China's Biggest Private-Owned Bookstore Chain Sisyphe Bookstore’s Secret To Profitability
摘要： While Amazon is simply opening offline outlets of its “online bookstore” one after another and displaying best-selling and high-ranking books online in offline bookstores, Sisyphe Bookstore, with an SKU of over 280,000 each and targeting the general public, aims to do a lot more.
Online retailing giant Amazon opened its first bookstore in Seattle half a year ago and just opened its ninth bookstore in San Francisco Bay Area recently. It is reported that Amazon chooses the location of bookstores and select books through big data analysis. Amazon’s attempt to turn online rating, commenting and recommendation algorithm offline amazed many people in the retailing industry, believing that such model represents the future of retailing.
Rumor has it that Amazon is set to open 400 offline bookstores, which helds even more people wondering if “the doom of traditional bookstores has come”.
Dangdang.com, one of the major Chinese online retailers, has opened 143 offline bookstores and plans to open 1,000 bookstores in total within the next three to five years. How should traditional offline bookstores react to the massive counterattack from online retailers’ offline bookstores? Despite the widespread appraisal of Amazon’s offline bookstores, we can’t help wondering if online retailers really could repeat their sales logic online in offline bookstores? Are online users and offline consumers the same?
Unfortunately, traditional bookstores that don’t have online big data and recommendation algorithm can do nothing but lament their own failure. Still, how can they maximize their advantages, achieve standardization, differentiation and good shopping experience at the same time and cope with the fierce competition from online retailers’ offline bookstores?
Sisyphe Bookstore, the biggest private-owned bookstore chain in China, may serve as a great example. This January, Sisyphe just opened a new bookstore in Blue Harbor, its first in Beijing, or 67th across China.
Jin Weizhu, chairman of Sisyphe Bookstore, told TMTpost that he never went to Sisyphe Bookstores to buy new books. Instead, he prefers to go to All Sages Bookstore, a bookstore near Wudaokou and known for social science books. Although it is Jin himself who designed the British-style gate, retro-style show window, guide maps, sign ribbons as well as “chicken soup” on the ground, his personal reading interest has nothing to do with the selection, classifying and displaying of books Sisyphe Bookstore.
Although Jin knew books very well and is often invited to serve as judges of “Best Ten Books of the Year”, he often decLines, saying that: “What’s so big deal about knowing books well? Do you know how the market works?”
If you often go to bookstores and are artsy and well-educated, you might not find Sisyphe’s books satisfying. The majority of books in Sisyphe Bookstores are too basic, and there are no short of chicken soups and silly romance stories. However, if you are just an ordinary reader and seldom read books, use Douban or follow closely the latest news of new books, you might be easily attracted by the British-style gate and café of Sisyphe and buy the first book you’ve ever bought after graduation.
Even if this is the first time you’ve ever entered a bookstore, you might find it easy to wander around, as if strolling an H&M, and find a book you are interested in.
As you are wandering around the bookstore, you may find the guide map carefully designed by Jin on the ground and lead you to the book you are so interested in. There’s a short intro to every sector of the bookstore and the transition is very smooth since different sectors are divided by topics. Taken into consideration of consumers’ understanding, a special book classification method is adopted here in Sisyphe Bookstores. For example, when you want to buy a recipe book, you don’t need to find it in the “Practical Technique: Cooking Skill” sector.
It is precisely due to a good understanding of general consumers’ mentality that Sisyphe Bookstore is designed in a way that can be called “fast fashion”. As a matter of fact, Sisyphe Bookstore’s “revenue per square meter” even reaches the average of a clothes store. “How can you continue if you can’t reach such level?” Jin said rhetorically.
All of these have to do with Sisyphe Bookstore’s positioning: fine books for the general public. To be exact, “fine books” doesn’t mean “advanced books”, but rather “the most appropriate books for its consumer group in each sector”.
“Which group of people are Sisyphe Bookstore’s target consumers? Certainly not artsy young people and elite readers in a city. For example, if there aren’t any bookstore in Blue Harbor, where Sisyphe Bookstore’s first outlet in Beijing is located, people will also come here and go shopping; however, if there is a bookstore that looks nice and even has a coffee area inside, people might be convinced to come in and wander around for a while,” Jin explained. For Jin, his goal is to make a bookstore that an ordinary consumer would be willing to enter and buy one or two books.
