In its first month, Bookshop brought in about $50,000 in revenue, and distributed a modest $10,000 to member bookstores. That number changed radically in March, when hundreds of bookstores shuttered their physical doors and signed up with Bookshop. Total sales are at about $4.5 million, with more than $870,000 of that going to stores, said Andy Hunter, Bookshop’s founder.
But a few independent retailers have rapidly pivoted toward e-commerce, in some cases using strikingly low-tech analog systems to retaliate against Amazon, which itself went live as a small online retailer of books 25 years ago.
These businesses may not beat Amazon at its own game, but with some creativity and customer goodwill, they might survive the crisis and come out with some much-needed upgrades. (Amazon chief executive and founder Jeff Bezos owns The Washington Post).
Independent retailers offering recreational products, like bookstores and toy stores, and sustenance, like grocery stores, seem to have better prospects if they are willing to offer some of the conveniences that larger players in the field already do. “Local merchants are struggling but being creative and finding ways to go digital,” said Andrew Lipsman, a retail and e-commerce analyst for eMarketer, a market research company.
Across the country, independent bookstores and other small businesses are hurting, a lot. Ninety-two percent of small businesses say they have been negatively impacted by the coronavirus, and about half of small-business owners say they cannot survive for more than two months under current business conditions, according to a recent report by the National Federation of Independent Business, an industry group. Congress this week voted to direct an additional $484 billion toward a small-business loan program after the initial $349 billion fund was overrun.
Meanwhile, Amazon is racing to hire more employees and improve its services. The company has hired more than 100,000 employees since March and plans to hire 75,000 more.
But Bookshop’s immediate popularity suggests some customers are willing to support local businesses and eager for a wider range of online shopping options.
Bookshop’s model is not technologically novel, but it is doing something new. Indies that set up a virtual Bookshop storefront get a generous 30 percent cut of every sale. Bookshop also offers affiliates sending in referrals a 10 percent commission, as opposed to Amazon’s 4.5 percent. And 10 percent of every sale made through referrals or directly on Bookshop.org goes to member bookstores.
“Most independent bookstores weren’t really participating in e-commerce,” Hunter said. “When covid hit, all these bookstores had to close their stores, and we had this massive influx.”
Hunter says he is on track to get 2 percent of Amazon’s share this year, double his original goal. The site is bringing in $150,000 in revenue every day and sending about $30,000 to $40,000 of that to bookstores.
About 530 of the nation’s roughly 2,500 independent bookstores have signed up for Bookshop, and Hunter is getting dozens of inquiries daily.
Without Bookshop, many small stores — and even bigger, well established ones — would not have been able to sell books during the pandemic.
“Bookshop allowed us to maintain an online business,” said Charley Rejsek, the general manager of BookPeople, a 40,000-square-foot book shop in Austin. Although BookPeople has an in-house online ordering system, the store was unprepared to move all sales online immediately, and Bookshop helped it stay in business until it got its website up and running on April 13.
“Without it, we would have had to pivot much more sharply,” Rejsek said.
If small local businesses are quick to build out systems for e-commerce, they may survive the pandemic and even hold onto a piece of the e-commerce market share after the pandemic passes, Lipsman said.
There are gaps that small businesses can fill as Amazon grapples with enormous customer demands, especially for online groceries.
About 55 percent of books are sold online and two-thirds of those sales are made by Amazon, according to data provided by eMarketer.
But Amazon has said that while it focuses on getting such essential items as household products and medical supplies to customers, other products, including books, might be delayed, presenting an opportunity for small businesses.
Small businesses of all types are setting up online ordering systems in the simplest of ways, allowing customers to place orders through text, email or Google docs. But their real hope is that those customers will stay on after the pandemic.
“There is a business opportunity there,” Lipsman said. “Humanity matters and that’s something that local businesses can provide that large retail businesses cannot.”
He predicts that this period, when customers might show allegiance to their communities and local businesses, will last about six months to a year, based on what he saw after the 9/11 terrorist attacks.
Politics and Prose, Washington’s beloved independent bookstore, is seeing that show of support. The store, which typically hosts dozens of author events per month, has moved some of those events online, and those events are still selling books, said Brad Graham, the store’s co-owner and a former reporter for The Washington Post.
Graham acknowledges sales have dropped 70 to 80 percent since the store closed its doors in mid-March. But “at least now I know this is possible,” he said.
