Its Sell or High Water
A customer walks into Three Lives and Co., the West Village bookstore, and picks up a copy of The Portrait of a Lady. At the counter, the clerk hesitates, seeing the Signet logo. Signets is the 1881 version; Henry James made considerable revisions to this text, and his revised version, issued 27 years later, is the one published by Bantam. Thanks to the cashier, the shopper ends up with the Bantam edition. But the customer would never have known of these essential nuances from a digital sale with Amazon; the only guidance the site offers is its customer reviews. So how did one Chicago consumer comment on the Signet copy? "The cover for the Signet version is best. The appearance, with the muted watercolor image, is just so much more classy than all the others. It really carries across that 'literary' feel that I think the author of the book is attempting. It looks great on my bookshelf! I look forward to someday reading it."
The American Booksellers Association estimates that only about 6 percent of books purchased in the U.S. last year were sold via the Internet. Nevertheless, e-commerce is steadily chiseling away at the traditional sales base, and independents-already battered by superstores-are hurting. To combat the superstore invasion, the ABA-a trade organization
representing independents-started Book Sense, a branding and marketing campaign. And springing from this attempt to build customer awareness is BookSense.com, an e-commerce site that aims to give independents a greater presence on the Web. BookSense will function as something of a cooperative Amazon.com, allowing its members to create customized sites on the server (or link their own domains), and also providing what can otherwise be prohibitively expensive back-end support. When a customer orders a book from the main BookSense site, the sale will be directed to the closest independent bookstore, determined by zip code. Bookstores will pay BookSense an initial setup fee of $500, plus monthly charges of $200 and 4.5 percent of sales. Few bookstores have the resources to put up a Web site, and, as one owner remarks, "to join collectively like this is really a fabulous alternative." BookSense.com, which will begin uploading stores' content by the end of this month, hopes to have a public launch a couple of weeks before Thanksgiving, in time for the holiday season.
The ABA certainly knows how to pick a fight. On behalf of independent bookstores everywhere, it has at some point or another tried to force every major bookselling chain in the United States to its knees. In 1994, it sued several large publishers for rigging sneaky deals with superstores, and received $25 million in damages from Penguin. Last year, it sued Barnes & Noble, Borders, and their subsidiaries, alleging that the stores were using their clout to illegally get deals from publishers (the case is still pending). It insisted in July that Barnesandnoble.com stop using the line "If we don't have your book nobody does," and won. And now the ABA is striding or, depending on your point of view, tiptoeing into the ring to go up against the greatest challenge brick and mortar stores have ever faced: the Internet.
But while everyone agrees that independent stores can no longer ignore the Net, the ABA is getting a late start. Recent statistics by the Book Industry Study Group show that online sales aren't expanding the overall market for books, which is slowly moving out of a mid-'90s slump. The small and ferociously
competitive online book space is still dominated by Amazon.com, which analysts estimate holds anywhere between 70 and 80 percent of the market share.
Yet even Amazon has reduced its book business, adding sales of electronics, videos, e-cards, and toys. In fact, Amazon no longer reports its revenues by category, an ominous hint that book sales may have slowed. "Amazon is starting to look more like Wal-Mart online," observes one industry insider. Even Barnesandnoble.com, which has struggled to keep abreast of Amazon since day one, has arrayed its site with trimmings ranging from CDs to frequent-flyer miles and Starbucks coffee.
With such a grim outlook, how can BookSense.com expect to remain standing? One e-commerce analyst, Evie Black Dykema of Forrester Research, is blunt: "BookSense.com will be smashed like a bug on the windshield of Amazon just as Barnes & Noble has [been] so far." Still, BookSense.com director Len Vlahos thinks comparisons such as these are misguided. "We are such a different model from Amazon that necessarily we don't copy them," he says. "Marketing and everything else is based on grassroots. Amazon and Barnes & Noble are top-down."
But grassroots tends to mean word of mouth, and so far BookSense has concentrated on creating a recognizable name. While BookSense.com's mission is admirable, it may be throwing its energy in the wrong direction. Its marketing kits contend that BookSense.com stores will gain customers through national advertising, echoing Amazon founder Jeff Bezos's strategy that "brand names are super important online." You don't get more corporate than that. It doesn't help matters that BookSense.com stores are already required to have a "featured title" on their sites, some of which, the publicity breezily mentions, "will be supported by publisher money."
The BookSense logo will appear on the front page of each store's site. Although a branding campaign could be a good thing on the mass market, some view this tactic with ambivalence. Dick Harte founded his own version of BookSense.com, called Booksite, in 1994. Now 150 stores operate within his system. Booksite is a totally invisible entity that merely provides the back-end stuff for its stores (some of which are ABA members). And unlike BookSense.com's "home page," you can't buy books through Booksite, only through the specific store's sites. "BookSense is creating another Amazon and having independents as associates," Harte complains.
Some booksellers are signing on to BookSense not to increase profits, but to take a stand. "I think that we need to be, as independents, an alternative that's put in people's vision," says Jill Dunbar, the owner of Three Lives-a Village fixture since 1970.
Proof that people do respond to an alternative lies in Powells.com, the largest independent bookseller online. Based in Portland, Oregon, Powell's, which specializes in used books, is one of Amazon's biggest suppliers for out-of-print titles. Powell's got a serious jump on e-commerce, offering its technical books online as early as 1993. Kanth Gopalpur, Powell's online marketing manager, believes BookSense may suffer from its tardy arrival on the scene. "It all depends on how they position themselves. It would be a big
mistake to try and compete head-on with Amazon and Barnes & Noble." He continues, "What's really going to set independent bookstores apart is their personalities, and that these people really know books."
Knowledge of product and sincerity of mission could finally be what drives traffic on the Net to indie sites. Successful independents understand the value of intimate customer interaction better than anyone, and to translate that level of understanding online would be impossible for a large, impersonal chain. Says Dunbar, "There's this 1984 notion that five CEOs are going to determine what we see and hear. Well, I'm an old hippie, I don't like that world. I can't go that way."
E-commerce is still evolving, and mimicking current models comes nowhere close to harnessing its potential. Amazon's glib formula for success is that consumers want three things: selection, convenience, and price; for fickle customers, this is an airtight combination. As Dick Harte of Booksite quips, "I'm as loyal as an old hound dog, but I still pump my own gas to save 50 cents on the dollar." So how to convert the masses? "That's the 24 million-dollar question," replies Harte.
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