Considering that many of them have had recent sales declines of 10% and more, the hundreds of booksellers at the fourth annual Winter Institute, held this past weekend in Salt Lake City, Utah, were remarkably cheerful and energetic. As always at these events, participants enjoyed being together in a focused environment and talking shop for several days straight. The mood may also have stemmed from a streak of good-natured fatalism that has long existed among many independent booksellers. After all, in the last two decades, they've dealt with a range of bricks-and-mortar competition, the rise of online bookselling, uncertainty about new digital forms, a supposed decline in reading, storms, hurricanes, floods, earthquakes--and other recessions. So what's new? And unlike some other retailers, booksellers tend to be especially creative, intelligent people who rise to challenges like this and share camaraderie in good times and bad.
Booksellers spent much of this conference in sessions and informally trading hundreds of tips and ideas that ranged from the simple--one store that cut hours put up a sign saying "now open at 10," which many customers took as indicating that the store was expanding its opening times--to the sophisticated--follow financial data carefully to keep key costs within certain percentages of revenue. They also took heart hearing about stores that had done such things as cut inventory significantly while increasing sales and about booksellers who are using all kinds of inexpensive, effective ways of marketing and promoting themselves and books--often on the Internet. (Some attendees were commenting on sessions on Twitter, allowing people who were clued in to keep up in real time on what was happening elsewhere at the Winter Institute.)
One of the best-attended sessions of the conference was the longest, consisting of two parts lasting much of one day. At Surviving Tough Times, ABA staffers, several veteran booksellers and many people in the audience shared ideas about how to respond to the economic realities.
Among the major bits of advice:
Booksellers were counseled to renegotiate leases. ABA CEO Avin Domnitz said that he had worked recently with a half dozen booksellers who received reductions in rent. He recommended booksellers approach landlords with a business plan or budget as they would prepare to talk with an investor or bank. To those who think a reduced rent is impossible, he added, "I suggest that any landlord who has not gotten a notice of a renegotiation interest [from a commercial tenant] is sitting there thinking I can't believe they're not asking about this."
Booksellers were urged to make necessary changes in payroll, a major expense and one over which they have more leeway than in other areas. Steve Bercu of BookPeople, Austin, Tex., said he took a simple approach to the payroll issue, which several people noted can be particularly sensitive. As sales have weakened, he said, he's taken action. "I don't worry about blips and graphs. I'm not worried if sales are down 4% or 11% or 9%. I figure it's happening and I have to cut costs, and labor costs are the main thing I have control over." Bercu said that he had "contracted [staff levels] in a way that makes sense. I haven't fired a single person. Through attrition I've just gone back to the way it was before all was swell. People did a job, then had someone helping them. Now they don't have those helpers." As a result, BookPeople has cut the equivalent of two and a half full-time employees.
He added that in the beginning, at some stores, "three people did everything. Now [after years of growth] there are 25 people. There must be a way to have fewer people working," even though that means some things must be jettisoned. "You can't do the same with 14 as 26 people."
Inventory is another major area of cost that booksellers can manage to conserve cash.
Bercu surprised many in the audience when he said that BookPeople had reduced its inventory 55% during the past nine years and that during that time, other than 2008, sales increased annually, usually in a range of 5%-8%. Above the Treeline is "the tool that allowed us to do that." Concerning his buying philosophy, he said, "I don't care about having really great books on the shelf. I care about having stuff on the shelf that people want to buy.
"It's a little bit painful for some who want to have everything in great quantities," he continued. But he now is able to do many faceouts, including all shelves at "eye level" throughout the store. (Those prime spots are also all staff picks.) "You may think you can't do without a lot of the stuff in your store," he added, "but you can do without it and have better sales."
Bercu added that BookPeople's turn rate is between six and seven "and moving up." As a result, return on investment has improved. "We're generating cash flow," he said. "We have a lot of money in a cash account. We pay our bills in 30 days or less. Everything works better."
Domnitz, who repeatedly emphasized the importance of generating and finding cash in this economy--"cash is king in this world because there is no credit. Banks don't even trust other banks"--advised booksellers to "reduce inventory to a place where it doesn't affect sales. You must be very aggressive in finding that sweet spot."
A woman from Gallery Bookshop, Mendocino, Calif., noted that after a fire damaged most of its books, it had 35% of its standard inventory but maintained sales levels. Many customers liked the change, and surprisingly "some thought we had a better selection," she said. The store has since built up its inventory but is nowhere near its old level--and doesn't plan to reach that point. "We have lowered our sweet spot."
Carole Horne, general manager of Harvard Book Store, Cambridge, Mass., said that besides "upping our game and trying to focus on things we've always done," returns have been "a major part" of the store's reaction to the economy. Harvard Book Store returned "a ton" of titles between Christmas and New Year's so that when it paid its invoices at the end of December, it had a lot to deduct against them, a kind of timing that it had not done so efficiently in the past.
As a result of the significant returns, Harvard Book Store had to deal with "what to do with the extra space," Horne continued. In some cases, the store has simply taken out fixtures. In others, it has increased faceouts. When it cut its philosophy section--a category of great importance considering the store's location near Harvard--it turned one part of the area into an "academic new arrivals section" where all titles are displayed faceout, a move "that's worked pretty well," Horne said.
Other cost savings can be green and include everything from using compact fluorescent light bulbs and turning off computers at night to turning down heat and negotiating with utility companies for lower rates.
Whatever they do, booksellers should take steps to respond to the economic downturn, Domnitz said, adding, "As things get worse, there are greater and greater consequences to doing nothing."
Horne said called it "seductive" to blame sales drops on "the weather or something else." Better to address issues immediately in these times, she went on, saying that "it's easier to add something again after cutting it than not cutting it when it should be cut."
And Alison Reid, co-owner of DIESEL: A Bookstore, which has three stores in California, advised booksellers to "go and check other establishments to see if things slow there, too."
Horne said that it is important to have staff involved in decision making. At her store, which has a union, some union members and managers meet every other week to talk about ways to improve the store. "The union wanted to do this because they said we're all in this together," she stated.
Likewise Reid noted that "if staff is involved in the conversation, they sometimes come up with alternatives and will suggest dropping shifts and hours."
Domnitz also advised that when business improves, booksellers should keep practicing what they have learned and put into effect during tough times. "You need to hold on to those lessons," he said.--John Mutter
[More reporting from the Winter Institute will appear this week and next.]
