retail news in context, analysis with attitude

by Kevin Coupe

There was a confluence of stories yesterday that went to the very heart of competition.

USA Today reported on how small bookstores are trying to survive in a climate that seems to favor the likes of Amazon.com, even to the point that Borders seems to be on the brink of bankruptcy and Barnes & Noble also is trying to be figuring out how to be relevant and effective. “Years after the rise of such mega-chains - and the explosive growth of Amazon.com's discount book business - helped kill many small bookstores, e-books are sparking another shake-up,” the paper writes.

According to the story, “Traditional bookstores (independents and the chains, including Books-A-Million) accounted for less than half of the book market last year, Greco says. The majority of books were sold by a variety of other retailers including Amazon, Price Clubs, supermarkets and convenience stores.

“The long-term economic effect of a shift from print to digital on both publishers and booksellers isn't clear. But whether the shift is dramatic or more gradual, the number of bookstores is declining.”

Michael Cader, founder of “Publishers Lunch,” a digital newsletter, tells USA Today that he “sees room for bookstores to experiment with digital-delivery kiosks, on-demand printing and self-publishing services: ‘Maybe we'll come to think of them as reading stores, or readers' stores, or publishing stores, or idea stores, more than simply bookstores’.”

In other words, they need to rethink their entire approach to the business, and recast the bookstore business in the image of the future, not the past.

• At the same time, the Wall Street Journal looked at the competitive issues facing independent video rental stores, and how “the rise of Netflix, and especially its newer streaming movie service that lets subscribers watch videos instantly online, has put growing financial pressure on independent stores,” even in places like San Francisco where people are passionate about the cinema.

According to the story, “Le Video, a 4,000-square-foot shop near Golden Gate Park with upward of 60,000 titles available for rent, is trying to adapt. The store recently lengthened its rental periods to reduce the hassle of returns. (Owner Catherine Tchen) also made management changes to improve Le Video's service after some former staffers - ‘movie snobs,’ she says - developed a ‘flip attitude’ with customers.

“She also is expanding the inventory of specialty films at Le Video, which features sections on Quebecois, Algerian and Swiss movies. Ms. Tchen also plans to start a Netflix-like DVD mailing service.”

If I had to bet, I think that I’d probably put my money on independent bookstores surviving longer than independent video rental stores. After all, bookstores can offer a specific experience - reading an actual, physical book - that is different from the e-book experience. So, if they can find a niche and exploit it by intimately understanding their customers, they’ve got a shot.

Whether you download a movie or rent a DVD, the physical act of watching it is the same - there’s really no difference, other than the delivery method.

But both businesses, if they have any hope of surviving, have to think hard about what they are selling and how they are selling. Because it is tough being an endangered species.

Even smart businesses that don’t seem in danger of immediate extinction need to do the same thing.

And that’s our Friday Eye-Opener.
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