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Saturday, 1 October 2011

Death of a Salesman - Part 2 Bookstores Tired of Selling Books

In years past, I used to work for a company that sold general merchandise. It made the lion’s share of it’s revenue from groceries and by lion’s share – I’m talking about somewhere between thirty five and forty Billion dollars a year. I know, you’re thinking ‘Andrew, that’s pretty vague. A Billion here, a Billion there, pretty soon it adds up to real money.’ Well, you’re right but I can’t be bothered to look up the exact numbers on their latest quarterly statements and l like throwing Billions around like candy.
Anyway, when my employer realized how much higher the profit margin was for GM, they decided to give it more space. They did this by building larger stores. People kept coming to buy groceries but they started to buy a lot more GM (bathmats, pillows, strollers, automotive, clothing, books…). Profits increased and shareholders were happy.
The reason I mention this is because of what I am seeing in the bookstore down the street. Over the last four years, I have noticed that the impulse purchase racks by the checkouts have been multiplying. At some point a couple of years ago they evolved, becoming heavy duty floor displays and they moved out onto the sales floor. Firmly established in their new habitat, they continue to displace the weaker species – books.
With eBooks doubling their market share every year, you would think they would reflect that in the pricing  but they don’t. Publishers often list eBooks for 60% more than the paperbacks. So you have the industry cannibalizing the eBook market to bolster sales of paperbacks even while reducing the square footage where those sales happen.
They are killing their business at both ends.
Frankly, when I see the type of impediment pricing I don’t think “I’ll just spend twenty minutes getting to the bookstore to buy the paperback like a good little consumer.”
I log onto Amazon or Smashwords and look for a new indie author (more on that in the next post).
We tend to assume that businesses know what they’re doing. In reality, this tends to be false. If you need further proof, then have a look at the bookstore down the street. They are slowly but surely getting out of the business of selling books. Roughly a quarter of their floor plan is dedicated to selling general merchandise, and that’s not counting the space taken up by the Starbucks franchise. Where books used to sit, we find coffee mugs, note holders, and various knick-knacks.
In another couple of years, this will reach a tipping point. People like to go shopping for books and sure, they might pick up a mug while they’re heading for the checkout but nobody will say; ‘Let’s go to the knick-knack store’.
A shame, really. They might have decided to pick up a paperback at the impulse rack by the checkouts.

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