What will chain stores be like in the future? This may be a question haunting many store managers. However, when you see the O2Sun Bookstore in Beijing, it may give you a concrete idea.
Next to the two-storey bookstore on the second floor is a quiet bar. The flight of stairs between the first and second floors leads to a garment store inside the bookstore where Bohemia-style fashionable dresses are sold. The bookstore sells not only Chinese and English books, but also music CDs, movie DVDs, scrabble books, markers, postcards and abstract paintings. On the second floor there is a café which is equipped with candle sticks, small desk lamps, a sofa, guest books and wireless network access. Inside the store, people can walk around freely or quietly read the books or casually look out of the window. While listening to melodious music with a cup of cappuccino, one can experience the “floating holiness and purity” in the night sky. It is in this magical state that the “store” concept is materialized.
Store Acts as Media
Let’s shift our mind back to reality. Due to the urbanization and accelerating life pace, it is getting more and more expensive for people to go out. The expansion of the Internet and mobile communication gives rise to many new business models to attract peoples’ shopping time. People turn to their PCs and click the mouse. Consequently, some people are thinking the end may be coming for physical stores.
According to Sun Chi, founder of O2Sun Bookstore, the ubiquitous network society (UNS) virtually extends peoples’ freedom and transcends the original geographical and physical barriers. While this transcending is becoming less costly and consumers are getting more used to it, the need for physical touch and contact raise the value. The growth of O2Sun Bookstore is closely connected with the need for physical contact that can’t be achieved via the virtual media. The bookstore is dedicated to the development of the values of the cultural media that enables physical contact.
O2Sun Bookstore is targeted at well educated young people aged between 20 and 40 in urban areas. It was founded in 1995 when the demand for cultural consumption had begun to rise. At that time, there first emerged the trend for doing business and then studying abroad. Books on business management, English, computer and other practical skills were the bestsellers. Later, the bestsellers gradually grew more complicated. With the emergence of “bourgeoisie”, literature, film, music and other cultural books became the most popular. Today, books on health, environmental protection, design and life creation are the new focus of this age group.
Over the past 12 years, the bookstore has gradually come to realize that the demand of its target customer group is constantly changing and being enriched. Therefore, as a culture communication company, it should not position itself as merely a primary bookseller. Instead, it should be a guide and provider of cultural information products centering on books.
As a guide, the bookstore convenes all its young employees for a “brainstorming” discussion each year to decide what theme activities it will organize over the next year, including the internal employee activities and publicity campaigns and even cooperation with writers and publishers to eventually communicate ideas and convey value experience which is abstracted from user survey. “We are like a media whose brand is gradually planted deep into our customers’ mind as we communicate the ideas,” said Sun Chi.
As a provider of cultural products, the bookstore is convinced that the more advanced communication becomes, the less physical contact and experience will be. The 24x7 trans-regional virtual contact enabled by the Internet and wireless communication is something the physical bookstore is not as good at. But they believe that the customers who face computers and mobile phones all day long are surely more eager for a place of physical contact and free action which can be provided by the bookstore.
After setting its mind on this trend, the bookstore which originated in Xiamen, has witnessed rapid growth in the past several years. In 2001, it became a book supplier to Wal-Mart. Although the net sales profit only accounted for 2%, this cooperation with the retail giant was of strategic significance to the expansion of the bookstore. In 2003, Wal-Mart began its nationwide expansion in China. On this strength, O2Sun Bookstore came to Beijing and Shanghai. Currently, its book sales amount to RMB100 million (US$14 million) annually. The bookstore experienced a smooth expansion in Beijing. In 2004, it set up the first store at Wudaokou. In 2006, its second store was opened at SOHO. It now has three stores in Beijing. All of its stores in Beijing began to make profits within two months after they were opened. The store at SOHO reported profits in the same month it was opened. Currently the bookstore has 22 chain stores in China.
The position of being a supplier of diversified cultural information products helps the bookstore shake off the low profit rate accompanied by the sale of books only. Although the logistics, labour and rent of book retailers are very high, and their net sales profit stands at only around 3%, the sales of coffee, CD, cultural products and electronic publications can bring higher profits. Moreover, these products only occupy a small place to display inside the stores but they are targeted at high-end consumers who are less sensitive to price.
The practice of the store to give full advantage in the communicating culture and in spreading its influence like the media is fully shown in the development of the Taiwan-based Eslite Bookstore. Eslite wielded its unique cultural glamour to attract intellectuals, bourgeoisie that have begun to pursue a quality spiritual life, artists and college students. As a result, it changed its place at the edge of urban area into a bustling and prosperous business area. Consequently, the property rent soared and the bookstore, as a lessor, secured considerable rent from the lessees for the property it subleases to cover its own expenses.
By levering this model, the bookstore surmounted the limit of a traditional “bookstore”, and explored a new model to “attract customers with culture and bring about a prosperous community”. From the end of the 1980s and the 1990s, it was a fashion among youngsters in Taiwan to go to the bookstore.
Moreover, the Eslite Reader, a magazine created by the bookstore, gradually grew from a book guide only available inside the store into a formal publication available to the public. The magazine influenced the whole island and even the entire Chinese culture community. The success of this magazine highlighted the model that a good perception and platform can help to build a bookstore into a unique media.
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