Virtual Insanity: Square Bookstores Struggle to Compete With Online Vendors

The textbook lines at the Coop were a little shorter this semester.

During spring rush period, the Coop contended with Internet book vendors and local bookstores offering discounted prices by hiring even more employees than usual for its rush season.

"No one had to wait in line for more than three or four minutes at a time," said David Sullivan, the Coop's general manager.

The bookselling business in Harvard Square has always been competitive.

Smaller neighborhood stores like Grolier Poetry Bookshop, the Harvard Book Store, Schoenhof's Foreign Books and WordsWorth have coexisted with the mammoth Coop by hiring personable and knowledgeable clerks, and by carving out a niche in the Square's unique market.

But with the advent of virtual bookstores offering discounted wares and extensive catalogues, a major competitor to bookstores is now coming from outside the Square.

Now both the Coop and its brick-and-mortar competitors have been forced to regroup and to adapt their business strategies to the changing climate.

Many are adding on-line sales to compete with Web-based vendors, while emphasizing what sets them apart from these vendors--physical space, carefully chosen selections and knowledgeable staff.

Crossed Wires

The Coop says it is now trying for a small-store feel in response to customer complaints of staff miscommunication.

Professors charge that the store has failed to inform them promptly of titles on their syllabi that have become unavailable.

"After my course had started, they kept me telling me about books that were out of print, instead of giving me a chance to rearrange my syllabus," says Professor of Sociology Aage B. Sorenson. "I think this type of arrogance is typical of monopolies."

The Coop's sheer size and volume has sometimes led to a lack of personalized customer service, some customers say.

"They didn't order the books for History 10b on time, then when they did, they came late," says Eric J. Lohr, a teaching fellow for the class. "Then someone returned them all."

But Sullivan says that the Coop's three-year-old affiliation with Barnes & Noble has helped it narrow the customer service gap between itself and smaller stores.

"Traditionally you would search for employees and not be able to find people in the college business or the book business," he says.

"Now we have access to some really fine people in this industry, because Barnes & Noble has affiliations with other schools," he says.

Students say they are increasingly turning to on-line vendors for course books, though.

Now that Internet vendors are offering exact editions at discount prices, students seem to be paying attention.

"I would choose Amazon.com over the Coop in a second," says Tara B. Purohit '99.

Other students are doing the same, it seems.

"We had a lot of people in here this fall shopping the shelves, writing down information and leaving," says Coop General Manager David Sullivan.

Sullivan says the store will primarily combat the Internet threat by trying to increase the quantity of used books it carries.

But, he cautions, this depends on professors.

"If we can get course lists far enough in advance, we can look for the used books," Sullivan says.

To this end, employees started procuring books for the coming semester one month ago, Sullivan says.

The store's three-year-old affiliation with Barnes & Noble has helped expedite the process, Sullivan says, because of the computerized database, tracking system and warehouses that the Coop can now access.

"We can now get a book within 24 to 48 hours of the time it is ordered," Sullivan says.

Barnes & Coop

But the Barnes & Noble affiliation has its drawbacks.

The Coop's corporate general manager, Alan Powell, says that since the affiliation, the Coop has had to struggle with the widespread public assumption that it has been supplanted by a mega-corporation.

Other booksellers in the Square hold this assumption.

Lisa Burkin, advertising and promotions manager for WordsWorth, says the uniformity in selection among most chain bookstores worries her.

"It's scary to have massive chains dictating what kind of artistic content you have access to," she says.

But Powell argues that the Coop's affiliation with Barnes & Noble was prompted not by profit motive, but by member demand.

"They wanted the Coop to be more of a bookstore and less of a department store," says Powell, referring to the results of a 1994 survey.

And he adds the change is not as drastic as some have made it out to be.

"The Coop has always had a large trade bookstore," he says. "The only thing we did in terms of major changes was put the bookstore in front."

The 1994 survey also indicated that members wanted an increased selection--one which Barnes & Noble was able to supply.

"We try to have the best selection in town," Powell says.

Still, even with the Coop's new customer-friendly approach, students are still complaining of its high prices.

Powell says this can be explained because "in the book industry, the more you buy, the more it costs." Buying a larger quantity causes distributors to assume that the book is being used as a textbook, he says, and actually leads them to charge a higher price than usual.

This discrepancy explains why the identical edition of a book can be priced lower in the Coop's trade section than in the textbook section.

"We try to catch those discrepancies, but our system is not yet set up for that," Powell says.

But the Coop is not profiting from the expensive books, Sullivan says.

The store's main source of profit comes not from its textbook division but from other wares, such as trade books, clothing and dorm room furnishings.

"It's done as a service," Sullivan says of the textbook floor.

And for those who are doubtful that the Coop is passing along the best price it can?

"We'd be happy to share with any professor the costs of acquiring textbooks," Sullivan says. "There are no secrets here."

