NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #64
by Pat Holt

Tuesday, May 25, 1999:

'REAL TIME' AND THE INDEPENDENT BOOKSELLER
A NEWSPAPER PARALLEL
LETTERS

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'REAL TIME' AND THE INDEPENDENT BOOKSELLER

Have you noticed a new impatience emerging in "real" life, now that the Internet has become popular with millions of readers?

It's hard enough, when you're on the Internet, to wait those interminable seconds for photos to pixel up or your next web destination to appear.

But the more we leap around in cyberspace, the more it seems there is NO EXCUSE on Earth for that parking place not to open up immediately, or for that elevator, food order, cab, movie or tax refund not to appear the instant we're ready for it.

It's no wonder we feel this way, observes Regis McKenna, one of the founding gurus of Silicon Valley and now more than ever on the cutting edge of Internet possibilities.

Although his latest book, REAL TIME (Harvard Business School Press; 204 pages; $12.95 paperback), has been written for people in corporate management, McKenna has much to say to independent booksellers, especially those who have resisted the Internet as a place to locate their store's "new" electronic presence.

But first some definitions: "Real Time" is that "ultracompressed time" in which technology gives us what we want, exactly when we decide we want it.

Feeling the jolt of an earthquake in Tokyo, for example, McKenna tuned the TV in his hotel room to CNN in the United States via satellite and learned the location and scale of the quake almost at the same time that it was still shaking up his hotel room. "When action and response are simultaneous, we are in real time," he writes.

As customers experience real time on the Internet, they come to expect "immediate satisfaction" from the marketplace that the Internet has created. "If the new consumer's expectations were spelled out on a billboard," McKenna writes, "[this] is how they would read . . . 'Right here. Right now. Tailored for me. Served up the way I like it.' "

So McKenna envisions the worst possible scenario - his subtitle reads: "Preparing for the Age of the Never Satisfied Customer." Yet as one reads this book through the lens of independent booksellers, there is something about the impatience of the Internet book customer and the energy, conviction and wisdom of the independent bookseller that is a marriage waiting to happen.

Look at the book industry's own worst scenario: The biggest competitor to the coming launch of booksense.com is still Amazon with its incredibly fast, fun and snazzy website, its full-color jacket illustrations, its many blurbs, reviews, quotes, first chapters, customer comments and that abominable rating system, all of which at least give customers some idea of what each book is about, and whether it fits their personal needs

.

Can BookSite or BookSense or other competing websites of independents compete with that? It's what the "never satisfied" customer is used to, after all. But instead of rushing to catch up with Amazon's look, competitors might pause a moment first, McKenna indicates, to see what they can learn from it.

"Marketing," he says, "is real time dialogue," always asking customers what they want, how they want it, when they want to get it. In turn, the customers, when they come to the website, always feel welcomed, engaged and revitalized by the process.

Of course, this is what independent booksellers have offered customers all along. The kind of technology Amazon uses is only a part of that service, and it's a faceless, efficient and detached part at that.

The human part, the truly interactive part at which independents are so wonderful, comes up when McKenna predicts that by the end of the year, with "200 million Internet users in America, [the Internet] will most closely resemble an ancient marketplace on the Silk Route . . . These bazaars did not serve merely for the exchange of goods. They were a cultural crossroads where people swapped stories, news and traditions.

"All of that cheerful chaos will be reproduced on-line. Companies will schmooze with customers, prospective customers, and other companies; customers with other customers."

What a great vision: It's another way of describing what McKenna and others call that " 'bottom-up' revolution" on the Internet that eschews hierarchy, takes orders from nobody and seeks the human element in trading even more than the biggest bargain.

It's a comfortable, conversational, easygoing, active, informative and EVENTUALLY lucrative gathering place. It's a place where the snazz and dazzle of speed and color take a back seat to elements of trust, confidence and friendliness.

It's a place where the most popular sellers have the most distinctive character and keep coming up with the best ideas (different books for different customers) and new services (book clubs! writing groups! children's programs! book searches! staff picks! store events! author chats! autographed copies!).

