The Challenge of Selling Children's Books Today
Judith Rosen -- 7/20/98
Booksellers battle new sources of competition and the complexities of publishing conglomerates
For a children's bookstore to be succesful today, it must take into account the chains -- whether bookstores or nontraditional book outlets. Over the past five years Barnes &Noble, Borders, Zany Brainy, Target, T.J. Maxx and Walmart, along with Internet bookseller Amazon.com, have become mighty forces to be reckoned with when it comes to selling books.
As a result of increased competition, many children's independent booksellers have been forced to diversify to survive. Few have turned their stores into a veritable menagerie a'la Wild Rumpus (Minneapolis), which used animals ranging from water rats to chickens right from the very start to set itself apart from other bookstores. But most stores have added sidelines, from clothing and jewelry like the Children's Hour (Salt Lake City) to used books like Edward T. Rabbit &Co. (Richmond, Va.).
With the bookselling shakeout just about complete and the economy booming, a number of children's bookstores and general bookstores with strong children's sections are starting to make a comeback. Across the country, booksellers are reporting that sales are up, for some significantly so. At Vroman's Bookstore (Pasadena, Calif.), for example, v-p and general manager Karen Watkins enthused, "We had our best year [ending April '98] in the 104-year history of our company. Our children's business is growing by leaps and bounds."
Other booksellers, like Sharon Hearn, owner of Children's Book World (Los Angeles), reported sales that were only slightly up."Growth is starting to happen," she said, "but it's a lot slower because of the chains. And that's the way it's going to be."
But even with improved sales, other problems haven't disappeared. Given today's changed children's bookselling scene, what are the hot issues? What impact has online bookselling had on children's bookstores? How has telemarketing by publishers affected retailers? And what difference has the consolidation of publishers made for children's booksellers?
Fighting Off the Competition
When it comes to pinpointing rivals, perhaps Sidney Jackson, frontlist children's buyer at the Tattered Cover in Denver, summed it up best, saying, "All the different sources for books have affected sales. We just keep having to do what we do best and be more flexible." But where she sees flexibility in increased author events and changes in stock, others see hindrances. "How many handstands do you have to do to get customers into your store?" queried Sally Jordan, owner of Jeremy's Books and Toys (Houston). "The more places there are for people to buy, the more places people will buy."
Yet despite the proliferation of various types of retailers, Jordan still sees a large part of her competition coming from book clubs. "So much of the business g s to Troll and Scholastic," she said. "They have become such an integral part of the business, we don't even recognize that." The schools, where Troll and Scholastic -- and increasingly Borders and Barnes &Noble -- do a large percentage of their business, continue to be an important source of revenue for booksellers. Children's Book World's Hearn now finds that despite the smaller teacher discounts that she can afford to offer (10% versus the chains' 20%), many schools that stopped buying from her a couple of years ago are starting to come back. "We've gained a lot of the p.o.s from schools we had lost," she said. "People are returning for the selection and service."
For Ellen Mager, owner of Booktenders Children's Bookstore (Doylestown, Pa.), who feels the pinch from Zany Brainy outlets and children's clothing stores, sales to schools make a huge difference in her bottom line. "Last week the walk-in was terrible," she remarked. "Business with the schools helps to keep us on track." In addition, Mager is trying to order smarter to stay ahead of the competition. She orders fewer titles that she thinks will be heavily promoted in the chains. "As I order," she explained, "I ask, which are the loss leaders -- the books that Zany Brainy and Borders are going to discount at 30 percent. I'm taking smaller amounts of those than I would have."
At San Marino Toy and Book Shoppe (San Marino, Calif.), Betty Takeuchi competes by ordering more frequently. She places orders with distributors for next-day delivery as often as twice a day. "Our customers want their books and they want them now," she noted.
