Books, driven by media publicity, are a category begging to be developed in supermarkets, according to industry observers.
The potential to create in-store excitement and impulse sales are there. This was demonstrated by the northern and southern Texas divisions of Randalls Food Markets [Safeway, Pleasanton, Calif.], which ran a contest to create the best in-store promotion for the latest John Grisham novel The Brethren. One of the stores set up a display designed to look like a law office with antique furniture, law books and other accessories.
Albertson's, Boise, Idaho, has moved books outside of the book department for ongoing promotions with merchandising fixtures at end cap placements highlighting a rotating display of an author's newest hardcover title while also featuring the writer's paperback back list titles. These fixtures have also been used to promote books around a particular theme.
Placement of books in supermarkets is predicated primarily on two factors: sales history of established authors and sales potential for established as well as new and developing authors.
"Publishers face the unique challenge of balancing the need to optimize the ongoing sale of established authors while still providing appropriate merchandising for development of new and growing authors' titles. Every author has a first book and convincing retailers to give some of those first books the chance to be well merchandised in their stores can be a challenge," said Derrick Davis, vice president, distributor sales for New York-based Harper Collins.
But lack of adequate data at the retail level often complicates distribution, presenting another challenge to publishers and wholesalers, sources said.
"We have data up to the wholesale level," said Nolan L. Bennett, senior vice president, book division, Comag Marketing Group (CMG), New York, a Hearst Conde Nast LLC venture. "But there is a lack of information at the point of sale -- no tracking of sales by title. Only a handful of supermarkets have a database. With that information we can fine tune distribution and make the proper product available at the right quantity."
Jeff Stogsdill, vice president of book sales for Levy Home Entertainment, Chicago, agreed. "The way for supermarkets to take their book business to the next level is by providing point-of-sale information," he said. "The investment in technology could mean a payoff in increased sales." He noted that book return rates of between 35% to 40% are typical. "Returns are costly. The more information we have of what's selling in stores, the more we are able to put the right amount of books in the right place."
Publishers and wholesalers noted that positive market conditions -- high gross margins, strong consumer interest and increased cooperation between all of the constituents in the book business -- indicate that retailers should build up their book departments to make them stronger competitors.
While they generally agreed that many supermarket chains have grown their book sections, publishers and distributors noted that mass merchandisers and other competitors such as club stores also have expanded and fine tuned their departments.
"Supermarkets have to commit to the book category the way they do to greeting cards," said Alex Osuszek, vice president of sales, Harlequin Books, Toronto. "Today, the average space given to books in supermarkets is 250 facings as compared to 500 facings in mass merchandising outlets," he added. "Supermarkets should commit to at least 10 to 12 linear feet of space, which would give them a minimum of 350 facings."
Mary Lang, director, retail marketing services, Random House, Los Angeles believes there is tremendous potential to develop supermarket book departments because, she said, they are under optimized -- they do not reflect the size of the category. She urged retailers to re-evaluate their book departments to insure that they "are meeting shoppers needs for browsing ease as well as title variety." She also suggested -- pointing out that over 70% of book purchases in supermarkets are impulse buys -- that retailers place books at checkout and other high impulse areas.
David Hall, industry consultant and a director at Independent Periodical Distributors Association, New York, suggested that 80% of supermarket book business should be mass-market paperbacks and the other 20% should be hard cover and trade.
"The trend has been for more supermarkets to ask for more hard cover and trade books," he said. "They offer supermarkets a large ring and gives their book departments more variety."
But Hall also indicated that one of the challenges faced by supermarkets if they are to become true competitors in the book business is to discount book prices. "Discounted books will bring more shoppers into the book departments and account for more sales. If a consumer can find a book he wants there and with a discount, there is no reason for him to go to a bookstore. It's another step towards one-stop shopping."
Discounted books still offer a high ring for the retailer he noted. "The average book price is $5.99 to $6.99. And they are among the highest rings on the supermarket cash register. Hard cover books are over $20, so even discounted, they will have a high margin."