Whitcoulls and Borders
I was thrilled to learn that the remaining Whitcoulls and Borders have been sold to Anne and David Norman. Now they have some hope. They will now live in the Pascoes Group and of course this group are known as having revived the ailing Farmers chain and given them new life.
Once the essential housekeeping details are sorted, such as property leases and staff contracts, there is every reason to hope that they will breathe new life into Borders and Whitcoulls.
That can not mean BAU or Business As Usual, because even though they did OK and the biggest problems were in Australia with REDGroup. Nevertheless these stores were not run optimally and they were not run with the times.
I heard people, partly lead by local publishers, saying that if the NZ stores were run from Australia, they would probably signal the demise of the NZ author. Certainly I agree that we would have seen less Kiwi authors in store, but I think ultimately either the publishers would have to become less greedy and insular or the local authors would start to embrace the new eBook media and of course in doing so they can either self publish or join Amazon or other local eBook publishers. Neither are ideal for people who love books.
As I’ve said in many previous blogs about Whitcoulls and Borders, a few of them can be found here, the first thing is to go back to basics. For these stores to be successful they need to operate smarter and provide what the modern shopper wants. There are many good examples overseas.
With the chain expanding, here a some ideas that I would look at.
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Gift Registry. Chains like Macy’s in the USA have had phenomenal success with their national gift registry programs for decades. They have kiosks in store which are linked nationally. I was so excited the first time I went through one I almost bought a gift for a young man’s Bar Mitsva in Chicago. I was in New York at the time looking for a hat in one of the coldest winters I have ever experienced. It was so well laid out, there were thousands of special events from weddings to anniversaries and being national, you could see from New York, what a person in Madison Wisconsin had their hopes on. Given that the chain owns Farmers and a number of jewellery stores, this would be a great opportunity to combine the lot.
- I keep harping on about Jeff Jarvis’ book What Would Google Do? It’s funny in a way that in one of his first blogs about the book, he suggests that you could buy it from Borders. The thing was though that I couldn’t buy it from Borders at the time because they didn’t have it, so I bought it from Amazon.
- So I think that Borders and Whitcoulls need to start saying, what would Amazon do. So many companies are naive and believe their own hype that web retailers (only part of what they are) are no threat, or they consider them such a threat that when things go bad, they become a self fulfilling prophecy.
Hanging a few Kobo’s on the wall is not the answer, that has been a major botch up in my humble opinion. Even on the web, sell the sizzle on the home page! But some things they could do with their ‘loyalty’ programs is monitor what each customer buys and make recommendations based on the buyer habits. I have bought at least a dozen books on Amazon’s recommendations. Amazon is also much cheaper than buying locally, but that’s a different story because it costs a lot to get books to New Zealand, so unless you buy a stack of books, you pay back what you save on freight.
Amazon has many great features that can be just asdestination events
Mobile Marketing easily applied to a bricks and mortar chain, which has the benefit of being able to hold a book, tell you what store it is in and provide you with much quicker gratification.
I don’t want to write a book, but here a some things you may find in this blog in the coming days for Whitcoulls and Borders:
- Becoming a destination for events such as readings and signings
- Back to basics and way beyond in inventory management
- A major web presence with lots of ideas perhaps sparked by What Would Google Do (which should be a mandatory read for all Whitcoulls and Borders management at all levels)
- A new way for both stores to have lots of stock available, but not necessarily on the spot. A central warehouse with the option of home delivery could cut down inventory sizes without sacrificing range and depth.
- Embrace proximity based marketing on mobile devices. I would strongly recommend that management from Borders, Whitcoulls, Farmers and in fact all retail chains attend the Mobile Marketing Forum in Auckland this June. This Forum could be called The Retailer Strikes Back. They will learn many new ideas at this event.
- Understand their regional customer base. There is no point in carrying the same stock range in each store. It simply won’t work and you will have aged stock going on sale. Some of the category managers need to take a long hard look at the books they have been stocking and ask themselves what on earth possessed them to make some of the decisions they made? Or was it the publishers reps that conned them?
- They should look at products like GeoSmart’s impending Business Intelligence on a MAP. This could produce many aha moments when used to geographically view their business results in combination with consumer demographics.
Ideas for Retailers including Borders and Whitcoulls
As I mentioned last week, I am speaking at the Mobile Marketing Forum in Auckland next month. I’m going to share some good practical business ideas there that smart retailers and destination businesses can implement. You might catch the odd one on #NZSoMo on Twitter, but I’d recommend if you want to get into and ahead of the wave of new social media and location based mobile marketing, you should invest in attending this event.
Some time ago I talked about the situation with Whitcoulls and Borders. I said I had lots of ideas about how they could run their businesses more profitably without sacrificing their models. I’m happy to share some of my ideas, but not all of them, because I am thinking that maybe there is an opportunity to partner with some local developers or entrepreneurs to commercialize some of my ideas, seeing as the people in these businesses can’t see the wood for the trees.
I’m happy to share a few concepts to get things started and to show I’m not just full of hot air.