Monica Holmes, co-owner of Hicklebee's (San Jose, Calif.), is constantly refining her product mix. "Nonbook outlets have definitely affected our sales," she said. "If I start seeing things that I've been carrying for a long time in grocery stores and Target, I don't know if I'll carry them anymore. I'd rather have something unique." However, she hasn't let price clubs affect her buying. "A lot of times we know something's going to be in the price clubs," she said, "but we know it's just an impulse. Like Putnam sells all its Eric Carle books there. But if you really want The Very Hungry Caterpillar, you can't count on it being there."
Carol Chittenden, owner of Eight Cousins Children's Books (Falmouth, Mass.), avoids carrying what Mager termed "chain pleasers." Chittenden d sn't stock Rugrats books, for example. "I don't want to let the competition define me." Others, like Karen Gaston, owner of Butterfly Books (DePere, Wis.), take the opposite approach. She carries Rugrats alongside Winnie-the-Pooh. "We don't want any customer on the way to becoming a reader to think that they have to get books at the gas station," she said.
Selling in Cyberspace
For most children's booksellers, online ordering via Amazon.com or other large online providers is not an issue. As J Naud, children's book buyer for Hastings Books, Music &Video (Amarillo, Tex.) pointed out, "I can't see it -- they don't do storytimes. I don't think you could buy children's books over the Web unless it was a no-brainer like a new Dr. Seuss."
Morgan's experience at Wild Rumpus is typical of most independents. Her customers walk in with printed lists they've downloaded from Amazon. "The online thing is actually helping us because people are doing their research for us," said Morgan, adding, "They don't want to pay for shipping."
Some children's booksellers, however, feel compelled to be online, even though, as Liz Smith, co-owner of Book Vine for Children (McHenry, Ill.), a mail-order company, noted, "If they can find me on the Web, they're going to go to Amazon. I have it more on there as an advertising medium than a selling medium." So far, sales online have not been great. Originally, Book Vine had a site with no ordering capabilities. Since it added ordering three months ago, the company has only taken one order online.
Still, for Roberta Rubin, owner of the Book Stall at Chestnut Court (Winnetka, Ill.), a general bookstore with a strong children's section, "the Internet is the biggest issue facing booksellers. Our customers tell me all the time how they sit alone at midnight and pull up Amazon.com. We haven't licked Barnes &Noble and Borders, but we feel the way for us to compete is through the Internet." At BEA, Rubin met with companies that could help her put her store online. Last month, www.thebookstall.com was up and running via BookSite.
Telemarketing W s
Children's booksellers joined in the fray at one of BEA's most spirited panels, on telemarketing. Many expressed their anger at no longer having a sales rep visiting their store. Diane Etherington of the Children's Hour was the only bookseller contacted for this story who prefers telemarketing to the traditional approach. "To me it's easier to order over the phone," she said. "Most people are too dependent on reps."
Those opposed to telemarketing sometimes had an almost visceral response. The very word telemarketing, for instance, led Jordan of Jeremy's Books and Toys to exclaim, "My stomach, my stomach! This to me is the scariest and the saddest part of what's happening. Children's books can be so deceiving -- you just have to see the f&gs. Independents don't position books, we sell them. We're the ones who take an off-the-wall title, and grab somebody by the arm and say, 'Look at this book.' How are we going to do that with telemarketing?"
Chittenden at Eight Cousins questions the criteria under which booksellers have their sales reps taken away and are sold to by telemarketers. Her sales may not be high, she says, but, she believes, "they are key. It's apparent to me at this point that small independent stores, whether general or children's, are essentially extensions of publishers' marketing process, in that we are the place where trendsetters tend to shop. I'm anxious to communicate to publishers that I have value that way. I think telemarketing is a real questionable use of our marketing capacity. Publishers don't get nearly as much feedback as they could, and the telemarketers get frustrated because they don't get numbers."
Hearn at Children's Book World was concerned about the imperfections of a different type of telemarketing: by adult trade publishers of their crossover titles. She agrees that she d sn't order enough adult books to see a rep, and yet, she complained, she often has trouble getting basic information on adult books with appeal for kids. While some publishers list these books in both children's and adult catalogues, many do not. "Where we have a hard time," Hearn remarked, "is getting the catalogues from the adult divisions. It's making it difficult for us with publishers that don't have outreach."
