Click and mortar: Book retailing at the crossroads
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.