Changing
Channels
Beefing
Up Special Sales, Publishers Surf the Downturn
FROM PUBLISHING
TRENDS (MAY 2003)
Be
it a defensive maneuver, market opportunism, or plain
necessity, a number of major book publishers are blocking
and tackling their way into nontraditional retail accounts
like never before. And no wonder, you might say. “You
look at the relative flatness in the book trade, and
it’s pretty obvious,” says National Book Network
President Jed Lyons. “We’re going to have
to go outside of the traditional marketplace. Special
sales are going to be very important in the future of
our industry, and we’re going to see a lot more effort
directed in that way.” While trade bookstores still
remain the sales bedrock for major houses, in these
straitened times, efforts to reach special markets provide
a number of well-known advantages: Far fewer competing
book SKUs. Sure-fire backlist sales. Mega-quantity purchases.
And “the bean-counters of the business love the nonreturnable
sales,” as one executive says (although not all books,
of course, are sold nonreturnable). “Quite frankly,”
sums up Martin Maleska, Managing Director for
Veronis Suhler Stevenson, who studied the market
for the acquisitions of Running Press and Sterling,
“we got the feeling that the special sales channel was
in many ways a more desirable channel than the traditional
bookstore.” Whether it’s woodworking titles at Home
Depot, or aromatherapy books at The Body Shop,
“this is an extremely interesting channel with good
dynamics and cash flow characteristics,” he says. “Access
to these markets was one of the reasons that Barnes
& Noble sought Sterling so aggressively.”
Yet non-trade sales statistics are scarce, he cautions,
and frontlist publishers are apt to say special sales
are all smoke-and-mirrors. “Customers are buying much
more conservatively,” one sales director warns. “There’s
a great deal more testing before any commitment to large
quantities.” Says another: “It’s very costly to do special
markets in any big way.” To many retailers, alas, “books
are what’s called an accessory,” jettisoned when the
economy does a nose-dive, and nowadays there’s all that
jostling from one’s peers. “All publishers are going
after special sales in a more determined way than ever
before,” says Elaine Panagides, Principal of
Special Sales Publishing Services. “It’s more
competitive than it has been and the opportunities have
to be sought after in a much more aggressive way.”
Gunning
for Growth?
One
such publisher would seem to be HarperCollins,
fresh from a reorganization of its special sales department.
In a flurry of new appointments and promotions (see
Book View, p. 2) the publisher created separate management
positions for special markets in both the general books
division and the children’s division. “Our goal is to
integrate both those efforts so that they’re more closely
aligned with the fabric of the company,” explains Josh
Marwell, SVP, Sales for Harper’s General Books division.
Harper had previously operated under a more traditional
structure, with a single head of special markets. “The
new structure echoes the way that the company is organized
in other areas, including trade sales,” Marwell says.
“We have a decentralized structure here, which we have
found has really contributed to strengthening our publishing
efforts.” HarperCollins has also consolidated selling
responsibilities in terms of categories. In the past,
the publisher might have had a mail-order specialist
for a particular subject, and a retail specialist for
that same subject. “Now the retail and mail-order customers
are handled by the same person,” Marwell says. “That
person becomes a resource for the entire company.” Though
executives would not explicitly confirm that Harper
is gunning for special-sales growth, “we have brought
on some key people,” Marwell says, “for the next phase
of our business.”
There’s no such circumspection at Simon & Schuster.
“We’re beefing up because of the growth potential in
the market,” says Ron Davis, Director of Specialty
Wholesale and Retail. “I believe we’re one of the few
specialty sales departments in the industry that’s actually
growing.” They’re up to 17 staffers, headed by VP of
Special Sales Frank Fochetta, and Davis says
sales have been increasing by double digits for the
past three years. The custom publishing unit has been
primed for growth — selling content to corporations
that are new customers to S&S — as has proprietary
publishing for trade accounts. On the wholesale front,
S&S has partnered with gift packagers (the first
gift set will be released for Father’s Day at a major
department store) and reformatted paperback titles were
stuffed into 5.8 million Cheerios boxes last
year as part of General Mills’ literacy program,
for which S&S will be back in the breakfast bowl
this year. “On the retail side, we’re competing not
with other books,” Davis adds. “We’re competing against
socks and sandals. And if I don’t have something to
compete against that, I will create it.”
