German Booksellers

Squaring Up to Amazon

new seattle store source Bloomberg
Amazon's tries its hand at classic book selling in Seattle.
  • Why it matters

    Why it matters

    Germans continue to buy books, but booksellers have to be inventive or find niches to survive death by the Internet.

  • Facts

    Facts

    • Last year alone, the German book trade lost 40,000 square meters of sales space and closed some 150 stores.
    • The Hugendubel on the Marienplatz in Munich was Germany’s first department store for books and at one point the largest bookselling establishment in Europe.
    • The Augsburg-based Weltbild Group intends to open 60 new stores, while Hugendubel plans to take over all the Karstadt bookstores, and Osiander will soon grow to 37 stores.
  • Audio

    Audio

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For a glimpse into the future, Nina Hugendubel crossed the Atlantic on a trip from Munich to experience a new kind of bookstore in Seattle.

Ms. Hugendubel is a member of the Hugendubel bookselling dynasty, one of the major book retailers in Germany. What she found was another bad omen for the ailing book trade — the first brick-and-mortar store run by Amazon, the Internet giant that first shook up bookselling and then went on to send shockwaves through the rest of retail.

The store opened last fall, but its red brick facade, parquet floors and dark bookcases convey a feeling of continuity and tradition.

“It makes sense from the customer’s point of view,” admitted Ms. Hugendubel. “It’s an attractive bookstore.”

Behind the scenes, however, the store is far from traditional. Publications on store shelves aren’t selected by booksellers, for instance, but according to the purchasing and browsing histories of millions of Amazon’s customers.

Basically, the store is a walk-in customer recommendation — and in this way, Amazon is reversing an old principle.

“Customers used to depend on booksellers. What the retailer didn't order in the store simply didn’t exist.”

Heinrich Riethmüller,, owner of Osiander, the oldest bookstore in Baden-Württemberg

“Customers used to depend on booksellers,” said Heinrich Riethmüller, owner of Osiander, the oldest bookstore in Baden-Württemberg, and head of the German Publishers and Booksellers Association. “What the retailer didn’t order in the store simply didn’t exist.”

That has changed through the Internet, and especially because of Amazon. The company circumvents the book trade and seeks to cut out the middle man wherever possible. Its second store will soon open in San Diego, and the industry expects to see hundreds more – even beyond U.S. borders.

Amazon is thrusting itself into a fast-morphing retail environment. It is entering a book trade in the aftermath of the wild years when firms like Hugendubel, Weltbild, Thalia and Bertelsmann were ensnared in territorial battles, opening huge stores and then closing them again.

Last year alone, the German book trade lost 40,000 square meters of sales space and closed around 150 stores. One of the losers was the longstanding, widely known Stern-Verlag bookstore in Düsseldorf. Now rugs are sold at the site.

But Germans continue to purchase books, so other stores have opened. The Augsburg-based Weltbild Group even intends to open 60 new stores. Also, Hugendubel plans to take over all the Karstadt bookstores, and Osiander will soon grow to 37 stores.

In the meantime, contours of the new German bookselling landscape are becoming clear. Store owners are on a steep learning curve, striving to master all sales channels, ranging from the classic store and the Internet to the electronic book.

Those book retailers that aren’t big enough or want to grow have to be inventive or occupy niches. And above all, they must turn their customers into friends.

This restructuring is nowhere more evident than on the Marienplatz in Munich. For almost four decades, a flourishing institution stood opposite the venerable City Hall. The Hugendubel sold books there on almost 4,000 square meters of floor space on six floors.

It’s called “the” Hugendubel because it was the very first department store for books, and it changed the way books were sold. With recent estimated sales of €25 million, or about $28.5 million, it was the largest bookselling establishment in Europe and a model for all other large-scale stores.

But it had aged visibly and renovations were expensive. The landlord wanted to raise the rent and the venerable bookseller was threatened with total closure.

Munich protested until a sort of Solomonic solution was finally found: Deutsche Telekom opened a mobile-phone store on the ground floor and Hugendubel moved into the two floors above – with a total of only 1,200 square meters.

It’s a tightrope act. On one hand, large bookselling chains want to be in top city locations, but those sites are sought-after and expensive.

