Click and mor­tar: Book retailing at the cross­roads

Point of Purchase - - CONTENTS - N. Jay­alak­shmi With in­puts from Nabamita Chat­ter­jee

When it comes to cat­e­gories such as mu­sic and books, there is a sud­den au­di­ble gasp in the re­tail space as on­line busi­nesses garner a chunk of the mar­ket leav­ing brick and mor­tar re­tail­ers with the ques­tion, “Now what”? The strate­gies for the sur­vivors range from greater con­nect with a loyal client base to en­hanc­ing the store en­vi­ron­ment. But where is the fu­ture headed? Point of Pur­chase speaks to some re­tail­ers and oth­ers in the busi­ness and presents to you the first part of a fea­ture on this whole as­pect, fo­cus­ing in this is­sue on books. Do watch this space for more.

Mr Sa­hai is a 70 year old book lover and sea­soned shop­per who loves to spend his quiet morn­ings brows­ing through the dusty shelves of an old and re­puted book shop in Ban­ga­lore, smelling the pages, brows­ing through the ti­tles, rev­el­ing in nos­tal­gia and soak­ing in the de­light of dis­cov­er­ing a ti­tle that had far too long been elud­ing his grasp. Cut to his 18 year old grand­daugh­ter Ash­wini, who prefers to buy her books at the click of a mouse, quickly scrolling down the list on a pop­u­lar e-comm site, se­lect­ing the lat­est best seller, a rage, among her peer group, and punch­ing in the credit card codes handed to her by her par­ents and lo and be­hold she has her book in the next cou­ple of days! Two dif­fer­ent gen­er­a­tions who re­flect not only two very dif­fer­ent buy­ing tastes, but also two very dif­fer­ent buy­ing be­hav­iors. For re­tail in­dus­try watch­ers, this is in­ter­est­ing as it has af­fected the whole dy­nam­ics in books retailing. While many book store chains have ei­ther shut shop or cut down on their num­ber of out­lets, thanks to the ag­gres­sive of­fers pitched in by on­line book re­tail­ers, many oth­ers are op­ti­misti­cally hop­ing that the true book lovers would still pre­fer to come to their stores, browse and buy. But al­most ev­ery one of them agrees that the on­line trend does not bode well for the books retailing in­dus­try leav­ing many of them grasp­ing at straws. Says Vidya Virkar, Pro­pri­etor, Strand Book House, an es­tab­lished book shop with two main out­lets in Mum­bai and Ban­ga­lore re­spec­tively, which are pop­u­lar among many hard-core book lovers, “This trend of on­line book retailing started sud­denly in a big way about two years ago, the on­line play­ers

