Michael Tamblyn of Booknet Canada made a series of provocative proposals for publishing, some of which he and his organization are involved in. I commented on 5 of them in a prior post; today I want to explore the one nearest to my personal interest: Michael’s suggestion that an intelligent data-connected electronic catalog would enable reps and stores to make better decisions about advance orders.
Michael has identified a promising area for industry improvement, since it is certainly true that advance order creation is among the least scientific components of book inventory management. But I’d frame the challenge a little differently than he has.
Michael’s presentation of the problem is to show how few books — of all those put on offer — achieve an ultimate sale of any particular number of copies. So the concept — similar to a sort-of rotisserie baseball game that Booknet Canada has organized — is to pick the eventual winners. The implied logic is that if you know the number of copies a book will sell in its lifetime, you know (or at least know better) what a store’s initial order should be. Michael also envisions pulling data on what a comparable title had sold in that store over its initial stocking period, which is a big step in the right direction. Trying to get to the right number by predicting the ultimate sale is not.
There are three critical factors a store should consider when determining its intial order for a title:
1. How many copies are needed to present the book properly at retail? Does it need to be faced out? Does it need to be displayed in more than one place in the store? Does it need a “presence” in windows or table displays? This is what I call “platform inventory” and what some publishers and retailers refer to as “minimum display quantity.” This is the most component of a new title stocking decision most likely to create returns. It is also properly looked at as a promotion expense (by the store and/or by the publisher.)
2. How many copies is the store likely to need right out of the box on the title? How many are needed to cover the first week or two or three (or six) of sales (depending on the answer to the third point below.) This separates the books on which there might be high anticipation from customers, such as a follow-on Rowling or Meyer title, or one that might create a large newsbreak, such as last summer’s book by George Bush’s press secretary.
3. How fast can the store get replenishment inventory? This combines two factors: the speed of the fastest-possible resupplier (wholesaler or direct from publisher) and the danger that the publisher will be caught out of stock (generally speaking: a bigger problem in Canada than in the US and a bigger problem with smaller publishers than larger ones.) If you can’t get replenishment inventory fast, you might have to gamble on a larger initial buy. (This is a bit unfair because it would appear to “reward” a publisher for lousy service, but things even out when that publisher gets the inevitably higher returns this tendency to over-ordering will produce.)
Michael’s suggestions for how the electronic catalog might work contains a lot of ideas already incorporated in a tool being developed by Above the Treeline called Edelweiss. Edelweiss, which will launch a beta version for the Fall 2009 season including most of America’s top publishers, is an electronic catalog with many of the features Michael suggests. Because Edelweiss is not offered by a BookScan equivalent (which Booknet is), it does not contain global POS data for the market. But it does have data from Treeline’s roster of stores (which includes Borders and many independents) and it does have the store’s own data. One large independent we spoke to was particularly happy about Treeline’s ability to populate the store’s own title database, relieving them of many hours of tedious, expensive (and error-creating) data input.
The overall message from here is that prompt and sensible reordering is actually much more important than guessing right on the initial order quantity to make sure any store gets its fair share of most big titles. If Booknet (or Edelweiss) reported the recently-published titles with the most widespread reorder activity as a flagged item every week (or every day), that would be the most valuable frontlist tool any store could have.