“Nevertheless, we want to stay here, because this location is the best service we can offer our customers,” said Nina Hugendubel, who manages the family firm along with her brother Maximilian. “We meet them in the middle.”

But the Hugendubels are also merchants.

“For many companies, store rents are part of the marketing budget,” said Maximilian Hugendubel. “But for us, every single store must be profitable.”

So the branch store in Munich is shrinking by two-thirds and only a fraction of the former titles will be offered. The store, which will open in mid-2017, will retain reader alcoves and a café that is significantly smaller. The intention is to distinguish the store from Amazon — and turn it into a social meeting place.

 

Germany Book Market-01

 

Martin Schwoll is trying a similar survival strategy. He runs the Backhaus bookshop in Aachen, only 500 meters away from the headquarters of the Mayersche book chain, founded two centuries ago. The Mayersche is to Aachen and North Rhine-Westphalia what Hugendubel is to Munich and Bavaria. Both have sales in region of hundreds of millions of euros.

Mr. Schwoll is happy his little store still exists at all. While Hugendubel and the Mayersche are expanding their online business — and Amazon fine-tunes its offline plans — Mr. Schwoll is pleased that his store was profitable in 2015 for the first time.

What brings his customers into the tiny store is his special selection of titles. Backhaus sees itself as a literary bookshop. Mr. Schwoll doesn’t offer the bestseller list from Spiegel magazine.

“We only sell what fits us,” he said.

That approach has received national recognition. Last year, Backhaus was one of the recipients of the first German Booksellers’ Award. The store also gets credit for offering space to small publishers amid its less than 90 square meters.

“We receive visits each half-year from more than 30 publishers’ representatives,” Mr. Schwoll said. “That is far above the average.”

He offers 9,000 titles and the concept is working. Contrary to the industry trend, Backhaus reported increasing sales for the first months of 2016.

To bolster sales, he holds unusual events. Each month, for instance, Backhaus issues an invitation to “Late Reading” nights. A dozen readers are allowed to spend three hours in the store without the presence of booksellers and enjoy wine and cheese.

Benedikt Taschen has a completely different approach.

The Cologne native is one of the most successful publishers of art books in the world. He attracts buyers with glamor and delights in surrounding himself with photographers, artists, and film stars.

One of the reasons for his publishing success is that he opens his own shops. Even before the bookstore crisis, he was unhappy with the way colleagues made individual selections from more than 500 titles.

“I consider our books to be a family,” said Mr. Taschen, adding that the titles simply belong together.

In 2000, he opened his first store in Paris, stocked only with the publisher’s own books. He followed that in 2003 with the flagship store in Beverly Hills. Today he has 10 stores, from Milan to New York.

Mr. Taschen inoculates the stores against the ups and downs of the industry by presenting them as book boutiques drawn up by the French designer Philippe Starck. At the Brussels store, for example, the door handle in the form of a branch signals that customers are entering an art space.

The publishing house attaches great value to appropriate locations and would never set up a store along on shopping streets. This also has practical advantages. In Paris, the publisher convinced authorities that the focus is less on commerce than on art – and the store is allowed to stay open on Sundays.

Mr. Taschen’s concept might be elaborate, but it seems to be paying off. This summer in Berlin, the next offshoot will open in the Schlüterstrasse not far from the Kurfürstendamm shopping boulevard. It is proof in brick and mortar of what is possible in the book trade beyond the bounds of Amazon.

Meanwhile the mood has also shifted among readers, many of whom have rediscovered their bookstores — and that gives Maximilian Hugendubel cause for optimism.

When he used to talk about his profession, he said the reaction of outsiders was hardly encouraging. “People would say: Oh, I’m so sorry – soon there won’t be stores like yours any longer,’” he said.

Now Mr. Hugendubel believes this phase has been overcome, and he looks ahead to a promising future, despite Amazon.

Heinrich Riethmüller, the head of Osiander books in Baden-Württemberg, has also invested in logistics and technology. And he too intends to open or take over more stores.

“With each additional store, expenses work in our favor,” he said, touting a strategy that is similar to that of its archenemy Amazon.

 

This article originally appeared in weekly business magazine WirtschaftsWoche. To contact the author: peter.steinkirchner@wiwo.de

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