Ditto for Jack Perry, VP, Director of Sales for
Sourcebooks. “We’ve been looking at what
type of books we can create that would be unique and
might even be driven by that market,” he says, pointing
to the impulse-driven “coupon books” such as Naughty
or Nice (for Valentine’s Day). On the selling side,
he’s been seeking gift rep groups that complement Sourcebooks’
line of titles. “We’re better off being a unique book
line in a line of products,” he says, rather than one
more book among dozens in the bag. To that end, Sourcebooks
has “staffed up” over the past six months, and probably
half the country is now handled by new rep groups, “which
has already started to pay off.” Other publishers are
jumping into the fray on a smaller scale. Travel publisher
and distributor Globe Pequot, for instance, is
now seeking a rep to sell to nontraditional mass merchandise
accounts — a new position for the publisher. And some
houses are angling for cost-effective ways to boost
sales without adding staff. Larry Jonas, Director
of Special Markets for Harcourt Trade Publishers,
has been mining mailing lists, working with affinity
groups, and looking closely at direct mail. Harcourt
recently published a book on the Apollo space program,
for instance, picking up mailing lists packed with retailers
such as the Johnson Space Center and NASA museums. “We
realized some significant sales into that marketplace,”
Jonas says. He’s now getting The Encyclopedia of Surfing
into surf shops using mailing lists tailored to that
market.
‘Everything
With a Cash Register’
Surf’s
always up at special-sales pioneer Sterling,
of course. “One area that’s going to grow the most is
the chain stores,” says SVP Martin Schamus. “A
Duane Reade or a Michaels — it could be
any type of chain store. My concept is also not just
going into a specialty store and putting a book on a
shelf. I love to see them cross-merchandised. You get
a much better sell-through when a book is next to a
product.” As a measure of the industry’s truly tidal
changes, Schamus recalls working with Publishers
Clearing House in their heyday. “They used to have
the ability to buy 100,000 books at a time,” he says.
“I would see their buyer at trade shows, and a few months
later she’d tell me, ‘You know, Marty, people see my
badge and ask to send me samples. But they never send
the samples.’” Schamus’s jovial reply: “That’s great!
If they’re so stupid, that just leaves it wide open
to me.”
Nowadays, he’s got plenty of company. “Our gift reps
will call on everything from a Hallmark store
to a car wash,” says Hugh Andrews, VP, Sales
and Marketing for Andrews McMeel. “That’s everything
with a cash register.” The company deploys 250 commission
gift reps and 50 book reps, while a small sales staff
targets display marketers such as Books Are Fun
and other unnamed venues. (“I hate to list those accounts,”
says Andrews. “I like to keep them secret.”) What’s
not classified is that “the market has grown immensely”
for gift books such as Bradley Trevor Greive’s
Blue Day Book, which has now sold 1.5 million units.
Andrews also just signed up a 50-store chain called
Endangered Species, and recently broke into Origins.
The icing on the cake? Business with one big-box retailer
has zoomed from $500,000 to a $4 million account in
just two years.
Others are mining their own special turf. “We have to
go where the average sports fan is going to hang out,”
adds Walter Pierce, VP Director of Sales for
Sports Publishing, where about 30% of the publisher’s
sales are nontraditional. “The average fan is not going
to go into Borders and look for a book on the
Yankees.” You will find some at the Kroger supermarket
chain, however, where Pierce sold 10,000 copies of Ohio
State’s 2002 National Championship. The title went out
the door at the standard list price of $19.95, and helped
boost total sales to 78,000 copies.
One beneficiary of all this growth is Josh Mettee,
owner of regional wholesaler American West Books,
which sells California-based titles into traditional
and special accounts — including Costco. The
chain buys in case quantities, but the trick is tightly
focused regional placement. “If you have a book on the
Bay Area,” he says, “how much of the Bay Area does it
really cover? You might think it would sell throughout
Northern California. That just isn’t the case.” Mettee
works with the likes of Houghton Mifflin and
S&S, but also praises the little houses: “Their
books often sell just as well or better than large publishers.
They may be focused on a smaller area of California,
and you’re able to get more concentrated sales in those
areas.” Perhaps as a testament to niche power, Mettee’s
total business has gone up 60% each year for the past
two years. “It’s had a snowball effect,” he says with
a note of bewilderment. “The floodgates are open.”
©2003
Publishing Trends
