It’s so much more than the 10%

In Australia this week one of the big media/news stories has been the campaign by a collective of retailers to have the government intervene in their failing sector. Their case boils down to the fact that we Aussies are buying too much from overseas merchants via the internet and Aussie retailers are all going broke/having to cut staff. They are demanding that the government collect the 10% GST (similar to VAT or sales tax) on low-value items (i.e. under $1000) which Australian retailers have to charge on all items sold here. The retailers believe that if this happens we’ll all buy locally again.

Because this is a book blog I’m not going to rant at those retailers in the collective who sell gadgets, clothes and other consumables (though I could) but I am going to say a few words to REDgroup which owns Borders and Angus & Robertson (two of our biggest book chains) and which is one of the members of the aforementioned collective. These words are equally applicable to all the other Aussie book retailers who are upset with my shopping habits.

You aren’t failing because we can get our goods minus the 10% GST you are forced to charge for the same items when sold locally. You are failing because you have the business sense of house bricks.

You know how I know you have the business sense of house bricks? Because you think forcing me to pay an extra 10% for the books I order online will make me come back to you. The last book I ordered from Book Depository cost me $14.87. Even with an extra 10% it would still have been $20.60 cheaper than it was in the local Borders on the day I ordered it (yes I checked).

You know how else I know you have the business sense of house bricks? Because you have never tried to sell ME a book.

If you were Dymocks or Angus & Robertson for example you would, via my respective loyalty cards, know that 95% of the purchases I make in your respective stores are of crime fiction and 75% of those are Australian crime fiction. And Borders you would surely have gotten a hint that I am a crime fiction buff from the fact I have bought 20 eBooks from you in the past 3 months and every one of them has been crime fiction. But when you send me emails (and between you there are a lot of emails) you never target me. I get the same emails that everyone else gets where you try to flog cricketing biographies, sweeping romantic epics and an alarming number of books written by people who didn’t win reality TV shows (is there a lot of interest in losers all of a sudden?). If occasionally there is a crime fiction title among the selection you have for sale it is a coincidence and there’s every chance I’ll miss it.

Instead of trying to sell me stuff that I have never given you the slightest indication I would be interested in why don’t you offer me things I have shown you I love and am tripping over myself to spend money on?

Why don’t you ping me a quick email every time a new crime fiction title is added to your catalogue/shelves? Not just the James Patterson ones but all of them?

When a new book by an author whose previous 4 books I have bought from you (which you know because the record is right there in your loyalty card database) is about to hit your shelves/catalogue why don’t you let me know and offer to hold one for me?

Why when Adrian Hyland’s Gunshot Road was due for release last year didn’t you know the date it would be in store and offer to hold me my very own copy? I knew the month of publication but when I asked you if you would be getting it in (about 6 weeks before the start of that month) you gave me one of those blank stares that only teenagers who have been made to get up before noon on the weekend can give so I pre-ordered it from the UK. I would happily have bought it from you rather than wait for it to be shipped no matter what the cost (I was kinda desperate to read that one) only you couldn’t even tell me if you were getting it in at all let alone the date.

Why don’t you tell me what the other people who bought the same books as me also bought (on the grounds we might share interests)?

You know those little cards you have in your store saying “staff pick” that I see stuck onto books when I browse the crime fiction section of your store? Why don’t you send me a monthly email telling me all the staff crime fiction picks in case I haven’t wandered into the store lately? Perhaps some of your staff might even like to write a little review of their picks to pique my curiosity further.

The reason we have deserted you in droves isn’t because you charge a fortune for things we can get elsewhere (though you do and we can). It’s because you have the business sense of house bricks. You have always had the business sense of house bricks only we couldn’t do much about it until the internet came along (because there are only so many books and pairs of sandshoes that one’s family can reasonably be asked to cram into a suitcase when visiting from the US). And now that we have options instead of looking for ways to compete (offering superior service, running genre-themed book clubs in store, reminding me that you have a shop open 7 days a week that is 100 metres from my office door so instead of having to wait for pesky packages from snow-bound England I could have that book I want NOW, putting together specially priced packs of books whenever an award shortlist is announced…) you have simply charged your dwindling number of remaining customers a fortune for things they could get elsewhere (if only they knew) and gone whining to the government.

I hope your current campaign fails primarily because I can’t imagine that the government collecting all those pesky amounts of money is going to be efficient for anyone but even if you succeed at the campaign you’ll fail in the long run. You have the business sense of house bricks.

