For the past eight years, Harvard professor Ryan Raffaelli immersed himself in the world of independent bookstores. Concluding his study, he just released a working paper, entitled “Reinventing Retail: The Novel Resurgence of Independent Bookstores,” that summarizes the findings from his extensive research, which included a series of interviews and focus groups, visits to bookstores in 26 states, and a detailed analysis of newspaper and trade journal articles.
While this working paper has immediate application to bookstore owners and managers, its implications go much further. It provides a road map for any retailer —independent or otherwise — into how to survive, even thrive against the competitive onslaught of Amazon.
“My research examines how industries, organizations, and business leaders reinvent themselves in the face of radical technological change,” Raffaelli writes. “In the context of retail, seismic shifts are affecting the way consumers engage with online, big box, and local retailers. Independent bookstores provide a story of hope for community-led businesses.”
Calling the resurgence of indie bookstores “novel” is putting it mildly. They were on the verge of collapse, with only 1,651 independent bookstores operating in 2009. Since then, the tide has turned and indies are on the rebound. The reasons why are detailed below.
Struggle for survival
Prior to 1995 when Amazon arrived on the scene, the number of independent booksellers reached historic highs, according to the American Booksellers Association (ABA). But five short years later, their numbers had dropped by 43%, decimated by competition not just from Amazon but big-box bookstores like Barnes & Noble and Borders as well. From 2000 through 2009 the number of independents continued their steady decline.
And Amazon didn’t just take down the independents. The big-boxes struggled to survive too. Borders went under in 2011. Barnes & Noble dropped from 681 stores in 2005 to 627 at the end of 2019, after it was acquired by hedge fund Elliott Advisors. Elliott also owns U.K.-based bookstore chain Waterstones, with 238 stores, and has put management of both chains under the wing of James Daunt, who was an independent bookstore owner before becoming CEO of Waterstones in 2011.
Unlike the way typical chains – bookstores or any other retail category – operate where each store is laid out and stocked pretty much the same, every Waterstones’ store is unique. Each store looks, feels and operates like an independent, not a chain store.
Waterstones and other successful indie bookstores follow the 3Cs model outlined in Raffaelli’s working paper: community, curation, and convening. Bookstores use these 3Cs as leverage to beat Amazon at its bookselling game.
But this 3Cs model is applicable to every retailer, no matter the category or whether its only one store or hundreds.
Building a community with customers
The concept of community as described by Raffaelli extends beyond localism as a social movement and a way for shoppers to support their local economy. Community connects customers with content in the store to build truly meaningful relationships.
“We basically took our relationship to the community and redefined what the bookstore is,” a bookseller said. “It is about the community which surrounds the bookstore and those interactions between author and reader, and readers and booksellers, and readers with each other.”
No doubt, there is a special connection that booksellers and their customers feel for the content contained in books, but the same kind of passion for brands and products in other categories is evident in all great retailers as well.
Who runs or works in a fashion boutique but passionate fashionistas or in a home furnishings store but design and decorating enthusiasts? The same goes for garden centers, pet boutiques, gourmet shops, wine stores, toy stores, gift, card and stationery shops; the list goes on. Those retailers’ passion for their product category draws in equally passionate customers who together build a community through their shared passion.
“I am first a businessperson. But who would be in this particular business if we didn’t also love books,” said this bookseller.
And just like readers have a special connection to certain authors, customers feel a special connection to brands, designers, and the people who create the products they are passionate about.
A retailers’ passion for their products and their customers is magnetic. It is the spirit that binds all together into community.
While it is essential for retailers to build their community in the real world, they also must extend their reach digitally to build an online community as well through Facebook, Instagram, and Twitter.
“The key to independent bookstores’ growth in the digital era has been their strong and deep ties to neighbors,” writes Raffaelli. “A robust digital presence has reinforced those communal connections. The connection between the physical and online communities strengthens both.”
