Shop Talk: Practical answers for tough business questions
Question: As a bookstore in business for 23 years, I am concerned about the huge impact e-books are having on my already stressed brick-and-mortar retail store. Any suggestions about how to either work with e-books or compete with them? We have expanded the gift, card, aroma, and other lines, but I really want to try to keep a little ahead of the game. Your thoughts would be greatly appreciated.
Answer: Congratulations for asking one of the toughest questions I’ve been sent yet! You really made me stop and think.
Some days I wish I had a crystal ball or could travel to the future and bring back what I learned. Since that is not the case, and e-books probably are not going to just vanish (as I used to hope), experience tells me that soon technology will catch up with the “little guy,” just as it has in every other area.
I remember years ago when I wanted to have plastic gift cards like the major department stores did. At that time, it was a service only available to the “big guys.” Before long, other mid-sized stores could join in the fun, but the set-up fee was a whopping $5,000! Within a couple of years, though, gift cards with our store name and logo were available for a $500 set-up fee, and now, a decade later, they are accessible to most any small retailer who wants to offer them. When new technology is introduced, the cost often is prohibitive for a time. Gradually, everything from cell phones to GPS to high-definition televisions becomes affordable.
When e-books were first introduced, the technology was totally proprietary. Amazon set the example with the Kindle, which is required in order to read the digital books offered at Amazon’s site. Next, Sony and other companies began offering open-source readers so e-books from many publishers could be downloaded onto a single device. Now, some publishers are offering programs to entice retailers to sell the publisher’s device in their brick-and-mortar store, point customers to the publisher’s website, and receive a commission for every book downloaded.
I predict that soon you will be able to purchase a variety of electronic readers (at wholesale price) for resale in your store, and customers will download the digital book of their choice directly from the publisher’s website. You will receive a percentage from the download as well as a profit from the sale of the hardware.
Until that time, do exactly what you are doing: Expand into profitable product areas and wait and watch for ways your store can offer e-books. For me, I want to hold books in my hands, bury my face in the pages, and breathe in the aroma of paper and ink. I know I’m getting old and have to move aside for the next generation, but I’m secretly hoping that I’m retired before selling e-books becomes mainstream.
First published in Vol. 25 No. 1 of Retailing Insight. © 2011 Continuity Publishing Inc. All rights reserved.