Do we indeed?
The story starts: "It's a familiar sight. At the entrance of every celebrated bookstore in the city, you are assaulted by international bestsellers or new Indian arrivals, many of them mediocre works. If you ask for something else, you'll hear, Sorry, we're out of stock ..."
That sounds familiar. For small independent bookstores, the main constraint is money and space. How we wish we had infinite resources to stock every book we want. But, unfortunately, no brick-and-mortar bookshop in the world is big enough to stock every book that is available, even if they had all the money in the world. The closest one gets to a truly mega bookstore is Amazon.com, but even they don’t have on their list several hundred titles we have in our tiny little store. (We have about three to four thousand titles in stock at anytime.)
"All bookstores are retailers and they have to be profitable. Real-estate prices are touching the roof."
Same here. The bookstore must be profitable enough to pay the rents and the staff salaries, at least. For the past three decades the story has been familiar -- large chains eating up independents for breakfast at an alarming rate. But now there are signs that things might be changing. We have been reading of trouble Borders UK has been having, and now a recent report from Publishing News, new CEO Phillip Downer talks about them consolidating before further expansion and a re-look at their business model. Another report in the Guardian Bookblog says "sales are tumbling at Waterstones ..." further talking of how the chain, now, has "a new focus on novels, cookery and children's books at the expense of the humanities ..." (All of which is good news for independents). And there are rumblings at WH Smith (a 3% decline in growth this year). And on the other side of the coin, the number of independents both in the UK and US increased in 2007.
It is too early for independents to be celebrating just yet, of course. But methinks that the writing is on the wall. The idea of the mega bookstore is a leaf taken from the supermarket (and the hypermarket) business model. The model is simple. Buy in large quantities. Buy it cheap. Sell it at the lowest possible price and undercut the competition. (If one bought large enough quantities of a particular consumer item, one could push the price down to ridiculously low levels, which would then, in turn, allow one to sell the items at extremely low prices to the consumer. (It will also run the same consumers out of work, but that is a different matter.) When mercilessly applied (together with globalisation) what this means is that hypermarkets like Wal-mart and Tesco can (and do) source for merchandise from the lowest cost producer anywhere in the world (from Vietnam or China or wherever) and compete at the expense of other players in the market, people's jobs or even whole economies of nations. (Some would say that the sub-prime crisis in the US is simply one form of collateral damage.) This model, of course works, (if you want to call it that) with merchandise ranging from pressure cookers to pottery, and from dungarees to DVD's made available at the lowest costs.
When applied to the book industry, this is how the model will work. First of all the book has to be made a commodity. Let's forget about all that namby-pamby 'cultural goods' bullshit the Europeans like to whine about. (Though we may have our own opinions on this, let us just go along with the 'commodity' premise for argument's sake.) Buy the books at the lowest prices possible, which means you have to buy titles in truckloads. Squeeze the publisher for discounts, and kill the competition by undercutting them. But, unfortunately, there is a problem. Firstly, there is no low-cost manufacturer for books. (Yes, you could buy Harry Potter in truckloads from China at rock-bottom prices but you could, also, end up in jail for that.) If the retailer wants a particular title by an author there is, normally, only one source. And prices are pretty much controlled. A hyper-mart might be able to get a pair of jeans made by near-slave labour in Laos or Cambodia for two dollars and sell it for a hundred (I have been told by a supermarket operator that those are the type of numbers in the garment trade. I know of someone who bought an intricately hand-embroidered saree -- all six yards of it -- in India for fifty rupees, a little over one US dollar. How much do you think the embroiderer who did the bead-work was paid?) Even if the book supermarket buys large enough quantities and swings that huge discount, the story is not over. What discount is he going to offer the customer? Fifty percent appears to be the norm these days for bestsellers and new arrivals. (Not in Malaysia.) If he does not offer the discounts, others will. What about his overheads then? The rent is not about to go down, nor are the wage packets. Taking all that into consideration, and assuming that he actually manages to sell all the books he buys, there will really not be very much left. So, Borders looking for a new business model is about right. (Note to Malaysian mega bookstores still griping about the Harry Potter deal: You are in supermarket territory. They invented the rules. You are a mere Johnny-come lately. So you can't complain when the local Tesco undercuts you. After all, you do undercut others.)
What is happening is not surprising. The big boys are fighting one another to death. One can pretend to defy gravity only for so long, especially when every store looks the same, and they all sell the same products. (But unfortunately, or fortunately, they don't 'get it'.) It is time for the independents to make a comeback.
Sarkar’s report further says: "Small bookstores usually have owners who are booklovers themselves. They stock books that the impersonal managers of chains do not stock. That's why, while small bookstores in the country have distinct personalities, the big chains that reek of coffee, don't."
Interestingly there was another story I read this last fortnight in Springfair.com Marketplace entitled Queen of shops claims service is the future of retail. The story starts: "Mary Portas, star of BBC TV show Mary: Queen of Shops, suggests that in future retail "... would be led by expertise and customer experience, rather than price and product ranges."
"Portas said that independent stores can build up their services and differentiate themselves from multiple retailers by creating efficient, good-looking stores that shoppers will enjoy visiting and by providing the service of expertise."
The other point she is making is about getting customers to go to a shop at all, given the internet craze and all. Maybe shops as we know it will cease to exist. Anyway, they have been predicting the death of books since television was invented. Resilient little buggers aren't they, books?
Interesting.
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