Wednesday, July 22, 2009

Lost sales

I was having lunch with M. the other day down in the sticky city, in a midtown restaurant, comfortable enough, yet of no great distinction, only two other tables of two occupied, a sign of the times, while two waiters, a hostess, a bartender, and at least one visible busboy fidgeted about the front window, as though their body language might conjure up a few more patrons. But no one was going out into the humidity unless they'd already made up their mind to. There are days when even the world's most exciting city drowses and disappoints.

M. is out of work too, stoically so after five months, with a stoicism born of that uneasy truce between heart and head which those of us who have been laid off recognize in ourselves. Yes, you believe in yourself with conviction, but you still feel bad about yourself because belief is never enough. We need independent confirmation of our worth.

M. and I were talking about the way books are sold in bookstores as opposed to the way they are sold on-line. M. said something important. "In on-line retail, there are no lost sales."

I hadn't heard anyone draw the distinction between the two quite so clearly before.
In on-line retail there are no lost sales. There may be lost deliveries, botched fulfillment, product recalls, or other disruptions which prevent books from getting to the customer. But the retailer completes the sale, whether or not the book is in stock, as long as it is listed. This fact, of course, confounds and badly undermines bricks-and-mortar retailers who must stock what they sell. Even if there are customers willing to special order an out-of-stock title, their number is negligible. If a potential customer knows what they are looking for, the choice is clear: it's better to shop on-line because no physical bookstore can compete when it comes to selection. Which means on-line shopping has made dinosaurs of the so-called superstores. Why pay rent on 20,000+ square feet and carry 200,000 titles when the majority of those titles turn less than once a year and most of that square footage is unproductive? True, the dinosaurs are still lumbering about, but for how long?

When I managed a bookshop -- this was less than three decades ago, in a big Fifth Avenue store that did more than $1,000/sq.ft. in sales -- we didn't have a computerized inventory system. The cash registers were merely that, they were not yet point-of-sale terminals. We kept track of inventory by hand, recording titles sold at the time of purchase in pencil on little pads kept at each cash desk. At the end of the day, or the following morning, section heads would carry these pads around, check on-hand quantities, and compile a daily wholesale reorder based on what was needed. I say this without false pride -- our in-stock position on hot titles was better than I've ever seen in any bookshop using any variant of an "automatic replenishment" system since. An added benefit: the staff learned a lot of the titles by heart.

We also kept a pad at the information desk. We called it a "lost sale" pad. Whenever we got an inquiry from a customer for a title that we didn't stock, we would jot that title down on our lost sale pad. The buying staff would routinely go through this list of titles to judge which ones were worth bringing into inventory and which were just oddball one-off requests to be ignored (or special ordered). Though we carried a pretty extensive selection, there were always plenty of lost sales to ponder, along with the inevitable feeling that we'd somehow let a customer down if we weren't carrying the book they wanted -- although the staff was brilliant at re-directing them to a viable substitute.

Lost sales were very important to us, for two reasons. First, they challenged us to strive to be better at anticipating what our customers wanted. Second, and more importantly, each lost sale started a conversation going between the customer and the store, a dialogue out of which we almost always learned something -- an unfamiliar author, a brand-new trend, an overlooked news story, a mention of a book somewhere, an enthusiasm we hadn't previously taken into account. The information desk and the lost sale pad constituted a wonderful education, in and of themselves. "What! You have no Leo Bruce in your mystery section?" or "Did you hear the British Government banned
Spycatcher?" or "I've heard of a new restaurant guide called Zagat's -- do you have it?" And so on. I remember one customer upon whose requests and recommendations we were able to build a first-rate crafts section.

What happens on-line? If a customer orders a title the ISBN is duly recorded and joins a lot of other ISBNs in a series of reports. Rate of movement. Frequency of ordering. Trend analysis. Endless spreadsheets, units ordered, units shipped, ISBNs stripped of any meaning other than their movement through the computational system. This is indeed a kind of knowledge, allowing its possessor to process a lot of "hard" information quickly and efficiently, and write algorithms "suggesting" titles to a repeat customer. But an ISBN, or a BISAC code, tells you little about the book it signifies, other than its place in an exceedingly large taxonomic system.

Then there is another kind of knowledge, the knowledge of the book itself, what it's about, what people think of it, whether it's any good or not, how it stands in relation to other books with a similar theme, and so on. If this knowledge is still important, how can we come by it in an age of reductive bookselling, where there are no lost sales, where every title is available all the time, no matter where? And don't tell me
reader reviews, or a rating system based on stars, or if-you-bought-x-you'll-love-y comparisons. They're just a lot of hooey.

M. and I were lingering over baklava and muddy coffee. We'd both grown up professionally in bookstores, serving customers, talking to people all day long about books. This had been our life, and it informed all of our thinking about the book industry, currently traumatized by its grotesque self-absorption. We agreed that on-line book retailers could keep their disembodied numerical knowledge. We wanted personal knowledge. We wanted people. We wanted real conversation.

He looked at me. "I agree with you but you're an ass if you think the world is going back to lost sale pads." I thought to myself, of course he's right, no one is advocating for the quaint practice of
writing things down. No one is willing to lose a sale. Hell, no one can afford to. And yet. And yet. Lemme ask you, poot, have you gotten rid of your paper and pencil yet? Or are you still keeping that useless information up in your noggin?

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