LDS Stores, Chains and the rise of the Internet; or How did we get here?

We’ve all heard the sentiment, I think. Independent bookstores are better than those inhuman chains, whose employees don’t even know books and whose policies made it impossible for new authors to break into the market. A few months ago, a friend made these same familiar claims, that chains of bookstores, especially Barnes & Noble, are somehow “evil” organizations destroying the virtuous, hard-working independent bookstore owner.

It somehow sounds like the plot of an early silent-film melodrama.

[In fact, there were such films, (and books) not talking about bookstores, but about general stores, those independent predecessors of today’s drug stores and department stores that sold everything from groceries to shovels.]

In historical context, Barnes & Noble and other bookstore chains are really not too different than many other chain stores that have arisen over the past century or more. Woolworth and its competitors took out the general stores in many communities, followed by the generally larger Montgomery Wards and Sears and their competitors, followed then by Walmart and Target. This cycle has repeated in many different special interest areas over the years — men’s clothing, women’s clothing, records, and even video stores.

Each of these chains have offered some benefit or benefits to customers (lower prices, better service, wider selection, etc.) that competitors either weren’t offering or couldn’t offer. In many ways, Internet retailers are just the latest iteration in the saga, they offer wider selection at lower prices than the chains do. And, each time this has happened, much of whole categories of independent stores have been taken out, often to the complaints of neighbors and friends of the stores, and even, less frequently, leading to new fodder for novelists and Hollywood telling the sad story of the destruction of the neighborhood store by the big bad chain. (The film You’ve Got Mail, strike a note for anyone?)

The truth is that this is a “Bambi” story, tugging at the heart strings, but lacking much underlying sense. Just as protecting Bambi from the evil hunters makes no sense given the fact that the deer population will become a problem (like we have north of New York City these days) if it isn’t checked, so too complaining about the Chains and calling them evil makes no sense if the chains offer something that the public wants that competitors don’t or can’t offer.

The key question is not whether some store is lost, but whether some benefit to consumers might be lost due to customer short-sightedness, focus on novelty, focus on cultural biases over substance or focus on price at the exclusion of other factors.

There is an irony that one of the chief benefits that B&N gave the book-buying public (wide selection) is the chief benefit that the Internet (esp. Amazon.com) gives buyers. I can’t wait to see what comes along next that will benefit customers more than what Amazon.com and other Internet bookstores now offer. [There are some possibilities — instant delivery via ebooks, as the Kindle facilitates, and on-site Print-on-Demand stores are both conceivable.] I am also interested to see what those independents that survive offer to consumers as a balance to the price and wider selection advantages that Internet retailers and chains offer.

The idea that “chains are doomed” or that “independents are doomed” because of the Internet goes too far. None of the waves of chain stores that have arisen has completely wiped out all competition. A few local general stores still exist, as do Woolworth and Sears and others of the once evil chains that have ironically suffered a similar fate to the stores they put out-of-business. Many local independent stores have re-invented themselves repeatedly, finding ways to stay relevant to consumers.

You see this in industry sales data. Sales of books through the Internet have had a tremendous effect on brick-and-mortar stores — Internet-based sales now account for more than 20% of all book sales — but the assumption that this 20% will completely take over the 20% of sales that occur in the large chains seems to me hard to swallow, especially given that these large chains didn’t manage to completely wipe out the independents (now 7% of sales).

In the Mormon end of the market, most sales are still somewhat insulated from the national market in the U.S. Independent stores have largely survived despite these changes. While DB and Seagull have done a little damage to some local LDS bookstores, it hasn’t been as much as the overall market in the US has seen from the rise of the large chains. And the Internet, while it is also having an effect (especially on the independent LDS stores), hasn’t quite led to DB/Seagull closing stores. (These facts may imply that there is room for a new chains in the LDS market, or an Internet retailer that pays proper attention to and actively markets to the LDS market, or at least new innovation in LDS stores.)

It is on the Internet where we are most likely to see a real competitor to Deseret Book (especially given how poor the DB and Seagull websites are in comparison to Amazon and Barnes and Noble). But the relatively insulated nature of the Mormon market makes even that a bit more difficult than in the rest of the market. Too often in the LDS market you have to actually know the publishers and what they are publishing to source the books you need to stock shelves, instead of simply ordering them from Ingram, like the vast majority of bookstores in the U.S. do.

