Joe Wikert's DisruptorFest

Bookstores Need to Respond to Amazon Prime...Soon

Amazon's decision to launch the Prime shipping service several years ago was brilliant.  The $79 annual fee means free two-day shipping and has created retailer loyalty like no other campaign I can think of.  So isn't it remarkable that the brick-and-mortars have mostly just watched with envy, offering their own loyalty programs that lack the punch of Amazon Prime?

I belong to the membership programs for the two largest U.S. chains and I sometimes forget to even show the card at checkout.  How often do you suppose Amazon customers forget to use their Prime memberships?  How about never?  This BusinessWeek article about Amazon Prime got me thinking about the brick-and-mortar store situation and the need for them to offer a compelling alternative.

I'd start off by recognizing and leveraging the single most important advantage the brick-and-mortar stores have over Amazon: a physical presence, probably fairly close to your home.  It's funny that the BusinessWeek article talks about how "instant gratification" is part of the secret to Prime's success.  Really?  I'm not convinced two-day shipping is really "instant."

I suggest the brick-and-mortars turn "two-day availability" into "today availability."  Here's the program: Pay $79 for our new bookstore membership program and we'll give you 34% off on all your purchases.  No limits.  Rather than waiting two days to get it from Amazon, stop by your local store and grab your book today, all for the same price you'd get online.  If we don't have it in stock we'll get it for you within two days (for no additional charge) and you'll still get 34% off the cover price.

The naysayers will start off by pointing out how the brick-and-mortars can't afford to compete with Amazon on discount.  Really?  I stopped in one of my local stores a couple of days ago and saw several of the books our company published that are available for 30% off and an additional 10% off for members.  So they're willing to sell those books for 40% off the cover price.  The thinking is they'll get customers in the door for those deals but they'll end up buying other products at full cover price.  Based on the various quarterly financial reports I've seen from the big chains it doesn't look like that model is working all that well.

So why not be bold and offer a program that's more competitive with the Amazon model?  Imagine how many customers would sign up for it, creating a new loyalty to their favorite brick-and-mortar.  I wonder how many of them would be Amazon customers looking for real instant gratification.

Maybe this program is just too ambitious and unpredictable for a big chain to take on.  I'd ask whether they can afford not to do something this big though.  If it's too scary though, how about initially just testing it out on a smaller scale?  Make an announcement that the plan is coming, but it will be limited to the first 1,000 customers in certain key locations at first.  Maybe even make it half price for those first-wave members the first year.  Now you've introduced a scarcity component that's likely to drive even more buzz.  Then launch it, measure the results and determine next steps.

What do they have to lose?  In the short term the chain might wind up losing money on certain customers.  Longer term they probably need to reevaluate store square footage and existing lease commitments/terms.  This sort of program would probably help determine those future needs, especially if they realize a higher-than-anticipated percentage of long tail sales (e.g., books to order, not on shelves already).  It would also create a feirce loyalty to their stores; just as Prime members want to get the most out of their $79 annual investment, so too would these members with this campaign.

If one of my local stores offers it I guarantee you I'm signing up.  Why?  I don't have an Amazon Prime membership.  My family and I tend to believe in the "instant" part of "instant gratification", so we tend to buy most of our books in the local stores.  We still buy from Amazon, just not enough to warrant a Prime membership.  The other reason I don't have a Prime membership is that almost all of my own purchases are ebooks now.  As more customers shift from print to ebooks there will be an opportunity to create new loyalty programs.  I don't think the big brick-and-mortar chains can wait till then to launch something exciting though.

 

Publishing in the Social World

I spent most of last week at our Web 2.0 Summit in San Francisco.  If you missed it, you'll find all of the video for it here.  I came away from it with two things in mind.  First, Google is under attack from every angle.  Sure, they've felt competitive pressures before but whether it's from Facebook, Bing or some startup in a garage, I get the impression it's more intense now than ever before.  No wonder they're giving all employees a 10% pay raise!  Seriously, search is getting more social every day and tomorrow's recommendations from people you know via Facebook are infinitely more valuable than search results from yesterday's algorithm.

That brings me to my second key takeaway from Web 2.0: The importance of a social strategy for every industry, inculding publishing.  I can already hear the skeptics saying, "reading is a time of solitude, not something that's done socially."  That's mostly right, but it ignores at least two key areas where a social strategy can have a profound impact on the publishing industry: recommendations and remixes.

Amazon pretty much pioneered the online recommendation aspect of book publishing.  Everyone wants 5-star reviews of their book, but I'm pretty sure we could also agree that a trusted friend's recommendation is even more powerful than a stranger's.  Almost every ebook purchase I make these days is because a friend suggested it.  There are just too many options (and too little time!) to risk buying a dud, even if it's only $9.99.

What's missing in the recommendation area though is a fast and easy way to share excerpts.  If I come across a terrific sentence or paragraph I want to share from Drew Brees' ebook, Coming Back Stronger (a terrific read so far, btw), what are my options?  The Kindle reader on my iPad doesn't offer a way for me to even tweet/email from within the app let alone share an excerpt.