started un­der­stand­ing books, of­fered dis­counts and other con­ve­niences such as free home de­liv­ery and to­day it is re­ally hurt­ing us. There is a near col­lapse hap­pen­ing.” Agrees Mayi Gow­dide, Pro­pri­etor, Blos­soms, an­other pop­u­lar and fancy-free book shop in Ban­ga­lore, “Sales from book stores have come down by 10-15 % in the last 8-9 months and many have closed down, yes it is tough due to the com­pe­ti­tion posed by on­line sales.” Says Jim Lu­cas, Ex­ec­u­tive VP, Global Di­rec­tor, Re­tail In­sight and Strat­egy Draftfcb, “For books two things oc­curred that have dra­mat­i­cally shifted the land­scape. First the re­ces­sion re­ally af­fected sales. I’ve seen de­clines of be­tween 5-10% re­ported. But per­haps more im­por­tant has been the growth of dig­i­tal books of two kinds--e-books us­ing a tablet-like reader of some kind (Kin­dle, Nook, etc.) and the rise of au­dio books (avail­able for down­load at all kinds of sites in­clud­ing iTunes, Au­di­ble, etc.). It is not yet clear if these are dif­fer­ent seg­ments from tra­di­tional phys­i­cal books, or rep­re­sent an adaptation to chang­ing pat­terns of time con­sump­tion on the part of those who were his­tor­i­cally ‘book read­ers’.” Says Gau­tam Ja­tia, CEO, Star­mark, “The e-com­merce sites have two ad­van­tages- first, they are pro­vid­ing huge dis­counts which are af­fect­ing the sale of best­sellers and se­condly, they do not need to carry in­ven­tory. For ex­am­ple ear­lier peo­ple used to send us req­ui­si­tion slips for spe­cial cat­e­gory books which they need like graphic novel or mil­i­tary his­tory, to name a few but now they may eas­ily get it through sites like Ama­zon and etc. So these type of busi­nesses go away from the stores.” But many also feel that be­yond the on­line trend sim­ply af­fect­ing the busi­ness, it also does not bode well when you look at the big pic­ture, ei­ther in terms of the over­all busi­ness/the in­dus­try or the mar­ket (the shop­pers/ the true book lovers). Says Vidya of Strand, “I don’t grudge the on­line busi­nesses, but un­der­pric­ing, which af­fects oth­ers, is not a very healthy way of do­ing busi­ness. Ul­ti­mately we have to make avail­able a wide ar­ray of books to the book lovers and that will get hit in the long run.” This is so be­cause the on­line choices will, by force of cir­cum­stances and busi­ness needs, be re­stricted to best sell­ers, and with many phys­i­cal stores get­ting hit, the mar­ket is likely to get flooded by these best sell­ers and other ti­tles not nec­es­sar­ily of­fer­ing the best in terms of lit­er­ary qual­ity that sat­is­fies the taste of a se­ri­ous book lover and shop­per. But then the fu­ture of ei­ther model of busi­nesses will ul­ti­mately de­pend on what the con­sumers want. And so while many feel that the on­line busi­ness is not a very vi­able one given the lim­ited mar­gin space avail­able, many other brick and mor­tar re­tail­ers are also con­fi­dent on ac­count of many other fac­tors. Says Ab­hishek Ku­mar, Chief Oper­at­ing Of­fi­cer, Apee­jay Ox­ford Book­stores Pvt. Ltd. “The fu­ture may not be rosy but it is not bleak ei­ther. A phys­i­cal book re­tail store is a des­ti­na­tion store and will continue to re­main in busi­ness as long as the end con­sumer has the propen­sity to touch, feel and ex­pe­ri­ence the phys­i­cal prod­uct. There­fore we are op­ti­mistic and are even go­ing ahead with ex­pan­sion.” These words also point to the fac­tors and strate­gies that many book stores have adopted or need to adapt in or­der to sur­vive in the chang­ing en­vi­ron­ment. For some like Strand, the USP is still the range of ti­tles and the pric­ing. And iron­i­cally, the of­fers given by on­line play­ers on some books are less than those of­fered by these es­tab­lished brick and mor­tar stores who of­fer big­ger dis­counts on some ti­tles, a fact that of­ten goes un­no­ticed by shop­pers who pre­fer the con­ve­nience of on­line buy­ing. Be­sides, Strand’s strength is also its di­rect mail­ers to its clien­tele who are kept updated on the lat­est of­fer­ings. Blos­soms of­fers other car­rots such as buy-back op­tions on all books, even those bought from other out­lets, apart from its huge sec­ond hand sec­tion. Says Mayi, “We are sur­viv­ing be­cause we have 2nd hand books too, so oth­ers can’t give the prices we give.” Be­sides, given these chal­leng­ing times, fac­tors such as in-store mer­chan­dis­ing, store lay­out, lo­ca­tion etc play a very vi­tal role. Says Ananda C, Man­ager, Ox­ford Book Store at 1, MG Mall, Ban­ga­lore, “We make sure not to stock the store space with too many ti­tles and leave enough space be­tween the racks for the shop­per to move round and browse. Be­sides, we have a cof­fee shop where a shop­per can sit, re­lax and get a feel of the book be­fore buy­ing. Thus we cre­ate the right en­vi­ron­ment in the store for the book lover.” Ox­ford’s mer­chan­dis­ing is also de­signed in such a way that each cat­e­gory of books has a dis­tinct visual iden­tity through spe­cific and rel­e­vant colour schemes, like bright colours for the chil­dren’s sec­tions, softer tones for the man­age­ment sec­tion etc. Be­sides as most point out, a knowl­edge­able staff able to guide the buyer in the right choice of books and of­fer updated in­for­ma­tion is al­ways a core strength for a book a store. Says Vidya, “A knowl­edge­able staff is very im­por­tant in this space, as a shop­per can eas­ily be put off if the store staff is not fa­mil­iar with the au­thor or the ti­tle he or

