Some Physical Bookstores are Still Thriving
I’m currently in Perth, which means that I had a chance yesterday to go to one of my favourite bookstores in Australia, Boffins. While I was there, I discovered that they were closing that store down at the end of the month.
But it’s not what you think! This is not another “Amazon is killing bookstores” story. No. Boffins is closing down this store because they are moving to a bigger, better space around the corner. The fact of the matter is that they are a physical bookstore that is thriving in the Amazon era.
The big question is how? The answer: Boffins stands for something.
They are primarily a technical bookstore. They have four main sections: art and architecture, legal, science and engineering and business. If you think about the first three in particular, you can see that they specialise in books that don’t work very well as digital books. Art and architecture books are big, with lots of pictures – they’re terrible on an e-reader. Legal, science and engineering books are dense, often used as reference books, and often have lots of citations that require you to flip back and forth, instead of reading straight through. These don’t work very well on e-readers either.
Boffins also has extremely knowledgeable staff in their areas of specialty.
Add it all together, and you can see that Boffins stands for something: comprehensive service in technical books.
There are other physical bookstores that are still doing pretty well too. I’ve talked before about Pulp Fiction in Brisbane – they succeed by specialising in science fiction, fantasy and mystery, and by knowing more about these genres than anyone else.
Last Christmas, The Strand in New York had their most successful holiday season ever. They’ve succeeded as a second-hand shop by hosting lots of events, focusing on the in-store experience, but mainly by stocking lots of good books. Their point of difference is serendipity.
Evolution in Bookstores
When I was young, the bookstores that I had the most access to were in shopping malls. Places like B. Dalton’s and Waldenbooks. They were just terrible. They never had anything that I wanted. They were great lowest-common denominator shops, I guess, but really, they were lousy bookstores.
When the big box book superstores showed up, I was much happier. Borders and Barnes & Noble were big improvements – they had credible non-fiction sections, and much wider variety. This helped to kill off Dalton’s and Waldenbooks.
Then they got killed in turn by Amazon.
Here is how purpose has evolved:
B. Dalton’s: If you want a really popular book, we might have it in stock.
Barnes & Noble: We have twenty times the selection of everyone else.
Amazon: We have everything, and also a relentless focus on customer service.
You can see how each purpose trumped the previous one. So now, if you’re competing against “we have everything” what can you do? Specialise – that’s the story with Boffins, Pulp Fiction and The Strand. They’ve all found a purpose that can co-exist with Amazon:
Boffins: The best in technical books.
Pulp Fiction: The best in sci-fi and mystery.
The Strand: Find the great book you didn’t know you want, and have fun doing it.
Innovation in Meaning – Retail Version
Shopping malls are (were?) a peculiar thing. They specialised in having lots of middle-of-the-road products, all in one place. The New York Times published a piece today on the demise of Sbarro’s Pizza. They argue that they have gone bankrupt not because their pizza is terrible (which it is), but because they made a big bet on mall food courts as the place to be.
What has happened with malls? From one side, they’ve been killed by the huge, cheap big box stores like Wal-Mart. And from another side, they’ve been squeezed by places with higher quality goods. For example, The Grove in Los Angeles is a high-end mall, with some of the highest sales per square meter in the world.
Here are the purposes:
Average mall: We have mediocre stuff for everyone.
Wal-Mart: We’re the cheapest.
The Grove: We’re the best.
You have to stand for something. Sometimes, even if you have a mediocre product, you can still succeed. Take Starbucks as an example. Everyone in Australia is mystified by Starbucks. I can’t tell you how many times I’ve heard people here complain about their coffee. But coffee isn’t really what they’re selling.
In a very thoughtful piece on what it means to work in the service class, Molly Osberg describes her first job as a barista in Starbucks:
I was 17 when I got my first job, at the Starbucks in my hometown, a suburb about an hour south of Boston. I was trained in the store’s break room through a series of videos. The position’s first directive—conveyed by softly lit panoramas of women chatting over steaming lattes, men in tailored suits smiling gently in the direction of the espresso machine—was to maintain the brand’s identity as a “third place.” The term, as appropriated by Starbucks, was actually originally coined by the sociologist Ray Oldenburg to describe a particular kind of community space, one that facilitated civically minded social interaction. The “first place” is the home and the “second place” is the office, in Oldenburg’s conception, and the idea fit Starbucks’ self-styled business of “conversation and a sense of community” so well that the idea of the third place became their very foundation.
Starbucks isn’t selling coffee, they’re selling the place – and that’s actually more important than the quality of the coffee. Howard Schulz believes that when Starbucks has stumbled, it has usually been when they have lost sight of their ‘third place’ purpose.
Nilofer Merchant talks about how we get to profits through purpose – and I think there’s something to this idea:
It’s not that Harish Manwani is wrong about needing to balance purpose and profits. He’s dead on. As I’ve already written about in Social Era, this is a central aspect of value creation in modern times:
Things we once considered opposing forces – doing right by people and delivering results, collaborating and keeping focus, having a social purpose, and making money – are not in opposition. They never have been. But we need a more sophisticated approach to understand business models where making a profit doesn’t mean losing purpose, community, and connection.
The companies that do stand for something – a purpose that is shared with their community – can bring a real coherence to their work, and have a real advantage in the modern market. People want to believe in something real, of substance. Purpose brings out the best in people and the best people.
Sbarro’s and B. Dalton didnt’ fail because they were mediocre – they failed because they didn’t stand for anything. They had no purpose.
Retail isn’t dead, but purposeless retail sure is.
The interesting innovation opportunity is this: can you innovate the meaning of something by finding a new purpose?
It’s time to start thinking about what you stand for.