While it is good to have a sense of the history of the market as I’ve given above, and even better to understand the factors that drove the creation of the current situation, it is even more important to be able to identify the factors that might drive the future. Certainly wider selection and price have driven many of the innovations that have shaped the market for books in the U.S., wider selection, at least, may not remain a factor. Since Amazon.com (and probably some other retailers also) essentially carries 100% of all books available in the U.S., its hard to see how selection could get any wider (although in the LDS market, wider selection could still be a factor). Instead, other factors will begin to drive the market along with price.

I don’t know what all those factors are. Convenience is probably one, and I suspect that categorization and “tagging” of products could be another. It will be interesting to see which factors become more important as wider selection becomes ubiquitous.

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29 thoughts on “LDS Stores, Chains and the rise of the Internet; or How did we get here?”

  1. Kent,

    I have always enjoyed your posts about the LDS bookselling community and this one is no exception. It has always been a goal of mine to open an LDS bookstore, especially since they are now placing a Temple in my hometown of Philadelphia (and in an urban setting to boot!).

    However, in pondering your comments – “While it is good to have a sense of the history of the market as I’ve given above, and even better to understand the factors that drove the creation of the current situation, it is even more important to be able to identify the factors that might drive the future” – I think you may be framing the issue too narrowly.

    In geographic areas outside the isolated and unique cultural region which is the mountain west, the LDS bookstore may best be considered a “cultural center” instead of just a bookstore. This can be seen in the sales patterns of the independent stores where those that are located near temples are the most successful. I think this is due to the expectation and desire to “reinforce” our cultural connection as we are participating in a sacred church-oriented activity such as a temple visit.

    Unfortunately, I don’t think that most of the bookstore owners see beyond the books and lowest common denominator cultural paraphernalia as is common in a DB or Seagull. And due to the lack of a centralized wholesale marketplace upon which to draw, the independent stores exhibit a sameness and blandness which can be off-putting to many of the other demographic sub-markets in the LDS culture. I even know of a bookstore owner who requires white shirts and ties of all his employees while playing the sounds of sunday type music because he has the mistaken impression that his customers expect to find a temple atmosphere in his store when they arrive. There is no excitement or new discovery taking place when you visit.

    Where are the Christ centered displays, the gospel scholar corners, the unique and interesting artwork or sculpture? Where are the sit down couches or chairs in the bookstores that allow you to mingle? Where is the unique and tasteful clothing that doesn’t parody some goofy marketing campaign of a national corporation or that doesn’t seek to hyper-masculinize the Book of Mormon personalities? Have you noticed how feminized Christ has been portrayed in LDS artwork lately? And what is with attaching a group of kids to him in every painting? Why do we attach a princess plot to every accessory for young women? Where are the LDS musicians who do not make a slow ballad out of every song? Where are the software titles that allow for gospel exploration by children and teens?

    While DB has focused its efforts on targeting a very limited and well defined market of “traditional” homemaker Mormon women between the ages of 18 and 45 with an LDS mountain west cultural outlook, there is a vast amount of Latter-day Saints that are not being served. And that is just in the English speaking markets. We have not even begun to touch the Spanish or Portuguese markets!

    I think the successful rejuvenation of the LDS bookstore will expand it beyond the traditional mindset. Have you ever visited Carmel, CA? All those interesting and unique shops that come up with creative and attractive items to sell? Or have you seen a nice Catholic cultural shop? The restored gospel has so much possibility and potential for expression in all types of ways – music, art, sculpture, literature, clothing, woodworking, technology, etc. Instead it has turned into an over-priced version of Walmart sameness without even the small aesthetics offered by Target.

    In closing, have you noticed what that young whipper-snapper J. Kirk Richards has done to spice up the LDS art scene? That is a perfect case in point.

    I look forward to the renewal of the LDS bookstore and the return of the sense of wonder, excitement, and joy that was so prevalent when I entered my first Deseret Book as a convert back in the early ’80s.

  2. .

