HalfPrice Books Finds Own Path to Success
As the liquidation of Borders has demonstrated, it’s tough making a go of it in the book business today.
RetailWire spoke with Kathy Doyle Thomas, executive vice president, marketing/development, HalfPrice Books, earlier this year to discuss what the 115-store chain with locations in 16 states was doing to achieve success in this highly competitive market.
"HalPrice Books is definitely a niche bookstore. We sell 50 percent of our merchandise used from the public and 50 percent are overstocks that we get from publishers all over the world," said Ms. Doyle Thomas. "It really is a nice healthy mix and we do have off-the-wall, weird, wonderful collectors books that people come and shop us for. So, we’re different then the main stream. I think that’s helped us."
Digital is becoming a significant factor in the book business. Industry watchers have pointed to slow adoption of e-books as playing a significant role in the demise of Borders. Ms. Doyle Thomas also sees the segment growing, but said it has less of an effect on HalfPrice Books’ business, largely based on price.
"If they can find a paper book for less than an e-book, people will continue to buy the book," she said.
While so much of the book business is migrating online, HalfPrice Books has sought to upgrade its in-store experience.
"There are things that we’re doing that basically say this store will be well worth your time. Our employees are going to be up on all the books and will be able to refer a book to you and recommend a book," she said. "When people come to the store, we want them to say, ‘This was worth getting out of my pajamas and getting out of the car and driving over because I got more than just a book. I got experience, great book recommendations from the people that are knowledgeable. I learned more about the book business and that experience was worth my time.’"
HalfPrice Books also has sought to bolster its business with an online marketplace.
"We have a relationship with 20 thousand independent sellers and bookstores around the world that list their inventory. …Â We have 120 million titles that we offer at any time. So, if people can’t find it in our stores (or aren’t near a HalfPrice store), they can buy it from someone in England or Canada or in Montana where we don’t have a physical location."
Social media is also part of HalfPrice Books’ customer outreach practice.
"It’s amazing how many followers we have on Facebook (85,665 likes). Our customers are eclectic, wonderful and absolutely love us. So, we have to consistently give them new things to make them come back," said Ms. Doyle Thomas.
"What’s nice about the social media is being able to ask our customers if we’re doing a good job. They want to respond and that’s kind of the different, because in the past if we wanted to do research, we would have to hire a research company. … Now, it’s not that way. They want to talk about your brand — good and bad."
HalfPrice Books has adjusted its policy to respond to consumer issues expressed on Facebook and elsewhere. The company monitors responses to its blog along with comments on Facebook and Twitter 24/7.
"We can’t have it be Saturday night and somebody who had a bad experience in a store basically talking negative about the company, (waiting to) respond to it Monday morning. It has to be done, and immediately. It’s everyone’s expectation now."
Discussion Questions: Has HalfPrice Books identified a sustainable niche in the marketplace? Where do you see the greatest opportunities for HalfPrice Books to further grow its business?
Discussion Questions
How soon will the price of e-books and e-readers fall to a point where they make sense for budget readers such as those who shop at HalfPrice Books?
Like different strokes for different folks, HalfPrice Books offers a different realm of fun and mystery for their niche customers beyond just the price of books.
HalfPrice Books should concentrate on staying unique and providing fun, an online marketplace and using social media for those folks who like to see something beyond conventional. That’s a good niche.
Yes, the HalfPrice Books model is a strong model for three reasons: 1) their focus and attention to having well informed staff who can truly work with a customer and create a positive experience; 2) The weird wall is something unique that people are drawn to. It’s the treasure hunt model that Costco is so great at; 3) Their pricing model – consumers can save.
It would be interesting to see if HalfPrice Books could create a model that allowed them to set up a store within a store. Imagine walking into your local grocery store or RadioShack and finding a 5- or even 10-foot section filled with HalfPrice books that are constantly changing. It would allow HalfPrice Books to more easily expand since they are not committing to large retail spaces, and the grocer or RadioShack, in this example, would benefit because they now have a treasure hunt for their consumers to visit.
Real books at a great price all wrapped into a treasure hunt model — what’s not to love?
At this point, the price of e-books isn’t falling fast enough to threaten HalfPrice Books. More importantly, HalfPrice Books has a very specific niche and brand identity. As Gene pointed out, there is a “treasure hunt” aspect to shopping at their stores that is very appealing to book browsers and value-oriented consumers. Combine the strategy with sensible approaches to e-commerce and expansion, and HalfPrice Books looks like a viable concept.
It may take awhile, as HalfPrice Books continues to merchandise the stores quite well. People like the treasure hunt for deals, much like a Trader Joe’s, so I see them staying around for quite some time. As a bricks and mortar guy myself, I wish them well.
Never, is the simple answer. Some people will always like paper, and the idea of a bargain at 1/2 price will keep them in business for a long time.
It is just fun to visit and browse their stores.
Here’s one of the retail ‘things’ about HalfPrice Books: the name is killer. Reminds me of The Beer Store in Canada. It is what it is and it is what everyone essentially wants. That will be hard to displace with machines and electronic files.
Also, I think there’s a correlation between 1/2 Price Books and used record stores everywhere. There will always be a niche customer who loves the idea of browsing in a physical space for great product at a fantastic price. Like music, the vast majority of consumers buy new product at major outlets (still seeking price of course). But for some, the lure of roaming through and touching an incredible assortment of fantastically priced items will never die (see also used clothing shops).
Readers are explorers. HalfPrice Books works because they fit the current consumer psyche. But to think the market and consumers won’t change is naive. Every brand needs to constantly reinvent and remodel their business.
What will HalfPrice Books do once the publishers stop printing their books with ink on paper? Hard to sell a 1/2 price digital book.
This model, in my opinion, does not have long-term staying power.
To those who argue that “some people will always like paper,” my question is, “Yes, but will there be enough of them to create a viable market?”
I think the main issue for HPB is not sustainability, per se – there probably always WILL be a market for used and coffee table “glamour” books – but sustainability at their current scale. If I see them around in 50 years, it will likely be at fewer than the 100+ stores they have now.
HalfPrice Books has found a niche in the marketplace that will keep them operating for many years. Of course, that is as long as they continue to market this niche. There will always be customers for hard cover and paperback books.
Our projection is that print and e-book prices will reach a parity. Let’s not forget that there is a higher sustainability/social responsibility aspect to buying used (i.e. recycling) that comes into play, along with the “retailtainment” and social aspect of the “bookstores of the future,” of which HalfPrice is one.