First is basics. Whenever a business starts falling by the wayside, the smart ones go to consultants or mentors. Often the business has gotten so busy they forget about what made them great stand out businesses in the first place and often they have forgotten good business practices.
A key one is stock turn by category. Some of the books I saw in the sales were going to struggle at $1 a book and should never had been stocked. How did Borders NZ decide what to stock in each category? Did they liaise with the people who read the books or just on what the publishers told them.
Back in the day the late Shaun Joyce of Sounds Music used to consult my daughter on which albums he should bring in for the big teenage market. She was big on music and researched amongst her friends which meant they got what they wanted and Sounds stocked what the segment wanted and it moved.
I haven’t explored retail in the US for a number of years because it was no longer relevant to my current business environment, but that is changing, partly due to a new solution that GeoSmart is launching soon called BIonaMAP or Business Intelligence on a MAP. More on this in the near future but it is very exciting for lots of businesses including retail chains.
I fell in love with Borders in the USA. Shame they may not be there much longer.
They were innovative in lots of ways. there were 3 that I particularly liked (I’m not writing a book here folks!).
- They had book signings and meet the author every week (I’m talking about big city stores here). The ones I liked best were autobiographies, for example imagine going to a store, watching BB King play Lucille and sing a couple of songs, having a chat and then personally signing his new autobiography.
- They encourage you to read in the store and have a cafe you can take the books to. My first thought was, they will damage the books. My 2nd thought was now I can check a few books to find out which is the one I really want, especially for me technical or music related books. I very rarely go to a book store and buy only one book. This year I have bought at least 20 books from local stores and another 8 from Amazon.
- They have massive range, width and depth. If I want to buy anything other than a top 100 book (I’m not generally in the demographic for many of those).
The end of Whitcoulls and Borders in New Zealand
If you have a Borders or Whitcoulls voucher, even if you hate the idea of spending double to be allowed to spend your voucher, I recommend you do it quickly, because within a couple of weeks it will be worthless. It was interesting to see that there is no mention of the current situation on the Borders website which talks about eBooks coming soon, although Whitcoulls have been a bit more responsible with a home page announcement.
The demise of these companies isn’t about eBooks, it is largely around debt as pointed out by Liam Dann in this morning’s Business Section of the NZ Herald. and the business models. I’m not going to discuss the debt because that doesn’t reflect on the industry itself, it reflects on higher level financial decisions and the economy, not on the book trade.
Book stores and music stores are in industries that are steeped in history of “this is how we’ve done it for the last 50 years and why change it if it aint broke”.
As was mentioned in today’s NZ Herald story by Isaac Davison, “In 2010, 9.67 million books were sold, an increase of 1.2 per cent in volume but 0.1 per cent down in value against 2009. This was despite the mark-up on books in New Zealand, which saw paperbacks sold for as much as $20 more than online, even after shipping costs.”
So much for Amazon (of course there were a huge number of Kiwis including myself who purchased from Amazon as well) being the cause of the demise of our local stores.
I also appreciated the comment in the same story from Jo McColl of Unity Books that many people bought hard copy books as a consequence of having purchased eBooks. I’ve done that too. I read eBooks, listen to Audio Books and still have a personal library of around 2,000 print books. The same with music, I listen to lots of music online but have still purchased at least 10 CD’s so far this year.
I might have to go to a separate blog about how Whitcoulls and Borders business model needed to change in order to stay viable and vibrant (ignoring REDGroup‘s debt which doesn’t reflect on the book trade business model itself) because for these guys its too late unless they get a savvy new owner (who will not purchase the chains’ debt) who is ready to adopt a new business model.
REDGroup have called in Administrators. I don’t care who the administrators are. Their role is a short term one and it isn’t about changing the business model or trading back into profit. It is about the creditors.
They will try to negotiate with the book publishers and wholesalers and other suppliers who are desperate to get paid for their product and worried about their future viability in NZ. Inland Revenue want their taxes and will be first in the queue.
They will need to negotiate with the 1,000 staff who will have to have new short term contracts and will be justifiably worried about whether they will get paid at all, let alone have a future with the chain, but at the same time, will be essential should they find a new buyer for the chains.
Based on the outcome of their negotiations a decision will need to be made on whether to go into receivership which is next most likely step. If that happens, enjoy the book sale, because there will be many bargains up for grabs.
The shame of it is that (outside of the decisions that got REDGroup into this financial position) the problem in the trade is that the business model needed to change and like the music industry and other industries, the people running them don’t get it. They should have learned from the music industry, which still doesn’t get it. Other industries who don’t get it include banking, telecommunications and consumer electronics to name a few.
What should they have done and what can other retail businesses do in order to not follow Borders and Whitcoulls into the mire? Subscribe to my blog and I’ll give you a few pointers for free. It isn’t rocket science, but it is a fundamental shift in thinking, whilst also remembering the fundamental simple principles of retail and distributon.
We live in a new world, its exciting and there is a lot of money to be made, but the fatal flaw is thinking that if you do the same thing you have always done, that you will get a different result.