For some booksellers, the fear of being placed on telemarketing has changed the way they do business. Holmes of Hicklebee's commented, "We're really trying to keep our reps and it's worth it enough to keep our backlist up to date with publishers. We probably order in smaller numbers more frequently and we're trying to trim down our distributor orders." As an added bonus, she has found that her increased publisher sales are getting her more author events and more co-op dollars.
San Marino's Takeuchi agrees, but she still finds it more economical to place backlist orders with wholesalers. "I wish there was a way to reward my reps for presenting the frontlist," she said. "But when Baker &Taylor and Ingram are giving me 40%-42% and free freight, why should I order from the publisher?"
Dealing with Conglomerates
With the rapid rate of publisher consolidation, it can feel as if soon there won't be many publishers to be telemarketed by. The merger of Putnam and Penguin, the recently consummated Random House/Bertelsmann deal, and Houghton Mifflin's distribution agreement with Random House were frequently mentioned -- as were attendant billing problems.
"With the consolidation, my bills look like the national debt -- Penguin, Scholastic, Putnam, Troll and Candlewick on one bill," quipped Mager of Booktenders. Wild Rumpus's Morgan added, "Billing is a nightmare. We pay 30 days from the statement date and they want to be paid 30 days from the invoice date. So we get put on hold every other day."
But beyond the bills, there are also concerns about backlist titles being declared out-of-print too soon. For Hastings's Naud, it all comes down to selection. "I have been working in this business for 13 years in chains and independents, and the more they consolidate, the less diversity we get. One big concern on my list is the combination of superstores killing the independents and the publishers eating each other up."
Pat Wroclawski, children's marketing manager at the Book Stall, agreed. "When we had different publishers we had wonderful backlists," she said. "Now things are starting to go out of print and slip between the cracks. We used to have a Grosset rep, a Bobbs-Merrill, a Putnam, a Viking, a Penguin, a Dial and a Dutton rep and they knew those books. Now we have one poor overburdened rep."
Frequently, it's also the store buyer who is weighed down by too many lists and too much paperwork. "It makes the sales calls incredibly long," remarked Hearn at Children's Book World. "I don't have more than three good hours in me." Jordan of Jeremy's Books and Toys believes that publishers just don't understand why consolidation should make a difference. "It's still the same number of catalogues. So publishers say, what's the big deal? But it's all a juggling act. We juggle time, we juggle money. When you owe that much money, you can't do the juggling. There's a tremendous amount of money going into Ingram, Baker &Taylor and K n from independents. Publishers don't recognize that Ingram is just the valve into the independents."
Although telemarketing, consolidation, and competition were by far the most talked about issues, other concerns emerged. For Etherington at the Children's Hour, it was the age-old problem of shoplifting, but by middle- and upper-middle-class women who do it because they need a rush. "They take everything," she said. "Clothing, toys, books, jewelry -- anything. This is an illness."
For Takeuchi in San Marino, the emphasis was on price. "The price of children's books has gotten too high, $17 for a so-so children's picture book," she said. "There are some publishers that are coming in with $13 and $14 books and we buy a lot of them. Publishers need to pay attention to price." She also voiced opposition to even pricing, when books are listed at $15 instead of $14.95. "The customer d s perceive it as a big deal," she continued. "If they see a $14.95 book and a $15 book, they take the lower-price book every time."
At Butterfly Books, "managing the inventory is the biggest challenge," said Gaston -- "knowing what to let go of and what to take a risk on." Perhaps risk is really the biggest issue of all-how to manage the risk of selling children's books in good times and bad-no matter how much competition. The children's bookstores included here have all passed the five-year mark when many small businesses close, and some are heading into their second decade and beyond. In order to succeed they have all learned the fine art of survival, or, as Etherington commented when questioned why she has so many sidelines: "To me what's important is surviving gracefully."
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