On Being Independent

The Conference Board Review^® Article

Some big lessons from small booksellers.

By Paco Underhill

I love books. They inhabit every room in my house. Cookbooks in the kitchen; art books atop the non-working fireplaces. My dining room doubles as a library. Novels are stacked by the bed, and poetry books live beside the thrones in all of my bathrooms. In my struggling years, the trade-off between dollars spent at the movies or on a book was no contest: Books represented more hours of pleasure.

At a recent marketing conference in Zurich, I asked a Swiss businessman whether he was a heavy reader. His answer was yes: He read nine or ten books a year. If that makes him a heavy reader, does that mean that my seventy-plus books a year make me an addict? No, but if the world were to have more readers like me, the book business would be in better shape.

One problem that big booksellers face is having to stock thousands of titles even though the majority of their sales comes from a tiny fraction of the inventory. (Baskin Robbins has thirty-one flavors of ice cream, but what it really sells is lots of vanilla and chocolate.) The chains can't afford to deal with small publishers and distributors; their buying engines are designed for certain efficiencies. While each Barnes & Noble store can feature a local section, the engines for buying from local publishers are, at best, clumsy.

On the Internet, the industry is still in transition. Where the online book merchant excels is in consummating the sale. Excerpts from reviews, feedback from other readers, and even the choice of new or used books help close the deal. But for all the work on suggestive selling, the online bookseller has only a few tools with which to work. No feature table, no staff favorites, no weird-and-wonderful section — only a record of what you've looked at and/or bought before and the connection between your selection and the selections made by other customers who bought the same item. It's a two-dimensional view on a merchandise category that is highly opportunistic. By browsing, we can get lost in a bookstore in a way we never can on the Web. And while I do order online, such purchases are less than 15 percent of my annual book consumption.

The independent bookstore recognizes the dilemma in which the chains find themselves. In the face of Amazon, Barnes & Noble, and Borders, independent sellers have had to take a hard look at their business. With margins on books modest and return polices in transition, the smart merchant has had to be different. The lessons learned by the independent booksellers that are succeeding are worth examining.

Early in my career, I did a project for the major chain Waldenbooks. The execs there had reports of a very successful independent bookseller in Houston and had opened a Waldenbooks around the corner from it. I was sent to figure out why Waldenbooks' store was doing so poorly while the independent, a hundred yards away, was continuing to flourish. Coming from New York, it wasn't hard to figure out what was wrong. Waldenbooks had moved in a store manager from the Midwest, a very capable woman. She was a specialist in setting up and hiring and training staff in a new store. I was not a welcome visitor. After spending a few days with her, I felt comfortable enough to ask a series of gentle questions about how much she knew about the Houston neighborhood where her store was located and where she'd been working for the past six weeks. She had no idea she was in the middle of one of Texas's most vibrant gay and lesbian communities, nor during her visits to the independent store had she processed which authors were featured and who was coming to give readings, much less taken in the broader vibe of the store. That Waldenbooks location lasted less than a year.

Almost all successful independent bookstores are more than just general booksellers. The easy way they specialize is by picking a genre. In New York, we have a number of stores that specialize in cookbooks, including one that further defines the category by focusing on first editions. (In a vintage cookbook, do food stains add to its value?) We also have the architecture-focused Urban Center Books in the same building that houses the Municipal Art Society. And two examples in my own neighborhood are Partners & Crime and the Biography Bookshop.

A good genre bookstore sells new and used products, features first editions and autographed copies, maintains a website, and stages events. Positioned correctly, it draws the dedicated customer. I was in one store as it rang up a $3,000 sale to a couple outfitting their small sailboat to go around the world. It wasn't the first time the couple had made a large purchase at that location. A good specialty bookstore is a destination business that trades locally. It becomes a temple to the genre it chooses.

For those working in a bookstore, it's not all about money. In the world of retail employees, there is something different about working in a bookstore, and in the subculture of books, working in an independent has a different spin. In my local bookstore, one of the sales associates builds author websites on the side and arranges book tours. Last time I saw her, she told me that she was working for Lee Child, the author of the hardboiled Jack Reacher series. Another person working at the same store has a reprint line of classic spy novels. Still another has a book-restoration business on the side. Getting service from them is like visiting a good masseur: You walk out feeling well-handled.

Location, location, location has also never been more important. Books & Books added an outdoor restaurant to its Miami Beach store — order your food, then browse the store. The big chains do not have the capability to do anything more than cursory adaptation to individual areas. Mitchell Kaplan, the owner of Books & Books, never expected to be selling food, but on trendy, pedestrian-driven Lincoln Road, it makes sense.

My favorite bookstore is BookPeople, in Austin, Tex., across the street from the flagship Whole Foods. Owner Steve Bercu is a former trial lawyer who drives a vintage Volvo with more than half a million miles on it. Steve eats barbecue, cusses, and doesn't make his own yogurt. He is iconoclastic, not crunchy-granola, and his store projects a sense of intellectual virtue and a strong sense of community. The coffee shop inside is big, the espresso machine is primo, and I've never been there without witnessing earnest conversation — and it wasn't about how the Longhorns were doing. The store delivers the unexpected, starting with good, inexpensive visual effects. An old stove anchors the cookbook section. Those browsing the sports and computer books can climb into old barber chairs. Aging Barcaloungers are used judiciously. Where he was able, Steve added merchandise categories themed to each section: puppets, hats, and masks in Children's; clothing, jewelry, and candles in Spirituality. Even his stairs are merchandised with wrapping paper and gag gifts. His checkout has "Keep Austin Weird" T-shirts, unusual confections, and BookPeople chocolate bars. Steve is not just selling books — he's selling to people who like books.

BookPeople is still a serious bookstore that has reinvented categories and subsections. The Insurrection & Conspiracy section sits next to Journalism; the pair of stuffed roosters flanking the Homesteading & Farming section caught my eye. It is a happy store, filled with personality. Bercu doesn't make a fortune, but he and his investors make a pleasant living selling something they believe in. Being an independent merchant in 2008 isn't easy. It takes dedication, thought, and a healthy dose of pixie dust to separate your store from the companies that answer to Wall Street analysts before they answer to customers.

The earth is populated with readers. I read the first Harry Potter novel with utter delight and got progressively bored with the subsequent books. That said, J.K. Rowling is now history's first writer-billionaire and perhaps the most effective advocate for literacy in modern history. My niece refuses to see the Potter movies, claiming, "The books are so much better. And I don't want to ruin my images of life at Hogwarts."

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