And it's a place where the personal touch, surrounded by nothing but technology, means everything.

How a website can create a "customer satisfaction loop for the never satisfied customer" is McKenna's coup in writing "Real Time." As a preparation, a bridge, a whack on the head, this is a great book for anybody moving from the "I'm a bookseller, not a webmaster" way of thinking to a philosophy that says, "I'll bring my love of books to any environment you like - let's take this journey together."

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A NEWSPAPER PARALLEL

News that the San Francisco Chronicle is soon to be up for sale brings a thought about the parallel situation currently affecting independent booksellers.

Many newspapers, losing circulation badly, are trying to lure readers back with sensational Monica/O.J. stories (of course this is one area where the Chronicle has always excelled), but are failing. They see themselves as newspapers first and websites (if they have them) second.

Meanwhile, millions of readers have moved on to the Internet and are developing tremendous enthusiasm and expertise for finding news on their own time and customizing news services to their own needs. As this continues, the attitude that a newspaper's traditional print-on-paper version dictates to the web version has become increasingly obsolete.

Take a paper like the Chronicle, always a century behind many other newspapers: If the new owners were to declare the Chronicle a website first - one that is absolutely exploding with possibilities for reporting the news and working with readers as partners rather than "end users" in that great interactive adventure - and a print-on-paper version second, it would leap a century AHEAD of most other newspapers.

I think the same switch in approach is coming, or has already arrived, for independent booksellers. If you think that your physical store is the "real" presence and your website is secondary, you may not be prepared to serve the customer of either.

But if you think of your website as the place of tremendous opportunity and growth - and a place where you can compete mightily against other online booksellers that spend millions on the "branding" game - your physical store will feel all the benefits of the breakthroughs you provide on the website.

It's just switch in thinking to which the McKennas of the world (and the Bezoses and the Middelhoffs and the Riggios) have adapted more quickly than others.

A more brutal way to put it - and the way it's often stated on the Internet - is that in the space of a decade, a true "revolution" has taken place, and it's succeeded. You can't judge it or decry it or call for a return to the old ways. Even that period of reaction is over.

It's as if we've all moved to another planet and must start building anew, or we won't make it into the 21st century. Happily, though, those parts of us that have always meant the most - our emotions, our ideas, our need for each other, our love of community - are very much along for the ride.

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LETTERS

Dear Holt Uncensored:

In Holt Uncensored #63, at the end of your delightful account of your "Ulysses adventure," you make mention of the close of Waterstone's, "one of the best independent bookstores in the area."

I'd like to point out that, while this mammoth store that resided in Boston's Back Bay is infinitely preferable to the Barnes & Nobles and Borders that have proliferated in the area, it can hardly be considered an independent bookstore. Waterstone's had 3 stores in the Boston area, and continue to operate 22 more in airports around the country, with plans to expand. Additionally, according to Publishers Weekly Daily's May 12th edition, they've 219 gift stores. And this is just their US presence; in Europe they are very well known as a large chain bookstore.

Waterstone's was loved by many in the Boston area, and I sympathize with those who are feeling their absence, but want to assure anyone who might (I think very unreasonably) feel this leaves "yet another hole" (as your Globe reporter put it), that the many fantastic Boston-area independents are excited and enthusiastic to welcome them into their aisles!

Kip Jacobson
Manager, brooklinebooksmith.com

Dear Holt Uncensored:

Isn't Waterstone's a huge multinational chain? I realize Amazon.com et al. are the "enemy", but I don't think independent Boston-area booksellers are mourning the loss of the huge store on Newbury Street (located close to several small independent stores, at least one of which has gone out of business).

Waterstone's was not an independent book store. The Harvard Bookstore, Wordsworth, New Words, Globe Corner Bookstore, Schoenhof's, Grolier Book Shop, Brookline Booksmith and Trident Booksellers & Cafe (still hanging in there on Newbury St.) are the true independents. May they live long & prosper!

Susan Taylor susan@wordstock.com

Dear Holt Uncensored:

That's an interesting idea (in #63) that booksellers can become Amazon affiliates to buy the 50%-off books and get an extra 15% - except for the following text from the affiliate contract that allows only 5% extra for books sold over 30% off.

