Selling direct to the consumerNews & Events 2008-05-19 One of the most pressing issues affecting publishers today is the challenge of selling directly to the consumer, or more precisely, the processes they need to put in place if they are to do this well. Temperatures seem very high in the industry as Amazon, amongst others, have made their feelings very clear on the subject of publishers using their position to undercut them. The book shops that have struggled for so long to compete must be looking on with some amusement. It is becoming increasingly apparent that publishers are no longer content to leave online consumer business to the major e-tailers. The reasons for this are also fairly clear – volume. The growth of eBooks and audio books and their suitability for online selling makes them a very attractive proposition for publishers as the delivery is relatively simple. Further innovations, such as the Espresso Book Machine, which delivers books printed on demand while the consumer waits, are also creating openings for publishers to fulfill with appropriate online commerce systems. Question time for publishers
Most publishers have asked themselves the question about whether to sell directly to consumers. If the answer is yes, they also have to ask if they should only sell electronic goods, or go the whole hog and sell their entire portfolio. But what can they offer that Amazon and the like doesn’t and why should consumers go to them? And, like so many other consumer buying decision, the most likely answer is price.
In a recent survey carried out by IBS at the London Book Fair, we found that 56% publishers are already selling direct to consumers. But where are they and are they making any money? We have to assume the amount of direct selling is a very small percentage of overall business. In addition, once the decision to sell direct has been made, a whole set of new questions arise. Top of this list is how does selling direct affect the overall business’ supply chain requirements? The direct effect
On the positive side, direct selling drives more electronic ordering, which saves administrative costs and allows orders to be automatically and instantly uploaded to the core IT systems.
However, that’s where the good times end as organizations that are geared up for mass fulfillment of orders to distributors and retailers are now faced with the prospect of carrying out small picks in the warehouse and enabling home deliveries. They also have to deal with returns, lost orders, online credit card validation, gathering customer data in line with privacy laws, various selling methods and all the other differences that Amazon makes look so easy. Faced with these issues, most publishers probably wish the idea was never suggested. But fear not. The e-Tailers success has come from the implementation of solid, reliable and fit-for-task IT systems, publishers simply have to commit to the same. And because these publishing systems can be integrated add-ons to their core business systems, they will even give them a big advantage over their better established rivals. What publishers need to succeed
The first system to put in place is a reliable way of selling online in order to reach the consumer. Some publishers are already using an ecommerce system for its Business-2-Business relationships, these just need extending to Business-2-Consumer. Those that aren’t will need a completely new book distribution software system. The good news is there are some very good ones out there that are well established and proven solutions. Some, like IBS Bookmaster, are even fully integrated with the rest of the core IT systems, like financial, book production, distribution and CRM.
CRM? What is that? For the uninitiated publisher, that is Customer Relationship Management, another essential tool for selling direct to the consumer. Firstly, selling direct brings publishers into contact with the great and the good of humanity. If the customer receives a book they weren’t expecting, whether it was their fault or not, they are likely to contact the publisher directly, because they are also the salesman. This puts an immediate demand on customer service and a good CRM system can help shave time off these calls by ensuring information is accurate and readily available to the customer service operative. Secondly, CRM enables effective marketing of products. The theory of ‘Build it and they will come’, may have worked for Kevin Costner in Field of Dreams, but simply building a web site and putting a few titles on it is unlikely to attract new buyers on its own. A CRM allows publishers to build targeted marketing campaigns to consumers that are likely to be interested in specific genres and drive them to the appropriate web pages. Publishers also need to recognize that to be as effective as possible, the CRM has to be an integrated element of an enterprise-wide business solution. As for distribution, publishers have the choice of establishing their own distribution facilities or adopting a 3rd party distribution provider. To handle selling directly to consumers require IT systems that can handle all the different possible sales methods that selling to consumers can require. E-Commerce
The eCommerce web site is the publisher’s main route to the consumer market and it needs to offer a similar or better experience than the e-Tailers. As well as taking orders, dealing with anonymous users, setting up customer accounts and handling credit card validation, it also has to take into account the various pricing methods that customers expect. These may be specific web discounts, bundles or delivery options or, for electronic products, cost per download, per user or even for time. These functions allow sales people and marketers to really let their creative juices flow as they aim to secure more sales through inventive and innovative deals. The site also needs to allow customers to view or update their order status.
To maximize potential sales, the web site itself has to be a virtual shop front. Powerful search engines, in-depth catalogues and product information, as well as subtle devices for cross-selling. Consumers need to be able to get as much information as possible online otherwise they will contact the supplier directly, instantly eating up their profit margin by engaging staff that should be doing something else. Subscriptions
Subscriptions are a rapidly growing sector of the publishing market and are no longer the exclusive domain of magazines and journals. Many professionals are now subscribing to a mixed bundle of products, both physical and electronic and publishers should be well-placed to provide this service.
Again, effective IT systems for book distribution are the answer, with dedicated technology specifically designed to handle the complex requirements of subscription management. However, as I keep re-iterating, a subscriptions management system can only be truly effective and drive efficiency and profitability to the organization if it is part of an integrated IT infrastructure. Making it all work together
This article has introduced the requirement for a number of different systems that publishers require to allow them to sell directly to the consumer marketplace. However, for many companies, making all these systems work effectively together is nigh on impossible. IBS believes that its fully integrated architecture delivers fast implementation, a smooth upgrade path and greater control through the organization. IBS Bookmaster, a publishing and book distribution software, delivers one database and one set of business logic to multiple user interfaces.
If publishers are going to take on the Amazons of this world at their own game they need to have something pretty special up their sleeves. IBS Bookmaster is the secret weapon they have been looking for. By Mike Irving, Vice President Publishing, IBS
Contact IBS for more information. » | 