Ask any bookseller what their chief challenge is, and you'll likely hear the same answer again and again, echoing back like a yodel: big-box competition. Ask a Christian bookseller the same question, and you'll get a slight twist on the familiar response: "mainstream" competition.
General-market bookstores have long realized their most worrisome competitor is not the indie bookstore across town but the large bookstore chains and big-box retailers such as Wal-Mart, Costco and Sam's Club. But Christian retailers remember a time in the not-too-distant past when their primary competitor was indeed the guy across town—someone they bumped into at the annual CBA convention or rubbed elbows with at smaller industry events.
This former mom-and-pop industry now finds itself staring down giants on every hilltop—and it's scrambling for five smooth stones. The irony, at least according to one CBA insider, is that "we brought it on ourselves."
"The Christian industry is so focused on the next big bestseller, both publishers and stores alike, that we're causing a feeding frenzy," Heath Hill, director of sales/marketing for Appalachian Distributors, told PW. "We're causing the bestseller wars with Sam's Club because we're focusing on the bestseller too, rather than supporting the broad spectrum of materials and showing customers that, yes, we have Max Lucado's latest book, but we have all his other titles, too. If we didn't focus so much on advertising Left Behind, Wal-Mart and Sam's Club wouldn't have such easy targets."
Faced with a market they no longer "own" exclusively, Christian booksellers and the marketing groups that represent them distill the core retailing issue down to one loaded question: How do we attract new customers, and how do we keep the customers we already have?
"For a long time, if customers wanted a Christian product, they came to a Christian bookstore," Chuck Milner, owner of the five-store Tampa Christian Supply chain, said. "Now they see something at Wal-Mart and think, Ah, it'll save me a trip to the Christian bookstore. Customers that used to come in six times a year now come only three times, and so forth."
Targeting the Niches
Munce Marketing Group, a Florida-based organization that offers marketing support to more than 700 Christian bookstores, has decided to make reeling in new customers its top priority. Kirk Blank, general manager and v-p of marketing, said he's identified four groups within the community that are underserved by Christian bookstores: the African-Americans, Hispanics, more intellectual readers and the "well-churched" who have, ironically, never darkened the door of a Christian bookstore.
"Just between the African-American and Hispanic markets, we're talking about 30% of the population," Blank said. "We've developed a lot of tools through census data about where these customers are living, where they are buying, etc. We tell the stores, Do you want to grow these markets? We can help you."
Awakened to the growth potential in these underserved markets, Munce created specialty catalogues for the Hispanic, African-American and intellectual communities in 2001, producing two each per year. In 2003 the group plans to produce three Spanish-language catalogues. Munce also hired a full-time Spanish specialist to connect with Hispanic booksellers or booksellers who want to target this burgeoning market. In fact, it was booksellers themselves who triggered the push into alternative markets.
"We challenged Munce to come up with a specifically targeted African-American catalogue," David Almack, manager of CLC Book Center in Philadelphia, said.
Located in a community that is 90% African-American, CLC ambled along for years serving "whoever came in the door" and growing about 5% a year, Almack said. When he came on board in 1997, annual store sales were at $325,000. Coming from a human resources background, Almack realized the store could do several things to spike sales and increase traffic.
"One of the first things we did was survey our customers," Almack said. "We asked them, What would you like to see us do differently, what policy changes can we make, what do you want from a store like us, who are your favorite authors?"
Lacking the capital for expansion or renovation, Almack focused the store's energies in 1997 on policy changes. For example, previously CLC did not accept personal checks due to several bounced customer checks. Realizing the lost revenue this policy represented, Almack reinstated personal checks but invested in TeleCheck, a check clearing service that takes the risk out of transactions. The store changed its return policy from a virtually no-returns stance to a very open procedure ("If it's in salable condition, we'll take it back"). CLC also expanded its operating hours from five days a week to six. "When we started opening on Monday, we found out it was our third busiest sale day of the week, after Friday and Saturday," Almack said. "That was a $50,000-a-year decision right there. We were doing a pretty good job with stock but found ways to enhance that, choosing companies and products that are clearly geared more toward the African-American market."
The results were astounding. In one year sales increased to $450,000. But that's nothing compared to what happened next, Almack said. Armed with customer feedback and a contagious enthusiasm, the staff started targeting radio and direct mail to the African-American community and then realized CLC's new buzz had one major gap—store events. Almack discovered the African-American community loves "just being together," so he planned a few store events to gauge response. After a blow-out event in which recording artist Kirk Franklin made a surprise visit to the store during a CD release party, "we went nuts with the event concept," Almack said. CLC Book Center held six or seven events in 1999 and several more in 2000. Now it stages four to five events a month, including book signings, pastors' breakfasts, Veggie Tales parties and vacation Bible school workshops. The store has also become a champion of local authors, a place that new talent "wants to connect with."
Have the events paid off? "This year my sales target is $1.4 million," Almack said. "That's pretty major growth."
