Thursday, August 02, 2007

What's Wrong With This Picture?

I love finding new websites--especially new websites that give me something to think about.

Yesterday's Shelf Awareness directed me to The Century Foundation here, which describes itself thus: "The Century Foundation, founded in 1919 by the progressive businessman Edward A. Filene, is a nonprofit public policy research institution committed to the belief that a mix of effective government, open democracy, and free markets is the most effective solution to the major challenges facing the United States."

Peter Osnos of the Foundation wrote an article on Monday called "Harry Potter and the Rest of the Book Business." He talked about the "logistical triumph" the latest Harry Potter release was for the publishing industry--twelve million books sold almost simultaneously at bookstores around the country on July 21.

"And then, there is the rest of the book business."

Osnos describes his experience in trying to locate a copy of a new book by Wilfred Sheed titled The House That George Built: With a Little Help from Irving, Cole, and a Crew of Fifty. The book received a number of great reviews, prompting a run on the supplies of every store Osnos contacted. Over a two-day period, he called a dozen bookstores (both chain and independent), but no one could sell him a copy of the $29.95 book.

Osnos complains, "the problems of supply and distribution I encountered are . . . endemic to the whole industry."

He ended up buying the book on Amazon.com at a 30% discount, complaining that had the book "been offered to me as an audio book, I might have bought it. Print-on-demand technology could have made the book available for shipping while a larger reprint was prepared. In any case, not one bookseller made a concerted effort to actually sell me the book and promise to send it to me as soon as possible and by the fastest means." Amazon did and, as he says, "performance counts."

Osnos' column underscores one of the major problems with the publishing industry. In a digital age, publishing is weighed down by a system that depends heavily on the physical shipping of books and the physical return of unsold hardback and mass market books. It's an expensive, ponderous and a not especially buyer-friendly system.

In the past month, I read reviews on two different books that I decided to buy. Both times, my plan was to drive the six miles to a nearby chain store. However, the same thing happened twice. Over a day or two, I thought about swinging by the store, but never made it. On the evening of the third day, while watching television, I checked Amazon.com. The discounts offered were fine and, by finding another book to buy in addition (thus raising my order total to $25), I could get free shipping.

I ordered from Amazon.com, and then forgot all about it until the books arrived.

It's a pretty sweet system. And Amazon.com got two $25 orders from me that, in the past, would have gone to my local bookstore.

How can a bookstore compete?

First, by catering to impulse buys. Lots of people decide they want a book RIGHT THEN. About six weeks ago, a friend recommended a book. Since I was getting ready to fly to Florida, I wanted the book RIGHT THEN to take on the flight with me. I went to my Barnes & Noble. They didn't have the book I wanted, but determined there was one at a B&N about nine miles away. I drove across town and picked it up. Amazon.com would not have satisfied me at that moment in time.

A far better solution would have been for the bookstore to have digitized its stock and invested in a print-on-demand machine like the Espresso described in my post here. That way, the clerk could have said to me, "You can pay for your book at the desk. By the time you get back here, we'll have printed the book for you."

And, take it another step. What if they offered me the book as an audio download or an electronic download--both available for immediate sale? They would never run the risk of a potential sale walking out the door dissatisfied again.

The minute I walk out the door, they're risking my taking my business to Amazon.com. It's axiomatic that you don't want your customers walking away.

I'm looking forward to seeing how Borders plans to run its newly planned model stores.

4 comments:

Sherry Davis said...

Another incredible blog! I think you've hit the target, here. It seems so simple, doesn't it?
Especially with the trade paperback format. I can see how it might be difficult to immediately manufacture a hardback in the time it takes to make a cup of latte.

I saw you at the PI Luncheone. Tried to get over to say "hi" but when I turned around you were gone.

Maya Reynolds said...

Sherry: Sorry to have missed you at the luncheon. I saw your mother off and on throughout the conference (she and I seemed to always be attending the same workshops).

Peter L. Winkler said...

"A far better solution would have been for the bookstore to have digitized its stock and invested in a print-on-demand machine like the Espresso described in my post here."

It might be economically feasible for large chains to do that, but not for many indie stores. I seem to recall that one book machine costs $100K.

Maya Reynolds said...

Peter: Like any new technology, the prices continue to come down. According to Engadget, the latest iteration of the Espresso machine is $50K--not $100K. I have no doubt that figure will be halved again within a year or two.

It would be interesting to see what a year's worth of shipping books costs a store doing a brisk business.

Of course, it would take more effort to determine how much they lose in sales every time a customer walks out without finding what they came to buy.

Independent bookstores will always struggle to keep pace with their better-financed big chain cousins. That's why so many have moved their operations online or gone out of business.