An idea for a book store of the future

I’ve been conversing with two authors I know and my wife about a windmill titling idea: what could a small book store do in order to survive the current decline.  One of these authors, Damon Courtney, is an old friend (I think we met in 1990 or ’91 playing Dungeons & Dragons), who also maintains The Pauper’s Book Club for inexpensive Kindle Books.  The other, Peter Cawdron, I met after offering up my critiques and support for his new writing project.  The conversations occurs through e-mails which were general in nature.  I’m not sure if such an idea if viable, but it’s a fun exercise.  What do you think a local book store could do to not only survive, but thrive in an industry dominated by

Conversations with Damon Courtney, 1/17/2012

Damon: …The percentage of self-pubbers in genre fiction has been steadily climbing for the past year.  I have no doubt that by next year, traditional publishers will have less than 20% in all of these categories if they don’t step up their game.  Genre readers love their genre.  They will read a lot of books in their genre.  Within their genre, books (and, by extension, authors) are a commodity.

Richard: Certainly, in the ranks of top selling ebooks.  Traditional publishers may maintain a hold on non-fiction books and print books for some time to come.  They will emphasize their marketing function over their production function.  I read an article for class called, “Even Commodities have Customers” about marketing concrete.  They [traditional publishers] will concentrate more than ever on their top names and might even get away from signing midlisters.  In that, I mean they’ll work to create top names from the few they do sign rather than allow an organic weeding out.  They’ll lay some people off, others will shutter altogether.  If B&N survives it will be smaller.  Maybe even smaller stores.

Actually, that gives me an idea.  Not that I would do it myself – but I can foresee a new kind of book store with virtual shelves.  They’d only need a few, plus some terminals for more exact searching.  The virtual shelves would be like big touch capacitive screens where one could swipe down the row or even to a new genre or over to the bargain “table”.  One could filter their shelf on price, publisher, author, publication date range, tags, etc…  The actual books would be on the premises, back in the warehouse, stored in a much more space efficient way.  This would allow a much smaller footprint for a store will a lot more inventory as compared with your typical B&N – more long tail, less real estate.  If the stores were small enough then one could have several of them in an area with slightly different inventory (one could browse books at nearby locations as well).  A book is flat and rectangle – it’s the easiest thing to store we could come up with, yet we display them in the most inefficient way possible.  You still get curation, recommendations, serendipity in finding books, etc… but in a 21st century way.   It’s a bit like shoe shopping.  The main problem is that only a company like B&N could undertake such an endeavor because it might not work and the project would require some hardware R&D.  If a small guy tried it they’d have to have the patent and the resources to sue the pants off B&N if they tried to mimic the business model.  Shrug.  Of course, people would just as likely reject such a model as too impersonal.  Maybe you could give people the option of walking through the stacks, though they’d be pretty dense and it wouldn’t be the best way to browse such a store.  Certainly, the stacks would be open to where the customers are so they could smell the books.

Damon: It’s a neat idea.  People were telling Blockbuster years ago that they should put up virtual kiosks inside their store where someone could walk in, slap down an iPod and “rent” a movie onto their device.  Much like publishing, they opted to keep going with their proven strategy, and now they’re worth less than Apple makes in a day.  I think a lot of opportunities could spring up around the idea of virtual goods in a physical space.

How about a “book store” that was mainly just a bunch of couches, coffee bar and a wi-fi?  You bring in your e-reader or your iPad or phone, and you’re immediately directed to their browsing website.  Sit on the couch.  Look up on the screens where new books are being pushed.  The “staff picks” is just a TV with some book covers up on the wall and a section on their website.  Buy a book.  Get today’s free e-book or short story in your genre with the purchase of a cup of coffee.  A place for READERS.