Even though I mentioned Google could face challenging times ahead I think they're on to a solution for this particular problem.  Google Books lets you share links right into the book's content.  For example, I love it when Brees says, "Anyone can see the adversity in a difficult situation, but it takes a stronger person to see the opportunity."  I could tweet that sentence but it wouldn't leave much room for an attribution.  I prefer to share a link, like this one, which takes you right to that page in the book (the quote starts at the bottom of the previous page and runs through the top of the one linked to).

Since Google Books already offers this service it seems likely the much-anticipated Google Editions will too.  If it does, that's one reason I'll seriously consider switching from Amazon to Google for all my future ebook purchases.  I want to be able to not only share excerpts but also give my friends more context though a service that lets them dive right into the book I'm talking about.

Even though Google lets publishers determine what percentage of a book visitors can view for free in their Books service it's clear many publishers aren't participating.  For example, I've queued up Bill Bryson's At Home to read soon but all you'll find about it on Google Books is this content-free catalog page.

Any publishers who are skittish about sharing content previews today are likely to choke on the idea of content remix in the future.  Remix isn't great for all types of content but it lends itself to formats like how-to, for example.  The author may have one way of solving a problem but a reader might find an even better approach.  Why not make that reader's solution available to other readers, even if it's just a small change to one of the steps originally provided by the author?  Some readers will offer their appoach for free and others might want some form of compensation; we need to come up with a model that supports both.  And remember, nobody's trying to jam these remixes down anyone else's throat.  I envision an ereader app that lets you hide all other reader comments and content.  But for those of us who are curious to see what other readers, especially our own friends, have to say, I think this will be a nice new service.

The social publishing/content options suggested in this post are things that can't effectively be executed in the print world.  Up to now, ebooks have mostly been nothing more than quick-and-dirty conversions of the print product.  I look forward to a future where social options and other features more fully leverage the ebook medium.

I Want QR Code Videos, Not Assembly Manuals

My wife's doctor suggested she use an exercise bike to recover from recent knee surgery.  The one we wound up buying had a QR code on the box which takes you to a promotional video (the link is embedded in the QR code shown on the left).

I didn't watch the promo video before buying the bike and I'll bet most other prospective customers don't bother with it either.  It's nice to see manufacturers using QR code technology, but I can think of a much better application than on-box advertising: enhancing or replacing the assembly manual.

When I opened the box I found it contained the typical assortment of screws, nuts, washers, all the various parts of the bike and, of course, an assembly manual.  I hate assembly manuals.  They're often too vague and sometimes even include the wrong information.

A video, on the other hand, is generally worth a thousand assembly manual words.  Rather than providing me with poorly-written assembly instructions, why not show me how each part fits together?  Manufacturers could either simply add QR codes to the written instructions or dump the print instructions completely and just have a code on the box.  For viewing purposes, my iPhone is always handy and something like this would be far more useful than most of the hundreds of thousands of App Store products.

OK, I know everyone doesn't have a smartphone and some people would prefer to read the steps, not watch them; for those people, provide a url where written (and up-to-date!) instructions can be downloaded and printed.

When I replaced the cracked screen on my daughter's iPhone awhile back I followed video instructions, not written ones.  I simply watched a step, pressed pause, did that step on my own, pressed play again, etc.  That's exactly what I'd prefer doing for any sort of assembly project.

There's another benefit to manufacturer's with this option: they could ask every customer to register on their website.  I would have gladly given my email address for access to assembly videos for that bike, enabling the manufacturer to follow-up with me later with cross-sell and up-sell messages.

This idea isn't just for assembly manuals though, of course.  QR codes could be used in owner's manuals (how do I replace a broken tailight bulb on my car?) or any sort of how-to guide (how do I fix a leaky faucet?).  Yes, there's a cost associated with creating all these videos, but it's a terrific opportunity to (a) provide more help to customers and (b) establish a direct relationship with those customers.

Extending an eReader with a Smartphone

Many ebooks can be read just fine on the surface area of your typical Kindle, iPad or other eReader.  The reading process flows sequentially from one page to the next.  No need to jump back and forth within the book or look things up in an index.  Your typical novel is consumed this way, but a how-to book or a reference guide is not; with these latter examples you're often dipping in and out, jumping to and from the index and sometimes wanting to look at pages that aren't adjacent to one another.

I ran into this problem recently with a home repair project.  Using my iPad I read a series of steps on how to replace a cracked porcelain soap dish on a tiled shower wall.  A video was also available but when I watched it I could no longer see the numbered steps on my iPad.  I needed a solution where I could could scan the numbered steps while watching the video, tying the entire process together.  And if you're holding a mallet and chisel at the same time you don't have an extra hand to keep flipping screens on the iPad.  What to do?

One solution is to show the video on my iPhone while the steps appear on my iPad.  I actually wound up doing that, but I had to find the video link separately on my iPhone.  A better solution is an eReader app that lets my devices talk to each other; touch and hold the link on my iPad screen and one of the options that pop up is, "Open link on iPhone."  Just as the Camera-A and Camera-B apps let your iPad use your iPhone's camera, there's no reason an eReader app couldn't use Bluetooth to solve the problem I'm describing.