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26 Responses to It’s so much more than the 10%

  1. Bernadette – Oh, yes, it’s much more than 10%! You have made such well, well-taken points about marketing. I’m not sure, either, why retailers assume that because they exist, they should be able to get all sorts of business without finding out who their customers are, targeting them, meeting their needs and so on. I nodded my head vigourously, said “Yes!!!” more than once and laughed out loud at your description of these retailers’ business sense.

    If it’s any comfort whatsoever, it’s not much different here, at least where I live, that is. And don’t even talk to me about chains like that supporting local authors… Grrrrr….

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  2. Kerrie says:

    Well said Bernadette

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  3. Best ever point about both A&R and Borders. They really do make no attempt to ensure you want to go there. And I think their latest “VIP rewards” scheme isn’t that great at all – one of the key points is ‘be rewarded with a unique experience’. What? I get their generic emails too filled with pages of books that I’d apparently like. My local A&R is now the size of a postage stamp and quite frankly their collection is embarrassing. And if I actually happened to ask if they had a particular novel, I got a blank stare, a bit of clicking at the computer and then a thoughtful “….No. No we don’t have that” and then off they’d go back to their own business. Well how about offering to find it for me? Order it in from another store? They never once offered to that and after a few times, I stopped bothering to look in there. I don’t see why I should make the effort to buy from them when they be bothered to make the effort to actually serve me.

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  4. Marg says:

    I do love it when you get a rant on Bernadette! lol

    And yes, all valid points. People talk about the experience of going into the bookstore and talking to someone who knows their reading tastes and will chat enthusiastically about the books you might like, but I haven’t actually had that experience in a bookstore face to face. I get it a little bit now from a bookstore owner in our area who has developed a fairly strong online presence, but I see that as her going above and beyond, and has been rewarded with a few purchases, but other than that I will stick to buying from overseas, from either Book Depository or Betterworld Books.

    I was interested in seeing that Gerry Harvey has backed away from being the one who is spearheading the retailers campaign after he got no government support and barely any community support.

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  5. Cathy says:

    Wow… this is so good I’m going to share!

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  6. kathy durkin says:

    Good rant! It’s true over here in the states, too.
    The exception if the wonderful independent bookstores–crime fiction and other neighborhood bookstores that seem to carry everything or will get it for someone.
    It’s really too bad many of them have been pushed out due to economics and the big fish swallowing the little fish.

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  7. bibliolathas says:

    Another great rant! I had an introductory $20 voucher for the Borders VIP thing, but do you think I could find anything in the shop (Adelaide — looks like it’s going broke very rapidly) that didn’t make me think, ‘Jeez, for $20 I could have two novels from overseas rather than 2/3 of one from here’? It should seriously frustrate them that I didn’t want anything they could offer even for free… I finally found something that I didn’t really want for $19.95 {just to spite them 😉 } and vowed ne’er to return.

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  8. I might send this to @borders hey 🙂

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  9. Maxine says:

    Well, Borders in the UK already has gone bust, and it looks as if the US version is not far behind. Sad, but when you read a post like yours, you can see why. Amazon and Waterstones manage to send targeted emails for example – though I wonder why Waterstones is so bad about emailing me with news of events (eg signings) in my area. One example – I went to a crime fiction reading/author signing event at my local Waterstones, including email and on-the-night registration. They had another similar event the following year but never let me know (I found out by accident as I happened to be in the shop and they had some printed flyers by the till.)

    To return to your post, it seems to me that the Australian bookshop business is just as doomed as the UK and US versions, sadly. They are so stupid. I saw a blog post from Martyn Daniels (UK Booksellers Association) the other day showing shots of bookshelves in Asda, the supermarket, where he was by chance. These pictures showed maybe 100-200 paperbacks, all current bestsellers by the looks of it, on sale for £1. He checked the price online in some book retailers and found them much higher. His point was to ask how booksellers can compete with the supermarkets who are selling at silly, loss-inducing prices (beats pulping, I suppose, which is what publishers do with returns they can’t afford to store). My point and I think probably yours is, why did the bookselling trade allow supermarkets to get into this position in the first place, when they could so easily have been clever (ish!) and built up loyal customers by using their nouses a little bit as you so aptly outline.

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  10. Mandy says:

    You’ve said it perfectly Bernadette. Couldn’t agree more!

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  11. Dorte H says:

    Those people were probably sent to sales courses in Denmark! That would explain why they think what customers really want is Stephen King, James Patterson & stationary, and that they think a VAT of 10 % is nothing and that their book are still relatively cheap 😦

    I just checked, and the lastest Danish Susanne Staun I want costs c 34 pounds.

