Slicing the Market Pie
Michael Kress -- 3/27/00
Mass merchants and online retailers are claiming larger portions
 | Zondervan's Doornbos notes that this 1998 title
has done very well via mass merchandisers. |
It is clear to anyone with an eye on the industry that religion titles are being sold through increasingly diverse retail channels. Books that once thrived only in stores affiliated with the Christian Booksellers Association (CBA) have penetrated general-interest bookstores and are now found more and more on the shelves at Wal-Mart, Sam's Club and other mass merchants, price clubs and nonbook outlets, a phenomenon Religion Update first examined a year ago (Mar. 16, 1999).
Though sales data can be notoriously difficult to come by, some religion publishers who have been successful in selling their books through multiple channels were willing to share numbers that indicate how much of their business now flows through these different kinds of stores. Although the data they released d s not al-ways lend itself to an apples-to-apples comparison, it d s confirm that multi-channel merchandising is continuing to grow in importance in the category.
Another channel generally assumed to be experiencing explosive growth is more difficult to track. While no one is dening the increasing significance of book sales on the Web, publishers say that they cannot currently track those sales, because (aside from Amazon) the major Internet book- sellers are affiliated with the chains. Sales through Barnesandnoble.com or Borders.com are not broken out from sales through their brick-and-mortar stores.
A Fundamental Change
CBA booksellers are still the mainstay of evangeli-cal Christian publishers, but other channels have increased in importance for them.' Chris Doornbos, executive v-p of sales at Zondervan, where nearly 24% of the company's business is now through mass merchandisers, explained the growth of his company's sales through nonbookstore retailers as a manifestation of the explosive interest in spirituality in all corners of American society. "The consumer in the U.S. seems more and more receptive to inspirational products overall," he notes. "When I came to this company 17 years ago, more than 90% of our sales were through CBA."
CBA bookstores now account for an even 50% of Zondervan's sales, a small dip from last year, according to Doornbos. Of that, 70% are through CBA independents and 30% are through CBA chains. Only 8% of the company's sales are through ABA retailers, and of that share, the chain-independent breakdown is more than reverse that of the CBA stores: 80% of ABA sales are in chains, 20% in independents. Doornbos attributes that fact to the company's sales strategy. "Our sales force concentrates mainly on CBA stores," he says. "My sales force d s not get to many ABA independent shops." Of the company's remaining sales, 24% are through nonbookstore retailers (mass merchandisers, such as WalMart), 10% are through direct sales (such as mail order and book clubs), an estimated 3% are made online and 5% are through what Doornbos calls "special markets," which include churches and parachurch organizations, such as the Promise Keepers and Focus on the Family.
The most dramatic one-year shift is in the mass-merchandiser category, which accounted for only 15% last year. While this year's 24% figure includes international sales (last year's did not), the 5% increase indicates the "dynamic growth" Zondervan has seen in that channel over the past 12 months, according to Doornbos. The other big change was in Internet sales: last year, Zondervan reported that direct sales and Internet sales together accounted for 11%; now broken out as separate categories, they together account for 13% of sales. "For us, direct continues to grow at a reasonable rate, while the Internet grows at an explosive rate," Doornbos notes. Although the current 3% online sales estimate is not overwhelming, Doornbos tells PW he expects swift increases in the coming years.
If the numbers have changed during the past year, they are dramatically different from several years ago. The sea change was due not only to spirituality becoming an across-the-board cultural phenomenon but was also a result of Zondervan's 1993 revised sales strategy, through which the company began to make a much stronger effort to reach non-CBA outlets. At the same time, Doornbos explains, its CBA sales doubled, giving it added sales from all sides. "We're selling more into CBA and capturing more of the CBA marketplace, while also reaching out to new markets," Doornbos continues; he adds that, considering the recent boom in interest in all things spiritual, the 1993 strategy was right on the mark.
Engaging the Culture
Ron Land, senior v-p of general-market sales at Thomas Nelson, overseeing titles from all five Nelson/Word imprints, tells PW that mass merchandisers, which currently account for 17% of the company's sales, are "one of the fastest growing segments of our business," a development he welcomes. "It allows us to engage nearly 100% of the culture." At Nelson, almost half of all sales are in CBA stores--down "a percentage point or two" from last year--while the 17% flowing through mass merchandisers is a 2% increase over the past 12 months. ABA-affiliated bookstore sales account for 8%, a bit more than last year; the remaining 25% of sales is a combination of e-commerce, international foreign-language sales and "special ministries," a category that includes direct-to-church sales, door-to-door sales and sales to para-church organi-zations and the like. "The shift wasn't much [from last year], but it still gravitated toward mass merchandisers," Land notes.
The Nelson senior v-p says the change is in part due to the realities of the retail world: mass merchandisers are following a "very aggressive store-opening plan," constantly creating huge new stores, and ABA chains are expanding rapidly as well. CBA chains, on the other hand, are growing by purchasing a lot of existing independent stores. "The shift is not so radical, but it's following a fairly constant trend," Land comments. As at Zondervan, this represents a change from the past, when CBA retailers reigned supreme.
"We're trying to sell books wherever books are being sold to anybody," Land explains. He stresses that CBA stores are still vital and important to the company, even beyond the still-high CBA sales figures: "That's where we build our reputation. That's where we build our bestsellers." If a book is popular in CBA venues, "it only follows that it's going to be popular elsewhere." Increasing sales at mass merchandisers accomplish more than fattening the company's bottom line, Land adds; it helps spread God's word, which is the mission of the company. "It's all an effort to reach the culture wherever it is," he says. Land thinks mass merchandisers bring books to many who do not frequent bookstores, CBA or otherwise: "That is the place where we are beginning to develop some new readers." The same is true for the Internet. Although the company has not been aggressive in selling products via its own Web site, and Internet sales are still a very small segment of the company's total sales, "It's probably the fastest growing segment," Land tells PW.
Chicken Soup, Too
While evangelical Christian houses such as Zondervan and Nelson have been especially aggressive in developing multiple channels for their product, they are not the only religion/spirituality publishers whose books have found their way into new retail settings. At Health Communications International, 51% of sales are through chains and independents, while the remaining 49% are through mass merchandisers, according to Terry Burke, v-p of sales. (Although HCI d s have sales through CBA stores, Burke declined to release those figures.) He notes that over the past five years, it has become increasingly difficult for the independents to compete with the chains. Meanwhile, the mass merchandisers continue to increase as a share of HCI's business. Burke says the 49% figure is driven largely by the huge popularity of the company's Chicken Soup for the Soul series. "The fact that we have some bestselling titles gives us a large percentage of sales with those mass merchandise retailers," he explains, adding that other comparably sized houses "sell more in the traditional retail book market." As for the Internet, Burke says that HCI's business through Amazon. com is small by comparison to its sales through other channels.
With the e-com- merce juggernaut still gaining momentum, and mass merchandisers still growing, these pub- lishers tell PW they see more growth in those directions in the near future, since readers' interest in spiritual matters shows no signs of abating.
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