While most physical booksellers are contracting and consolidating, Half Price Books has been slowly and steadily growing. Multiple factors, all of which are aimed at creating intense customer loyalty, contribute to the retailer’s success in a difficult industry:
- A focus on choosing highly promising locations for new stores;
- Comfortable store layouts built to encourage browsing and discovery; and
- An enthusiastic staff of associates who are empowered to shape each store’s inventory.
“People always ask me, ‘How are you opening stores when other people are closing stores?’” said Kathy Doyle Thomas, Chief Strategy Officer at Half Price Books in an interview with Retail TouchPoints. “Part of the reason we are growing is because we’re privately held — we don’t have to open stores if we don’t want to, and if we can’t afford it. If we don’t have enough money in the bank and we know that store won’t make money for three or four years because it needs to build its brand and customer base, then we don’t do it, and we don’t have any debt. We grow and expand when we want to and how we want to.”
This process includes taking a careful look at the overall retail market. Half Price Books opened fewer stores than it had planned in 2018 due to high real estate prices and the fact that its existing markets were already well-saturated with stores. The retailer currently operates 120 stores, and is looking at new cities and states, including Boise, Idaho and the Detroit area.
Half Price Books is unafraid to take its time when expanding to new markets. The retailer needs the right combination of demographic makeup, population growth and size for a city to become a good target, and it recognizes that not every scouting mission will be successful.
“Unlike a shoe store, we need lots of people, just because such a small percentage actually buys the printed word,” said Thomas.
Homey Stores And Devoted Associates Generate Strong Loyalty
With such a small audience, the key to success is making sure those that do shop there are dedicated. One way Half Price Books achieves this is through its ambiance. The retailer builds its own wooden shelves for a “homey feeling” inside the store, and its eclectic selection of both popular and unknown authors recalls the experience of visiting the famous Strand, an independent New York City store that claims to house 18 miles of books.
“Stores are a destination,” said Thomas. “If you’re a reader, and you live in New York City, you go to Strand. You want to browse their sections and discover new authors and discover new books, and we are a browser’s paradise. People love treasure hunting.”
The other key to the Half Price Books shopping experience is the staff. These associates aren’t just passionate readers who are experts on their favorite genres — they are also the ones purchasing used books from customers to further develop their relationships. Half Price Books uses a comprehensive onboarding process that includes author and category tests, as well as training on how to price incoming books.
“We give them a lot of autonomy and a lot of responsibility and authority,” said Thomas. “We’re giving our employees a pot of money and telling them, ‘You decide how much to pay for this book.’ So they feel an ownership, they love it, and they know how important it is. We have to train them thoroughly because we have 3,000 employees, and over 2,500 are deciding what to buy that book for, and what to price that book at.”
The extra effort and responsibility gives the staff more to do than the average retail associate, creating a deep sense of investment in the company. The buying process also means local selections are highly tailored to their shoppers — a Half Price Books located next to a university will make a large volume of purchases from students and professors, which can then be sold to students looking for the same books during future semesters.
The combination of carefully curated, comfortable stores and highly empowered associates has earned the retailer an extremely loyal customer following who will happily share stories about their “HPB Hauls” online. While used book shoppers represent a limited market, Half Price Books has fashioned a business model that perfectly fits their needs.