Therefore, Sisyphe Bookstore’s target consumers are actually people who don’t read books and its goal is to convince them into buying books.
“If we don’t count textbooks and teaching materials, Chinese read less than one book on average every year. There’s a huge market out there,” Jin explained. Sisyphe Bookstore’s rapid expansion in second and third-tier cities proved Jin’s judgment.
Up till now, Sisyphe Bookstore already opened over 60 bookstores in most second-tier cities in South China. This new bookstore in Blue Harbor, Beijing, marks Sisyphe Bookstore’s march into first-tier cities. In fact, Sisyphe plans to open four bookstores in Beijing within 2017.
For Jin, the most important indicator is “number of customer arrivals”. As long as this figure reaches 1,000, Sisyphe Bookstore’s annual income can reach 5 million RMB.
Since the first Sisyphe Bookstore was opened in Shenzhen CocoPark, it has already made it clear that shopping malls would be its main “battleground”. However, Sisyphe Bookstore, in general, aren’t large and often covers less than 500 square meters. “500 square meters is enough to run a super-efficient and well-functioning bookstore,” he said.
For Jin, to achieve high “revenue per square meter”, there’s no use to appeal to customers’ emotional needs. The only way to succeed is to apply retailing tricks to book-selling.
“Many people who left Sisyphe and turned to movie theatre business would tell me that it is a lot easier than book-selling,” Jin told TMTpost that book-selling is the most difficult business in retailing.
How come? This may have to do with the unique features of books.
Above all, if each book counts as one SKU, then the total SKU in a 500-square-meter bookstore can reach over 280,000. Moreover, the content of books can’t be directly conveyed to consumers, since it takes time and effort to read texts and understand a book.
While Amazon is simply opening offline outlets of its “online bookstore” one after another and displaying best-selling and high-ranking books online in offline bookstores, Sisyphe Bookstore, with an SKU of over 280,000 each and targeting the general public, aims to do a lot more.
Sisyphe Bookstore not only has to create better shopping experience than online bookstores, but also learn from online recommendation algorithm. After all, you can’t expect to be guided by “reading guide maps” or have a special “Parent-Kid Reading Space” when shopping on Dangdang.com or Amazon. Another “trick” Jin learns from online bookstores is adding several tags to a book. Therefore, books are better linked together inside bookstores, compared with traditional book classification system,
That’s why Sisyphe Bookstore has a special book analysis team. Different from books recommended by artsy bookstores such as MUJI Bookstore, which are typically based on bookstore owners’ own reading interests, Sisyphe’s books are selected based on a thorough analysis of books’ features and consumers’ preferences.
However, better shopping experience can’t be standardized and massively reproducible, and isn’t enough to ensure high shopping efficiency.
To turn the entire bookstore into an efficient and reproducible “selling machine”, Sisyphe Bookstore focuses much of its effort on aspects most customers aren’t aware of. For example, there are nineteen professional systems and three numerical control models behind Sisyphe Bookstore.
Through its special book selection and control model, the team would first conduct a model analysis of target customers’ reading habit and affordability. Then, since books are classified through different tags, the team will decide to purchase which books and select which books in which bookstores. Every three months, the model will be slightly adjusted based on the change of the target customers and the compatibility between customers and books.
Through traffic control model, each book is carefully displayed based on its sales pattern, so old books will constantly be replaced by new ones.
Storage adjustment model deals with the biggest headache of any offline bookstore: inventory turnover. To maximize inventory efficiency, inventory of all Sisyphe Bookstores are managed as a total.
With all these models, Sisyphe Bookstore is able to achieve profitability simply through book-selling. As a matter of fact, book-selling accounts for 78 per cent of Sisyphe’s income, and all its new bookstores can achieve profitability within one year they are opened.
By targeting customers who don't read books and focusing on the goal to convince them into buying books, Sisyphe Bookstore filters out customers who care about price and often rush to collect coupons. Since Sisyphe Bookstore’s target customers often lack their own interest and judgment over books, they might be attracted to follow the “recommendation guide map” inside the bookstore and buy the first book he or she has ever bought within half a year on impulse, regardless of the potential higher discount on online bookstores.
[The article is published and edited with authorization from the author @Zhang Yuan, please note source and hyperlink when reproduce.]
Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.