With some in the industry still questioning the idea behind, and particulars of, category management, Borders CEO Greg Josefowicz explained the controversial program and offered other suggestions to help the industry grow when he spoke at the AAP annual meeting two weeks ago.
In a rousing, if general, speech, the Borders CEO offered more questions than answers. He did, however, make a bold suggestion about a return to the days of no returns.
Returns, he said, "arose during the Great Depression, when publishers needed a way to reduce the risk of buying books, so they gave retailers the opportunity to return unsold orders for a full refund. Today, nearly seven decades later, we're still playing by the same rules. While this certainly offers obvious benefits to companies like Borders, I wonder if it is the best way to run the book business in 2003 and beyond."
While some publishers have discussed selling nonreturnable, it was notable that the suggestion came from a bookseller (though of course, some other booksellers have raised the possibility in the last few years, hoping to trade returnability for higher discounts).
Josefowicz also was pointed in his comments about what he thought were lazy explanations for slow growth that shift the onus off the industry. "While it's easiest to blame the economy for all our problems," he said, "I think it's a hollow excuse. After all, this slide has been going on for 10 years, including one of the strongest economic periods of our history." He did add that he is an admirer of "the art of the long view," and said, "when I look at the bigger picture, I think the problems we face are cyclical and not structural."
Josefowicz said publishers and retailers should be looking at ways to increase efficiency. He described category management as one such idea.
"Category management isn't a strong-arm tactic to reduce selection or exclude small presses. Nor is it surrender to the whims of mass market appeal." Instead, it is "a successful concept within many retail sectors for many years. The process relies on input gained from historical data performance, relative performance in the total market and input gained from intense consumer research."
Josefowicz added that last year saw "completed implementation" of the program in six categories, leading to a growth in "average transactions" as well as "demand within individual categories."
Josefowicz seemed most troubled by inefficiency and a lack of cooperation: "Do we have to change? No, we don't. But without greater partnering, we're going to leave opportunities on the table."