Forging Pathways to Net Sales
Marcia Z. Nelson -- 3/27/00
Is increased e-commerce activity taking a byte out of traditional retail sales?
 | 'Publishers are shocked
to see how far into
backlist we're going.'
--Lauren Patterson, Amazon |
What's Inside
News flash: These days, not every store that sells books is a bookstore. Sometimes it's not even a physical store, but a destination in the Internet ether. Religion Update first examined the phenomenon of increasing sales through multiple retail channels a year ago ("Moving into Special Markets," Mar. 15, 1999), and since that time, the trend has become even more pronounced. This issue revisits the topic, intensifying the focus on book sales via the Web, as we examine the effects of growing online sales on publishers, on book clubs and direct-mail sellers, and on other outlets. Though still representing a small portion of overall sales, there can be no doubt that e-commerce in religion books is a force to be reckoned with.
Still, in spite of the well-jus-tified attention being paid to online bookselling, the most significant new retail channel for some publishers is the mass merchandisers. Certain kinds of books seem to fly off the shelves at stores like Wal-Mart, Kmart and Target, and publishers who are finding success through those outlets feel they are often creating new book customers, reaching those who rarely if ever set foot in a bookstore.
And even though some sales have shifted from religion specialty stores to these other venues, many religious bookstores seem also to be enjoying healthy business. Certainly they must be sharper and more competitive than ever in a crowded marketplace, but religion specialty stores are far from down for the count. Among religion/spirituality publishers, industry trade groups and the various kinds of retailers, the consensus seems to be that as retail options have expanded, so have sales. That books will sell outside the traditional bookstore might not be a news flash anymore, but it's still glad tidings for the category.
 | 'What business people
call competition
the consumer calls options.'
--Bill Anderson, CBA |
Christmas was apparently very, very good in cyberspace. Sales numbers from the 1999 hol-iday shopping season at Amazon.com documented the strength of online sales in the year's peak retailing period. In the fourth quarter, the pioneer and leader in online book sales enjoyed revenues of more than $650 million, compared to $253 million in the last quarter of 1998 (though Amazon notes that book sales accounted for less than half the revenue total). Media Metrix, which measures visits to Internet sites, showed that Amazon.com was the top destination for Web shoppers this past holiday season, logging almost 5.7 million visitors during the five-week season.
If healthy online sales have had a positive impact on book publishing overall, what d s that mean for the religion/spirituality category specifically? When PW asked publishers, online booksellers and industry executives where this phenomenon is headed, they pointed to unique benefits offered to the religion category by the online medium (see also "Can Book Clubs Survive the Web Onslaught?" in this issue).
But first, a caveat about the measurement of online commerce: though all of those who spoke to PW attested to the growth of online sales in religion/spirituality, publishers and retailers are extremely shy about disclosing numbers to prove that sales growth, citing the usual litany of competitive reasons. Using data to describe online commerce is also difficult for reasons unique to the young medium. Says Rita Cavicchio, Internet marketing manager of christianbook.com, the Web site of direct-mail retailer Christian Book Distributors, "People measure differently. It wasn't until last year people started to really hammer down common measurements. We had millions of unique visitor hits, but hits are meaningless as a measure of commerce." Lauren Patterson, category manager for religion and spirituality at Amazon.com, agrees. "It's hard to get your hands on numbers. It's always new and changing." That said, however, everyone is happy to talk about growth and expansion, as well as the lessons being learned about Internet marketing and selling.
How the Web Helps
Harper San Francisco's Stephen Hanselman, v-p and associate publisher, tells PW the house is noticing that religion books are reaping benefits from the online medium. "It's certainly been a significant channel for us," he says. "For all the gains religion and spirituality have made--and it's been significant--these books still suffer from visibility issues. Within HarperCollins, we've noticed religion and spirituality have benefited disproportionately from the advent of online selling." It increases visibility, Hanselman notes, by providing the virtual equivalent of face-out display space for every title, something impossible to achieve in brick-and-mortar stores. In the resulting marketplace of equals, the conventional distinction between niche- and general-market books breaks down. This has brought increased sales for HSF across its broad spectrum of religion titles, on topics ranging from Sufism to Christian spiritual formation.
The online medium also makes for very distinctive, even surprising bestsellers. Hanselman cites Richard J. Foster's Renovaré series of books on spiritual formation, which have been top-sellers on Amazon.com. Conventional wisdom in trade bookselling would hold that there's little call for such a specialized topic, yet, says the publisher, "This indicates to us that something like spiritual formation, while it may not be perceived as 'sexy,' has got a significant market out there." As a result, HSF is putting together a major marketing campaign for the Renovaré books, including traditional print advertising and promotional efforts within traditional bookstores serving the Catholic and evangelical Christian markets. "It's a new way of thinking," explains Hanselman about the impact of online selling on religion publishing and marketing. "We'll try to continue to build our Web presence, since it seems to be the strongest channel for getting books to customers."
Boon to Backlist
It is often said that religion publishing is a backlist business, and online retailers have the unique ability to refresh the sales of older titles. "When publishers start working directly with us, they're shocked to see how far into back- and midlist we're going," says Amazon's Patterson. "And that's very profitable." Internet exposure can aggregate the more diffuse demand for a backlist book, extending its shelf life. "Many of the books are timeless," notes Patterson. "That's how back- and midlist have a renaissance, if you will, in terms of finding an extended audience."