she is look­ing for. So we train our staff in­ten­sively. Most of them over a pe­riod of time grow to be­come al­most a part of the fam­ily and they ab­sorb the cul­ture and knowl­edge as they grow.” And all these fac­tors apart, what most book re­tail­ers are do­ing or are in­clined to do is to fol­low the dic­tum: ‘If you can’t beat them, then join them’ to cater to their shop­pers. So given the in­evitabil­ity of the on­line busi­ness in this seg­ment, many are ex­tend­ing their own pres­ence to the on­line space or are work­ing out other ways to lever­age the on­line space. Says Sid­harth Pansari, Manag­ing Di­rec­tor, PGE Life­style Ven­ture Pvt. Ltd, Cross­word, “There are cer­tain lim­i­ta­tions in the brick and mor­tar busi­ness in terms of space and stock­ing and e-com­merce sites do not have such lim­i­ta­tions. On­line sales are grow­ing more in or­der to stay in the mar­ket for long and we are also present very ac­tively in the e-com­merce sites.” Says Gau­tam Ja­tia of Star­mark, “The on­line sales and phys­i­cal sales will both co-ex­ist. In terms of shop­per con­nect ini­tia­tives we keep on do­ing book launches, work­shops for kids and so on ev­ery month. The brick and mor­tar out­lets are also com­ing up with on­line di­vi­sions in this com­pet­i­tive mar­ket and in the near fu­ture we are also adapt­ing some ag­gres­sive pol­icy to­wards it. We feel that these two sec­tions will in a com­bined man­ner reach the tar­get group ef­fec­tively.”

And there are oth­ers, es­pe­cially those in the pub­lish­ing in­dus­try, who feel that the on­line trend has re­ally helped spread the sale of books and lit­er­a­ture. Says Subhankar Dey, CEO, Dey’s Pub­lish­ing, Kolkata , “Due to the e-com­merce sites, the cir­cu­la­tion of our books has in­creased a lot. Thus our motto to cross all the bar­ri­ers and in­crease the habit of book read­ing among the mass is met.” Agrees Sabi­ten­dranath Ray (pop­u­larly known as ‘Bhanubabu’), owner of Mi­tra and Ghosh Pub­lish­ers Pvt. Ltd in the fa­mous Col­lege Street in Kolkata which is a hub for text-books in the city with more than 1,200 book shops in­clud­ing big pub­lish­ers and small stall own­ers sell­ing new and old books, “There has been a pos­i­tive growth in the mar­ket. New chan­nels have opened up and the counter of sale of the books has gone up be­cause of on­line play­ers.” Well, the de­bate over the on­line and the brick and mor­tar re­tail busi­ness model will go on for some time to come, at least un­til the play­ers across spa­ces set­tle down com­fort­ably in their re­spec­tive slots hav­ing carved their own niche and hav­ing lever­aged each other’s strength in a healthy man­ner. And healthy it will be if, at the end of it, the needs of all kinds of shop­pers (book buy­ers in this case) are met. Mean­while, as Vidya of Strand Book House points out, there is also the onus on the shop­per to make sure to en­cour­age the brick and mor­tar out­lets which, so for so long, have whet­ted the for­mer’s ap­petite for an en­rich­ing book buy­ing/ brows­ing ex­pe­ri­ence. This, as she says, will be for their (shop­pers’) own ben­e­fit as it will ful­fil their need for a va­ri­ety of choices in qual­ity lit­er­a­ture. Any­one lis­ten­ing?

Jim Lu­cas Ex­ec­u­tive VP, Global Di­rec­tor , Re­tail

In­sight and Strat­egy Draftfcb

Vidya Virkar Pro­pri­etor, Strand Book House

Gau­tam Ja­tia CEO, Star­mark

Ab­hishek Ku­mar, COO Apee­jay Ox­ford Book­stores Pvt. Ltd.

Sid­harth Pansari, MD PGE Life­style Ven­ture Pvt. Ltd.

Sabi­ten­dranath Ray, Owner Mi­tra & Ghosh Pub­lish­ers Pvt. Ltd.

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