Bookstores taking page from larger competitors

Independent owners try to compete using e-commerce program

May 30, 1999|By Shanon D. Murray and Kristine Henry | Shanon D. Murray and Kristine Henry,SUN STAFF

As the owner of a bookstore the size of a small living room, Elizabeth Garrett said she did not have the time -- or the cash -- to launch an e-commerce site to help her St. Bede's Books store stay afloat in the treacherously competitive bookselling marketplace.

As a life raft for thousands of private bookstore owners like Garrett, the American Booksellers Association has created a national marketing campaign called Book Sense that will feature an e-commerce site.

The idea behind the Book Sense program -- unveiled this month at a book convention in Los Angeles -- is to build a national identity for the independent booksellers that are members of the New York-based trade group.

In 1991, before Barnes & Noble Inc. -- the nation's biggest bookseller -- and Borders Group Inc. began to expand, and before Internet bookseller Amazon.com existed, ABA had 5,200 members. The success of those mega-booksellers has forced hundreds of independent stores out of business, ABA said. Today the group has 3,300 members.

More than 950 independent bookstores -- about 40 percent of ABA members that have storefronts -- have signed up for the program, the trade group said.

The Book Sense program will feature four parts:

* A national advertising campaign in magazines, newspapers and on public television promoting the program.

* A logo-branding component that requires participating bookstores to display Book Sense posters and distribute Book Sense bookmarks and bags.

* A national gift certificate program in which a consumer can buy a gift certificate from a local Book Sense participant, send it anywhere in the country and the recipient can use it at another Book Sense store in the area.

* A $4 million e-commerce site at BookSense.com. to be launched in September.

1.6 million titles

The online bookstore is the crown jewel of the marketing program, ABA said. The site will feature 1.6 million titles to start, and then include the entire inventory of each member bookstore.

The Book Sense campaign has become imperative for private bookstores as they struggle to remain solvent despite the cheaper prices offered by superstores and online bookstores, experts said.

The increased competition is painful in light of the decline in overall book sales. The number of adult books sold in the United States dropped from 1.07 billion in 1997 to 1.04 billion last year.

"The pie is getting to be so small it's absurd," said Steven Baum, president of Greetings & Readings in Towson, one of seven Baltimore bookstores that have joined the ABA program. "The Internet is worse than the superstores -- they're selling at a loss and that makes it very difficult to compete."

Amazon.com announced May 17 that it would increase the discount on New York Times best-sellers from 40 percent to 50 percent. Barnesandnoble.com and Borders.com followed suit. Amazon.com hasn't made a profit -- it posted a $61.7 million loss in the first quarter -- yet its shares closed at $118.75 Friday.

"They do not need to make money, it is so ridiculous," Baum said. "Independent retailers need to make a profit to stay in business."

He said Greetings & Readings has survived because it offers a large selection of gifts and cards with its book section.

"Bookselling is an exciting place to be, but I have no sense what the future holds," said Garrett, explaining why she signed up her religious bookstore in North Baltimore for Book Sense.

St. Bede's, which opened in 1992, has gross annual revenue of less than $200,000 and no workers besides Garrett.

Being a niche bookstore has saved it from being crushed by the nearby Barnes & Noble-operated bookstore at the Johns Hopkins University, the Barnes & Noble and Borders superstores in Towson, and Internet sales, she said.

In addition to St. Bede's and Greetings & Readings, the other local bookstores participating in Book Sense are Bibelot, which operates large general bookstores; Jacob's Ladder, a Jewish bookstore; Lambda Rising, a gay and lesbian bookstore; Sibanya Inc., an African-American bookstore; and the University of Maryland, Baltimore County campus bookstore.

`Marketing dollars'

Michael Hoynes, ABA's marketing officer, said the new campaign is designed to raise the independent stores' visibility.

"This campaign is based on the basic marketing principle of `out of sight, out of mind,' " said Michael Hoynes, ABA's marketing officer.

"When a store is bombarded by its competition, and it doesn't have the marketing dollars to fight back, customers will forget about the store," he said.

Hoynes noted that although independent stores' sales have declined over the past five years, the decline between 1997 and last year was the smallest since 1993.

"It might be a leveling-out period. We don't know at this point in time," he said.

He said it's hard to say how much business has been siphoned from e-commerce booksellers.

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