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Assessing the Outlook for Bookstores

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Tattered Cover FrontMany of us remember when Barnes & Noble was a single store in Manhattan, the Internet was only a government project, department stores had book buyers, and most cities had at least a few bookstores. Places such as Seattle, San Francisco, and Boston seemed to have a store in every neighborhood— and in some neighborhoods, on almost every corner.

Then came the chains, Amazon, and publishers’ own websites—and we saw independent booksellers close, one after the other. Between 2000 and 2007, about 1,000 were shuttered. Some were forced out by mall owners who yielded to a chain’s demand for no competition. Others, with less buying power than big stores, got lower discounts from suppliers, couldn’t match larger stores’ prices, and couldn’t afford to offer many loss leaders. Some lost low-rent space as neighborhoods gentrified.

Overall, being the owner of any small storefront retail business became a greater financial challenge. The result: Many communities were left with nothing but a chain bookstore, and when it closed, online buying became the only option for books. And then, for those neighborhoods that still had indie bookstores, there were the double burdens of the Great Recession and showrooming.

So does this mean bookstores will continue to disappear?

No, say many in the industry. Although few would describe business as thriving, words such as upbeat and positive were typical in the feedback I received when I started contacting indie booksellers and ABA regional affiliates. Optimism is also supported by comments made in “Why Indie Bookstores Are on the Rise Again.” Published in Slate, the article cites ABA membership, which recently increased more than 20 percent, from 1,651 in 2009 to 2,094 in 2014.

“Without talking dollar figures, the store managers and owners I talked to at the fall conference of the New Atlantic Independent Booksellers Association were doing well and seemed optimistic about the coming season,” reports Mark LaFramboise, head buyer at Politics & Prose Bookstore in Washington, DC, and president of NAIBA. But, he cautions, they weren’t “shouting ‘Alleluia’ from the rooftops.” Also, he notes, stores feeling “cash-strapped and nervous” may have decided not to spend time and money to go to the conference.” But the booksellers in attendance were optimistic,” he adds, “and their stores are doing at least okay.”

Wanda Jewell, executive director of the Southern Independent Booksellers Alliance, based in Columbia, SC, is even more positive.

“A colleague and I were talking about how nice it is to be around for the revival of indie bookstores,” she says. “It seems we are returning to the era of 1995, which we perceive as the heyday for indies.”

“Indies are feeling the love with the groundswell of support from the likes of James Patterson, Sherman Alexie, and everyday readers,” Jewell observes. “Most stores are reporting a comeback of sorts.”

At Gottwals Books in the Macon, GA, area, Shane Gottwals reports that sales have increased at most of the indie’s locations in each of the past five years. “Feedback from our customers tells us that they are tired of impersonal online shopping,” he says, noting that people crave interaction with staff and the bookstore ambience. “We hear more and more often that there’s nothing like the smell of the bookstore.”

Gottwals staff capitalizes on customers’ exasperation with online buying. “We try to give the best service possible,” Shane says, “and we believe our customers keep returning because we are successful with this goal.”

Seeing Positive Signs

Woman readingOn a recent trip down the Pacific Coast from Seattle, I heard more people express faith in the future of indie bookstores and I also heard evidence that the faith is justified. At Cannon Beach Books in Oregon, new co-owner Maureen Dooley-Sroufe needed to interrupt our conversation twice to handle purchases on a rainy, windy Saturday that figured to keep people at home.

Having worked at the store for 12 years before buying a half-interest from Valerie Ryan in late 2014, Dooley-Sroufe says she’s seen an upturn since 2011. “People tell us they really want to hold a book.”

Revenue is increasing at WinterRiver Books in Bandon, OR, too. In fact, co-owner Grover Hatcher says he’s seen revenue rise every year since he and Debby Johnson bought the store in 1990. He attributes this partly to the fact that Bandon’s historic district established itself as a tourist destination after decades of decline for the town as a fishing and timber center. Many people with vacation homes on the shore come in and buy several titles at once, Hatcher says. During the recession, WinterRiver kept sales from slipping with its broad selection of sidelines, and with its continuing policy of discounting hardcover editions of bestsellers by 20 percent.

“The serendipity and joy of shopping in our retail stores continues to be the number one reason customers come back,” says Mirian Sontz, CEO of Powell’s original Oregon bookstore. If you’ve ever wandered through that store, you’ve experienced what some would describe as the ultimate in bookstore ambience. And it pays off for this Portland landmark.

Retail sales are up because of growth in the neighborhoods where Powell’s has branches, because the company has completed some remodeling and repositioning of store sections, and because the Oregon economy has improved.

The frosting on the proverbial cake? The Stephen Colbert “bump.” After Colbert and fellow Hachette author Sherman Alexie plugged Edan Lepucki’s debut novel, California, on air and recommended it be purchased through Powell’s in response to the Amazon-Hachette conflict, the store sold almost 10,000 copies prepublication, setting a record for pre-orders.

And the television publicity has had a lasting impact on Powell’s in-store sales, Sontz says. “The conversation about conscious online shopping continues, thanks to this increased awareness.” No wonder she can conclude, “We are very bullish on the long-term prospects for bricks-and mortar bookstores.”

