Rock, Paper, Scissors
More bad news in the book world, for those of you following along. On the heels of bad news from the Big 5 publishers, we have yet another dismal earnings report from Barnes & Noble. Sales are down 6% over the same period last year, which probably explains why they just changed CEOs … again.
The previous CEO was around for just over a year, and this kind of turnover does not bode well. The chain is most certainly in trouble. But it’s a comment from Riggio, the new acting CEO, which makes me think they don’t understand why. Riggio blames the drop in sales to reduced inventory. He says the only way to stand apart from other bookstores is selection. This tells me that one of the handful of names synonymous with selling books doesn’t understand what’s happening in book retail.
I probably know the least amount there is to know about selling books, but from as many angles as humanly possible. I basically grew up in the Waldenbooks in Monroe Mall. It was the only reason I wanted to go to the mall. I lived on that nasty carpeting between those crowded shelves; it was where my mom knew to find me. My mom went on to become a B&N general manager, first in Spartanburg, SC. She would put me to work moving sections, and I’d help customers who figured I worked there. When I went off to college, I got a job with B&N and helped open their North Charleston store, stocking bare shelves according to planograms and selling books to customers.
Later, I helped run an indie bookshop. I did this for years while trying to make it as a writer. I also went to book conferences and worked as a professional book reviewer for a while. Then I became my own publisher, started working with several of the largest publishing houses in the world, dozens overseas, and went on a hectic travel circuit to six continents where I spent more time talking about the book trade and business of being an author than I did hawking my own books.
So while I haven’t done any one thing in the book trade for decades, for decades I’ve been doing all of them. As a result, I eventually observed and then came up with what I call the rock, paper, scissors model for book retail. I think I first gave this talk at a private conference put on by Tim O’Reilly of O’Reilly publishing. The room was full of cutting-edge tech and publishing geeks. On a whiteboard, I drew something like what you see below (Later, I would use nifty slides, some of which you can see here):
On the bottom left of my terrible trackpad sketch, you have the mom and pop indie bookstore, which for a very long time was the only way to find and buy books. The factory there on the right is the big box discounter, which wasn’t a book phenomenon so much as a laser and database phenomenon. The advent of the UPC code and computers allowed for massively more inventory, and we got the Home Depots, Best Buys, and the B&Ns of the world. (Seriously; the laser did that shit)
In the above book version of rock, paper, scissors, B&N crushes Indie due to selection and price. This is what all the big box discounters do, and it’s what happened in the 80s and early 90s. Indies couldn’t compete on the vast selection and massive discounts, and they started going under. We even got a Hanks/Ryan film about this.
Then Amazon comes online, and Amazon destroys B&N in the two things they were really good at, which again was selection and price. We might say that Amazon smothered the big box discounters with their online web presence and global shipping. Borders shuttered, B&N languished, and indie bookshops began to increase in number. (I’ve given this talk a dozen times, and at this point I normally liken Amazon having saved indie bookshops to the way introducing Canadian wolves saved Yellowstone National Park by winnowing the deer population, but I’ll spare you.)
So B&N crushes Indies, and Amazon smothers B&N, which leaves the fact that Indies snip away at Amazon. And Independent bookshops do this by bettering Amazon in both presence and community*.
Presence means being able to pop into a local shop to browse for a gift for a friend, or see what the staff recommends, or because many of us can’t walk by a bookshop without buying something the way other people can’t pass a Starbucks or a Ben & Jerry’s without satisfying their addictions.
The other aspect, community, means a place for book lovers to gather*. It means author signings and book clubs and storytime for children on Saturdays. It means staff picks and local interest sections and a small shelf for area authors. It is the literary book hub of the community in the same way that libraries are. The good ones have a dog or a cat roaming around.
Which gets us to why B&N is failing and why Riggio doesn’t seem to understand the book trade anymore. B&N will never be able to compete with Amazon on price or selection. Never. No one goes to a B&N hoping they’ll have the backlist title they’re looking for. B&N has books 2 through 12 of the fantasy series that everyone is telling you that you have to read, and they’re sorry but they can special order book 1 for you, as they’re currently out, but it’ll take 3 to 5 weeks to get in, and they’ll CALL YOU ON YOUR PHONE when it arrives, and you can drive back to the store to … fucking kill me already.
Riggio, and whomever he hires, is going to run B&N like it’s the 80s when Amazon didn’t exist, and B&N is going to go under. What’s absolutely stark-raving mad about all of this is that Amazon understands the rock, paper, scissors model, and they’re diversifying by opening indie-style shops. Their new small footprint bookstores are giving them the presence they’ve never had. A third store has been announced for Chicago. They are moving into an area that B&N should have pivoted into, though it’s not clear B&N could have. Long leases were signed to lock in great rates, the way a noose helps lock life out of the brain.
