Booksellers use affiliate programs and email newsletters -- not ads -- to draw customers.
Book retailers selling online is no longer a novel idea. It’s a reality that brings together the likes of Amazon.com and Borders, Books and Music and other booksellers who desire a Web presence whether independently or through Amazon.com’s Associates program or Book Sense.
Marketing and selling books online is pure commerce sans advertising. Enewsletters, links and partnerships reach buyers who congregate around a home computer rather than a bookshelf or an in-store café.
According to the U.S. Consumer Book Industry, the Internet in 2003 accounted for 12 percent of sales. Other channels included superstores (the Borders and Barnes and Nobles), independent stores and malls.
For Internet sales and for the book industry as a whole, demographics indicate favorable trends. Half of all book purchases are made by buyers 45 years or older, notes the U.S. Census Bureau and Book Industry Trends, Veronis Suhler Communications Industry. By 2010 Americans age 45-plus are expected to rise by 24 percent, college degrees to increase by 28 percent and personal income by 50 percent.
Making it easy for customers online and offline
Emily Swan, Borders' public relations/marketing specialist, describes the company’s online marketing as part of Borders’ holistic approach to reaching customers. The customers are "innovative and tech-savvy," welcoming multiple shopping options. Demographically, the Borders customer is middle-aged with a higher-than-average education and income level. Many of Borders customers use its site for research, and then come into the store to browse further.
Neither Borders nor Amazon.com rely on advertisers. Swan says this allows Borders to deliver a clean marketing message. Web sales for Borders are all conducted through Borders.com and Waldenbooks.com in partnership with Amazon. Amazon handles the sales/distribution function and coordinates online marketing research.
Borders provides some site content such as promotions, special events and a store locator. A summer reading link sends the shopper to a page on Borders’ site that lists summer reading suggestions and book details. The store locator link allows customers to find a bricks-and-mortar store, check its inventory and use functions like the “in-store express pick up” that combines the ease of online ordering with the convenience of paying for the purchase and picking it up the same day.
Co-branding drives sales without increasing marketing spend
Borders and Amazon launched their co-branding in August 2001. The ecommerce agreement became a multi-year extension in November 2003 with Amazon.com continuing to provide Borders Group with an ecommerce solution of technology services, site content, product selection and customer services. Sales through the sites are recorded by Amazon.com with Borders Group receiving a percentage of sales.
In its first two years of partnership, Borders saw a dramatic increase in sales originating through the co-branded sites with no incremental marketing investment made by Borders Group. Sales through the co-branded Web sites for the 12 months ended September 2003 were more than 50 percent greater than Borders' ecommerce sales for fiscal year ended January 2001, says Mark Stabingas, Amazon.com vice president for worldwide business development and service sales. The sites included editorial reviews, personalization and recommendations, 1-Click® ordering and other shopping technology tools.
Borders sends email newsletters with links to the Web site to customers who sign up for the service. Swan sees a high clickthrough rate and views the enewsletter as one way it cross-markets to Borders' shoppers.
Swan says teaming with Amazon.com combines the strengths of both companies: Amazon’s online expertise along with Borders knowledge of running bookstores. Not only have book lovers adapted to online shopping, customers expect retailers to have an Internet site. Newspaper and email are Borders' primary marketing vehicles.
Amazon.com applies team strategy to bookstores
At Amazon.com, senior public relations manager Kristin Mariani says the company does not sell advertising space, but works with its vendors the same way any retailer does to merchandise their products on its site. Its strategy applies to book retailers such as Borders. The focus for its six global Web sites -- localized for each market -- is on customers, selection, price and convenience for its more than 41 million active customer accounts.
The Associates program allows other Web sites to link to Amazon.com free of charge and earn a commission on any sales generated through those links. It’s one way for book retailers to establish an online bookstore. In the second quarter of 2003, Amazon.com sold more than 1.4 million copies worldwide of “Harry Potter and the Order of the Phoenix.”
In 1995, books became part of Amazon’s global selection. And it recently launched "search inside the book," with searchable pages from hundreds of publishers. It's not unlike browsing in a store and thumbing through the pages.
Its Associates program, the first online affiliate program of its kind, began in 1996. Associates goal is to drive Internet traffic to Amazon.com through specifically formatted links that allow Amazon to track sales and other activity. Associates earn up to 9 percent in referral fees on qualifying revenue made through their links. The user can choose to navigate Amazon.com or continue to browse an Associate site. The program is a tool used by book retailers and book publishers to gain insight into users' interests and buying habits. In turn Amazon handles payment transaction, customer service, marketing and usually fulfillment.
Independent bookstores have marketing champion
Book Sense is a national branding campaign launched by the American Booksellers Association (ABA) to build a national identity for independent bookstores. More than 1,000 independent bookstores in 50 states, plus Puerto Rico and the U.S. Virgin Islands are members. The Web site features more than 2 million titles. Any bookstore that is a member of ABA that wants an Internet presence can become part of the BookSense.com national network.
Bookstores have the option to establish their own domain name for a fee or have the store's name tied to booksense.com. Book Sense charges a one-time $350 setup fee and 4.5 percent commission on wholesaler-fulfilled orders only. The monthly fee is $225. A store can make about 34 percent gross profit on a $10 trade book.
One of Book Sense's selling points is that marketing costs are wrapped into the fee. In most cases, book sales are randomly assigned to the BookSense.com store located closest to the zip code provided by the consumer. Book Sense also provides book retailers assistance with publicity.
It's all about the links
Book stores are taking a page from multichannel retailers who have found that online operations generate profits and help boost in-store performance by driving customers back and forth. While most bookstore Web sites are free of advertising, the online book-buying culture represents linking in all its glory. It’s all about the customer, the sales and the convenience.
Opportunities here come in finding creative ways to link with bookstores to drive sales through less traditional means.