For Milner, becoming intentional about reaching new markets made all the difference. In his case it was the Hispanic market, a large subculture in the Tampa area. "We've been working on the Spanish market for 10 years but always had mediocre success," said Milner, whose main store employs three or four bilingual staff. "We decided to take out a [Munce] catalogue and put it in a local Spanish newspaper. We were real pleased with the amount of new customers who came in with the coupon. Now the Spanish department is one of the fastest-growing departments we have."
Even with his success in the Hispanic community, Milner admits that the African-American market has outstripped it in sales performance due to one key reason: "In evangelical circles [the niche most CBA stores occupy], there's a higher percentage of African-Americans, whereas most Spanish people are Catholic."
Blank agrees that, for existing bookstores, the African-American and "intellectual reader" communities are the two easiest markets to target, simply because there's no language barrier. For instance, Munce's Thoughtful Books catalogue has seen brisk response in stores that want "a quality catalogue with solid books," Blank said. "You won't find gifts in it." Instead, the catalogue carries reference books and authors like Kay Arthur and R.C. Sproul.
"Some stores have seen tremendous response with the specialty catalogues, others have not," Blank said. "It takes a while to develop a new market, to develop trust. But generally response rates on our targeted markets run higher than on our other catalogues. When we send out the African-American catalogue, it's going from a shotgun to a rifle."
Honing Efficiency Counts
At the Parable Group, a marketing consortium that services 300-plus large and midsize Christian stores, honing retail efficiency is top of mind, said Wayne Hastings, v-p of retail development. That single issue ties in closely with the two other challenges Hastings identified as primary issues for Christian retailers: mainstream competition and finding and keeping new customers.
"The mainstream market is awakened to Christian product, everywhere from BookExpo America to the local Wal-Mart," Hastings told PW. "Wal-Mart recently cut expenses by another 28%. They already led the world in efficiency, and their expenses as a percentage of sales are very low. How we can help independent stores get more efficient I think is going to be a real key to addressing the other two issues."
Parable employs a full arsenal of retailer aids to give store owners a leg up in the business, ranging from 28 distinct catalogues to consumer data modeling, core inventory reports and 80/20 reports. They'll even send a team of experts in to do an operational audit to assess a store's efficiency.
In the past three years, Parable has invested heavily in improved consumer data to help stores mail more efficiently, Hastings said. "Stores that are using it are seeing vastly better response rates. Instead of simply measuring recency, frequency and dollars, we're going a step further and measuring 16 variables that lend themselves to consumer response. These things help us determine the possibility of a consumer responding to mailed advertising."
To boost stores' competitive edge, Parable also provides alternative catalogue covers featuring "aggressively priced" key product. "If you have competition in your market, the aggressively priced cover shows you're in business," Hastings said. "We had four different covers [promoting] The Remnant"—book 10 in the Left Behind series, debuting in July.
From a distributor's perspective, "we can't draw new customers into stores, but we can enhance the stores' service level," Appalachian's Heath Hill said. To achieve that, Appalachian offers a penalty-free returns policy and processes returns in three to five days—something almost unheard of in the CBA market, he said. The primary benefit of quick returns is that it doesn't tie up a store's credit line. When that happens, a bookseller has "double the money out there and only one item on the shelf," Hill added. "This is the whole crux of how we get more breadth in Christian bookstores. It's definitely not on price that the stores will compete—they must compete with breadth of product and breadth of knowledge." By employing a liberal returns policy, Appalachian encourages stores to risk buying product they may not have sold before, Hill said.
The Christian Booksellers Association offers seminars and classes for retailers, and the Evangelical Christian Publishers Association (ECPA) has hosted retailer/publisher seminars and roundtables for 10 years, hammering out the sort of issues this article highlights. At its upcoming fall management seminar in Tucson, Ariz. (Nov. 2—6), ECPA will zero in on what president Doug Ross identified as the top three concerns: competition, secular influences on the CBA industry and communication between retailers and suppliers. But, as always, competition is the number one concern.
Exploring New Frontiers
Moving into new markets will likely remain the clarion call of CBA bookstores for years to come. For some, such as Munce Marketing Group, that means going outside North American borders into foreign territory—literally. For the first time this year Munce had a booth at Expolit, a large annual Spanish-language publishing event that attracts publishers from all over the world. During the event Munce added stores in Panama, Guatemala, Uruguay, Colombia and Puerto Rico to its roster of retailers, which now totals more than 50 international accounts.
Back on the home front, sharpening competitive edge will continue to drive people like Almack who are passionate about retailing—challenges and all. "If you become an expert in your particular niche, you will always be successful," Almack said, enthusiasm crackling in every word. "Wal-Mart will never be a specialist. They'll pick the best of the best and sell it cheap. If you think you can put up a gorgeous new store and draw everybody through your doors, you'll be out of business pretty soon. But if you target who you are and go after it, you'll be successful."