Richard: I like the idea of bringing in ebooks as well, but there are people who just flat out refuse to read ebooks, at least for the next couple of decades.  This store would be a way for that to continue to exist in a world where most books are bought online (dead tree variety or not).  It would be a place for readers – where a husband and wife could come to the book store together and each browse their own book shelf, while still sitting together enjoying their espressos.  For indie books you could also offer print-on-demand if you really want that physical book (plus other publishers who will go along – can’t POD the book, can’t carry it – sorry).  The store has to offer a compelling reason to get up and drive to it and not just buy the book on Amazon.  To that end it has to appeal to people who are technophobic by making the technology used extremely easy and intuitive a la Apple and giving them a tactile experience.  At the entrance you’d still have books on showcase (no more than one unit of each title, though).  Of course, like B&N you could also offer music and movies – both digital and disk, but concentrate on books.  You’d play music quietly over the speakers.  You’d host book clubs and readings.  [but not bored and lonely authors sitting at a table piled high with copies of their book waiting for somebody to take interest]

Conversations with Peter Cawdron, 1/30/2012 – 2/6/2012
Richard: As far as I can see we will always have physical books in one format or another.  One way that may happen a lot more is print-on-demand.  Imagine going to a book store that could print you a copy of almost any book from the big-6, Smashwords, or Google Books in an hour or less.  When you think of most paperbacks or hardbacks, they are remarkably similar in construction.  There are certain sizes, particularly of paperbacks, but a single machine could handle any paperback size.  Similarly, one machine could be built to print and bind a hardback (it might not exist yet, but I can see a path to such a device).  The dust jacket is the easiest part.  Certain books, whose format is part of the design (medium is the message type stuff) might not work this way, but those would be the exception.

Now, I don’t agree with Jonathan Franzen, but I do see a place to hold onto certain books.  It’s good to have a physical copy of the Origin of Species, even better if you can get a nice old hardback version of it.  Mine is paperback, though.  Still, it’s a book I won’t send to Half-Price Books.  Likewise, I have various Bibles, books on and by Tolkien, various classics, and other books I value.  Some I even have in electronic format as well.  I think, in the end, physical books will be more valuable – but because there are fewer of them.  They’ll all be collectors items, or luxury items.  But, frankly, there will be very few people who want to own a physical copy of most books.  They’re for entertainment value.  They’re almost a commodity.  Authors just want them read and readers just want to get ahold of them, read them, and move on to the next book.  These are distinctly different goals from a book like Origin.

Peter: Hey, I love the idea of a bookstore printing its own works. Seems an obvious next step, but I’m sure the big publishers are not exactly endorsing the idea, but it sounds reminiscent of the move from sending film off to be developed, to having it developed in-house, to finally getting it developed at Wal-Mart, etc.

Me: Well, as long as they got shelf-space and floor displays and sold as many copies they wouldn’t care too much.  Many of them are embracing ebooks, though not the pricing people want (this is starting to change as they experiment with pricing on certain titles – their reluctance to bring down prices is actually creating the opening for indie authors to step through).  We tend to look at the traditional publishers as a kind of monolithic evil (or monolithic stupidity?), but some are adapting and looking for ways to not just survive but truly thrive in this new environment.

Peter: If you know anyone that’s undertaking this as a business venture and wants the support of an independent author, I’d gladly endorse it. I have no interest in printing hard copy books, but if people wanted a hard copy and there was a means to get them easily, then, OK by me. 

Richard:I don’t know anybody off hand.  I’ve heard some brick-and-mortar independent book stores have been cautiously getting into POD, particularly of books on Google Books.  I don’t have any articles at hand, though, pointing to specific shops.  I’ve been talking to Damon and my wife about various ideas for book stores to survive the future.  The POD idea is part of a much larger, yet [possibly] impractical idea.  Somebody with an existing shop might try it, but from scratch it’s too much of an unknown. The capital cost isn’t cheap , but that might quickly be made up in not having to ship and carry a lot of book inventory.  Supposedly, you could keep less paper and binding materials on hand than books because you’d only need to keep as much as you sell in a given month or so.  Book stores today hold many books for many months or even years before they sell.  The keys are having a simple, fast, and cost effective way of printing the books, and a reliable source for the books people actually want to read.  That means getting the Big 6 and their subsidiaries to play ball, which – as you point out – the real trick.

