Stand Book Stall, one of the most prominent book stores not just in Mumbai, but in the country shut down earlier this year. Prominent people such as former President APJ Abdul Kalam and Vikram Sarabhai and former Prime Ministers such as Dr. Manmohan Singh and Jawaharlal Nehru have all visited and enjoyed their visits. The closing down of this iconic store is a symptom of a larger structural shift in the country as India embraces digital. The essential question here is, can traditional bookstalls compete with Amazon, Flipkart and digital e-books?
There has been a fundamental shift in the way we read and the way we transact. E-commerce is able to provide goods at lower prices than available at retail outlets. They are able to do so because of the economies of scale that accrue to them.
The large volumes and scale of transactions allow them to have low margins on their products. To add to this, there is also the aspect of promotional activities such as sales which allow consumers to access goods at even lower prices. On the other side, the volume allows firms to negotiate with publishers and get better deals. Retail outlets are unable to do so for two reasons – the value chain and overheads. The distribution network through which these books reach retail outlets have intermediaries. To add to this, rent on prime property, salaries, overheads, etc. add to the cost side. With declining purchases in stores, the revenue side also gets impacted. Apart from this, there is also a trend to move digital. E-books have changed the way readers read. Devices such as Kindle and softwares that support e-books have made it easier to access books and carry them around the world. The burden of carrying a physical book is tedious. These are the forces with which retail players must contend.
What will it take for them to compete in this age? Can they compete? Or is just a matter of time before they cease to exist?
Book stores will always exist. Some find pleasure of reading a physical book much more appealing than reading an e-book. The experience is much better, although it is limiting in certain ways. This breed will always exist. So, there is hope. But some may find the experience of shopping online more convenient and to add to it, cheaper. This is the biggest pain point for retailers. While digital is the name of the game, it isn’t the only game in touch. E-commerce companies are also branching out into brick and mortar stores.
For traditional bookstores to compete, they must start creating other ways of reaching their customer.
While a bookstore has a magical charm of its own, there have to be other ways by which customers can purchase books. Sapna Book House, a 51-year-old book shop based out of Bangalore has also started its own online book store to ensure ease of access to get customers in the tech capital and across the country. They are coming up with ways to reach their customers. There is a significant shift from the customer competing to reach the store before the stock runs out to stores trying to reach customers before a competitor gets to the customer.
Discounts are just one aspect. Sapna Book House has limited discounts as compared to the deals online.
Other icon stores such as Blossoms has a flat discount on its books and has always positioned itself aggressively. While discounts do play a key role in driving volume sales, other specializations are necessary. Blossoms is known for having old and rare books which have been out of print. Their second-hand book business is a solid part of their value proposition. Sapna has found its own way of competing.
These stores are making inroads into their communities. This is the biggest force that will help them succeed. There may be significant changes to their operating models in the near future, if this hasn’t happened already. It is authenticity and experience combined with connecting with the local community that will help them succeed. Let us not forget that Flipkart started with distributing their promotional material outside Blossoms.
While one might be motivated to place their bets on E-books, it seems like bookstores in the real world could actually perhaps compete fairly in this largely virtually inclined world, albeit with some adaptations.
Picture Credits: Thecitizen.com