    Interesting points, Michael. Most LDS bookstores I know are in-and-out places, rather soulless with warn carpet and no sense of design. I haven’t even been the bookstore by my temple because 1) they haven’t been open the times I’ve tried and 2) I don’t expect them to be pleasant or 3) to carry what I want. So why go?

    But I think you’re absolutely right about the “cultural center” conceit. I would like to see stores embrace that idea.

  3. Michael, in general I think promoters of ebooks need to take a deep breath and think about the entire system needed to write, publish and promote books. While I agree that ebooks seem like a natural way to go, I think it could be decades before they make up the majority of the market. There are simply too much infrastructure in the industry that is geared to print to expect a quick change. Yes its easy to MAKE ebooks, but it isn’t so easy to SELL them at a significant profit. And it doesn’t help when major players look at the market and decide the only way to make money is with proprietary equipment!!

    I too am hopeful that the release of the Apple Tablet will give the ebook market another boost (after the big boost that the Kindle gave it), but to think that this is an automatic win for books is, I think, not too reasonable.

    [I fear that it is mostly just a glorified iPod Touch/iPhone, and books on the iPod Touch have to be encased in apps to be sold or packaged for the Kindle (which has an iPod Touch/iPhone app). I don’t see the relatively smooth system for getting books published for the iPhone/iPod Touch that exists for the Kindle. Publishers need that kind of infrastructure.]

    And, I have to add, “LDS publishing” is headed that way, really? You do know that the vas majority of LDS book publishing is a dinosaur, right? I wouldn’t be surprised to see LDS Publishing end up a decade behind the larger market in adopting ebooks. As far as I can tell, not one of the major LDS publishers has a program to sell individual ebooks on any platform.

  4. Mojo, FWIW, the current rumors are that Apple will announce its tablet in February, and Microsoft will announce in June or July.

    Apparently, Apple’s tablet was prototyped several years ago, but no one there could tell Jobs what it was for–what role it was to serve for the consumer, so Apple focused on the iPod Touch and iPhone. Now that the business case for how consumers would use a tablet became clearer in the last year or so, it mades sense for Apple to pick up its prototype and work on it.

    I do have to say, however, that the leaked video floating around of the MS Courier and how it works looks pretty cool. I do like the double screen in a way, although it looks like you would have to use it on a table instead of on your lap.

  5. Kent, the Apple tablet rumors have been floating around for the last year (or more) and yet, no one’s seen hide nor hair of it. At the last Apple conference, the absence of its mention was conspicuous, and all mockups have been speculative by outsiders, NOT people associated with Apple.

    OTOH, Microsoft HAS a prototype and it’s showing it off.

    Apple rumors don’t mean much to me after having waited for the last year for the tablet rumor to come to fruition.

    I think promoters of ebooks need to take a deep breath and think about the entire system needed to write, publish and promote books.

    Meanwhile, while those people are taking that deep breath, e-publishers are creating the business models and defining the future for them.

    Margin on digital is decent now, but even better, it’s as X approaches 0.

  6. .

    I think there will be a point (and soon) where the market suddenly switches to ebooks whether anyone’s ready or not. It may be tablets that make that change. I think the Courtier looketh awesome.

  7. Margin on digital is decent now, but even better, it’s as X approaches 0.

    Apologies. What I mean to say is that EXPENSE on digital formats is as X approaches 0, meaning margin rises accordingly.

  8. Eastman Kodak sat back and took a deep breath as digital photography took off and then they almost went under while they figured out how to respond.

    When technology shakes up your industry in a profound way, you have to be willing to allow the old way of doing business be cannabilized by the new way. There may be diminished profits (and perhaps even losses) during the transition but profits return in the long run.

    Just as a side note: I post my wonderful comment (at least in my mind) of making bookstores into cultural centres and no one responds except TH.

    I post a little link about the Apple tablet and all the comments come out of the woodwork.

    What do you all think of my idea of making the bookstores more like cultural stores?

  9. Michael, I kind of shook up a lot of people (particularly booksellers) with this post (written last December): The Perfect Bookstore. It’s still making the rounds and, um, irking some people.

    I plan a followup post soon on how I feel this is the foundation for a community center.

    As for your particular idea, I think it’s wonderful and I envisioned something like the Polynesian Center at BYU Hawaii. Perhaps I should’ve said so at the time.

