In an earlier post, I told the story of Ingram’s introduction of the microfiche reader in the 1970s and what it did for backlist sales. There was another new technology introduced at the same time by the B. Dalton bookstore chain, based in Minneapolis and owned by the Dayton-Hudson Company.
At this time, B. Dalton and Waldenbooks were pioneering the concept of many-outlet national bookstore chains. There were some national and regional chains: Brentano’s and Doubleday had a dozen or two dozen store nationwide; Kroch’s & Brentano’s had a cluster of stores in Chicago, Lauriat’s in New England, Books Inc. in California. But Dalton and Walden built businesses by becoming the tenants in the shopping malls in the era of their great expansion. They were each on their way to hundreds of stores nationwide; this was an entirely new opportunity for publishers.
Dalton was particularly innovative. They assigned each book an SKU number. When the purchase order for the book was issued, which would be for many or all of the hundreds of stores, the requisite number of stickers with the correct SKU would go to the stores. When the books arrived, they’d get the stickers, which could be read (by the cashier, not by the cash register). The punched-in numbers, usually correct, created a record. For the first time, buyers in a far-flung book operation knew exactly what was selling. (Or almost exactly, there were more than a few holes in the system.)
If memory serves, when there were about 300 Dalton stores, the sale of 6 copies a week constituted a “hot list” book and 6 copies a month was “warm list.” This was my first lesson in how few books sell enough to create statistical significance in any one store. That’s a critical thing to understand.
Soon, Dalton had established the concept of “model stock”, books that were automatically reordered based on sales. Smart sales reps learned quickly that getting a model was more important than getting a big quantity buy to the sales health of most books.
Meanwhile, Walden had no such system. They relied on the diligence of their store managers, with limited coordination by the central office in Stamford, CT, to do the reordering. And in pretty short order, Dalton was eating their lunch. Particularly on backlist.
But then technology made another twist and turn. In the late 1970s, “machine-readable fonts” were perfected. Harry Hoffman, who had been the CEO of Ingram who introduced the microfiche, was by now the CEO of Walden. And he put out the edict that Walden would only stock books that had the ISBN and price in one of the OCR fonts. Compliance was pretty rapid.
Now Walden could do what Dalton could do — capture the POS data — but they didn’t need a clumsy sticker system to do it. The playing field between the two chains was essentially leveled.
There is an ironic coda to this story. The two mall store chains still exist, but in a very diminished state. They are essentially being liquidated by today’s book retailing behemoths: Barnes & Noble, which owns B. Dalton, and Borders, which owns Walden. The irony is that B&N has the modern supply chain and, of course, needs no stickers on the books. But Borders does have a requirement to sticker books, and therefore has to do another “touch” at a warehouse before books can hit the stores, a costly enterprise in both time and money.
In some ways, the Dalton model stock system can be seen as the first growth of what became The Long Tail.