"The current referral fee schedule is: "15% of Qualifying Revenues from the sale of each Individually Linked Book that, on the date of order, is listed in our catalog at 10% to 30% off the publisher's list price and that is added to the customer's Shopping Cart directly from the first page that results from following a Special Link to the Individually Linked Book. [And]

"5% of Qualifying Revenues from sales of all other Qualifying Products, including: Individually Linked Books that, on the date of order, are listed in our catalog at the publisher's list price (such as special order books) or at a deep discount of more than 30% off the publisher's list price . . . "

Ed O'Dwyer
Shamrock Hill Books

Dear Holt Uncensored:

In an internal memo from Len Riggio, it was revealed to B&N-ers that best sellers are less than 3% of B&N's sales. 50% off 3% is not a big deal.

Holt responds: That naughty 3% figure has been bandied about by the Riggio brothers for so long and so publicly that I'm surprised it looks like a secret from an "internal memo." It's used to make people feel sorry for B&N because the Costcos and Walmarts and Targets have all discounted best-sellers so heavily they've stolen these sales right out from under that bastion of traditional bookselling, little ol' B&N. That way we're distracted from the truth: The chains were the first to discount bestsellers so deeply that independent booksellers, who often discovered and "made" bestsellers in the first place, could not compete.

Dear Holt Uncensored:

Paula Lozar's letter in #63 told of her experience with ordering an out-of-print book from Amazon which was considerably more expensive than through some other venue, and how she showed those rascals a thing or two by "promptly" canceling the order. I, on the other hand, have TWICE made orders to Amazon's "1 Click" (okay, so I live in Mexico and have no local "independent bookstore" that I can turn to) and WITHIN MINUTES tried to cancel the orders only to be told I was "too late." What a scam! And Adam Parfrey is experiencing exactly what we expatriates south of the border are - that is, a NEW address that identifies us as "Private Mailbox Users" - obviously communist sympathizers, huh? Oh, well . . .

Dear Holt Uncensored:

A letter you quoted in your previous column referred to the following:

"The National Governors Association passed a very sensible resolution regarding a national sales tax on ecommerce."

Of course the association of state governors would like such a tax - as long as the funds get returned to the states!

The only reason the states do not tax interstate sales is because they are not allowed to - the right to regulate (and tax) interstate commerce belongs to the federal government.

But I do not think sales taxes are a significant factor in losing sales to the Internet sites. For the average book, the cost of sales tax paid when a book is purchased in a local store is more than offset by the shipping costs on a book ordered over the Internet.

Conversely, the fears of some small booksellers about the record keeping required (e.g. filing in 50 states) is unfounded - if a national tax were created, the taxes collected would either be paid to the federal government or to the state in which the business is located for disbursement to the individual states (just as one pays California now for the portion of the sales tax in California that is charged by counties or cities.) Certainly, the record keeping is a nuisance, but that is what computer software is for: to track things like this.

In the case of Barnes & Noble and barnesandnoble.com, one can argue that the Internet company has a physical presence in the states where it also has stores - and I can guarantee you that if it is possible to make this argument stand up in court, California will try it. (This is the state that tried to collect "use tax" from all California residents who had travelled abroad and filled out a customs declaration.) B&N seems to be trying to maintain some separation. I believe that is the main reason why you don't see banks of computers in the California stores for customers to order, say, out-of-print books thru the web site.

Chris Volk, chris@vibooks.com
VOLK & IIAMS, Booksellers

Dear Holt Uncensored:

Regarding the "new postal law which forces all 'private mail box' services to have all their customers change their address" (#63):

http://207.158.251.216/ has a clear, terse, four-page(!) description of exactly how harmful and illegal the Post Office's new private mailbox rule is. House Joint Resolution 55 (Ron Paul, TX) aims to cancel the rule. Write your congresscritters! (The web site has pointers to their contact information.) In addition to changing your address, they want to keep copies of your photo IDs on file...

Chris Phoenix cphoenix@best.com

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