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  12. farmwifetwo says:

    Same as agency pricing for ebooks. Those that use those devices read hundreds of books/yr… but we can’t cut the price to sell more and make more money. They want to make lots on little and people are going to look and find it the cheapest. When you have a Province wide interlibrary loan service… guess where I get mine instead of buying my own copy.

    Personally, it’s not just stores. People in general think they are owed. Reading comments on places like CBC they expect the gov’t to give them a pension – I have to save part of it myself??. They think they should pay their bills – whenever – late fees?? I shouldn’t pay those. It’ll swing back one day…. but for now… nobody takes responsibility for their own choices.

    Getting off my soapbox 🙂 🙂

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  13. shelleyrae@ Book'd Out says:

    Nicely put Bernadette – I’ve often ranted about the shortsightedness of the Australian businesses and booksellers and publishers are the most extreme example.

    I posted my rant about book pricing a while ago http://bookdout.wordpress.com/2010/11/10/profiteering-publishers/

    I’d be interested in your opinion!

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  14. JoV says:

    Business sense of house bricks. I like that. Keep ranting, I love it! 😀

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  15. Maxine says:

    That “Asda” article I mentioned has now been put on a book trade email alert, so it will get a lot of circulation. The link is here if you are interested to take a look (includes photos!):
    http://bookseller-association.blogspot.com/2011/01/book-pricing-madness.html

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  16. @Margot I don’t work in retail but I get the basics of it – sometimes I feel like these places think just opening their doors is good enough.

    @1girl2manybooks – Exactly – it’s like they’re saying “what do you mean we don’t have what you want – we’ve got books – surely one is much like another – stop being so fussy” GRRRRR

    @Marg – I know what you mean about never having had that experience of the interested bookseller. It’s one of the reasons I feel no compunction about buying most of my books overseas – If I’m going to get impersonal service regardless I may as well go for price. And as for Gerry Harvey I could cheerfully kick the man – I was in Sydney when he used some pretty dodgy (though legal) practices to squeeze out all his competition back in the late 80’s – if he’s being squeezed out now via similar means my sympathy is non existant.

    @kathyd – we just don’t have such stores here so you are lucky – I guess our population is too small

    @bilbliolathas – LOL – I ended up spending my $20 voucher on a couple of kids books to give as a Christmas present – there wasn’t anything I wanted to read for the prices they had. I agree the Adelaide store looks like it’s going out of business – and now they’re selling such an odd assortment of non book related stuff I fully expect to see farm animals for sale shortly.

    @Maxine – that’s it exactly – how did they not notice this stuff was happening and do something about it long before it hit crisis point?

    @Dorte I suspect all the schools are the same everywhere in the world – apparently none of them have caught on to this new invention called the internet

    @farmewifetwo – I do agree so much that there’s a growing entitlement mentality – both individual and at a corporate level – frightening really – I work in the health sector and it scares me to see what people’s expectations are of what the government should provide for their health care needs – so many people using emergency rooms as their local doctor because it doesn’t cost them anything – meanwhile the emergency rooms can’t cope and genuine need cases get lost among the lazy/cheap people who won’t pay the $35 to go see a GP

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  17. kathy durkin says:

    Well, on a related note, the Book Depository does get back to me right away with a personal email if I ask questions. Last week I emailed in a question about delivery addresses, and I was answered the next day with a personal note.

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  18. Chuck says:

    Hi Bernadette. Love the blog. I’m actually the manager of a large Dymocks store in Melbourne, and – it may surprise you to know – think you’ve made some damn good points here. I do have to say that, while you’ve largely targeted the RedGroup here, Dymocks also unfortunately falls down on many of the points you’ve raised. The only ‘excuses’ I can offer on our collective failure to implement such things as sending out individual emails to specific customers based upon their previous purchases is that a) all but one of the Dymocks stores in Australia, NZ and HK are franchised, and the formatting of in-store systems (such as email, POS, and inventory services) is dictated by Head Office in Sydney (I’ll be sending them a link to this, BTW), and b) I’m making an assumption here, but – in terms of the general advertising that so irritates you – it’s almost certainly less effort (and possibly less costly) to ‘blanket’ the public with general ads that describe a whole rage of ‘stuff’ we have on offer (apart from anything else, drawing attention to such things demonstrably increases the number of people who are aware of certain items we want to push). I’m guessing that individual stores could set up an individual-targeting system/s of the sort you’ve suggested, but this may not necessarily be the sort of thing we could do under the terms of our franchise contracts (I shall have to look into it), given that the ‘blanket’ emails we currently send out even for individual stores need to be ratified by HO. As a long-term book-buyer myself, the only store I’ve ever patronised that actually does target individual customers in this way (although I’m guessing there must be others) is Infinitas in Parramatta, NSW, and even they restrict this to ‘new book by an author whose books you’ve previously purchased’, which leads me to suspect that all the suggestions you’ve made – while sound in theory – may require more effort in practice to implement that might be immediately apparent.

