Category Archives: Bookshops

Business opportunities: students and their ‘everyday life research’

In First Monday’s recent issue (Volume 4, 4 April 2011) researchers Alison Head and Michael Eisenberg from the University of Washington report on their research into college students’ everyday life information-seeking behaviour.

A few helpful findings for book industry players:

  • ‘books’ are often considered more authoritative than blogs or random info – one student went in search of methods for curing food, they ‘blew those (blogs) off’ and went to an online cookbook.
  • students are ‘more engaged’ with ‘everyday life research’ than conventional course work.
  • search engines are used most for making purchasing-related decisions and other high-risk decisions (like curing food properly so it doesn’t make you sick).

Most importantly, this research points to  business opportunities for publishers and campus book-sellers in:

  • identifying the everyday life research that students engage in.
  • developing online information services to meet these needs.
  • integrating these information services with course-related products and services they already access.

Online book-selling – a growth opportunity, price is NOT the only driver

Australian book-sellers have got it particularly tough at present – as Borders troubles partly reminds us – publishers are not willing or able to respond fast enough to the intense price competition from overseas, GST continues to put them at a disadvantage, and free freight offered by players like the Book Depository makes Australian postage rates for the average book-seller appear  almost extortionist.

Yes, it would be sweet if the current BISG investigation resulted in some of these issues being effectively dealt with. But book business people are generally good at simply accepting that their future is in their hands, and more than ever before it is time to explore more fully the opportunity for growth that online book-selling represents.

1. Customers especially know best – those book-sellers who do well regardless of the trends are usually independent and are exceptionally good at listening to their customers, and selling them more of what they want. Riverbend and Readings are two of several that come quickly to mind, both have vibrant and relevant online stores to complement their bricks&mortar base.

2. Specialization means advantage – one of the criticisms of Borders recently is that what they offered was not much different to Kmart’s book sections, but were a lot more expensive.   Many people love lounging in a Borders store, with a coffee or not, reading a favorite author. But that was not translating into sales, being a destination is good, but it must be grounded in a form of specialist interest(s) that prompt people to spend. Again, the Indies are good at this.

3. Current advantage gives leverage – many stores have the simple advantage of a good retail location, or a well-known brand. Established stores with these types of strengths may have more leverage online than they realize. Growing an email list, and an online customer base does add competitive advantage and value to the business over time, even if it is not the main source of revenue.

4. Online represents multiple propositions – events, partnerships, book-inspired ventures, multi-media products, can all form the myriad of products and services a bookshop might consider offering their customers, with their specialist interests in mind.

5. It must be slick – Amazon and The Book Depository have set the benchmark for ‘slickness’, you have to be confident you can come close to their standards of ease of online use, if you are serious about exploiting these opportunities online.

Price is a major driver, that is true, but when a bookshop gets these other types of drivers right, their customers are less inclined to seek out a few dollars in savings.

Bookshops servicing self-publishers = new revenue AND profit?

Oscar Art Books in Canada is the latest bookshop to install the Espresso Book Machine. In this August article we read many of the arguments that have been floated for many years. ‘Anybody could do it’, ‘higher profits’, ‘production speed’, easy changes via an ‘updated Word document’, to name a few. But are they opportunities for the book-seller, or for the self-publisher?

They say the machine cost $CAD120,000, and one author says he is charged between $CAD4 and $CAD5 per book for printing. Here are some cost estimates in CAD to see what might be left after the raw inputs. Cover stock (60cents), paper (250ppX.005 = $1.25), printer click charges (250ppX.008=$2) and labour (say, $1.50 per book), these total $5.35. If these page and cost estimates are inflated by 25% then the costs might come back to under $CAD4. Whichever way we look at it, there is not going to be much left to go towards the capital cost or to reward the risk takers by way of profit. The cost structure is made worse by the fact that an operation like this will be geared to short runs, and therefore, higher labour costs. The major printing firms who are staking out a position in the short-run book printing market are reducing the costs dramatically with new production-scale equipment and smart online job submission systems.

Conceptually, it makes a lot of sense for bookshops to be exploring this as an opportunity. There is certainly an opportunity to compete on service and especially in providing self-publishers with publishing service and support. However, then it becomes a fee-for-service activity that will always be difficult to build scale around. Many have tried and failed to make a really profitable business out of it.

Bookshops setting up self-publishing and printing services need to consider the risk of over-capitalizing in this area at the expense of investing in new ways of interacting with, and stimulating, their whole book-reading customer base with new and innovative online services.