Traditional bookstores are struggling in India. First came the onslaught of big chains that put many independent stores out of business, leveraging their muscle and economies of scale. But within a few years, the big boys themselves were struggling against the biggest of them all: online retail, a.k.a., Flipkart and Amazon. Endless volumes, unbelievable discounts all year round, only on online launches, convenience of buying, safety of transactions, easy returns policy… the benefits are endless.
The most recent trend has been “showrooming” – a customer walks into a store, checks out a product, then takes a picture of it or the barcode and finds a better on an e-commerce site and buys online! Bookstores have not been immune to this trend either.
Dreamland Books (not the real name) is a mid sized bookstore, with 3 outlets in Bangalore, and 2 more in Mysore. Second-generation owners, struggling with reducing footfalls and diminishing sales. The company has tried different physical formats – kiosks in airports and bus stations, a short-lived lending library, home delivery etc. But the last few years have been bad, and the company is facing unprecedented pressure on margins, as costs escalate. They have been forced to close the stores in Mysore, and now the pressure on the Bangalore stores is growing.
Does Dreamland continue to run the bookstores as they are running, take losses and shut shop, like many of its erstwhile competitors? Already, there are rumblings in the family and the managers, and the value of the real estate on which the bookstores sit is being considered more valuable than the brand and its books.
Dreamland Books did their own research and defined the problem simply as “How do we get more people to visit our stores?” The focus is on increasing footfalls, with the hope that the more visitors the stores have, the more books they will sell.
With the problem, we received two Insights from the management:
1. Books are not being sold as much as they were a decade ago because the public’s tastes have changed – they don’t read as much any more.
2. People are not visiting bookstores any more as they have too many other sources for entertainment.
The UBQT met with the promoters of Dreamland a number of times to understand the problem they were facing and to decide the context and the scope of the work. Then the team went about using Design Thinking processes and steps to dive deep and create solutions.
Understand: Developing Empathy
The first step was to Identify the Problem. And that posed a challenge – the two “problems” that Dreamland faced were big, but they were also not based on any data. And that made us suspicious that these were more assumptions than Insights. So, we started with some Secondary Research, to find out the trends in book publication and sales in India.
What we found was interesting: the Indian publishing industry is growing at an impressive pace and India is one of the few (if at all any) major markets in the world which is still seeing growth in both print and digital publishing.
India’s book market, currently worth Rs 261 billion making it the sixth largest in the world and the second largest of the English language ones, is expected to touch Rs 739 billion by 2020, says a survey. “Nielsen India Book Market Report 2015: Understanding the India Book Market” was conducted in association with Association of Publishers in India (API) and the Federation of Indian Publishers (FPI) to evaluate the opportunities and challenges facing the industry, as well as where its future lies. The study estimates a CAGR (compound annual growth rate) of 19.3 per cent for the industry in the next five years.
A nationwide survey conducted by the National Book Trust of India in 2010 revealed that one-fourth of the youth population, a staggering figure of 83 million, identify themselves as book readers. India also has about 19,000 publishers although out of those only around 12,400 have ISBN’s. It is further estimated that about 90,000 titles are published in India every year which includes books across all genres.
Given that almost half of India’s population is under the age of 25, it’s no wonder that a large part of the book trade is dominated by academic and children’s books which account for 40% and 30% of the market respectively. The remaining 30% constitutes trade publishing. In terms of print languages, 20% of sales volume comes from English language books which also makes India the third largest market for English books consumption after the US and UK markets. The largest sales volumes among Indian languages are that of Hindi books which constitute 25% of the market while the rest of the market is divided between other Indian language books. However, 55% of trade sales are of books in English. Books in Hindi account for 35 % of Indian language sales, but the largest share of these sales is taken by “Others,” despite what the report identifies as a “highly disorganised” local publishing sector. Barring some run away successes, print-runs for non-academic books rarely exceed 2,000 copies in the first instance and a bestseller is often a book that has sold only as many as 10,000 copies.
Although organised retail is growing in India at 15% per annum it still only accounts for 7% of book sales in India. Flipkart claimed earlier this year that it had sold 30 million books in its 8 years of existence. And then came a clincher: while analysts once predicted e-books would overtake print by 2015, digital sales have instead slowed sharply , with signs that some e-book adopters are returning to print, or becoming hybrid readers, who juggle devices and paper. E-book sales fell by 10% in the first five months of 2015, according to Association of American Publishers. Digital books accounted last year for around 20% of the market, roughly the same as they did a few years ago. The surprising resilience of print has provided a lift to many booksellers. The American Booksellers Association counted 1,712 member stores in 2,227 locations in 2015, up from 1,410 in 1,660 locations five years ago.
Did this not fly in the face of the assumption that “Books are not being sold as much as they were a decade ago because the public’s tastes have changed – they don’t read as much any more”? Clearly, more books are being consumed in India than ever before, and coupled with the slowing down of e-book sales, the market for offline bookstores could be promising.
Next, we embarked on Primary Research to ascertain the tastes and preferences of the public, who are seen to shunning bookstores. Our team interviewed close to a hundred respondents in Bangalore and found out some even more interesting.