The pandemic has forced the store to get better at online retail. Last Christmas, Politics and Prose was swamped with online orders, and Graham did not know how to fill them all. This year, he will be prepared.
“It’s pushed us to get more of our staff trained on how to process Web orders,” he said. “Before we had three or four, and now we’ve got eight or 10 with some familiarity.”
Other booksellers, including Barnes & Noble, America’s last surviving national chain of bookstores, are using this time to revamp their physical stores.
“The store in North Dakota is just a scaled-down version of the store in Manhattan,” said James Daunt, the new chief executive of Barnes & Noble. “I am using this period to literally change each store so that it has its own look and layout.”
It is the same strategy that Daunt deployed to revive Waterstones, a large British bookstore chain that he also runs. His goal is to transform each of the 600-plus Barnes & Noble outlets in time for the winter holidays, changing fixtures and lighting, and rearranging furniture, books and shelves so each store is unique. “Oddly, this ghastly, terrible pandemic may allow me and my booksellers to make some big changes quickly,” he said.
Outside of the book business, a toy store in Connecticut is experimenting with video conferencing to help shoppers select products. A small produce market in Berkeley, Calif., is taking orders via text message. A candle shop in New York is hosting regular Facebook live events to showcase products and hold sales.
These are the sorts of innovations that could help retain a customer base in the long run, Lipsman said.
“As much as local business can be quaint, they haven’t been the best in the dimension of convenience,” he said.
Because of the deep discounts Amazon offers, local retailers can rarely match price. But if a retailer can offer easy online ordering, curbside pickup and delivery, it might be able to match Amazon on convenience. And while a small store can’t offer Amazon’s wide selection of products, it can offer the opposite: a small but well-curated selection. Eventually, he said, businesses may have to consider more sophisticated digital ordering systems.
“They may realize it is imperative,” Lipsman said. “No homegrown solution will last.”
The stores that have had to make the quickest pivot toward e-commerce are small neighborhood grocery stores, who have had a flood of customers as homebound Americans cook more and stock up on staples.
The Market at Edgewood in Palo Alto, Calif., is an example of a small, family-owned grocery store that had no e-commerce until a few weeks ago — despite its location in Silicon Valley.
When stay-at-home orders went into effect in Santa Clara County on March 17, Emel Mutlu, the store’s owner, threw together a basic site within an afternoon.
“Basically, it says, ‘Send us a list the way you would write one for your spouse,’” she said. “We had to think scrappy and come up with something that would work.”
Mutlu’s employees fill lists the best they can, making substitutions if needed, and then call customers to say the order is ready for pickup. Business is better than it ever has been and Mutlu has hired extra employees to keep up with the demand. She’s wanted to set up online ordering for some time, but something always came up.
“It kept getting deprioritized,” she said. “You keep prioritizing the urgent things and not the important things. The pandemic has been a forcing function.”
She’s been testing out new ideas, too. When customers order online, they are less likely to make impulse purchases, she realized. To keep things exciting, she added a “Surprise me” option to the online form in which customers can request to be surprised with 10, 15 or 20 dollars’ worth of items. She also began packing such bulk items as sugar, flour and pasta and selling them to customers.
“We had these huge sacks, and those items were in short supply,” she said.
One of Mutlu’s new customers is Gaurav Garg, a head of engineering at Uber. Before the coronavirus, Garg’s family did not use the neighborhood store, preferring the convenience and variety offered by larger chains. But the Market is able to fill orders within a few hours and Garg’s family finds it useful for such basics as milk, eggs and produce.
“The situation is such that we’re happy with whatever we get,” Garg said of his orders with the Market. “If we ask for seven things and get five, we’re happy. In a normal situation, that would be painful.”
Things are not perfect. It troubles the engineer in Garg that the store collects credit card information online in an insecure way. And mistakes happen. After getting home from a recent pickup, he found the store had sent him home with another customer’s groceries. But this is a forgiving time and Garg, who like many others is working from home, did not mind driving back.
After the virus subsides, he does not expect to frequent the Market at Edgewood as often and will likely return to his standard places: Whole Foods and Trader Joe’s.
But he appreciates what the Market is doing. And his wife prefers the store’s simple order form and its neighborhood feel. Many times, it is Mutlu who calls when an order is ready, and she is often the one to load bags into cars. And Garg and his wife appreciate her fresh local produce.
“There is an affinity that develops,” Garg said. “So for things that we like from them, we may keep going back.”