Building Bookstore Business

Old lady in bookstoreOther booksellers are restrained in their assessment of industry health. Although Matt Miller, general manager of Denver’s Tattered Cover Book Store, says, “We’re pleased that we’re currently meeting our projections,” and “It has certainly been uplifting to see new stores opening in recent years,” he adds that several factors need to be considered when evaluating the prospects for bricks-and-mortar booksellers. These include “the constant struggle to be profitable in an industry with such small margins, the reality of pervasive online competition, and the ever-increasing choices for consumers’ time and money.”

Many would-be booksellers recognize these challenges, says industry consultant Donna Paz Kaufman of the Florida-based Paz & Associates. “Fewer entrepreneurs are stepping forward to own independent bookstores, even at a time when many communities throughout the country long to replace a Borders or Barnes & Noble store that proved too large to be sustainable,” she notes.

One reason she cites: Some would-be entrepreneurs have family members who are risk averse and cannot justify investing the family’s wealth in “something that still seems iffy.”

To reduce risk, many bookstores have pursued special markets and worked to generate new traffic, sometimes by installingEspresso Book Machines and/or by hosting more events.

“Stable, perhaps slowly increasing,” is how business is at the Flintridge Bookstore & Coffeehouse in La Cañada, CA, says Gail Mishkin, marketing and events manager. “One of our greatest strengths is that we provide core literature for the La Cañada school district,” Mishkin says. “We work very closely with public school faculty and staff and we stock titles on the required reading lists. This is a major source of support for us.”

Flintridge also emphasizes local history, geography, and culture of the San Gabriel Mountains foothills. “Our local focus keeps us part of the community,” says Jenny Wannier, Flintridge’s Espresso Book Machine technician and sales representative.

Almost all EBM customers are new to the store, Wannier notes. Although only two, three, or four of each month’s dozen inquiries about self-publishing result in books being produced, many writers who use the machines to print copies of their books return again and again for additional print runs. And the store is getting more orders for titles produced on demand through the EBM. “They further increase people’s awareness of the machine’s and the store’s general offerings,” Mishkin believes.

The Espresso Book Machine also attracts new customers to the Tattered Cover, where Miller estimates that 70 percent of its self-publishing clients are new to the store. But Sontz at Powell’s, where marketing of its EBM is low-key, says that most EBM customers were already loyal Powell’s patrons.

Other tactics for drawing people to bookstores have been common for years and include hosting story hours for kids, YA book clubs, and midnight openings for Harry Potter launches. Now, as Publishers Weekly observed in “More Stores Are Moving toward Ticketed, Bundled Events,” bookstores across the country have various ways of generating more book sales from author appearances. Some require a book purchase for admission to an event; others sell admission tickets valid for a discount on any purchase that day.

As the article notes, ticketed and bundled events are particularly common at off-site venues, where room rental and sound system costs can be significant. Most stores however, continue to host at least some free events. At Seattle’s Elliott Bay Books—which now hosts 500 events a year—events coordinator Karen Maeda Allman regards them as a way to “keep us in people’s minds as a cool place to visit,” and adds that “almost every night at 7 p.m. there’s something going on.” As she told PW, she prefers not to charge for in-store events because “having customers buy books in order to attend events can backfire by discouraging people from attending.” And ticketed events work only for certain authors, as Stephanie Schindhelm, marketing and promotion manager for the Boulder Book Store in Colorado points out.

Whether or not stores host ticketed events—or have the space for any kind of events—many booksellers have recognized the need for promoting what is special about their stores and the need for creating the rapport with store visitors that generates sales and recommendations. And they’re capitalizing on consumers’ frustration with automated online retailing, often with the assistance of their communities’ “Buy Local” campaigns. In a comment typical of those from booksellers, Shane Gottwals points out, “We intend to continue eliciting an emotional response from our store visitors for many years to come.”

Bokstores’ Strong Points

A bookstore can be different from other retail environments because it can “elicit such a grand emotional response,” says Shane Gottwals of Georgia’s Gottwals Books.

And Donna Paz Kaufman of Paz & Associates says that the entrepreneurs best prepared to elicit that response have several characteristics in common. “They feel confident in their market,” she points out. For example, they can find retail space at affordable rates, with the right mix of retail neighbors. And they’ve identified a market void in their area, perhaps due to closures of bookstores, toy stores, or kitchen shops.

“Every prospective bookseller who joins our workshops is very realistic about competition and the need to carve a niche,” she adds. “They understand that bookselling is retail management with soul and that they’ll need to combine the science and the art to create something that mirrors the success of the country’s best indie booksellers. They learn it will be hard work and can take three years to reach breakeven.”

Of course, Kaufman is also all too familiar with would-be booksellers who don’t invest time and money in attending training programs like hers. “Way too many people don’t do their homework and simply follow a dream, thinking it will somehow work out. In today’s competitive world, it’s nuts to invest thousands and not train for this new career,” she declares.

Like so many indie booksellers today, Kaufman believes that “there’s something about the printed word that remains compelling.” And, she reminds us, “Bookshops are beloved places, in the number two spot when communities ask what people want (second only to bakeries).”

Linda CarlsonLinda Carlson (lindacarlson.com) writes for the Independent from Seattle, where there have always been several indie stores, and where the weekly literary arts calendar is packed with book events.

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