When we asked the respondents how they spent their weekends, we got the usual answers: out of town with the family, movies, restaurant visits, parties, visiting parents, trekking and cycling trips, sleeping. All sorts of answers.
A little later in the questionnaire we asked pointedly “what did you last visit a bookstore?” The response was surprising – almost 50% mentioned that they visit bookstores at least once a month (even more than the National Book Trust findings)! That too, mostly over weekends! And yet, none of them had mentioned the bookstore visits when asked how they liked to spend their weekends.
So, was there a disconnect?
Defining the Problem
The apparent incongruity was soon sorted out when we dived deeper. Most people who said “yes” to bookstores mentioned that they visited a bookstore on the way to other places. They often just “dropped in” to pick up stationary or gifts, and as bookstores make space for toys and mobile phones and groceries, all other kind of stuff. They did pick up books, but did so quickly and picked up pre-decided titles as they did not want to “waste time” browsing.
When we probed more, a number of reasons for not wanting to spend too much time in the bookstore came up: the location of the store, traffic on the roads, easier to buy online featured high on the reasons. Other reasons included poor staff quality in terms of knowledge and communication skills, poor ambience and limited titles on offer, lack of discounts vis-a-vis online options, no options for family entertainment while browsing topped the list.
So, we were clearly looking at a different problem. Like the earlier assumption, the view that “people are not visiting bookstores any more as they have too many other sources for entertainment” turned out to be unsustainable in the face of primary data. Clearly, the problem was not in bringing potential buyers to the store, but keeping them there, engaged and interested, for them to buy!
Our team went back to Dreamland owners with our findings. They were surprised, but agreed that our research had thrown some strikingly new angles into the equation. We met a couple of times, and finally managed to Reframe the problem statement.
The new statement was different: “How can we make the visitors bookstore experience more memorable?” This rested on three major Insights: one, the majority of the people interested in books would like to spend time in a bookstore if the experience was right. Secondly, the majority of those who came to bookstores buy books if they can be motivated to spend more time in the store. And finally, online book buying still was a preference for the majority of the public, due to price and convenience factors.
Ideas Flow Fast
In this project, the Definition of the Problem Statement was the most crucial thing. Once we could Reframe and Redefine the Problem, we found the course correction to be a great new driver for Ideas. We went into structured brainstorming sessions with the new energy and spend time generating ideas that could transform the bookstore experience.
We also found that talking of “experience” as a more esoteric and subjective space led to greater creativity and idea-generation (we feel talking of number of visitors would have been more restrictive). We coached the participants who attended the Ideation sessions on how to suspend premature judgment and be open to ideas, used our proprietary Divergent Thinking tools, and also introduced an interesting model for scoring ideas that emerged.
What emerged were a bunch of brilliant new ideas! These included innovative hiring and training plans for the staff (hiring bloggers and aspiring authors to moonlight as store staff for instance) to digitising the whole store with special apps that read ISBNs and provided immediate reviews and automated check-outs (to remove the staff entirely), selling books in a pub or cafe or a massage parlour ambience (redefine and redesign the physical space), add children’s movie experience to allow parents time to browse uninterrupted, to offering “Happy Hour” discounts, student loyalty cards for price cuts on academic books, and mixing new and old editions of the same title to offer different pricing for the same title (this came from my own experience in the US recently).
Prototyping and Validating
Since we had the opportunity of making “live” changes to the existing store, we went right ahead with some of the best ideas, to prototype. It started with the recruitment and training drives, and we used social media extensively to attract the right talent. This cut costs and also helped us break down the stereotypes of “sales person” profiles, and Dreamland managed to hire intelligent, passionate and articulate resources, often for less salary!
The store layout has also been improved, with less clutter and more seating and browsing space, to create a relaxed ambience that invites spending time in the store. The display is being reworked to build more focus on the newly launched loyalty programme, and the focus is being shifted to more visibility for “class” offers that signify taste and value rather than just “mass” (or bestseller) offers driven by numbers.
As I write, the partial automation process is on, where the app-based ISBN reader is being explored. Also, the Dreamland owners are reviewing their supply chain model to see if they can incorporate used book sellers as suppliers, to augment their collection and offer differential pricing. As a part of this project, they are also looking at creating a book buying centre to attract book owners to come and sell their old books, which can be evaluated and placed in the store (the metrics are being worked on). The downstream benefits of this will be community building and promotion, as well as the possibility of offering these sellers loyalty options to convert them into buyers!
Since some of the ideas are still on the drawing board, we will have to wait to divulge more. But in terms of validation, we are seeing a definite surge in customer numbers. They are also spending more time in the stores, engaging with the staff more in meaningful conversations.
Sales revenues, in the last three months since the implementation of the ideas, has increased a good 40%. Profit numbers are awaited.
Overall, this project made us acutely aware of the need to Define the Problem clearly with data and research to support the Insights. It is easy to work on assumptions and biases and they may lead to incorrect problem identification and therefore provide false relief.
Design Thinking as a process is an exercise in Creativity strongly backed by Data. It is a great example of the Emotional meeting the Rational. For some great results!
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