Despite the contentious presidential election, sales at indie bookstores are expected to be up slightly last year, edging out what had been for many a record year in 2015. If sales hold steady in 2017, that would be good news for many booksellers. In his holiday letter late last month, American Booksellers Association CEO Oren Teicher predicted that most indie stores would end 2016 on “a positive note,” with sales up nearly 5% overall compared to 2015.
That still left a number of stores with flat sales in 2016. “The election did suck out all the air,” said Michael Tucker, president of Books Inc., a bookseller with 11 stores, headquartered in San Francisco. “October was strong, November so-so. We’re looking to finish the year without any growth. We had a bump with Harry Potter and Bruce Springsteen. Sidelines for us are doing very well. It’s trade paperback and hardcover that aren’t seeing growth. Even remainders are up.”
Tucker is not anticipating a big change in 2017. He misses the sales boost his stores once got from media outlets, such as the Daily Show with Jon Stewart, that promoted books and authors. “You can’t live off of NPR,” he noted. “We’re budgeting for flat again. I budget very conservatively.”
Although BookPeople in Austin, Tex., beat its 2014 figures, sales in 2016 weren’t strong enough to continue the store’s streak of six consecutive best-ever years. “It’s not like we cratered,” said CEO Steve Bercu, who noted that BookPeople had several best-ever months, including October. Unfortunately, that strong October was followed by a 17% drop in November; June was also weak.
Bercu is already working on a plan to turn 2017 into a record-setting year. He recently added a 4,000-sq.-ft. warehouse so that the store can stage book fairs and expand its school business. “I have to get back on track,” Bercu said. He also anticipates a boost simply from more people going out now that the election is over.
At Carmichael’s Bookstore, with two general stores and a kids’ store in Louisville, events and marketing manager Kate Weiss is concerned about the ramifications of the presidential election, particularly when it comes to protections for freedom of speech for authors, publishers, and readers. In terms of sales in 2017, the biggest challenge for her will likely come from Amazon and other online discounters. “We will dig in our heels and excel at the things that online retailers can’t do,” she said, pointing to customer service and a curated selection. “We see the need to be ever-more agile, streamlined, and willing to support and give back to the community that has supported us for almost 40 years.”
Amazon has also been a negative factor for Hudson Group, North America’s largest travel retailer. It operates Hudson Booksellers and frequently partners with indies at airports—for example, it runs two Book Soup bookstores at LAX, which are among Hudson’s top-performing locations. “Amazon and other giants continue to drive customers to believe that media content of all types should be free or cheap regardless of its quality,” said Sara Hinckley, v-p, book purchasing and promotions at Hudson. She’s also concerned about digital audio, a category almost exclusively owned by Amazon. Still, Hinckley said, “I am feeling pretty positive [about 2017].” She added, “Airport traffic is good, and travelers are buying books.”
Northshire Books, which saw “modest” growth at its 40-year-old flagship location in Manchester Center, Vt., and flat sales at its newer store in Saratoga Springs, N.Y., in the year, is planning to “double down on magic in 2017,” according to co-owner Chris Morrow. “My goal is to have most of the people who come into our stores leave with the feeling that being there was not an ordinary experience, that it was memorable and nurturing.”
Morrow has begun to work on enhancing the customer experience in both stores and will change both floor plans in 2017. Much of his focus has been, and will continue to be, on physical elements. In Vermont, he took out an office to build a loft where kids can curl up and read. “It is very cool,” Morrow said, “and it is now a beloved feature of the kids’ section. It builds memories for the kids. There are a few elements like these [in the stores already], but there need to be more.”
“The future of bookselling looks good now,” said Roxanne Coady, owner of RJ Julia Booksellers in Madison, Conn., who defined “now” as the next three years—and possibly forever. “Obviously, a [physical] bookstore is still something that people want,” she said. Coady signed an agreement in mid-December with Wesleyan University to open a 7,000-sq.-ft. bookstore in downtown Middleton, Conn., in May, and RJ Julia handles the buying, website, and events for BookHampton in East Hampton, N.Y.
As the late ABA CEO Avin Domnitz used to say in “The 2% Solution,” his popular seminar on bookstore profitability, the problem is in the payroll. And that was before minimum-wage laws in some communities, particularly the Bay Area, began jumping workers to $15 per hour with little or no progression. Stores such as Books Inc. anticipated the increase and have been proactive in raising salaries over the past year. “Still, it’s a challenge,” said Tucker. “It means everybody’s getting paid the same, part-time and full-time [employees alike]. Ultimately we know we’ll be shrinking staff by attrition.”
The minimum-wage increase also means that Books Inc.’s system of bringing up management through the ranks (two-thirds of Books Inc.’s management staff were promoted that way) could end. Tucker said that if he has to pay $15 per hour, he would rather hire someone with more experience, whereas at a lower hourly wage, he could hire someone with less experience who could then grow into the job.
Housing has also proved to be an intractable problem for retailers in fast-growing urban areas such as San Francisco, where a one-bedroom apartment rents for $2,500 a month. “Austin is like a mini New York,” said BookPeople’s Bercu. “No people can afford to live there. [They] have to live farther and farther from the city. We’ve got to have something happen.” He regards housing as the biggest issue facing booksellers, and one that the entire city government of Austin has to help resolve.
A smaller issue, but a real one nonetheless, said Carmichael’s Weiss, is when publishers work directly with organizations in a community rather than routing those sales through the community’s local bookstore. “We want to work with publishers, not be in competition with them,” Weiss said. “As publishers continue to do more direct-to-consumer business and offer bigger discounts than we can offer—or sometimes even receive—we can’t help but see them as competition instead of partners.”
Bercu has an additional request of publishers: “We need publishers to get us the information on [forthcoming books] in a timely fashion, so that no online retailer gets the news first.” BookPeople relies on preorders to fuel online sales and has to have the same books at the same time as Amazon. Together with signed books and gift cards, preorders generate most of BookPeople’s online orders. In 2013, online sales for BookPeople doubled and have since grown to become “a significant” source of income, Bercu said. Last year, BookPeople’s online sales declined slightly, which Bercu attributed to a drop in preorders.
For many stores, online is still a very small part of their overall business, but booksellers would like to see it grow. At Northshire, Morrow acknowledged that online sales could be larger, but said that the store doesn’t market its website as well as it should. One online program that is working for Northshire is Northshire Selects, its book-a-month gift-giving program.
Books Inc.’s online sales mainly come from people who order a book and pick it up in-store. To ensure that customers get the latest information on which books are available, the bookstore updates its online inventory twice daily. It also offers free shipping on orders over $50 and has begun shipping via USPS instead of UPS to save customers money.
“I still feel that none of us have quite figured out what experience online people want from an independent,” said RJ Julia’s Coady, who delayed the launch of the bookstore’s new website until 2017. “I don’t think our industry has figured out how to use technology. A joke I make is that our idea of data analytics is running a bookstore. What people really want is a [personal] connection online. We’ve figured it out in the store, but not online.”