Posted on July 15, 2013 in Archive

How bookstores can make a profit from showrooming

15Jul

Do you ever browse bookstores to find a new title and then walk out the door empty handed, only to go home and purchase online instead?

If so, you are not alone.

I do it, and according to new research in the UK, so do almost two-thirds of shoppers.

A report by the Booksellers Association (BA) looked at the spending habits of 2,045 UK book buyers, and revealed that 63% of shoppers admitted to using bookstores as “showrooms”.

The survey showed that 76% of young people (16-24 year olds) and 51.7% of over 55s’ admitted to browsing a brick and mortar bookstore before buying online.

Interestingly, even though young people are more likely than older people to keep their credit cards in their wallets until they can get to a computer, they are more inclined to feel guilty about it.

This feeling of post-showrooming guilt is one that I am very familiar with and it stems from the fact that I genuinely love visiting bookstores – a sentiment that I think would be pretty common worldwide.

In the UK, 68% of consumers said they still prefer shopping in brick and mortar stores.

Despite a growing trend of showrooming, people still place a high value on bookstores because they are still the best place to discover new books.

Even if online shops solve the discovery problem, which they show no sign of doing any time soon, bookstores will always be preferable to online stores, simply because of the experience they offer.

Unfortunately online stores can’t replicate the comforting smell and crisp feel of a newly printed book and at the moment service they provide in terms of discovery can’t compete with the personalised service of physical bookstores.

Although Amazon has a recommendation system, it’s not quite as effective (or reliable) as a face-to-face conversation, full of friendly advice, with your local bookstore assistant.

For example, just because I once bought a digital version of one of my textbooks, and an emergency copy of Harry Potter and the Order of the Phoenix, my Amazon account can’t shake the impression I’m an HTML dummy with a fetish for wizards. No bookstore assistant would ever accuse me of such things.

So if we’re all on the same page when it comes to the true value of bookstores – that they’re the number one spot for finding new books – is there a way of preserving them that would simultaneously allow them to make a profit?

Image of brick and mortar bookstore - bookstores

What is the best way to combine the comfort of bookstores with the convenience of online shopping?

 

 

It would be a shame to have to pay entry to your favourite bookstore (and for a lot of people, probably a turn off) but surely there’s a way bookstores can capitalise on the showrooming craze.

We had a chat in the office about potential new business models for bookstores and hit upon a novel (had to do that pun!) idea. Bookstores should have an affiliate arrangement with Amazon, where the bookstore gets a cut of any book sale it helps Amazon obtain.

Essentially people would go to the bookstore, browse, have a chat to the sales assistant, get some advice, and then if they wanted to buy, the shop would put the transaction through Amazon and take a percentage.

This would mean the bookstore saves on inventory and storage costs and is no longer a direct competitor of Amazon, who currently dominates the book industry.

So far, even big book chains like Barnes & Noble haven’t been able to successfully rival Amazon’s dominance, which suggests that the alternative option of collaboration might be the way to go.

Perhaps they would have more luck if they worked with Amazon, rather than against them.

And what would Amazon get out of the union?

At the moment, they have an affiliate system in place where people can sign up to advertise and sell their products through the Amazon Associates site, but they don’t have an allied service with independent bookstores.

A partnership with independent bookstores would provide Amazon with an additional means of making money and allow them to access otherwise difficult to reach customers. Plus, Amazon would be helping to keep bookshops in business, which could only be good PR for them.

We think it’s a win-win situation but bookstore owners would probably take some more persuading.

They see Amazon as one of the leading causes of the demise in offline print book sales and resent the control they have over the digital book market.

A lot of independent bookstore owners wouldn’t like Amazon extending their reach of power to include their businesses; they would feel like they’re admitting defeat and conceding to the very corporation that is slowly ruining them.

But if they want to stay in the industry, they need to understand the choice is adapt or die and an affiliate system with Amazon is an innovative and profitable adaptation that has the potential to save brick and mortar bookstores.

What do you think? Let us know on Twitter