CD-Rom titles are often closely allied with books and bookshops would appear to be a natural outlet for the right titles. Up to 40% of booksellers were planning to sell CD-ROMs at Christmas 1995, according to a report by Book Marketing Limited, with nearly all those in the u1 million turnover bracket planning to do so.
Bookstores are following book publishers, notably Dorling Kindersley, into multimedia. "We were interested in multimedia because the publishers were involved," says Mike Runshaw, manager of the multimedia department at Heffers bookstore in Cambridge. He stocks about 400-450 titles in 300 square feet of the basement, an area which was previously used to stock videos.
Runshaw first had to persuade the board to take multimedia seriously.
"The problem with putting it somewhere very prominent is that you are taking an area which is already successful. In a year or two when multimedia is more accepted we may stock titles alongside relevant books - medicine with medicine and history with history. But at the moment everything is in one place to persuade customers that we are serious about multimedia."
Runshaw's main problem is sourcing enough quality titles; he feels that of the 10,000 available he struggles to find 400 worthwhile titles. And not all of these titles are available through his usual sources of supply. He has attended trade shows to make new contacts: "I first saw THE and Interactive Ideas at a computer trade show.
"The whole distribution thing is a bit of a problem. Release dates are always fairly speculative and we've done advertising three or four months before titles appeared. Things come back 'out of stock' more than with (book) publishers and software houses tend to be slower to supply; 24 to 48 hours is the norm with books. The terms offered vary quite a bit.
Heffers is quite big and we get better terms from the publishers which is why we tend to go to them."
Dillons book chain has also embraced multimedia with 25 stores housing demo machines carrying a minimum of 70 titles. Like Heffers, the titles are closely aligned with book titles - promotions manager Claire Studd says most titles carried are educational and reference. "Reference and arts do particularly well - arts seem to fly out. We might do things like dictionaries in future - they might be more acceptable and easier to use on a computer.
"It is not that profitable. It is long-term thing. We didn't expect to see huge sales - sales have steadily increased. Technology is moving on apace so who knows what is round the corner?" This uncertainty has been a major factor where book retailers are reluctant to sell CD-ROMs according to the research by Book Marketing Limited. Booksellers point to the relatively small installed base of CD-ROM drives and fear the technology is going to be rapidly superseded.
"The market is not exactly mature yet. There is talk of it being a temporary market anyway because of the internet," says Sid Davies, spokesman for the Booksellers Association. "Encarta sells well but for every title that is a hit, a lot are really struggling." He says that part of the problem for bookstores is the bundling of CD-ROMs; consumers are used to getting them for nothing.
"People in multimedia have always been frustrated by the attitude of booksellers. They weren't used to price matching or promotions or anything tricksy," says Andrew Gough, sales and marketing director at Dorling Kindersley. The publisher has had trading relationships with bookshops that go back 20 years.
"Two years ago we thought the book trade would be a major outlet and we put huge investment in. We did presentations at board level at bookstores like Dillons and WH Smith and provided a number of demo machines.
"The reality is the market started off slowly and stayed slow; it still accounts for only 8% of our business. The book trade was working within the confines of the Net Book Agreement (NBA) and they couldn't move in price. Since the NBA has gone there is much more awareness that you have to be competitive." Book Marketing Limited's survey Publishing and Selling Multimedia backs this view, finding price and margins the most important issue for book retailers.
Booksellers are also having to adjust to competition from different sources.
In the past, maybe supermarkets might have carried food and cookery related books and the local newsagent a few popular titles. Now bookstores have to get used to rival products from electronics chains such as Dixons and toyshops, for example. Some are simply not prepared for this according to DK's Gough: "Certain stores are doing wonderful things. Others are putting in a lot of effort and not getting results because they have a Tempo, or a Dixons or a Toys R Us on their doorstep.
"When we opened no-one else was selling CD-ROMs - now every Dixons and WH Smith is selling them, but if it is going to take off we have to be in there," says Runshaw at Heffers. His attitude is not shared by many booksellers who more commonly back off from the competitive real world, according to One Stop Software's sales and marketing manager Terry Chapman.
"We do sell product through WH Smith but bookshops should be doing more.
Dillons, Waterstones, Blackwells - they're dabbling but they are very reticent about throwing themselves in at the deep end. Somebody's got to bite the bullet." He says One Stop Software approached the bookstores and "response was good, but the action wasn't". He warns: "The bookshops are being overtaken by the likes of Tesco and Safeway where trials are going on and the bookshops are going to lose out. The bookshops don't understand that of the one million PCs sold into homes, 70% have CD-ROM drives. Bookshops lost out on video and will lose out on CD-ROMs. They are misjudging their market very badly - we have language translation software for u50 but they don't carry it."
