By Amanda DeMarco
Hudson Booksellers: A Reason to Buy Print Books
In some ways, airport bookstores are sales utopias: high-traffic locations where people have time to browse. But they’re not sheltered from sales shifting to digital; heavy travelers are also early tech adopters, so oddly people who were frequent customers may be the most likely to migrate away.
“It’s this weird dichotomy we have,” says Sara Hinckley, VP of Book Buying & Promotions at Hudson Group, which runs 66 Hudson Booksellers and countless Hudson News outlets in airports and other transit outlets around the US. “I think some publishers would be surprised at how many sales we are losing to e-books, but in the sales we retain, how much potential we have in the physical book market . . . When you look at our percentage of Bookscan sales on featured titles, you can absolutely see the impact. Even facing stiff competition from discounting and e-books, Hudson can outsell B&N.”
For Hinckley, the challenge is “giving the customer a reason to buy the physical book . . . Our customers are not especially sensitive to price per se, but they are extraordinarily sensitive to value.” Beautiful editions are appreciated. Paperbacks can be a couple dollars more than their digital counterparts, but it’s critical “there’s a reason, and you’re not just telling the customer, ‘Pay more because you didn’t buy a $400 reader.’” Publishers have long been trying to explain to readers that e-books cost nearly as much as paperbacks to produce; now Hudson presents publishers with the opposite side of the coin: why pay more for a physical book?
It’s a question that’s part of the process of deciding what the core of publishing actually is, a process in which publishers must supply creative solutions. “We have an absolutely great market for discovery and for impulse, and I think we will be a holdout for physical books,” says Hinckley. “But I think the real big question now is what will that legacy business be?”
Pocket Shop: The Value of Service
Pocket Shop is a travel bookstore founded in 1989 in Stockholm, and its CEO Per Sjödell says he faces different challenges and sees different priorities than Hudson.
The visually-distinctive purple stores are a knock-out success in Sweden, and now they have big plans for expansion in partnership with the German bookstore chain Thalia. Providing more selection and a better trained staff than the typical airport bookstore are keys Sjödell cites to Pocket Shop’s success. “You might expect it at a store in the city, but you don’t expect it in an airport. They can actually have a discussion about literature.”
According to Sjödell, Pocket Shop isn’t losing much ground to e-books, since few in Europe have adopted e-readers. Yet. And since Pocket Shop will be selling Thalia’s Oyo reader in its stores and online, it’s hoping to cash in on the digitalization wave whenever it does finally wash up in Europe.
Nor is the value of the physical book much of an issue, though the level of service Pocket Shop provides could well be considered an added value. “Books are still extremely cheap if you compare them to everything else in an airport,” says Sjödell. “A cup of coffee costs almost five euros.” Though things are going undeniably well, it’s hard to imagine that Pocket Shop won’t be immersed in the same issues as Hudson shortly; for now the German rollout is the major challenge.
Pocket Shop Moving Fast for Good Locations
When Pocket Shop opened a single store in Berlin’s Tegel Airport, they wanted to “show the airport that we could operate a very good, very profitable bookstore. The goal was always to get a really good location in the next airport.” They had their eye on the Berlin Brandenburg International Airport set to open in 2012, a bid they ended up winning.
A small Swedish organization faces limits in a foreign country. Alone, Pocket Shop “had to move at a slower pace, in terms of finance, but also especially in getting the right connections.” That’s problematic when prime locations are critical to your business model. “We need to be quite fast-moving because Germany is a bigger market than Sweden. We need to roll out more stores . . . so that no one else beats us to the punch.” That’s where Thalia comes in.
Thalia has 294 locations and is owned by the Douglas Group, a large retail organization. Together, Thalia and Pocket Shop will open 40 to 50 stores in airports and train stations over the next four years. The stores will have the Pocket Shop feel, including the characteristic design and training to “get everyone in a Pocket Shop mindset. Thalia has the muscles to find the right locations for us. They can help us with logistics, IT-systems, and e-readers, but we have a stronger concept for travel retail, which they are lacking.”
There are a few reasons that Germany is so attractive to Pocket Shop. It’s a large nearby market, but unlike Sweden, it has fixed pricing for in-store and online sales. Pocket Shop’s real advantage is its service. If it doesn’t have to compete on price, it can focus on its strength in the stores. The advantages are even clearer in online bookselling, says Sjödell, which is “much more interesting in Germany because you can make money on it. In Sweden…you don’t get any margins.”
Hudson’s Expansion at Home and Overseas
Hudson Booksellers has plans for new stores in Dallas Fort Worth and San Diego, and they’ve taken on several Borders locations, some directly related to the bankruptcy, others acquired before. According to Hinckley, though Borders made a central mistake and “abandoned their roots as booksellers to become a retailer that sold books,” many of their locations are still extremely desirable. “Every location is a challenge of its own, but the Borders stores do not represent a special challenge per se, except perhaps the very rapid turnaround time in which we are trying to re-open them.”
Like Pocket Shop, Hudson Booksellers’ strategy for expansion involves relying on core strengths — and the help of larger actors. The Hudson Group is owned by Dufry, a $2.5 billion publicly traded travel retailer whose enormous reach has helped Hudson Booksellers and Hudson News set up shop outside North America — in the Shanghai airport, for example. Those international stores report to Dufry headquarters, but they share information and “work with the basic principals of those two brands.”
Hinckley credits its position in the Hudson Group for Hudson Bookseller’s continued growth and success: “Hudson Booksellers is one of the highest producing brands in the Hudson Group and is a core element of any of our airport packages. However, it would still be difficult to profitably operate a standalone bookstore in an airport, especially given the uncertainty surrounding book sales right now.”
A regular contributor to Publishing Perspectives, Amanda DeMarco also edits Readux: Reading in Berlin.