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Exit strategy of traditional bookstore

November 23, 2010

The largest book retailer in Taiwan, Eslite bookstore is endeavoring to compete for their sales volume in physical store with virtual store online because of change in the mode of consumption.

Even though Eslite bookstore in Taiwan is the most popular bookstore, seldom people notice the sales volume of physical bookstore is hugely striking its existence in market. In fact, the reading rate in Taiwan is one of the highest in Asia after Hong Kong, however apparently high reading rate doesn’t mean that people will spend their money buying books in physical bookstore which mainly result from rising up of virtual bookstore and the change of consumption mode. As we see the internal factors, the subsidiary shops inside the physical bookstore can be a threat because it disperses part of income. Meanwhile the emergence of internet force Eslite constructed the online shop further scattering the profit, too. Outside the company, Books.com.tw, the most prevailing online bookstore could be the vital threat to Eslite as well as other retailers, and recently the appearance of “e-book” such as Kindle will of course hit the traditional bookstore again. Examples such as Barnes & Noble bookstore in the United States shutting their branch due to “ insufficient profits to operate” as stated by David Deason, vice president of development at Barnes and Noble shows severe outcome of the current situation.

While portion of people prefer to buy the books online, still, the other portion of people insist the existence of physical store which does impact their life to a certain extent. Mentally people like to shop at a physical store because they like the atmosphere which is mostly peaceful and comfortable. “My love affair with bookshops, 1997” by Fang-Ling Jong and “The yellow lighted bookshop, 2007” by Lewis Buzbee is books describing why bookstore is a necessary being to them. In the movie “You’ve got a mail” the little bookshop of Meg Ryan contains many people’s childhood memory. It is also a major reason to keep brick-and-mortar store because beyond the word meaning, bookstore is not just a bookstore but a place for those people to rest their minds. As for physical account why a person goes to bookstore may because of expediency that if the person needs the book immediately, the most rapid and convenient way is to go to the nearest store directly.

However people go to bookstore does not equal to they will purchase any of them, in fact, seems online shop is the biggest enemy of physical store, people usually compare the price between both of them and decide to purchase online. This is because online store requests lesser expense than physical store such as rent for storefront or human resource. Therefore, the weakness of going to physical bookstore will be take time, money and resource.

Even though physical bookstore spent lots on prime cost it still have chance to compete with online bookstore. Emphasizing what online shop can not do is in-store events, such as author appearances, children’s storytimes and book groups. By these events customers are brought to the physical store less or more, the chance they spend money is increased.

Learning a lesson from Barnes & Noble bookstore in the United States they also face to the same awkward situation recent year. Internet, the new media has significant changed human behavior, thereafter the mode of consumption from traditional shopping at store turn to a totally different way- shop online. According to the news at first the mode of consumption about to reform, Barnes & Noble wasn’t paying too much attention to it. Their strategy is to observe others, make sure online shop system is workable then they are going to join the field. However they didn’t imagine that in quick succession the online bookstore emerge one after another with erosion of e-book and other lower price sale, the sales volume of brick-and-mortar store tend to suffer a serious threat. On the other hand, to make up the vantage point they lost at the beginning of online bookstore, Barnes & Noble further put huge amount of money into development of Barnes & Noble Nook, an electronic book reader. Unfortunately the money they spent is far away from the money they earn therefore set the business even more difficult. To be directed against the situation, Barnes & Noble plans to map out a place around a thousand square meters inside the store of all branches to display their electronic reader, Nook, and allow customer to experience it. Hope through this way to improve sales volume of both physical store and the new electronic reader.

Similar to Barnes & Noble, the first important thing Eslite has to do is try to get their customers back to brick-and-mortar store. Here the most useful strategy I think is that Eslite is the only bookstore open 24hrs in Taiwan which provide nine-to-fiver, students or those who have only free time during the night more time to select the book they want. In addition, cooperate with government organization Eslite has become a prime tourist spot as demonstrating the image of Taiwan by holding all kinds of exhibitions, lectures, contest and so forth. Now Eslite is still the largest book retailer in Taiwan but with new identity and function. I hope their physical store could last for a long time.

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