Damon essentially wants a physical store which could service tablets and readers.  You could come in, plug in your device, and rent whatever.  You’d basically come in for the coffee and advice and promotions like free short stories or deep discounts with your coffee.  My idea would allow for that, but would also carry physical books – both POD and shipped.  The shopping experience could be done from couches and chairs using virtual touch capacitive shelves.  This idea is kind of like a shoe store, where a salesperson would bring you physical books you wanted to see (though, you could buy the physical book and it would just be delivered to the front desk).  The main idea is the get the long-tail of book choice into as small as store as possible – to have the selection of a B&N taking up a quarter of the real estate.  Books are flat, rectangular, and hard to crush – perfect for staking and being handled by robots.  Either idea, however, is not likely to be successful.  Technophiles will just shop online and technophobes would not feel comfortable there – at least not while other book stores continue to survive.  The capital cost is also very high, but not as high as the POD idea alone.

Peter: Thinking about the bookstore POD coffeeshop concept, one way this could work would be to on-sell a service to an established chain. For example, you could partner with Starbucks and build an app (ipad, iphone, android) that can only be used on the Starbucks wifi, giving readers full access to all books as long as they’re connected to the wifi, dropping them back to the samples when they walk away, and giving customers the opportunity to purchase any book they want at any time. You’d be in direct competition with Amazon Kindle, but it would be pretty darn cool. I suspect companies like Starbucks would lap it up if they could have it provided to them as a service. Ah… perhaps one day… when we’re all millionaires… we can sink some venture capital into the Starbucks Independent Authors project… bring in POD as a second phase, etc… it’s an interesting idea, and one I think has merit. 

Me: I found a way to lease or purchase a POD system.  It already carries books from some major publishers:
110 pages per minute using the Xerox 4112, though there are apparently faster models and ones that also do color.  From what I can gather the 4112 costs $63k USD.
The touch capacitive screens look like ~$3k USD each.

That’s not including a store front, supplies, initial marketing, initial inventory of non-POD books, some servers, software development cost (this might be a time cost if, like me, you’re a programmer), initial wages, etc….  I think such an operation could probably need somewhere in the neighborhood of $300k USD just to get started with a minimal store front and no guarantee of success.  $500k might be reasonable – and this is in Texas.  Doing this in California would likely be a lot more expensive.  I don’t know about doing it in Australia or a European country. Might be able to get some free PR, though, from a local news station or two.

That’s starting from scratch.  Another possibility is to partner with an existing book store open to such an experiment.  Then, you only need to worry about the technology aspect (still significant).

Peter: That certainly sounds like it’s in the same range as the photo printing machines you see in the Mall. Someone like Starbucks or Wal-Mart would have the economies of scale to absorb the start-up costs and make this work. It’s surprising they haven’t ventured into it already. It would gouge Amazon. But, then Amazon has gouged everyone else, and competition is good.

Makes you wish you were on the board for Starbucks and could whisper in the right set of ears.

Me:  Most boards tend to reject new ideas they didn’t come up with themselves.  It’s a natural conservatism that served many industries well for centuries – until recent decades.  Now, the pace of innovation is just too quick.  It’s often said these days that the risky thing to do is to not take a risk.

At Amazon, they’re comfortable with risk and trying things out.  They don’t try everything they think of and see what sticks, they only try things they believe might work.  The streaming videos and lending library we get as part of Amazon Prime are great examples of their experiments.  Both programs are subsidized by profitable parts of their business and not sustainable in their current form (either how much they pay for content or in how much users are charged, or both).  The only exception is if Amazon truly believes the lending library sells Kindles and Kindle Fires, because once a user owns a Kindle their lifetime value is huge – purchasing something like $100 in the first year.  Those programs will likely either go away or change in how they pay or how much they cost users.

Amazon, however, does not shy away from a short-term risk for long-term gain.  If there was one red line I would have thought Amazon held above all others, it was opening a retail store front.  Guess I was wrong:
People laughed at Apple for opening retail stores.  There’s nothing in here about print-on-demand, but it’s a logical extension.

I’m actually not worried about Amazon taking over the world.  I used to be scared of Microsoft doing that, but now look at them.  They were once in the same place as Amazon – changing industries and taking on new competitors left and right (who were immediately shaking in their boots).  It’s a cycle.  Amazon can’t squeeze too much because that would open a door for somebody new to walk through – just like the big publishers left for Amazon.  The traditional publishers could close that door right here and now, but it would require such a leap from their current business practices that they can’t even imagine it.  That is why I don’t feel sorry for them.