  10. I agree. The Diamond Age is a good example. It’s also quite the good novel (except that like all of Stephenson’s novels the end isn’t super great).

  11. Mojo, Michael, I think you are missing my point. I am NOT suggesting that anyone ignore the developing ebook market while they take a breath. I AM suggesting that the infrastructure isn’t there or is poorly developed.

    I recently did some research on ebook stores, where ebooks are sold and where to purchase them. In general, the sites that sell ebooks are not that well known, don’t make it easy to tell if a book will work with your device or not, and make it very hard for publishers to know how to get their books into the stores. With many of these stores, I get the idea that you have to approach each of them individually to get your title listed. While I have found a couple of major distributors of ebooks, not everyone carries the books these distributors have. There isn’t any standard resale discount, or even any standards about formats or whether or not drm is employed — although the major distributors assume drm and the smaller, independent stores usually do not. Prices seem much higher than you might think. There is no standard way to find books that are available, and many retailers don’t require the ISBN or any standard for identifying works — making it theoretically difficult to know if the book sold on site X is the same as the book sold on site Y. In addition, it looks like each of the smaller retailers is preparing its own descriptions and sales information for each title, instead of getting that information from the publisher or a distributor — so perhaps the publisher doesn’t have a way of getting the information to the retailer. Significantly, I was surprised to find that some device manufacturers offer no help whatsoever in finding ebooks that can be read on their machines. Other sites offer exclusively public domain materials — google books and project gutenberg materials. So, the market as a whole feels chaotic and unstable. These are all issues already worked out for print books. Its these problems that may, I think, take decades to work out.

    [Interestingly, many of these same issues plague the LDS market for print books too — they are part of how the LDS market is undeveloped in comparison to the U.S. national market.]

    Yes, some publishers are and will make a lot of money in the mean time. BUT, all of the above has a cost — and that cost is generally lower sales and less penetration of ebooks in the market.

    Part of the assumption that everyone makes is that ebooks will take off any day now and overnight become a significant part of the lives of most Americans, just like the DVD has and like the VCR did before that. But the DVD and VCR had sales channels built already for them. Ebooks, because they need an electronic delivery mechanism that hasn’t existed before, don’t have the sales channels they need. And these channels don’t develop overnight.

    The major brilliant innovation of the Kindle is its distribution system. Amazon got that part of its ebook reader right. But its a proprietary system that gives Amazon all the control, and probably too much of the margin. Give me distribution like that in all ebook readers and all ebooks, regardless of format, publisher, distributor or existence of drm, and I’ll be a believer that ebooks will overcome print books any day.

  12. Michael wrote:

    Just as a side note: I post my wonderful comment (at least in my mind) of making bookstores into cultural centres and no one responds except TH.

    I post a little link about the Apple tablet and all the comments come out of the woodwork.

    What do you all think of my idea of making the bookstores more like cultural stores?

    Michael, I did mean to respond to your comment, but I ran out of time because of some additional obligations I’ve been given recently.

    In general, I do think that stores can and should be cultural centers, especially in comparison to current LDS stores. I’ve had the same idea myself. BUT, I would caution you to be flexible and careful about how you do this. Holding instore events is one thing, giving up a lot of store space to a stage or seating is another. Only in the largest stores have I seen anything approaching the latter.

    The biggest problem with the idea is promoting events. The LDS market has a built-in difficulty in communicating to its potential audience (you can’t use the Church’s lists or events or anything else to promote your business, and lists of addresses of members in your area are generally not available.) This limits you to those who are already your customers.

    Besides the practical difficulties of the idea, I do think you are largely right, and in line with the way I would like to see LDS stores develop.

  13. I recently did some research on ebook stores, where ebooks are sold and where to purchase them.

    I’m just curious: Which ones are you talking about, specifically?

    Third-party digital book distribution is a BIG problem. I’ll be the first one to agree with you on that. There are many reasons I don’t distribute with any of them, and not all of them because I’m not eligible. At this stage of the game, I’m not sure I would want to anyway.

    That said, Smashwords is making the inroads here because not only are they all-inclusive, easy to use, inexpensive (WRT its cut), and open/friendly to publishers, they are also all-inclusive, easy to use, and open/friendly to purchasers and readers. They’ve struck deals with B&N to provide their content through B&N’s site with B&N’s reader (crappy thing), and now through Sony’s store. You’re on Smashwords? Voila! You are also in B&N’s and Sony’s stores.