    With regards to the general state of ‘physical’ bookshops, I certainly agree with many of the opinions above, that things are currently pretty dire; however, I’d also suggest that this isn’t always down to the stupidity of booksellers (at least on a store level – although I’m not saying it isn’t, either). Markets change, products change, industries also need to change to keep up, although this doesn’t guarantee survival. The music industry suffered badly when they chose to ignore the impact of music downloads. On the other hand, I’d suggest that there was little that small businesses such as greengrocers and butchers could do to stem the loss suffered when supermarkets began stocking a better range of goods at better prices (see below my comment on slashing prices). The bookselling industry is currently dealing with the triple-whammy of an ongoing Global Financial Crisis (three years and counting), the soaring popularity of e-readers, and the growing attraction of online purchasing. Again, there aren’t necessarily any ‘easy’ fixes to this (easy suggestions, sure, but not fixes). Slash costs? Well, cost-wise, there’s only so much you can slash the price of a book by before it’s simply not worth selling (for a bookseller); Big-box stores like Big W generally sell their books *under* cost (which booksellers simply can’t compete with), the idea being that you go in to purchase an incredibly cheap item, and hopefully end up purchasing some additional items that have been marked up several-hundred percent (such as clothing), thereby balancing the profit margin. Get on board with e-reader technology (which is something most physical booksellers have failed to do)? I can’t speak for other chains, but – regardless of the huge amount of research that employees like myself have put into the tech, with a view to stocking it and attempting to intergrate it into our sales model – e-readers aren’t something we can stock without ratification from HO (and please don’t ask where HO stand on e-readers currently. Just don’t). And if someone can show me how to effectively compete – without going broke – with online prices, hell, tell me so I can look into it. Because, for all that there are some folk like yourself, Bernadette, whose purchases truly are driven by service and loyalty to customers, the sad fact is that the majority of consumers these days are price-driven, a point driven home to me daily by the number of even regular customers who – generally politely – ask me if I can match Big W’s $20 price-tag on a book we’re selling (at RRP) for $32.95, then politely walk away when I politely explain exactly why we can’t.

    That’s not to say that service doesn’t count for a great deal; I suspect that the only major reasons my store has been able to continue trading over the past year is a) our in-store service, which, while we could always do more (and what retailer couldn’t?), certainly ensures a large, ongoing clientele of regular and semi-regular customers, in addition to ‘walk-ins’ who make purchases simply on the basis of being treated pleasantly and not bullshitted to simply in order to sell units, and b) specialisation, in as much as any general bookstore can be said to specialise; the bulk of our sales last year came from our large paranormal/horror and SF/fantasy sections, which included titles you normally wouldn’t find outside of a genre specialty store (or online), as well as from our finance/management section – both of these specialities backed up by staff who Know and Are Passionate About Their Product.

    There’s probably a great deal more I could say to address points you’ve raised (both in agreement with and in defence against), but I do hope the above gives you something of an insider’s view of what’s going on on *our* side of the retailer/customer fence. I also hope (and assume) you’ll keep writing – and encouraging others to write – blogs like this, because (sadly) it’s usually public opinion that generates change and movement, rather than similar comments from within the industry or even within the company. Hint, hint. 🙂

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  19. @Chuck thanks for taking the time to comment so thoughtfully, it’s great to hear things from an ‘insider’ perspective – there is much food for thought in what you’ve said – particularly with regard to the problems you retailers face being compounded by a disconnect between HO and local stores. I shall respond properly when I’ve had time to mull over my thoughts and reactions to all of this. For the record though at least you can rest easy knowing I wasn’t specifically having a go at the Dymocks store you work at as I live in Adelaide.

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  20. Chuck says:

    Cheers Bernadette. 🙂 Even if your comments had been directed specfically at my store (and I knew they weren’t), I’d like to think I’d have responded in much the same manner. I personally feel that any feedback – positive or negative – is infinitely better than no feedback at all, because no feedback offers you no clues as to What Isn’t Working (for the same reason, I always examine the occasional ‘unfavourable’ Mystery Shopper reports very seriously, even if I don’t necessarily agree with them, as it offers at least a snapshot of stuff we could potentially fix). I’ll greatly look forward to your further thoughts on everything discussed thus far.