Besides lengthening shelf life for publishers and authors, online retailers are adding capabilities for small online sellers of religion books-church, parachurch and ministry groups. Amazon maintains an associates program, a partnership arrangement that takes prospective shoppers from a specialty site to Amazon to order a book or other product. The site sending the traffic receives part of the sale proceeds, and Amazon provides fulfillment services, taking care of warehousing and shipping. Amazon currently has 400,000 associates, though Patterson couldn't break out a percentage for religion associates.
An Evolving Business
The dominant online booksellers' own religion and spirituality business continues to evolve. In mid-January, Amazon added the Zondervan Bible Store to its Christian store, to help customers learn more about Bibles(specifically, Zondervan's 400-plus New International Version titles) and decide which type--study, devotional, etc.--they want (Nota Bene, Mar. 13). Other Amazon "sub-stores," opened in February within the religion area, are devoted to different major world religions.
With features like these, Amazon continues to exploit the quintessential ability of the medium to sort and arrange data in meaningful ways. Customer comments, links to related titles and categories, purchase circles that show information about who is buying a particular book--all of this added content about a book is intended to be the virtual equivalent of hand-selling. Patterson tells PW that Amazon is doing "very well" with Christian and other religious sales. "It's really organic how customers will pick up on a book," she says, "and then it starts to spread, through comments or purchasing."
Rival Barnesandnoble.com opened its religion books "storefront" on November 15, in time for the 1999 holiday shopping season. Prior to that, religion/spirituality books had been scattered throughout the site, grouped under related categories such as nonfiction, depending on the title. According to Greg Sewell, the cyberstore's nonfiction manager, religion-related titles were consistently selling well (though he declined to give numbers), but feedback from customers asking for an easier way to browse religion titles prompted the creation of the new "storefront." "When we launched, we got very positive feedback from customers and saw a dramatic increase in sales," says Sewell, who has managed nonfiction for three years. "We had a lot of people going to our religion and Christian sites." Although it didn't break out religion data, BN.com reported that fourth-quarter 1999 sales tripled, to $81.5 million, compared to the same period in 1998.
Like Amazon, BN.com is growing business through its network of partners, called affiliates, for whom it d s back-end product sales and fulfillment. The affiliate network is 300,000 strong and growing, though again no breakdown of specifically religious affiliates is publicly available. (It remains to be seen how Amazon's recent patent application for its associates program will affect the BN.com program.) Future plans are to follow subject sales trends and grow accordingly. "Editorially we'll expand as we get more detailed sales information and we can find the areas of specific interest," continues Sewell. "Bibles is an obvious one to break out and make it easier for customers to find what they are looking for."
Much of the buzz at the winter Christian Booksellers Association trade show, CBA Expo, held in Nashville at the end of January, was about the exponential growth of the e-retail channel. At the show, iBelieve.com marked the full launch of its $30 million site, the online presence of the 340-unit Family Christian Stores chain. The site has a commerce component, powered by the retail chain. And Parable, a buying group of more than 330 independent stores, debuted a program to help its members launch their own branded Web sites for a one-time $495 fee. "What we business people call competition the consumer calls options, and consumers love options," notes Bill Anderson, CBA president and CEO. "[Retailers] need to be taking a serious look at how they use online to augment what they do with brick and mortar."
Cheap Real Estate
One reason online sales and marketing can expand so quickly is that building a virtual bookstore is relatively quick and inexpensive--up to a point. "Online real estate is cheap," says christianbook.com's Cavicchio, who with three years of experience is an online veteran. It's cheaper to add a virtual page on a site than a paper catalogue page, so continually increasing the number of products available online is fairly simple, she points out.
Still, real products to fill orders have to be stored somewhere, and when christianbook.com started carrying more products, it had to expand warehouse space, which it did last summer. "We doubled the size of our warehouse to accommodate online business," Cavicchio tells PW. The site now has 70,000 products available, primarily books. Online business specifically helped the company grow its line of books and supplies for home-schoolers, a highly specialized area that evan- gelical Christian brick-and-mortar retailers aren't as likely to stock in any depth. Growth plans for christianbook.com include additions to its line of Catholic products and products that will be Web-only exclusives. "We'll introduce them on the Web," says Cavicchio. "If they're runaway bestsellers, we may say we need to add them to our catalogue."
So online retailers are smiling about sales of religion books, which seem to particularly benefit from the Web's ability to give both content and context that enhance a book's salability. But they are also quick to assert, albeit anecdotally, that Internet book sales aren't taking a "byte" out of bookstore sales. Bibliophiles get their product fixes wherever they can, they say, whether it's online or on Main Street. "The same consumer may use both in the same day," suggests CBA's Anderson. "They key in, and with the click of a mouse it's done, and that evening they may show up in the brick-and-mortar store, wishing it would stay open longer." Adds Amazon's Patterson, "I personally think it's a growing of the market. There's a fluidity between people who shop online and who shop in the physical world." That view is affirmed by HSF's Hanselman, who says, "I also buy as many books as I ever have at my local brick-and-mortar. There are just more books flowing into my household."
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