June 23-29, 2005

cover story

Survival of the Niches

Community Service: Giovanni's Room owner Ed Hermance says, "Most of our customers live in the region and make a visit to the store one of their ordinary activities when they come to Center City." Photo By: Michael T. Regan

Unable to beat superstore prices, indie bookstores forge on by offering localized cred and the occasional McSweeney's soiree.

by Natalie Hope McDonald

At some point in the late 1990s, the way people bought books shifted, thanks in part to a one-word excuse for cost savings and front-door delivery: Amazon. And while the presence of this dot-com giant may cause acid reflux among small business owners who already face serious competition from big-box retailers, independent new and used bookstores in the Philadelphia region have begun to reinvent themselves and find a new niche. While competitive pricing is one way to lure customers, it's often not as feasible as staging an event like the recent visit of McSweeney's own Kevin Moffet to Molly's Café & Bookstore.

"It's a lot like a clubhouse," says Molly Russakoff, owner of the humble Italian Market storefront. "There is nothing that is keeping Borders or Barnes & Noble from having readings that I have, but it has more of an intimate feeling when it happens here." Just this month, she says, about 30 twenty- and thirtysomethings gathered to see Moffet read. "For as big as McSweeney's is," she says, "they still [have an affinity] for the small guys."

While Russakoff says she used to feature weekly events at the shop, the schedule was overwhelming for a mother of two. Russakoff takes the idea of a family-owned business to a new level by living upstairs, and she admits it's not unusual to see her kids running around the store.

These days, she relies on community efforts to spur momentum at the ground level. Matthias Schwartz, former editor of The Independent, runs readings. "[Local writer] Erik Bader will also start to do events this summer," says Russakoff, who breaks down the modular shelves housing classic paperbacks and replaces them with chairs to create what she describes as "an intimacy the megastores can't replicate." She adds, "I would like to have a steady schedule of readings and maybe some book arts events — we've had bookbinding workshops in the past — even if only once or twice a month, but I would need someone who can really handle it from beginning to end. For now, it is sporadic."

Overarching Theme: Some indie bookstores in town, like House of Our Own (pictured), joined with BookSense.com to compete with Amazon. Photo By: Michael T. Regan

The love of books and the dusty enclaves they call to mind may be quaint, but it is becoming a bit of a dinosaur as more bookworms look to the megastores, which supplement their stacks with music, cappuccinos and shiatsu massages. Some businesses are luckier than others. Just 35 minutes outside Center City, Doylestown Bookshop thrives in an area without a megachain in sight.

"There are a lot of independent merchants in this town. We all work hard to support each other," says Doylestown Bookshop events and PR coordinator Kristy Paredes.

According to Paredes, competition goes far beyond the book business. "The Wal-Mart controversy is an example of this issue," she explains. "Small, independent family businesses have been driven to near extinction in an economic and political climate which strongly favors large corporations. This should be a serious concern for politically or socially minded book shoppers when they decide where to buy books. Independent bookstores are also holdouts in a world where information is increasingly filtered through corporations."

Even though Paredes admits that giant coffee/book businesses are at a premium in this historic enclave, she contends that the impact of the Internet is undeniable. "E-commerce has affected book sales powerfully," she says. "People occasionally try to haggle with us to match Amazon's prices, which are often not far from our cost. Certain categories and subjects have transferred the majority of their sales from bookstores to online sales. Online sellers are able to evade much of the overhead and expenses that we cannot avoid."

A few e-tailers, like the indie-minded Powell's in Portland, Ore., have managed to combine the best of both worlds with quirky e-newsletters in addition to Web-based shopping. Even so, the majority of small-time operations can scarcely afford to staff their brick-and-mortar storefronts, let alone invest in a Web site that carries the additional challenges of warehousing extra inventory and coordinating drop-shipments. In theory, indie bookstores serve a much lighter patronage, a local audience, whereas Amazon conceivably has the world under its thumb.

In addition to Web-based competitors, independents must also contend with new distribution patterns springing up at grocery stores and mass merchandisers like Wal-Mart.

Despite the dour mood that seems to hold sway over independent booksellers nowadays, it may be a little premature to get apoplectic. The experience of Peter Hiler's Book Trader suggests that there may be a calm eye in the storm. Forced out of his spot on Fifth and South streets last year after three decades, thanks to inflated real estate prices and eager corporate base stealing, Hiler packed up shop and moved to Second and Market. With stories like this coming into consciousness around the country, at least one industry watchdog estimates that indie sales are actually steady.

According to the American Booksellers Association in Tarrytown, N.Y., last year independent bookstore sales increased both in terms of units sold and dollars gained, capping a three-year period of sustained growth. "The independent bookstore and small-chain segment of the book market remains a vibrant and important part of the retailing landscape," says Avin Mark Domnitz, the association's CEO. "The American reading public continues to look to the independents to discover new books of quality."

