Publishing Trends

Beefing Up Special Sales, Publishers Surf the Downturn

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.”