As publishers worry about the shrinking number of physical bookstores, Levy Home Entertainment is making the case that mass merchants will be a viable alternative not only to showcase books but to sell them as well. In a presentation at the Book Industry Study Group's May 5 "Making Information Pay" conference as well as at its own meetings with publishers, Levy argues that by 2015 mass merchants' share of a shrinking print retail book pie will slightly increase from 2010 while the share of units sold through bookstores loses half its market share to online bookstores.
Levy's projections are based in part on its experience in the music industry. As CD sales gave way to digital sales and music stores closed, mass merchants' share of physical album sales rose between 2002 and 2006 before settling back to a 33% market share last year (its share was 34% in 2002). As music stores closed, mass merchants continued to have a large retail footprint, get lots of customer traffic, and maintain their large displays of albums, explained Tara Catogge, senior v-p of inbound supply chain at LHE. "They get a lot of impulse buyers," added the distributor's Kyle Marx. There is no reason to believe that if publishers continue to support titles at mass merchants, they won't continue to carry books, said LHE president Carol Koster. "Mass merchants have given no indication they are thinking of reducing space devoted to books," Koster said. "Customers want books in the stores, there is no risk to the retailer, and while sales per square foot may go down slightly, books are still among the most profitable items," Catogge explained about why mass merchants continue to stock books.
Keys to be successful at mass merchants remain the same: being on a "race track" aisle, large endcap displays, good signage, and advertising support, Catogge said. Mass merchants do best with bestsellers, but do carry all formats. Recent trends have shown an increase in space for children's titles and less room for hardcover bestsellers.
St. Martin's executive v-p and publisher, Matthew Shear, is a firm believer in mass merchants' ability to sell a large number of books. The most recent P.C. Cast and Kristin Cast title, Awakened, sold more copies through Wal-Mart than any other outlet, Shear noted. "As space at other stores decreases, mass merchants' ability to showcase books becomes a more important factor," he said, noting that SMP's business with mass merchants continues to grow. "They've expanded their selection," he said, "and they've proven they can sell books."