The Shops Around the Corner

But some professors prefer the personal ambience and personalized service of smaller stores.

Professor of Romance Languages and Literatures Bradley S. Epps says that because he teaches the majority of his classes in Spanish, he habitually orders through Schoenhof's rather than the Coop.

"Schoenhof's is one of the premier foreign bookstores in the country," he says. "They have a very experienced staff."

"I've tried it at the Coop, but transcribing the titles is difficult," he continues.

Indeed, Schoenhof's Store Manager Rupert A. Davis insists on employee expertise.

"Everyone has to have knowledge of at least one foreign language," he says.

The Harvard Book Store's head buyer, Carole Horne, says her store has "a handful" of professors who choose them instead of the Coop for textbook orders.

In addition, she says, their ample used book section draws many students searching for textbooks.

This year, the store has begun posting signs to make students aware that it carries books used in Core courses.

But Harvard Book Store's main customer base is drawn by the store's carefully selected academic titles, Horne says.

"Amazon.com has a comprehensive list of all titles available," she says.

"We choose to display and promote books that we think are important," she says, adding that when customers choose a displayed book, they are assured of its quality.

For WordsWorth, too, a handpicked list of titles is key.

Burkin says she takes pride in the store's inventory, which includes many books imported from Britain and titles carried on consignment from self-published authors.

"We're looking for things that are a little more quirky," she says. "There aren't necessarily 1,000 copies of the new John Grisham book in the store, but there are hundreds of books you can't find anywhere else."

Customer service is also a source of pride--and profit--for WordsWorth, Burkin says. She says the store always has at least five people specifically responsible for looking up titles at customers' request.

As for the discounts offered by on-line booksellers, Burkin says that for years before Amazon.com was offering across-the-board savings, WordsWorth already discounted every title every day.

Still, the store has had to adapt in the face of on-line giants.

WordsWorth's new policy of offering a 40 percent discount on new hardcover titles was a response to discounts offered by Amazon.com, Burkin says.

But the store's biggest draw, according to Burkin, remains "its indescribable nature"--specifically, its multi-level layout and the short outdoor jaunt required to travel between sections of the store.

"There is nothing chain-like about WordsWorth," Burkin says. "It's a great place to browse."

And apparently it's not just books that customers are browsing for. Boston Magazine rated WordsWorth the number one pick-up bookstore in Cambridge, Burkin says.

And that can beat any chat room.

Earning Its Letters?

But at least one on-line bookseller contends that, like small bookstores, it fills a niche and cares for its customers.

In December 1997, Varsitybooks.com president Tim Levy and fellow Georgetown law student Eric Kuhn thought of the idea for a company that could offer students all the books on their syllabi at the click of a mouse.

"Students can shop for textbooks any hour of the day or night," Levy says. "You can come home from a finals club at three in the morning and order books."

The site, launched in August 1998 with syllabi from five Washington, D.C.-area schools, now offers books from a pull-down menu of 75 colleges nationwide, and is still expanding.

Varsitybooks hung flyers on Harvard students' doorknobs this fall, despite the fact that Harvard is not among the 75 schools. The flyers advertised radical cutbacks from list prices for several popular textbooks.

Levy says the company's low overhead--it has just 25 employees, one office and one warehouse--allows it to offer drastic discounts.

According to Levy, Harvard students responded well to the site this year, and so may soon see their school on that pull-down list.

Harvard.com

But Square bookstores are fighting the on-line onslaught.

"We are currently developing a way to have a textbook presence on-line, shooting for this fall," Powell says of the Coop.

And most of the Square's smaller stores have been reaping the rewards of on-line sales for several years.

Davis estimates that 70 percent of Schoenhof's sales are sent through the mail, and on-line orders make up a large chunk of this.

Davis says the store imports books from about 50 countries, and carries language-learning materials in 300 languages.

Because of its foreign book selection, Schoenhof's actually serves as a supplier for many large chains--including Amazon.com and Barnes & Noble.

"Most of our competitors specialize in one language," says Dan Cianfarini, marketing director at Schoenhof's.

Burkin estimates that WordsWorth does between 10 and 12 percent of its total business through its Web site, which offers the complete list of titles available in the store.

Gomez.com, a Web site that rates on-line booksellers, ranks WordsWorth's site first in "customer confidence."

Burkin says her store's site is head and shoulders above Amazon's because of its hand-picked list of titles and that old standby of personalized customer service.

"We still deal with customers by their names on-line," she says. "We don't ask them, 'What's your password?'"

The site also offers overnight shipping to any location in the Boston metropolitan area.

Horne estimates that the Harvard Book Store offers between 500,000 and 750,000 titles on-line through Booksite.com, an umbrella site that helps independent booksellers introduce Internet sales into their business schemes.

Horne estimates that the store currently conducts only one percent of its total business on-line, but says she expects that to grow.