Selling Books Like Bacon

Horrors! The industry is taking a leaf from supermarkets

If there's anything close to a sure bet in publishing, it's that most of the 8.5 million copies of Harry Potter and the Order of the Phoenix hitting store shelves on June 21 will get snapped up. But what about the million copies of Hillary Rodham Clinton's new memoir, Living History, due out on June 9?

Even the book's publisher can't respond with much more than a semi-informed guess. That's because for books, unlike most other mass-produced goods, instincts and hunches determine what gets made -- and in what quantity. Such guesswork isn't good for business. For every The Da Vinci Code, there are thousands of volumes that come back to publishers from retailers, who have a guaranteed right to return any unsold books for full credit. From there, it's a straight path to the pulpers.

In a plot twist that may disturb some literati, the book trade is looking to supermarkets and apparel chains for clues to improve efficiency and profits. Like grocers studying customer research to decide which brands of toilet paper or spaghetti sauce deserve shelf space, publishers are enlisting market researcher ACNielsen for news on what's selling and what's not. Barnes & Noble (BKS ) Inc. is aggressively expanding its private-label selection of literary classics the same way Wal-Mart Stores (WMT ) Inc. and Macy's (FD ) wield lower-priced alternatives to national brands. And Borders Books & Music has taken a page from retailers by appointing some of its publishers as "category managers" for a given section of the store. Those lucky few get to choose which titles merit prominent display.

Some people dread the idea of beloved books being treated like so many brands of bacon, or say the approach won't work. That includes certain publishers who see themselves as guardians of the cultural flame. Bookselling, they argue, has unpredictability at its core. Serendipity and word-of-mouth can create surprise blockbusters such as Little, Brown & Co.'s The Lovely Bones, by Alice Sebold. And whatever the direction suggested by focus groups or consumer-buying trends, the creative element defies attempts at replication, they say. "Someone might write like Patricia Cornwell, but they are not going to be Patricia Cornwell," says Carolyn Reidy, president of Simon & Schuster's adult trade group.

Frankly, concerns about the new marketing tactics seem overblown. For one thing, they are likely to have the biggest impact on very commercial stuff -- cookbooks, how-to's, anything for dummies, and the latest warring blockbusters of Tom Clancy and John Grisham. Literature isn't at risk: Through a dozen different mechanisms, publishers are almost certain to discover the next Alice Sebold.

More important, the industry desperately needs new tools to improve its performance. Since 1997, sales growth in trade books -- virtually everything except textbooks and academic tomes -- has run around 1.3%, barely ahead of population growth. With attention diverted by Web surfing, video games, and plain old television, the average American now spends just two hours a week reading books. That's rough even for chains captained by the likes of Gregory P. Josefowicz, the supermarket veteran who runs Borders. Independent bookstores, meanwhile, have been driven nearly to extinction as book buyers turn to the chains and Net outlets such as Amazon.com.

Against that backdrop, developments that help sell books are welcome. And yet, some of them clearly hurt publishers. For example, falling margins have encouraged retailers to become publishers themselves. Last month, in a direct challenge to lucrative backlists at Pearson (PSO ) Penguin Classics and Random House's Modern Library, Barnes & Noble brought out the first 15 titles of a new line of cloth and paperback literary classics, priced as low as $3.95.

Contributing to the general commercial pressure is the growing clout of such mass merchandisers as Wal-Mart Stores and Costco Wholesale (COST ) in the shrinking retail market. Last year, such nontraditional outlets accounted for 30% of all general trade book sales, according to Ipsos BookTrends. Several megaretailers, who can't see why books should sell differently than other wares, have come to rely on distributor Advanced Marketing Services (MKT ) which offers computer projections of how many copies of various titles an outlet is likely to sell over three or four weeks.

Then there's category management, which arouses both hopes and fears. In Borders' case, the practice entails exit polling and analysis of sales receipts to understand how customers view the various sections in a store. Starting last spring, the bookseller put a publisher in charge of each area, hoping to discover the most profitable use of shelf space. HarperCollins Publisher (NWS ) Inc. got the cookbook assignment and quickly learned that books by famous chefs move faster if they have their own subcategory, rather than being sprinkled throughout the cookbooks.

Is this a bad thing? It depends on whom you ask. Some publishers worry that category management presages a ruthless winnowing of slower-moving titles, regardless of merit. "Even best-sellers can take a while to catch on," notes Andre Schiffrin, director of The New Press, a small independent publisher. "This will make it even harder for the necessary variety to survive." There are similar fears about the widening use of point-of-purchase data from Nielsen BookScan, a sales-tracking service launched in 2001 by the same company that records sales of food, music CDs, and videos. In April, the nation's largest trade book publisher, Random House, became a convert, bringing the total to 60 and leaving HarperCollins and Penguin Group (PSO ) (USA) as the only major publishing industry holdouts.

But again, the fears seem exaggerated. For some smaller publishers such as George Gibson at independent Walker & Co., this technology offers the first opportunity to track his own books' sales in various regions and retail channels. That's old hat to many larger publishers, but they value BookScan's data on the sales of other publishers' books and the ability to see how an entire genre is faring. That has helped in everything from acquiring new books to holding more factually based negotiations with writers' hyperbole-prone agents.

New marketing techniques will always alarm bibliophiles who like culture unmixed with commerce. Yet despite their outcries, culture isn't in peril. Even the largest publishers are ever on the lookout for new voices. Moreover, such writer-entrepreneurs as Dave Eggers, author of A Heartbreaking Work of Staggering Genius, are developing innovative networks to promote the next generation of authors. Among his myriad efforts is McSweeny's -- a magazine, Web site, and book publisher that draws attention to the new while rediscovering talented but neglected writers. There are also numerous prizes such as the National Book Awards, whose purely artistic criteria and influence on readers keep editors honest.

Will the new tactics help put the book industry back on track? "This is a unique, complicated business," says Walker's Gibson, speaking for enthusiasts and skeptics alike. "It almost resists order." At the very least, if the industry can ratchet up efficiency where its most commercial products are concerned, there will be more space for the inspired hunches.

By Hardy Green in New York

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