I really enjoyed meeting Kristin McLean at BEA and invited her to post this essay on our blog:
A New Way Forward
Is it just me, or did anyone else notice the new glasnost at BEA? Gone is the Henny Penny panic we were all feeling in January, and in its place there is a palpable sense of problem solving and openness to change. What the change is, no one completely knows, but it seems that everyone is on board with the fact that it’s no longer business as usual.
It’s quite refreshing, actually. Very few industries have the opportunity to revisit the business model in the way publishing is. There’s nothing like a hole in the boat to get the serious creative juices flowing.
John Foster Dulles, Secretary of State under Eisenhower, once said “The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.”
Ironically, this new era of creative problem solving might allow us to tackle one of the biggest problems we’ve had for many years—our distribution system. Quite literally, it is the most inefficient system in all of retail, and it’s costing us billions in labor, fuel, materials, and environmental karma. No wonder our margins are so low at every level of the industry. We’re subsidizing this system with duplicated effort, overprinting and un-saleable stock, wild swings in inventory, and lost opportunity because billing pressures force returns before books have had a chance to gain traction.
I came to the book business from the toy business about a decade ago after spending many years managing an indie toy chain. In each of our three stores, we had a full children’s book section—a store within the store. We carried a comparable amount of stock per square foot to a bookstore, and averaged a respectable 3-5 turns per year on each SKU.
The section was twice as profitable as the average bookstore.
Why? Because the buyer chose about half as many new titles, and went twice as deep on the ones she knew staff and customers would love. Key backlist was always in stock in two copies, and every effort was made to stock best-sellers and staff favorites. It was highly edited, full of personality, and well respected. Proof that you don’t need to have everything, just the right things.
And the stock was bought direct from the publishers, non-returnable.
If it didn’t sell, it was just marked down and moved out. I must say, returnability seemed like a pretty screwy way to do things then, and I haven’t changed my mind much since.
I understand why our model developed as it did. I understand why, when general interest bookstores were the only outlet, returnability made sense. However, the general bookstore model is under heavy pressure, and I believe one of the most viable ways forward is to develop a retail model that emphasizes a strong curatorial eye, narrower choices, and a deeper commitment to our stores as unique places carrying a selection that isn’t duplicated anywhere else. You don’t need to have everything, just the right things. The Special Markets departments at many publishers already know this. Niche is the new black.
Moving to a non-returnable model will demand changes throughout the chain: Publishers will need to start publishing less frontlist and do more to nurture backlist; Authors will need to give up large advances in lieu of a higher cut of sales; and Stores will need to trim some space, wean themselves off the psychological comfort of returns, and commit to a different way of operating.
Am I saying that all stores should start buying everything non-returnable tomorrow? Perhaps not, but I bet a percentage of buying from particular publishers could be shifted to non-returnable for a nice bump in the bottom line right away. I applaud forward-thinking publishers like Harper Studio who are trying to shift the paradigm.
Do I think going non-returnable is going far enough? Frankly, when I look further down the road, non-returnability is neutral compared to other innovations like a pure consignment model—you pay when you sell the book, the potential of local print-on-demand, focusing on selling the consumer a shopping experience as opposed to an object, and as yet unforeseen technological and consumer innovations.
All I know for sure is that we can’t evolve to our next model before we figure this out. Books aren’t going away, but they way we handle them needs to. I am hopeful that we can use a little of our bountiful creativity to re-imagine and reinvigorate our way of doing business. If BEA is any indication, we seem to be heading that way.
Kristen McLean is the executive director of The Association of Booksellers for Children (ABC), a national non-profit trade association for the children’s book industry.