There is an RSS feed to this blog. Come back and read some of my ideas on how companies like Whitcoulls and Borders can thrive and prosper.
Here are a few things I would look at:
- Understanding your business
- Communication with customers
- Communication with staff
- Distribution methods
- Stock turn and inventory management
- Engagement
- In Store Events
- Proximity based marketing
- Shelf Management
- Relationships with community
- Relationships with education
- Location Based Business Analytics
- The Internet
- Gift Registry
I could and probably will go on. The answers are a mixture of the old and the new, neither of which these chains have effectively managed. Borders started in the right direction in the US, but didn’t continue the evolution. International chains like Borders and WH Smith focussed more on the era of globalization than evolution of the business model. Something that would have made short term heroes who have probably made their money and moved on, but was only ever going to be short term.
Seth Godin on Kindle
It’s a shame that Seth doesn’t support direct comments on his blog, but maybe that’s because he wants us to read what he writes rather than the huge numbers of people who would want to comment on his blog.
I won’t paraphrase his blog about the Kindle because I think it’s worthy of your time to pop over to his blog and read it for yourself.
I have promoted eBooks for a number of years including writing one myself, Unleashing the Road Warrior, which you can buy from many sites including the new eBook site ReadingIt which I am involved with.
I also wrote a FREE Whitepaper which might add to the story called Are eBooks Ready to Come of Age, which has been used as readings in a number of universities.
The key things that I totally agree with Seth on are:
- eBook prices are crazy. Why should you pay a similar price to a hardcopy book? The cost of publishing is tiny in comparison to printing on paper. It is more sustainable as trees don’t need chopping, retailers don’t need huge margins, so someone is being greedy. Readingit.com is a startup founded on the concept that the writer should enjoy the majority of the revenue from their professionally edited book.
- The Kindle is easy to use, you don’t need to be a technology buff and with good internet access downloading new books is easy. It’s about reading not about technology.
- The Kindle display is more like paper and therefore doesn’t give you the eye strain that I have suffered from on many longhaul flights because of the backlighting, just the same as when you are at your computer too long at a tme.
- The Kindle doesn’t give you the same fuctionality that I wrote about in Are eBooks Ready to come of age. In Palm and Windows Mobile devices and others, you can highlight, annotate, bookmark, draw and other features which mean that you can readily access information you want to revisit and you don’t ruin the book with lots of scribbles and ear tagged pages. Like Seth I have several thousand books and it isn’t easy in a hurry to find the book you wanted and which of the many post it flagged pages you wanted.
- While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course http://luigicappel.wordpress.com.
Thanks so much for your support:)
Using CAPTCHA to digitse old books
This morning in the shower I was listening to Digital Planet, one of my favourite podcasts from the BBC. No I’m not sad, I just like to maximise my time:)
They interviewed Luis von Ahn about how Carnegie Mellon University is are using CAPTCHA technology to help digitse very old books that are in the public domain.
What is CAPTCHA? It is an acronym for “Completely Automated Public Turing Test to Tell Computers & Humans Apart” You will have found that many times when you register to use an application on the web, or perhaps when you want to invite someone to be your ‘friend’ on MySpace or leave a message, you will see a small clump of letters and you have to enter what you see into a text box.
The reason for this is because spammers and hackers create bots, that allow them to access information and pretend that they are real people. For example there are people running businesses where they can guarantee you lots of ‘friends’ on MySpace for a fee. Personally I am against this and ultimately it is a waste of time, because just being able to say that you have thousands of friends, doesn’t actually help you in any way.
Just to sidetrack for a moment. I have lots of ‘friends’ on my MySpace page, 3967 at last count. They are people who have requested my ‘friendship’ or vice versa and because of that personal relationship, wherever possible, I have a fan base that I can use when I have a concert or gig that I am performing. I can use this to make contact with them, even by geography, but that is really a topic for my About Songwriting blog.
Anyway, many organisations are trying to digitise as many books as possible to allow them to be read as eBooks. The best known of these is Project Gutenburg, which has already digitsed more than 25,000 books.
The problem with older books, especially those prior to 1900 is that the pages are fading and the fonts are harder to read by OCR (Optical Character Recognition) tools, which themselves are still not 100% reliable. On a tangent, I hate reading books that are not perfect. My eBook Unleashing the Road Warrior was edited 12 times to get it as good as possible and I was dissapointed to find an error on page 309 of Stephen King’s latest book, Dumas Key, but that’s another story:)
So what the Carnegie Mellon people have done is to scan the pages and have created a tool which grabs 2 at a time and feeds them into the CAPTCHA environment. So now when you complete a CAPTCHA that has 2 words instead of random letters, what you are actually doing is not only autheticating that you are indeed a human, you are also helping transcribe these old books and ensuring their texts are protected for future generations to enjoy, is that cool or what?
Personally I find CAPTCHAS a pain in the proverbial, but having learned this, I am feeling a lot better about them.
While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course http://luigicappel.wordpress.com.
Thanks so much for your support:)
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