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  21. Rob says:

    It sounds to me like Australian booksellers need to get themselves some decent Customer Relationship Management (CRM) software. CRM software integrates sales, marketing and service strategy. Typically CRMs consists of six integrated activities: (1) the creation and data mining of a database of customer activity; (2) the use of data analysis for deciding about which customers to target, how to target, contact and build relationships with them; (3) the development of personalised customer experiences; (4) channel management for enabling efficient share of customers’ knowledge across the organisation so that they can get personalised and consistent service at anytime, anyplace, anywhere, and on any platform; (5) management of privacy issues; and (6) the development and gathering of metrics for measuring CRM success. In short, CRM scrutinises information about people, their characteristics, and their history of purchasing with a company in order to better manage the relationship between the business and a customer. The booksellers are undoubtedly collecting the information. They are clearly not doing anything substantial with it, and certainly not providing a better, enhanced service to customers.

    A different type of customer profiling is collaborative filtering, now commonly used by web retailers and online markets. This technique takes multiple data streams supplied by an individual, either through them answering a series of questions in a online survey, or through personal interests expressed in terms of information posted on a social networking sites, search terms and ratings, or through transaction patterns of purchases, and uses them to construct a personal profile. This profile is then entered into a pool of other profiles and compared to them to construct other aspects of an individual’s profile, or to suggest other potential purchases based on the similarity of the profile to other people in the pool. Amazon’s ‘personalised recommendations’ works on this principle, tracking the browsing history, keyword searches, and purchases of individual customers to build a multi-dimensional profile of taste in reading or music or other consumer items, to then make recommendations for other purchases based on what other people with similar profiles have bought. Sounds like Australian chains needs to start doing this if they want to compete with the services being offered by others. Again, they are already generating some of the information through transaction sales and loyalty cards.

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  22. Maxine says:

    One of the many points Chuck raises in his (very admirable) response is about targeted emails and whether they annoy people more than “general” ones. The way Amazon handles this is to have a page of all of its e=alerts, and the customer opts in to the one (or ones) he/she wants. This is not difficult, technically, for an organisation to implement but I am sure that bureaucratic and organisational difficulties can be great, even so.

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  23. kathy durkin says:

    A strange experience happened to me which raises the extent to which targeted emails should be sent and the spectre of “Big Brother” hovering over our online communications. Awhile back, I was researching something on women’s rights and I emailed a friend, who is a published author on related issues. Right after I received her reply to my email, an ad for her book was emailed to me from Anazon.com I thought it was a bit of an invasive of privacy. Emails were being tracked. The writer said that she knew of no agreements to tag her emails with book ads. An eerie moment.

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  24. LauraR says:

    Very thought-provoking post and response by Chuck. Like the previous poster, I also have misgivings about targeted e-mails and tracking of previous purchases to suggest new purchases in terms of invasion of privacy. One point I was particularly nodding to Chuck, was the comment about carrying specialist genre titles, I really like to physically hold and have a little flick through a book before buying, so stocking the more obscure items, (i.e. ones the public library is unlikely to have) would definitely tempt me to buy in store despite the higher cost than online sellers.

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  25. I read this with enjoyment and want to thank Bernadette and all commenters for the thoughtful remarks and great points.

    My own book buying habits are random, impulsive and sporadic. If I am near a book store, chances are I will enter it and browse. I mostly WANT to buy a book. But there is never anywhere to sit! I have a faulty right leg and can’t stand for long. I sometimes sit on the floor, but inevitably someone needs to clamber over me to get to that one copy of Chicken Farming in Australia. When I was in the USA, I can’t remember which store (Borders? Barnes and Noble?) had comfy chairs dotted around, practically begging you to browse. The smell of freshly brewed coffee enhanced the experience. I guess it is a matter of not enough space/paying for rental by square metres of space in my Australian town etc, but I dream!

    While I prefer to hold a book, sample the text and illustrations before I buy it in a bricks and mortar store, I love that the internet allows me to find books in a much less random way. While sitting! I can read reviews from my favourite reviewers, then use Google to research the author and sample a chapter. Places like Book Depository and Amazon make it easy then to order a book and have it delivered to my home.

    However, I would prefer to support local businesses, and the Australian publishing industry. So I am conflicted.

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