Sunday, July 05, 2009

Taking Wing: Dead end streets

Back in December of last year, in the midst of the "conflation" debates, I posted a couple of articles about the retail book industry: "Who benefits most economically from state centralization?" and "there’s nothing wrong with competition." In them, I talked a bit about the relative merits of the "big-box" and "small-box" models of bookselling, and started to talk about two competing visions of how "competition" can be thought about as an economic good. It's tempting to relate the two models of competition to Dyer Lum's distinction between "militant" and "industrial" types: on the one hand, we have the centralists' vision, where the fact that somebody wins and somebody loses on the field of commercial battle is almost by itself an indication that the system is still working, the weak are being winnowed out, etc.; on the other, a decentralist vision, that sees competition as a dynamic that ought to be expanded across as wide a field of competitors as the market will support, and maintained in a sort of dynamic equilibrium, because everyone is benefitted by the diversity of offerings. Since I wrote those posts, we've had a chance to see the big-box stores struggle to maintain themselves under conditions designed to test their most prominent weaknesses: the economic downturn created a genuine credit crunch for the big-boxes operations, which depend on being able to float really enormous quantities of key titles in, and out, on short notice. The rocky ride of my employers is certainly no secret: plumeting stock prices, narrowly avoiding NYSE delisting, short-term high-interest debt and an uncomfortably close relationship to a prominent hedge fund, board and CEO changes, predictions of the company's demise within the years, fears of a pump-and-dump, a new emphasis on hand-selling "make" titles, etc. What all of that uncertainty has imposed is a need to further concentrate vendor and distributor relationships, to further concentrate inventory investment on "key" items, to focus labor on a few key tasks, and, of course, a wide range of cost-cutting measures which have focused on reducing labor costs, by eliminating salaried positions and those with benefits, and inventory costs and commitments by returning a lot of product to non-key vendors. Corporate culture has undergone a massive change, with an overwhelming emphais on making quotas on "make" titles, for reasons which undoubtedly have a lot to do with keeping those "key" vendors happy, but which also seem to have some of the character of imposing rigid discipline on the workforce. From the salesfloor, there has certainly been no sense that "we are all in this together," and when I announced my resignation I figured I was just speeding up the process a little, since I'm no sort of high-pressure salesman, and I've been selling books for too many decades to feel very sanguine about being told on a regular basis that I wasn't doing the job because I was getting the customers the books they wanted, rather than the ones the buyers or the vendors wanted them to want. As it turned out, I've been of continuing use as a strong back, rearranging fixtures to adapt to new stock and staff levels, etc., and my immediate employers and I have come to a very part-time understanding.

But the resignation, and the weeks expecting every shift picked up as a favor to be the very last one, together with all the research and soul-searching leading up to it, have precipitated a fairly radical crystalization in my thinking about a number of things, chief among them the current (rotten) state of capitalism and the possible outlines of some alternatives. Corvus is a rather imperfect attempt to put some of these new understandings into practice.

But I should be clear: I do not "hate" the company I work for. There is really not much point. Some of my friends take a certain amount of pleasure in the thought that one of the Big Three book chains might fold, but, honestly, the only thing that could be much worse right, for bookbuyers and the publishing industry, than the present concentration, would be the sort of near-monopoly conditions if there was only a Big Two (particularly since one of those two, Amazon, isn't a bookstore in any meaningful sense, and gets its illusion of selection from its marketplace sellers.) And all of the bass-ackwards nonsense that have made the job miserable are really quite logical, given a remarkably bass-ackwards context. Righteous indignation and enlightened consumerism aren't going to address the crisis in the bookworld which is already pretty well upon us. Pity the poor big-box bookstore, at least a little bit, as centralization continues to have its way with it. They don't have much choice but to screw the little guys, and they would rather not, if they could help it, because if they concentrate their "key titles" too much, there are some even-bigger-boxes that are going to have them for lunch. Product diversity is the specialty store's friend, as is a variety of suppliers, but the "big-box specialty store" is a slave to two highly incompatible masters, economies of scale and breadth of offerings.

The upshot of all of this is that the big-box bookstores are committed, and in important senses have to be committed, to a dangerous strategy of putting their eggs in damn few baskets, all the while hoping it's not so few that they simply lose any purpose as a "specialty" retailer. Publishers and distributors are along for the ride, or left in the dust. And while some small bookstores have managed to wrangle a little rent-relief from desperate landlords or extra credit from desperate vendors, they're not really even in the same game. At a small shop I was affiliated recently, there was a belief that Ingram, the main new book distributor, had singled them out for changes in terms because of some bad publicity. Maybe. But more likely they had simply dropped below the business threshold where it made any sense for the Big One of distributors to mess around with them. Economies of scale eventually commit you to certain kinds of transactions and concerns, and make others simply untenable. And from the perspective of the small bookstore, those same concerns can change the business you are in so completely that a relatively complete reinvention is necessary.

I failed to reinvent in my own business, despite some concerted attempts. I found it necessary to leave the collective I was involved with when it became clear that they were collectively incapable of reinventing their business, in part because they weren't prepared to deal with it as a business, as part of an industry, etc. I still haven't solved the problem of how to restructure a brick-and-mortar bookstore sufficiently to much more than dream about reentering that fray, but I think I have some relatively clear ideas about what is presently wrong with the industry, and how we might begin a reinvention from the publishing and distribution side. The beginning of the trick, it seems to me, is to reintroduce product diversity, and to do so in a way that is both sustainable for the new producers and affordable for retailers and consumers who we have to assume are straitened circumstances.

To be continued. . .

1 comment:

johanna said...

... the "big-box specialty store" is a slave to two highly incompatible masters, economies of scale and breadth of offerings.

The upshot of all of this is that the big-box bookstores are committed, and in important senses have to be committed, to a dangerous strategy of putting their eggs in damn few baskets, all the while hoping it's not so few that they simply lose any purpose as a "specialty" retailer.

I can't help noticing how true this is for us as individuals, too. We are all hemmed in, our economic options are limited, yet we are all involved in the specialty enterprise of living our own lives with their own unique combination of contingencies, challenges and hardships. Whatever good comes out of these economies of scale, it's plain that their option-limiting, avenue-closing consequences are detrimental to life and living.