Monday, January 28, 2008

Seduced between the covers

There’s a nice little battle taking place in my local strip shopping centre. Within a stone’s throw of each other, there’s each of Dymocks, Angus & Robertson, and Borders. The latter, definitely cast in the role of foreign interloper, has made a splash since its arrival in my local centre a year or two back. Massive range, extended hours, adjoining coffee shop, unlimited browsing. Not quite the David & Goliath battle tellingly portrayed in You’ve Got Mail, but certainly a massive threat for the local incumbents.

Part of Dymocks initial response was flawed, appealing to local bookworms’ sense of patriotism, proudly pointing to its long tradition of Australian ownership. For what does this count in the loyalty stakes? Not much at all, I'd suggest. Retail Australia is littered with the remnants of Buy Australian campaigns. However, it is worth reflecting on the other loyalty devices used by these chains. Dymocks has invested over the past few years in its Booklovers program. Quite a neat loyalty card, where 5% of your purchase price is redeemable as a discount on your next visit. Options to receive email newsletters, but unimpressive servicing options (their web page refuses to recognise my card number).

Over at Borders, you're encouraged to receive their weekly emails, which contain the usual book reviews etc, but also contain weekly discount offers. These discounts are variously targeted by product (e.g. DVDs only, children’s books only), by quantity (buy 3 books, get 20% off) or sometimes just a sizeable unconstrained discount (30% off any book). The gregarious nature in which the emails are offered combined with the attraction of the discount suggests that a reasonable proportion of their sales are subject to these discounts. Mere observation of the number of Borders customers armed with the discount coupons at point of sale tends to reinforce this. How much is this loyalty device costing Borders? A hint that Borders itself is questioning this device came in the form of a recent online survey which queried whether there was anything in the email newsletters that was of interest, apart from the discount coupons.

Across the road, Angus & Robertson has bravely resisted jumping into structured discount programs, either the formalised loyalty card of Dymocks or the emailed discount schedule from Borders. If anything, the bargain bins have been A&R’s go. And I have to say I was mightily impressed this month to see some reasonable titles thrown out for just $5 – genuine bargains. That in itself has been sufficient for me to make sure I pop my head in to see what’s on offer. You don’t always need a highly structured or technologically elegant loyalty solution.

Who’ll win out in the end? Borders seems likely to have the resources to come on top in any fight. For the others, who knows? For the time being, the winner just at the moment appears to be the book loving public – bigger choice, longer hours and good prices. Or have I just been sucked in?

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