Continuing with our SWOT analysis of physical bookstores, we now move onto Opportunities and Threats. Unlike Strengths and Weakness, which are largely internal to an organization, Opportunities and Threats are external, part of the environment in which the organization operates.
Opportunities arise where our internal strengths are best aligned with the external environment, whether it’s in relation to competitors, general consumer awareness, changes in technology, and so forth. But there are also Opportunities in Weaknesses if one can find a way to turn that Weakness around. The ones I’ll focus on are counter parts to ones I listed in Part One of this post. [link]
At the risk of seeming like I know their business better than they do (I don’t), here are some thoughts on opportunities that might be available to bookstores.
Anyone browsing in a bookseller’s shop is already pretty devoted to physical books and bookstores. Direct marketing can help cement that devotion by giving bookstores a way to have an on-going relationship with their customers. When a customer is willing to special order a title for delivery to their home or for pick up in the store, the communication is handled by eMail. Once his or her eMail address is acquired the customer can be asked to opt-in to the bookstore’s newsletter, or to receive special offer notifications, etc. Why not use the physical inventory as a way of doing this? One example might be to have signage in the section that lets customers know that if they’re not finding what they’re looking for they can order it at a significant discount, as a first time offer. The bookstore may lose a little on the transaction but they’ve accomplished two things: they’ve gotten an eMail address and they’ve reinforced the understanding that this service is available—that what is on the shelf is just part of the inventory bookstores have available. The general notion here is using physical inventory (which is busy tying up cash) to generate sales of virtual inventory and gain closer ties to your customers.
Could bookstores find ways of amplifying the fact that their staff knows books so well and is able and more than willing to recommend a book? In-store signage is one way, but social media is another. What if a bookstore’s Facebook fans and Twitter followers could, for example, get a recommendation by posting about two books they recently read and loved?
Bookstores already do a great job of using loyalty programs to reward their customers but I don’t always sense there’s as much creativity around the dynamic of customer identity. T-shirts, bumper stickers, buttons, all make great giveaways when particular thresholds of sales are reached on loyalty cards. But social media is also a rich area of identity building. Check-ins on Yelp, for example, could be incentivized. Friend & family discount codes, reserved seats at author events, etc., are other ways of helping your customers reinforce their loyalty and identify themselves as a fan of your bookstore.
Here’s one that was identified as a threat but it’s also an opportunity, though it requires a change of perspective. One of the heated topics these days is that bookstores are being used as showcases for sales that customers make via Amazon or elsewhere online. While I can somewhat understand the desire to discourage this when it comes to print sales [[reference video from Harvard Bookstore]], I find it perplexing that bookstores are so conflicted about eBook sales. On the one hand they want an eBook fulfillment solution, on the other they are very concerned about giving up print sales for eBook sales (onwhich they make much less). While it’s true that surveys [[ref Verso]] show avid readers tend to read both print and eBook format, it doesn’t follow that if bookstores don’t actively sell eBooks they’ll preserve print sales. Nobody who is considering buying a book in print (who is also a reader of eBooks) doesn’t already know that they can get that book in eBook format. The only logic I can see for not encouraging eBook sales is if bookstores think their clientele is resisting buying in the eBook format as a way of supporting the bookstore. That seems like a slim and attenuated possibility. In any case, it might be offset by the opportunity.
What if, instead of fighting it, bookstores embraced the fact that they are a showcase for eBook customers and found a way to benefit directly any time someone browsed and bought an eBook while in their store. It’s very doable if the will is there.
Indie bookstores clearly benefited from Borders collapse and B&N may go the same route. The DOJ ruling regarding eBook pricing, if upheld, will likely not be good news for the Nook as it would fling open the doors to an all out price war for market share.
Threat here is just another word for risk. They’re external and uncontrollable: increased competition, downward pressure on pricing, changes in technology, things of that nature.
Unlike most retail businesses, bookstores have benefited from having suppliers (authors and publishers) who have been strong allies. With authors—both traditionally published and self-published—increasingly seeing their revenues coming from online retailers, one has to wonder if, especially a younger generation of authors, will for example see Richard Russo’s support for Indies and dislike of Amazon as less laudable than laughable. As for publishers, their willingness to buoy up bookstores has been sporadic and slow in coming (at least by bookseller accounts I’ve heard); how much less sanguine will they be as financial pressure builds and the indie bookstores piece of the pie gets smaller and smaller.
One bookstore owner I know, despairing over the likely DOJ ruling against the agency publishers, told me that he worries that pricing for eBooks will be a race to the bottom with perceived value of print books the collateral damage. This strikes me as a very real threat. At what point does the customer who preferred to shop at his local bookstore start to feel like that $17 paperback novel would have been better purchased at a deep discount online or in eBook format for $6 or $7 dollars?
Perhaps the most obvious threat, and most toxic, is, naturally, around eBooks. What if, for whatever reason, bookstores just don’t figure out a way to benefit from eBook sales, through choice or lack of good options, and that format gains more and more market share?
Okay, once again, please pitch in your own comments, corrections, and disagreements, whatever.