Think of it as a way of extending the surface area of your eReader device.  In addition to the video feature I described above, here are a couple of other cool uses for a device-pairing feature like this:

Searches -- I'm reading a book and come across a phrase, location or some other item I want to learn more about.  Today I have to leave my ebook app to do the search through my brower.  I'd prefer touching the phrase on my iPad screen and having a menu option that says, "Bing search on iPhone."  I never have to leave my reader app and I can click through any of the search results on my iPhone.

Index access -- Indexes are pretty clumsy in an ebook.  And btw, please don't tell me indexes don't matter in ebooks.  Just because I can search for any phrase I want to doesn't mean I don't want access to a well-developed index that groups all the related items, includes synonyms, etc.  But thanks to the one-frame-only view in today's ebook reader apps, if I want to hop to the index I have to leave the page I'm currently reading.  So how about an option where I touch the screen and one menu option is, "Display index on iPhone"?  Then anytime I touch an index entry on the iPhone, the reader app on my iPad jumps to that page. 

If I'm reading on my iPad I always know my iPhone is close by.  That's because my iPhone is almost always clipped on my belt.  The two devices are obviously capable of talking to one another, so I'm hoping that we'll soon start seeing more apps that enable this functionality.  The two devices together are more powerful than either one individually.

eBooks: Lending vs. Reselling

Why am I underwhelmed with Amazon's recent announcment about an ebook lending feature for the Kindle?  The Nook has offered that option for awhile now and I don't think it's been a big game-changer for that device.  Don't get me wrong.  I think lending is nice.  It's the restrictions that come with ebook lending that disappoint me.

First, it's only a 14-day program.  I can't tell you the last time I managed to get through a book in 14 days.  My book reading is generally done in smaller time slices when I have a free evening, so I'm usually reading a book for a couple of months, not a couple of weeks.

Then there's the feature's single-access nature.  If I lend an ebook to you I lose access to it.  Yep, that's how it works with a print book but can we please stop trying to simply mimic the physical book's limitations in the ebook world?  If retailers insist on the 14-day limit, what's the harm in allowing my friend and I to have simultaneous access to the book, encouraging more discussion about it, etc.?  And if that's still too frightening for retailers/publishers, how about offering dual access for an additional fee?  I might pay an extra dollar or two for my friend and I to have access at the same time.

Next, these lending programs are typically only allowed once per title.  So if I lend my ebook to you I'm unable to lend it to anyone else after you're finished.

The problem in all of this is we're dancing around a core issue: Why not enable a model where customers can resell their ebooks?  It's been said that ebook prices have to be lower than print book prices because of the limitations of the former.  Reselling is an example of one of those limitations.  So what would happen if you could resell your ebooks?

Publishers and authors hate the idea because they're cut out of the loop in the resale of used print books.  That doesn't have to be the case in the ebook world.  I'd love to be able to resell some of the ebooks I've read, particularly the ones I know I'll never go back to.  And just like in the print world, I'd be willing to receive less than what I paid for it originally.  Right now they're pretty much worthless to me, so I'd accept a lower price to resell them.

I can think of a few books I paid $9.99 for that I'd be happy to get two or three dollars for (each) in resale.  Let's say I could put those up on the used ebook market for $8.99, or a dollar less than the original version.  I'd keep $3 and the retailer would get the other $5.99, which they would then share with the publisher/author.

I know what you're thinking...  Why would a retailer/publisher/author want to sell an ebook for $5.99 when they could sell the same darned thing for $9.99?  The answer is this program would have to generate incremental sales.  How many people might be willing to pay $5.99 for the book but not $9.99?  And there's only one "copy" of my version for $5.99, so once one person buys it, it's off the market.

This sort of a campaign has the potential to increase two things: Interest in ebooks as well as the origianal prices paid for them.  It increases interest only if the retailer leverages the campaign though.  If you thought there might be someone reselling an ebook you're interested in, you're more inclined to go back to the catalog page to see if a used version is available from time to time.  On the pricing side, I'm willing to pay a bit more for my next ebook purchase if I know I can resell it later.

But why do we have to say used ebooks should cost less than originals?  I've talked about used ebooks in the academic market and how they could potentially be sold for more than the originals.  There are possibilities beyond the textbook area though.  Here's an example: I've been a fan of Bill Gates for a long time.  I hear Bill reads a lot of books every year and that he makes a lot of notes about ones he likes.  What if he were to do all his reading in ebook format and capture his notes digitally?  The next time I go to Amazon to buy an ebook he's read, it's available for $9.99 by itself or for $14.99 with all the notes Bill Gates wrote about it.  I'm buying the $14.99 version!

Would Gates participate in a program like this?  I'll bet he'd be very intersted in it if the additional $5 went directly to The Bill & Melinda Gates Foundation.  And, of course, unlike the earlier ebook resale model I discussed, this would be for an unlimited number of copies, not just one.

That last example features the resale of a different type of "used ebook."  But that example is also something that would be very difficult to implement in the print world.  My point is that we need to stop enforcing print book limitations on ebooks and, more importantly, start thinking about new ways to enhance and sell ebooks, especially when these new models allow us to do things we simply couldn't pull off in the print book world.