Gloomy predictions perhaps, but some bookstores lack the knowledge of how to jump on the bandwagon. A total of 71% of respondents to Book Marketing Limited's survey said they would source multimedia titles through wholesalers, with 47% planning to go direct to the publisher. Wholesaler Computer Bookshops, which has added CD-ROMs to its range of computer books, recognises the need for handholding. "We work on a sale or exchange basis, so if titles are no good we'll have to take them back. If booksellers come to us looking for an expert opinion we can offer them that," says Computer Bookshops' representative Simon Moore.
He says booksellers are used to working on 100% sale or return facilities and fixed prices, allowing them to operate on very tight margins, whereas software has always been heavily discounted, with volume agreements common.
Dillons has an exclusive relationship with Computer Bookshops and Claire Studd says: "We can't afford to ignore the CD-ROM market but there is a lot of crap about. That is part of the reason it is nice to work with a distributor who takes the crap out of the equation."
Moore says Computer Bookshops has put multimedia machines in stores.
"It is important when the consumer is looking to spend u50 to u100 on an encyclopaedia they know nothing about." Heffers bookstore has two or three computers available for demos; Runshaw points out that the u1000-plus cost of each computer is likely to put off smaller bookshops who are unlikely to attract a supplier demo machine.
Suppliers can help in more low-cost ways. Runshaw finds that dealing direct with software houses is the best way of getting catalogues and demo disks. "A lot of publishers are happy to supply them but Microsoft is the worst - it doesn't seem to need to. I'm sure they're very helpful to WH Smith and the chains. We need dummy boxes for security too."
Microsoft's Paul Tollet, ex-consumer business manager describes the company's attitude to drumming up business via the bookstores as laissez faire.
"If retailers saw an opportunity to sell we would work with them. Some of the bookstores are selling relevant titles. WH Smith is a good example - it is not just a bookstore - it has been successful with reference title Encarta, Wine Guide and Bookshelf. We have a strong relationship with Smiths. It is a direct relationship in terms of marketing - they were included in our advertising. They actually buy from our distribution partners which is just a matter of logistics but the relationship is direct.
"We offer marketing help, cooperative marketing spend and negotiate what we can do for booksellers. I'm not sure we would go as far as loaning machines. Trial at point of sale is a big issue in the industry at the moment. People might come along and pinch your mouse or kids delete files.
It is a high maintenance operation and hugely expensive," says Tollet.
Dillons' Studd says distributor Computer Bookshops sponsors its instore PCs and provides a rolling demo disk with a possible 60 titles; six titles are set up to look at in full. She does not find the demo facilities heavy on staff time. "Most people who are interested in the product are familiar with the mouse and the front-end of the demo disk is pretty straightforward.
If they are not familiar with the mouse they can ask the staff. We have had a number of training days; not everyone in bookselling is familiar with software. There has been some resistance but on the whole the opposite is true - people are saying 'we want it in our stores'. There are places where it hasn't really worked and there have been problems where some people are not familiar with the technology but we have addressed that over the last year."
DK's Gough says it is the non-threatening environment of the bookshop, where customers are used to being able to browse without being attacked by salesmen, which could make book stores a powerful retail tool. "They are very liberated in terms of letting the customer see what it is they are going to buy. Indeed Dillons in Oxford let speople buy a CD-ROM and take it back and swap it."
The organic approach of building gently on what is already there is unlikely to lead to an explosion in sales, he concedes. "My feeling is that bookshops are not really attracting in a new type of customer; they would like to, but they are just making multimedia available to the type of person who likes browsing in bookshops."
Microsoft's Tollet sees this as a positive trend: "The pleasing trend from my point of view is that we are getting away from the technology.
Three years ago you would have had to buy from a computer store and a typical customer would have gone out looking for software - whereas now it is the title they are interested in.
"The challenge for bookstores is to make end users aware that they sell software. To some extent it is the publisher's job to make end users aware of the software's existence by advertising. The retailer's job is to pull in the customers," says Tollet.
Bookshops are not known for their synonymity with exciting new technology and the small family-run businesses are likely to hold out. Computer Bookshop's Moore says we should look west for a taste of what will happen to those who fail to move with the times.
"It is still a battle to persuade new people to take CD-ROMs but they are not all aware of it. I can't imagine family businesses having to stock CDs but they will have to. In the States they now have multimedia outlets rather than bookshops."
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