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Business by the book

National | Big-volume discount booksellers put the squeeze on specialty retailers, especially small Christian shops

Issue: "Remember Los Alamos," March 27, 1999

Owners of Christian bookstores won't mourn the passing of a mail-order discount competitor like Great Christian Books (see sidebar). But there's no joy either. In a relentlessly competitive marketplace, with secular giants like Amazon.com, Sam's Club, Borders, and Barnes & Noble now going after the Christian trade, many independent Christian retailers are scrambling to stay alive themselves. Christian chains like Family, Lifeway (Southern Baptist), and Berean tend to have large stores with choice locations, wider selection of products on the shelves, and better financing, but they are feeling the pinch, too.

Owner Ernie Polanskas of The Mustard Seed, a 23-year-old medium-sized store in a mini-mall in Arlington, Va., said he was disturbed to learn several of his older customers were now ordering their books on the Internet. "I told them I could get the same books for them usually within three days, and it wouldn't cost them shipping and handling," he said, shaking his head.

Sam's Club-Zondervan's largest customer last year-is too far away to be a threat. But there are two Borders stores within a 10-minute drive of The Mustard Seed and two others farther away, Barnes & Noble stores in two nearby shopping malls, and Family Christian stores in four area malls. Mr. Polanskas knows his customers shop in those malls. On top of that, the demographics have changed. Many aging residents have moved from Arlington, replaced by immigrants. Mr. Polanskas attempted without success to build a base among Hispanics. Traditionally, the mix in his business has been about one-third books, one-third gifts, and the remainder split between music and greeting cards. Now greeting cards account for half of the business (and a large chunk of store space) while books account for only 11 percent.

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No solid research to date has measured the impact of Internet shopping on Christian retailers. But there are clues. In a random mail survey in 1997 by Colorado Springs-based Christian Booksellers Association (CBA), about half of respondents said they buy religious materials, mostly from stores specializing in those materials. But roughly one-fourth of these same buyers said they make purchases online.

Another clue may be Apollyon, the fifth in a series of novels by evangelical authors Tim LaHaye and Jerry Jenkins about people left behind after the hoped-for "Rapture." The volume, published by Tyndale House, was the No. 1 bestseller at online discount Goliath Amazon.com shortly after its release last month.

To hit national bestseller lists, a book must do well in the secular retail outlets. Apollyon debuted on the New York Times fiction list in 13th place on Feb. 28 and surged to 7th March 7. The Wall Street Journal listed it at No. 3 the week of Feb. 15. Sales were headed for the 1 million mark within four weeks of its release, industry sources said.

A 1998 CBA-sponsored survey of frequent church attendees found that more than 70 percent buy books in a book superstore like Borders or Barnes & Noble. Of those, more than three out of five said they have purchased Christian or religious books or magazines from these superstores in the past. Nearly three-quarters of the respondents buy books from a discount store like

Wal-Mart, Kmart, or Target. Of those, about 44 percent said they have purchased Christian or religious books or magazines from this type of store in the past.

Of all those who purchased Christian-related books and children's books in the last two or three years, according to the survey, more than one in four said they purchased these items at a Christian bookstore. The figure represents both good news and bad news for Christian retailers. As recently as the early 1980s, fewer than 10 percent of regular churchgoers ever visited a Christian bookstore. The current percentage is a vast improvement. However, it still means the majority of buyers are shopping elsewhere.

There's plenty of room for growth, says CBA president and CEO William Anderson. He points to a survey of 12,000 Christian bookstore consumers in which 98 percent said they buy books. "Customers expect above all else that your store will carry a broad selection of books," he says. According to CBA research, books account for 28 percent of total Christian bookstore sales. Superior selection, merchandising, and availability of books will help a Christian bookstore withstand and even best the secular competition, he believes.

As part of their strategy for survival and growth, many independents are joining marketing groups. For example, more than 500 of the CBA's nearly 2,600 member stores, including some of its strongest and most profitable ones, are part of The Parable Group, based in California, or the Florida-based Munce Marketing & Buying Group. These associations provide marketing tools and purchasing leverage with publishers.

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