Chains, marketing groups 'actively working' or 'not considering' digital solution for growing format

Christian bookstore chains and marketing groups are taking varying approaches for delivering e-books to their stores in order to help them compete in the mushrooming digital market—the fastest-growing sector in the publishing industry.

Despite an industry-wide effort began at the International Christian Retail Show in St. Louis this summer—where the impact of digital publishing on retailers was a major focus—some chains are taking a wait-and-see strategy, while other groups are aggressively looking for ways to make e-books available to their shoppers online or in-store.

With consumer demand rising rapidly, digital books—which generally cost less than hardcover books—have seen explosive growth. E-books made up 2.9% of all trade book sales in the first five months of 2009, but grew to 8.5% in the same period of 2010, according to the Association of American Publishers (AAP)—spurred by sales of the Amazon Kindle and the new Apple iPad. As of June, year-to-date e-book sales were up more than 200% on 2009, AAP said.

Skip Prichard, president and chief executive officer of Ingram Content Group—which includes Christian products distributor Spring Arbor—told Christian Retailing that the company was working with several retailers on a digital book solution, but he could not elaborate on specifics.

"Christian retailers have highly specialized product knowledge, trusted relationships with their customers and brand recognition in local markets," Prichard said. "All of these are beneficial, and some stores have shown they can translate this into a digital advantage. The technology certainly exists and there are a number of players that offer viable solutions for the delivery of e-book content, including Ingram.

"Though all of this is possible, it will not be a guarantee of success and will not work for all stores," he added. "It is a monumental task to connect the dots in a hyper-competitive marketplace."

Parable Group CEO Steve Potratz told Christian Retailing that the marketing group was "actively working" on a digital solution for its franchise stores, which will be connected with its e-commerce site, Parable.com.

"We have had ongoing conversations about the growth of digital books, how it will affect us and our industry, and what our appropriate role is," he said. "Digital books is a new format, and like past format changes, we believe we can offer the consumer a compelling experience that will bring them back to our stores time after time."

Potratz added that it is "extremely important" for all Christian retailers to be proactive regarding digital books.

"With digital music, we were not aggressive and lost a lot of business," he said. "We don't have to lose books. In fact, I am confident we can win this one. ... It's going to require some major capital investments—and that is where the challenge lies."

Kirk Blank—president of Munce Group, which serves nearly 500 stores nationwide—told Christian Retailing that the marketing group was "working on a solution" for its member stores.

"We are looking at a few options," said Blank, who declined to elaborate. "We have been encouraged by various publishers who do have a more comprehensive plan for digital content. ...

"The consumer demand is most definitely there, and so we are working towards a digital solution, while continuing to equip our member stores to reach the millions of consumers who are still shopping for physical books."

Mardel Christian & Education, though, is taking a different approach for its 34 stores in Arkansas, Colorado, Kansas, Missouri, Oklahoma and Texas.

"We are looking into the concept of digital books, but have not made any concrete decisions on what or when we will do anything," Kelly Black, marketing director for Mardel, told Christian Retailing. "We see it as something for the future, so we are just in the information gathering stage."

Berean Christian Stores, another regional chain with 18 bookstores in California, Arizona, Montana, Georgia, Ohio and Pennsylvania, is also taking a wait-and-see approach.

"We're not considering anything right now in terms of digital," said David Jordan, director of operations for Berean. "I think there's a lot more going in Christian retail than digital books. … Digital books isn't the thing that's going to save Christian retail. It's not really something on our radar at this point."

Elsewhere, spokespersons for LifeWay Christian Stores and Family Christian Stores declined to comment on the chains' digital books strategy because they said it involved proprietary information.

Mark Kuyper, president and CEO of the Evangelical Christian Publishers Association, told Christian Retailing that he was confident Christian retailers will have a viable option for digital books.

"There are many different developing and available option for digital sales—from Ingram to Google and other third-party applications—so there is no question about the ability to sell e-books," said Kuyper, who anticipates digital book sales to grow 10%-15% in the next year.  "Obviously, with the anticipated growth of digital sales, it is paramount that Christian retailers develop successful strategies for e-books.

"I think the greatest challenge for Christian retailers is not acquiring the ability to sell digital content—that will happen," he added. "I think it will be convincing the consumer to buy it from them. The digital book market is significantly dominated by Amazon, Barnes & Noble (B&N) and Apple. It will be difficult for any retailer, and particularly independent retailers, to gain top-of-mind awareness as a source for digital content."

Christian retailers, though, could reap the benefits from the recent financial struggles of general market competitors Borders and B&N. The largest and most powerful bookstore chain in the country, B&N has put itself up for sale due to declining profits and store traffic from stiff competition. Borders and B&N could cut back on their Christian book inventory, which could drive traffic to Christian stores.

"The competitors are different in each city, so the answer will vary," Kuyper said. "But overall I think the brick and mortar with the most selection can gain an advantage. In many cases it will be the Christian store."

Munce's Blank disagreed. "Since Christian products are a relatively small percentage of sales for B&N and Borders, I'm sure there may be some increases in a few markets, but my guess is that it would be very minimal (for Christian stores)," he said.

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