    A, um, purist, might not like that Smashwords does not curate, and it might seem that Smashwords is one big slush pile (because it is), but that’s for the readers to decide. The fact that B&N and Sony are using it to feed their digital catalogs is huge.

    don’t make it easy to tell if a book will work with your device or not,

    Right now, the people who have digital book reading devices know what devices read what formats. It’s the newbie e-publishers and the big traditional NY houses who don’t know anything about e-publishing who don’t know what format goes with what device, and who are confusing the issue for their customers. They also don’t care.

    On the other hand, they really don’t need to know because, again, the people who read digital books just want content.

    With the push toward a universal format (EPUB, which is the heir apparent of the title “mp3 of digital books), and manufacturers’ building in the ability for their devices to read the EPUB format, this problem will decrease over time.

    Sony recently dropped their BBeB proprietary format (as far as I know, it’s the only format never to have been broken) in favor of EPUB (albeit all wrapped up in Adobe DRM), which is a step in the right direction. Those of us in digital books are crossing our fingers that Amazon does the same with Kindle, because Kindle has one predator:

    iPhone/iTouch. People (including me) do not want a single-purpose device. There are 3M iPhones out there and applications aplenty with which to read digital books, and myriads of ways to go about getting them. One of those big ways is Smashwords.

    I’m not going to lie and say that I’d rather people get our books from Smashwords, because I’d rather they get them from my site. (Why? Because my formatting is excellent and Smashwords’s is not.) They can do that, no problem, but visibility there is the issue. Still, I’d far rather they get our books from Smashwords than from Amazon, because Amazon is bordering on racketeering, IMO, and Amazon’s digital upload do-hickey is abysmal on both publisher and reader ends.

    Ebooks, because they need an electronic delivery mechanism that hasn’t existed before, don’t have the sales channels they need. And these channels don’t develop overnight.

    The delivery mechanisms and sales channels ARE there. The people who read digital books know this and know where to find them. The people who don’t yet, well… It’s kind of like Mozilla Firefox. And the church. You get converts one at a time. The easiest to convert are the people who already have the devices and just haven’t discovered all its bells and whistles yet. So many analogies, so little time.

    Yes, digital books have a long way to go before they hit the mainstream, most notably in price (because traditional publishers who venture into digital books have no idea what they’re doing and/or [more likely, IMO] they want to discourage digital book sales by pricing them out of desirability), universality of format, and ease of purchase/download. I’ve made the process as simple as possible, but I’m a one-chick micropress and still building.

    The rumored Apple tablet that has yet to prove it exists, and the Microsoft Courier which has proven it exists (and with Microsoft’s EXCELLENT reader updated last month for the first time in four years, I hope, in preparation for the Courier’s launch), will be a huge leap forward for digital books.

    Note: Deseret Book has somewhat gotten on board, but I’m not sure the free download approach with only the crappiest format for reading digital books ever (PDF, which does not a digital book make) will prove anything good to them. This is more Doctorow’s approach of giving something away for free in the hopes of boosting print sales, but that misses the point of digital books altogether.

    No, it won’t happen overnight, but the movement is gaining momentum and I believe it’ll explode sooner than anybody actually thinks. It does no publisher any good to pretend it isn’t happening and not prepare for it. I’m prepared and preparing, looking to the future, and I have ideas.

    Not only do I intend to be there when it takes off, I intend to be one of the pioneers in the next generation of digital books, which will happen while this generation’s taking off.

  14. And just FYI:

    Palm uses the Mobipocket (MOBI) format.

    iPhone/iTouch reads EPUB and/or PDB (eReader), depending on which reading application you have.

    BlackBerry et al reads PDB (eReader).

    Free advice: If a publisher is looking to digitize, remember that people who are digital book hounds can change an HTML file into whatever format they want/need. However, it would behoove the publisher to offer (at the very least) those four formats. If the MS Courier takes off, add LIT to that. MS didn’t abandon its reader for four years, only to update last month, for no reason.

