Beyond the chains

by on August 26, 2004 at 12:08 pm in Uncategorized | Permalink

Interesting piece (subscription required) earlier this week in the Wall Street Journal on how independent bookstores are competing successfully against Barnes & Noble and Borders by actually getting bigger.

The 46-year-old bookseller [Neil Van Uum] has managed to prevail thanks to an unusual retailing strategy: combat the giants by being even more giant. His Joseph-Beth Booksellers in Cleveland is bigger than the Borders, sells merchandise ranging from toys to quilted handbags and boasts a restaurant where flank-steak salad goes for $9.95.

He’s one of a hardy group of survivors that has emerged from the independent bookstore shakeout by supersizing. In Michigan, Schuler Books & Music boasts a 35,000-square-foot flagship in Grand Rapids. In West Chester, Pa., Chester County Book & Music Co. owns a 49,000-square-foot store that includes a New Orleans-style restaurant.

The six stores owned by Joseph-Beth average 30,000-square-feet — or 5,000 square feet more than a typical Barnes & Noble.

It isn’t size alone, though. What the really successful independent stores do is combine consumer friendliness in terms of design, space, and amenities with the kind of knowledgeable and dedicated staff that’s traditionally thought of as characteristic of independents. I think there’s a plausible argument that independent stores underestimated initially how important the experience of shopping was to customers. But that’s no longer the case at the stores the Journal’s talking about, a list to which you’d want to add stores like Powell’s in Portland, Tattered Cover in Denver, and Stacey’s in San Francisco.

These stores are also taking advantage of a genuine market opportunity by being active intermediaries between their customers and book publishers. (Amazon does it via collaborative filtering, while brick-and-mortar rely on staff members.) The real challenge for readers today is figuring out which of the tens of thousands (or more) of books published every year is worth their time. Stores that customers can count on for reliable recommendations should be able to build reputational capital and profit from it. It’s a hard business, though: net profit margins rarely get above 3-4%.

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