Reinventing the Bookshop

The Financial Express, December 23, 2012, Mumbai

The phoenix Market City mall in Pune has two of the biggest bookstore brands in the countryLandmark and Crossword. Rajiv Malla, centre director at the mall, is happy with the performance of the two. Crossword is a small-format, only-books store spread over 3,000 square feet, while Landmark is a large-format, mixed store with books and a host of other products, from toys to stationery to sports goods, spread across 18,000 square feet. Both formats are doing well and the stores are happy with the sales, says Malla. The mall attracts 15 lakh footfalls a month. Crosswords average sales figure at the mall is about R15 lakh, while Landmarks is three to four times that number. However, this success is an exception, rather than the norm, as bookstores struggle with new business models and technologies threatening the traditional book retail business.

Reinvention is the only way players like Landmark can survive. The 30-store chain (with 18 large stores across 12 locations, the remaining being small-format stores at hotels and airports) is trying every trick. Landmark is adding categories continuously and is no longer the same books and music retail store that Hemu Ramaiah founded in Chennai 25 years ago, and later sold to the Tata Group seven years back.

The way it is evolving, Ramaiah may not even recognize it any more. It has become the largest bookstore chain in the country, selling not only books, but where the majority of space is devoted to products like toys, sports goods and stationery. All this in a bid to attract more people and offer something for everybody in a family. Landmark is also considering adding a food corner at the Pune store with coffee, smoothies and snacks. So from the come, browse, linger, read and, maybe, buy store, Landmark is now a come, see, play, eat and, hopefully, buy, and if not buy, at least borrow a book from the lending library store.

Landmarks COO Ashutosh Pandey recently spoke about lending books, starting with the childrens section. Lending books is a part of their reinvention plans and adding a book-lending library to the store will attract those who cant afford to buy books. Pandey finds inspiration from the many successful examples of libraries running out of bookstore across the country. Landmark is also experimenting with the format, trying to make it more relevant, so that it becomes the go-to leisure and entertainment space for a family. So a space for reading, a cup of coffee to go with it, some munching on the side, children playing in the gaming zone, and the family ending the day with a musical session by popular performers could be the way ahead.

Landmark has transformed itself from just being a bookstore to a mixed-store format, where you can buy not just books, but a host of other services like gaming, stationery, technology, music, movies, gift items and sports goods. After reworking the product mix, the share of toys and gaming has almost doubled in the large-format stores. Landmark, a division of Trent Ltd, is looking at crossing the R300-crore turnover mark this year, though the company refused to offer any comment or share any details. However, consultants working with the company said they had been grappling with the challenges of high inventory and significant unavailability across its stores. In addition, they were having a tough time managing the four lakh stock keeping units (SKUs) in its chain, affecting profitability.

Landmark collaborated with the Vector Consulting Group, which specialises in the Theory of Constraints (TOC) solutions and processes, to take a relook at its supply chain. The exercise resulted in Landmark reducing its chainwide inventory by over 30% and introducing a central warehouse. It also resulted in the availability of goods in stores increasing by 90% and arresting declining sales. Kiran Kothekar, founder-director, Vector Consulting Group, says Landmark had a huge variety of unsold books and music, which resulted in a huge inventory and blocked working capital. So the number of books was reduced from 1.2 lakh to around 40,000, which didnt affect the stores sales negatively, says Kotekar. This is because it is only 10% of the range of books and music that actually contributes to 90% of the sales, explains Kotekar.

Landmark has also diversified into e-books and is pushing its own online retail of books to cope with competition from aggressive e-retailers. Frankly, it has little choice.

Vaitheeswaran K, founder and CEO, Indiaplaza.com, one of the pioneers in the online shopping space with its headquarters in Bangalore, does not see how large-format bookstores, or even the tiny ones, will survive in the days to come. Such stores have closed down across the world and the same is going to happen in India, with the percentage of books sold by large stores, such as Landmark and Crossword, coming down and the share of non-book items increasing, says Vaitheeswaran. The product mix at stores is changing, as increasingly people have started purchasing online or just downloading books from the Internet, says Vaitheeswaran. This shift is taking place at a faster rate in India, he says, as buying books online is faster and easier. Downloading, though, needs investment in book-reader devices. His portal, Indiaplaza.com, has seen books contributing 65% in the volume and 25% in the sales value. Most people who were reading books have shifted to buying books online, so brick and mortar stores will not be able to survive, or they will be struggling, says Vaitheeswaran.

Deepti Krishnan, analyst, ValueNotes Sourcing Practice, which tracks the outsourced publishing services industry, says the book industry study groups research has shown that, globally, there has been a massive acceleration of e-books adoption by consumers since 2011, with digitisation increasing with readers turning to mobile devices to read. Panelists on the Global 50 CEO panel at the Frankfurt Book Fair, held in October this year, agreed that e-books are well on their way to change the way the publishing industry operates, says Krishna. Clearly, this will impact the book retailing industry and bookstores.

And it is now becoming more visible on the ground. Landmark opened with a 42,000 square feet space at the Palladium mall in High Street Phoenix Mills in Mumbai in 2010. It was Landmarks national flagship store. But it was closed for almost a year and when it reopened, it was in the form of a smaller version. Landmark is also reconsidering its store sizes from the earlier 25,000-35,000 square feet to a more manageable 14,000-15,000 square feet.
Landmark is a work in progress. How stores such as Landmark evolve and survive in the days to come is hard to predict, but clearly, reinvention and upgrading are the needs of the hour.

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