  15. MoJo, you are nothing if not opinionated.

    However, I have to observe that you seem to claim that these chanels exist, but then hint that they are only known to those that have a reader–and blaming the traditional publishers for not knowing where and how to get books into the necessary formats and where to sell their ebooks.

    This is, of course, my point exactly. Until most publishers interested in selling ebooks can get their books into the most widely used formats and easily distribute them to most ebook retailers, these channels are under-developed, and an impediment to the wide acceptance of ebooks, just like the lack of national distribution systems before the 1900s was an impediment to the development of the book industry before that time.

    I disagree with most of your claims, principally because you seem to dismiss major factors as unimportant. One company (Smashwords) that formats ebooks for multiple retailers in multiple formas doesn’t make a developed sales channel. Assuming that everyone who has purchased an ebook reader knows what format to buy for their device and where to find that format, doesn’t really help newbies who have just got a reader for Christmas or those who are exploring the market ahead of purchasing a device or software to read ebooks. Likewise, dismissing “newbie e-publishers and the big traditional NY houses who don’t know anything about e-publishing” for not knowing about formats kind of misses my point in a big way: their books are needed in the market also. If they need time to figure out the formats, the market can’t take off until the majority of the titles are from publishers who have figured it out! Likewise dismissing the most popular ebook format just because you don’t like it and how it works is also a good example of an important part of my point — the fractious disputes over what format is good and what isn’t, or what device is good and what isn’t, or over whether drm should be used or not, too often ignore the fact that customers will eventually decide what is acceptable, and the market needs time to sort that out. And that time will keep ebook sales from reaching a significant portion of the total book market for several years still, at least. It could even be several decades before ebooks quite arrive.

    I don’t mean to say that anyone should ignore ebooks. I do think, however, that a lot of work needs to happen to build a workable infrastructure that draws the major providers of content into the market in a way that satisfies most consumers.

  16. .

    I think the Kodak analogy was excellent. Even Random House could be in danger of bankruptcy if they ignore the future until it has already arrived. Because in this virtual world, one company really can be a distribution network all on its own. Think about how out-of-nowhere iTunes was.

  17. There’s also the fact that it wouldn’t take much disruption to mess up the Mormon market (or make it better), which is what we’re mainly talking about here. I also don’t think that competing formats is that big of a deal — give people the right device and content and they don’t care if there are other formats (although it would be nice if they did. I mean what if everybody was forced to offer OggVorbis because of consumer demand? That’d be awesome because the best formats for consumers are open source, well-developed, high quality formats). That’s the evil genius of iTunes — which only the Amazon.com MP3 store with non-DRMed MP3’s is beginning to impact.

  18. BTW: I think this discussion is good. I also think that it’s a lot to wade through for casual readers so I’m going to do a Q&A with MoJo so that we can have a place where some of the basics about e-books and esp. as they relate to the Mormon market. Look for that sometime in the next two weeks.

    —-

    Regarding Michael’s original notion: I agree. I’m too lazy to look up the comments right now, but both Kent and I have talked a bit here at AMV about how bookstores could be more cultural centers and do a better job of making their customers friends of the store rather than just someone who comes in and buys a book when they need a gift. And that’s an effort that needs to extend to their electronic communications and presences in addition to in-store events and amenities.

  19. Kent,

    I think my idea of a cultural centre and your understanding may be different. By a cultural centre I mean more of an art/sculpture/book/clothing/entertainment store which also will serve as a gathering place next to the Temple to be built in Philly.

    Given that many of the saints in PA/NJ/DE/MD will be traveling into center city and may want to treat the visit as more than just a normal suburban Temple visit, i was envisioning a centralized place to meet.

    I also think it would be a good idea for occasional events such as you describe but not to excess.

    By focusing the art and sculpture and books on more of a Christian theme instead of just an LDS theme, it may also be an attractive store to those of other religious faiths since it has the advantage of an urban location with lots of foot traffic and proximity to the expanded Philly convention center.

    What do you think? I respect you experience in this area.

  20. It’s been a while since this discussion has taken place, but I find it fascinating nonetheless. Has there been any movement forward with a bookstore or “culture center” as you stated Michael in Philadelphia? I too am from Philly and am in the process or moving back as we speak. It is something that I would defiantly be interested in becoming involved in.

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