Friday, June 4, 2010

Can monetary incentives + local benefits generate a brighter future for independent bookstores?

"Publishing is changing fast, bookselling is changing fast" said Skip Prichard, Ingram CEO last week at BookExpo America in a 'A CEO Panel: The Value of a Book'. No one seem to be immune to these changes, especially not independent bookstores, which might look as the most vulnerable to the changes in the industry.

But are these changes just a risk or also opportunity for independent bookstores and how going green can make a difference for them? The answers are coming right away on our fourth part in a series on the green future of the book industry.

These are not easy times for independent bookstores. Earlier today The Working Waterfront reported that "
Maine coast loses two independent bookstores". The article quotes Steve Fischer, executive director for the New England Independent Booksellers Association (NEIBA), who estimated that some 10 percent of association bookstores have closed in the last year.

The article also mentions couple of the challenges independent bookstores are dealing with: "Big-box stores have muscled smaller stores out of the market-share, many publishers are starting to sell their books directly and online booksellers are taking an increasing chunk of the bookselling business." And there's of course also the small but growing market of ebooks.

So it's not surprise that independent bookstores are looking for improved or alternative business models that can help them meet today's and tomorrow's challenges. In BookExpo America, the
American Booksellers Association (ABA) held a panel entitled 'The New Reality: Alternative Business Models for Independent Bookstores', which was described as follows:

A business model based on book sales alone is growing more challenging each year, but there are viable alternatives. Hear from a panel of innovative booksellers who are growing their businesses in directions beyond the book. From selling children's clothes and creating stores within stores to offering local delivery, indie booksellers are using their ingen
uity and their roots in the community to find new and interesting ways to sustain their book sales.

So, is there an alternative model that is better than the others? is there any secret sauce that can make all the difference? I'm not sure, but I think the best shot for independent bookstores is to make a green bold move, or in other words: Go local.
Yes, I know that independent bookstores are already an important part of local communities and economies, and there are many economic, environmental and social advantages to buy at local bookstores from a local perspective point of view.

For example, as
IndieBound mentions on their website, if you spend $100 at a local, $68 of that stays in your community. Spend the same $100 at a national chain, and your community only sees $43. But apparently this is not enough to incentivize local residents to shop in their local independent bookstores. The market share of independent bookstores is only somewhere between 5%-15% (depends which data resource you're looking at).

I'm talking about taking a different approach, one that will provide customers with both personal benefits and the feeling that they're contributing to the prosperity of their own community. I'm talking about creating a collaboration with other local businesses that will enable these businesses to provide customers with discounts for each other.

For example, if I buy a book at the local bookstore, I will receive a one dollar discount coupon for every $10 purchase I make. Later on. I can use in other local businesses, like the local coffee shop, the local diner, florist, barber, etc. The same goes when I go to the other local stores and buy there something. This way I get two things: 1. A gift that worth money and will provide me with monetary benefit. 2. An opportunity to support my local community.

Why it is important to combine the two incentives? Because one cannot work without the other.
Firstly, people care about the price of books. Just look at the data revealed on a 2010 Survey of Book Buying Behavior that was conducted by Verso Digital for ABA. From the slide below (no. 22 on Verso Digital presentation), you can clearly see how the monetary incentives are significant to buyers at independent bookstores:

But independent bookstores just can't compete solely on pricing. They'll almost never be the cheapest option. If a customer wants the cheapest option, she will just go to and find one. Independent bookstores need an added value that will bring customers to their place and not to and this is exactly the 'go local' factor I'm talking about. My belief is that although you can't see this factor on the slide people do care about their communities and understand the importance of living in a strong and thriving community.

At the same time, at a slow economy and with less money affordable to spend, it makes sense that it won't be the first or the second, or even the third factor in their decision making process.
Therefore you need to combine the two - monetary incentive + local benefit.

How you do it exactly? Well, there are many platforms that can be used, from establishing a local currency system, such as
Ithaca Hours, to collaborations with local business networks, such as one of BALLE's local networks.

I'm sure each bookstore can find the platform that can be the best fit for the local nature of its community. The important thing however is to find the right equilibrium between the two parts of the model to ensure it will have the highest possible beneficial value to local book lovers.

The last part on our series will be focused on authors and will be posted here next week.

Here are the articles we published so far in our series on the green future of the book industry:

You can find more resources on the future of bookstores on our website at

Raz @ Eco-Libris

Eco-Libris: Promoting sustainable reading!