Curation offers what retailers’ community of customers crave
Curating the retail inventory to make sure it meets the needs and interests of the local community is another critical component of indie booksellers’ success. But even more than that, it requires the bookseller get the right book off the shelf and into the right person’s hands. That is the role of handselling, as Raffaelli calls it.
Through handselling, “booksellers serve the role of matchmaker between a customer and each book on the shelves,” Raffaelli writes. “Booksellers possess a unique ability to find unexpected hidden gems in their stacks – whether it be up-and-coming authors or unexplored genres – that online algorithms have yet to fully replicate.”
A typical indie bookstore may carry 2,000-5,000 titles, way too much for any customer to browse. That may be more than the typical independent retailer in other specialties carry. But every retailer stocks far more merchandise than any customer can effectively digest.
Customers bound by the spirit of community value the guidance and expertise of the merchant who has custom-curated the store’s selection to find that special something they might be looking for.
“The practice of curation combats the challenge shoppers often face when trying to figure out what to buy from the seemingly unlimited inventory of Amazon, popularly known as ‘the everything store,’” he writes. This need applies to any retailer, bookstore or otherwise.
The paradox of choice is a real problem for customers and only getting more so as consumers’ endless choices gets broader. The gentle art of handselling helps overcome the anxiety-inducing choice paradox for customers.
Convening gives reasons for people to come out and commune
Successful bookstores are places for people to gather together and where community ties are strengthened. Raffaelli explains they borrow the “Third Place” strategy, originally identified by sociologist Ray Oldenburg (not Starbuck’s Howard Schultz), as “a gathering place where people come together outside of home or work that is accessible to the general public and does not set formal criteria of membership or exclusion.”
Raffaelli writes that indie bookstores have amplified and extended the third-place concept by hosting special events. Noting that some of the bookstores in his study host as many as 500 events per year, Raffaelli explains these retailers recognize they are competing not just for their customers’ discretionary money, but their time.
So, they offer people events that bring them out to the store to have an experience that is worth their most valuable time. Because of the importance of events, many of the bookstores studied have added full-or part-time event managers to oversee their programs.
While scheduled events are important, so too is the ambiance of the store. Convening places are comfortable and home-like, not sterile or too commercial. They have plenty of places for people to sit alone or in groups to chat, relax and read, as well as have a nosh or cup of coffee.
While it doesn’t make sense for every retailer to have a café, they certainly can be designed with customers’ comfort in mind. Cold fluorescent lights, loud intrusive music, and the absence of any place to sit down doesn’t make for a comfortable place to be, quite the opposite.
Reafaelli also notes that real estate developers increasingly view indie bookstores as “anchors of authenticity” that attract customers to shopping centers, malls, and Main Streets. “In the case of bookstores, readers may choose to visit a shopping location so they can spend the afternoon reading at an independent bookstore café, and then shop at several nearly local businesses.”
Indie bookstores provide other retailers in whatever category inspiration for how far they can stretch to make their store a community-centric, locally-curated space for convening, learning and experiencing. Retailers are only limited by their imaginations. More is more when it comes to creating in-store opportunities for people to get together and share experiences.
Resurgence of independent bookstores
Based upon the 3Cs practices of community, curation, and convening identified in Raffaelli’s research, the American Booksellers Association reversed its membership slide that bottomed out at 1,651 in 2009 to rise 49% to over 2,500 last year.
Even better, the ABA stores are thriving. While big-box bookseller Barnes & Noble reported revenues decreased by 3% in fiscal 2019 ending April 27, 2019, the ABA reported sales among its members grew an average of 5% year-over-year in 2018. That is a level of growth any retailer would be over-the-moon to report.
That’s why the findings in this working paper are important not just for bookstores, but for every retailer to embrace. “Through practices like community, curation, and convening, bookstores [and any other retailer, I add] authentically connect consumers with the values (e.g. localism) they may espouse,” Raffaelli concluded.