I’ve blogged in the past about what I’d do as a Big 5 CEO (I still love all of these ideas). And I’ve written about the indie bookstore that I plan to open someday (it was going to be before my circumnavigation, but now it’ll likely be immediately following). So what would I do if someone forced me to be CEO of Barnes & Noble? How would I save the chain? Could I? Can anyone?
I normally can write my protagonists out of the most dire of situations. That’s what my brain spends a lot of its processing cycles doing: coming up with realistic escapes from certain doom. But in this case, I don’t think B&N has an answer. This isn’t the first time I’ve tried writing this blog post (the first time was a few weeks ago, when the new CEO was let go). I tried writing a long piece about creating a small footprint bookstore franchise, like the Waldenbooks that I grew up frequenting. I saw them being as ubiquitous in strip malls as Gamestop and GNC. A reliable place to see what’s new or bestselling, pick up a gift, grab a magazine or newspaper, or a picture book our kid hasn’t read yet.
Maybe it could work. I tried to make it work on paper. But it would require a rebranding that I don’t think B&N can pull off. They aren’t going to win the anti-corporate PR angle that indies manage with their patrons (shop here and pay full price to keep our squeaking, non-automatic doors open). They also can’t be flexible in scope, opening the occasional big-box (non-discounter) where needed, like we see in Powell’s in Portland, the Tattered Cover in Denver, and other massive indies around the country.
Independence means flexibility, creating the bookshop the community needs. B&N has been completely shitty recently about their commitment to community. When I worked in a B&N, I ran a book club and arranged chairs for a weekly meeting with loyal shoppers to discuss whatever we’d decided to read that month. There were comfy chairs everywhere! We actually did author signings.
Someone at B&N counted some beans a while back and didn’t see the point in author signings (they only sold 4 books?! We had to return 12?!) or the comfy chairs (they’re reading without paying!) and so they stopped competing with indies. Again, there is no competing with Amazon, not with the wreck of a website they’ve got (Amazon and Google hire computer engineers from MIT, Stanford, and Harvard. B&N gets a CTO from another physical retailer with a shitty website and tries to patch existing code. They’d be better off — I shit you not — if they paid one brilliant teenager a million bucks to see what she could come up with in a single cheeto-and-redbull manic month).
The problem with the franchise model that I kept going back to is that there aren’t enough readers to support it. We don’t have as many book addicts as coffee addicts, so forget the Starbucks model. And everyone needs a haircut, so SmartCuts will be everywhere, but reading physical books is dying. The avid readers have moved to digital, which doesn’t clutter the house or break the bank. Physical books won’t go away, but neither will vinyl records. The problem is one of growth. There won’t be any, not of the non-coloring variety. And most physical books are bought online now anyway.
So where the rock, paper, scissors comparison breaks down is that it was a model in motion. It wasn’t a permanent balance. The big box discounters only had their advantage in the pre-Amazon days. They got complacent, lazy, moved too slowly, and they won’t survive. The future will be a mix of indie bookshops and the big A. And if Amazon keeps figuring out the physical retail side of things, and gets author events, book clubs, and writing workshops going, they may be able to beat the indies at their own game. Perhaps they can become the franchise model that I tried to envision, the resurrection of the Waldenbooks of my childhood.
I certainly hope so, because the one unspoken thing here that Amazon does better than the other two is diversity. Amazon doesn’t blacklist books from self-published sources like CreateSpace. They also carry (naturally) the Amazon imprint titles that indie bookshops won’t touch. Limited space means they can’t carry everything, but their inclusive philosophy means that there’s nothing they won’t carry. Breaking out online won’t get easier for indie authors, but any who do will have a bookstore willing to shelve their titles. The impossible just moved to very, very difficult. That’s an infinite improvement.
I miss my days of working in B&N, and I miss the days when my mom ran a store and would put me to work moving the entire computer section one shelf at a freaking-hell-these-things-are-heavy time. But I’m not sure I’ll miss what B&N has become. I celebrate the increasing number of indie shops. I welcome the Amazon bookstores. And these days, I spend most of my processing cycles trying to figure out how to make reading as addictive as coffee and ice cream. That’s the protagonist hanging over a cliff. And nobody is talking much about her.
*I put an asterix on community twice when discussing Amazon, but I think this might be incorrect. The advent of reader reviews, and the way that book links are shared via social media, not to mention their acquisition of Goodreads, puts Amazon in a clear leadership role in the online community of readers. But this is physical community I’m talking about, and we have yet to see what Amazon has in store here (if anything).