Last year, independent and small chain bookstores accounted for nine percent of the dollars spent by consumers on books overall, up 2.1 percent since 2002, says Domnitz. But lumping all those stores into one category makes it easy to overlook smaller trends in the marketplace. For instance, some specialty bookstores seem to have been losing ground. In 2003, Larry Lingle, owner of New York's The Oscar Wilde Bookshop, the oldest gay and lesbian bookstore in the country, gave up in the face of competition from bigger chains offering a wider selection. (In the eleventh hour, Washington D.C.-based retailer Lambda Rising took over Lingle's bookstore, giving it a second lease on life under new ownership.) Other gay and lesbian bookstores have closed in New York, as well as cities as diverse as Chicago, Houston, St. Louis and Austin. Yet a notable exception is Philadelphia's own Giovanni's Room, which opened just six years after Lingle's store in 1973 and is still thriving at 12th and Pine.

"Our customer base has not changed noticeably in many years," says Ed Hermance, Giovanni's Room owner. "Most of our customers live in the region and make a visit to the store one of their ordinary activities when they come to Center City. We have an international reputation, thanks in large part to our wholesaling GLBT books and films to bookstores overseas, so we have quite a few foreigners coming to shop. In the past year or two, we have noticed an increase in the number of New Yorkers coming to town."

But even though he has fared relatively well, Hermance nevertheless has a beef with media, or at least how big chains harness it to their advantage.

"The biggest challenge is getting mentioned in the media," he says. "The chain stores and the online booksellers have done a fabulous job of dominating the media, with free mentions as a matter of routine. They have succeeded in creating the illusion that they are faster and cheaper than independent bookstores — to the point that people don't consider the advantages of locally owned and operated bookstores."

Though Giovanni's may look small on the outside, it stocks more gay and lesbian titles than the average megachain store. Giovanni's also does something that few other indies in Philadelphia do: sell online without corporate endorsement.

"Our on-hand inventory allows us to fill Internet orders faster than our Internet competition," brags Hermance, who leaves much of the responsibility to a small, sometimes shorthanded staff.

But it's also worth noting that the kind of book a customer is looking for influences where he or she will shop for it. In the gay and lesbian market, recent years have witnessed a gradual shift towards greater visibility — but for gays and lesbians who aren't out of the closet, the anonymity of the Internet offers obvious charms. This also means that for every holdout like Giovanni's Room, there are also plenty of casualties.

Afterwords, a Gayborhood staple for 14 years, was one such casualty when it closed in February of last year. Owner Steve DeShong, who now operates Market Blooms in Reading Terminal, admits that figuring out how to stay afloat was exhausting. "It was more and more work for less and less reward. We saw we were losing customers," he says.

"The retail environment in Philadelphia had changed dramatically for the better," notes DeShong. "There were a lot more options for people. The whole gay and lesbian movement, and visibility of gay and lesbian materials had really gone mainstream." Though Afterwords attracted diverse customers who weren't just searching for periodicals, DeShong says that once gay-themed products began to filter into mainstream advertising, his own niche for selling the material changed for the worse.

"That changed the dynamic of the store," he recalls, "to the point where [customers] no longer felt the need to identify themselves with rainbow T-shirts."

DeShong says when Rizzoli at the Bellevue and Borders came along, business at his indie shop slowed. "People would find the same book online," says DeShong, and ask, "How much of a discount on this?" He says, "Everyone was going online to compete with Amazon. We had customers coming in and writing down ISBN numbers and ordering online."

Amazon declined to comment, but a little research into the used-book marketplace shows that quite a few independents team with the e-commerce heavyweight to sell more books online.

Shilough Hopwood, manager at Doylestown Bookshop, however, has no intention of going corporate. "We cherish our independence and would never give up the freedom that we have to a large corporation/chain," she says. "We are in this business to promote literacy in our community. Although we desire and need to make it, it is not our sole purpose."

Paredes adds that events are not structured around corporate ideology: "We have had in the past month a journal-writing workshop and Peace Week talk here at the store."

Quite a few independent bookstores in Philadelphia, including kid-friendly Chris' Corner, activist-oriented House of Our Own, Giovanni's Room and Robin's Books, have joined with the American Booksellers Association's BookSense.com, a site that strikes right at Amazon's Achilles' heel. It lets visitors not only search indie shops across the country, but also lets them credit purchases to local holdouts.

It's a way, says BookSense Marketing Officer Michael Hoynes, of being an armchair activist, even if the book desired is on the best-seller list. For the Philadelphia region, the list of participating indies extends into the Main Line, Delaware and New Jersey. BookSense also offers a gift card that's welcomed at independent locations nationwide, and locally at the Doylestown Bookshop.

And while the financial promise is great in joining a community of other like-minded retailers, indies like Hopwood are adamant about their vocation. "One of our goals is to promote a sense of community," she says, "not just make money."