One of the best aspects of the Frankfurt Book Fair is meeting book people around the world. Thanks to an introduction from Bill Preston at Baker & Taylor, we talked with Pedro Herz, owner of a bookstore company in Brazil whose retail approaches--particularly online--should strike a chord with and perhaps provide a few ideas to American booksellers.
Livraria Cultura (Cultural Bookstore), which has six elegant
bookstores in Sao Paolo, Brasilia, Porto Alegre and Recife, had an
unlikely beginning: in the 1940s, Herz's mother, who with his father
had fled Nazi Germany in 1938, began a lending library in her house
with 10 German books--for her friends in the German-speaking "colony."
By 1969, when Herz took over the bookstore, which had moved outside the
Herz household, it lent and sold both German-language and
Portuguese-language titles. One of Herz's first business acts was to
stop lending books, mainly because most of them are paperback and
"after a few readings, you need to bind them, and that's expensive," he
said.
In the '70s, Herz tried to expand, opening two branches, but found it
difficult to match stock with customers. "Later I realized why we
didn't succeed," he said. "The branches were too small. We should have
carried the same stock in all the stores. It was Murphy's Law: we
carried the stock people didn't want."
After closing the two branches, the company concentrated on "growing
vertically," as Herz put it, emphasizing an "efficient infrastructure
and good service." In 2000, he decided it was time again to try to
expand horizontally, so to speak, and opened a branch.
Between having worked out "organizational problems" and with the aid of
inventory control systems and the Internet, the branch model has
worked. "Technology allows me work online and know exactly how many
copies are sold in each store, when a book is sold, so we can transfer
books," Herz explained.
Since then, Livraria Cultura has opened a store a year. The stores are
quite large, all over 30,000 square feet in size. The stores open every day Christmas and New Year's Day. The next
major store project involves one of its Sao Paolo stores, where
Livraria Cultura has four sites in the same building. Come February,
the stores will moved into one large space in an old cinema, a location
that will have the company's first restaurant. (The stores all have
cafés.)
Livraria Cultura aims to be "more than a store," Herz said. As befits
its name, the stores are "a cultural place. We want people to feel
comfortable. We like them to stay for many hours." The stores have many
events, including jazz and classical performances.
One of the largest problems for Livraria Cultura, Herz said, "is getting people." Each store has a staff of about 100.
The company's loyalty program awards points or gives
discounts. It has 800,000 members; they receive a monthly newsletter
via e-mail, and a printed version of it is given out in stores.
The stock is about 80% books; the rest is CDs, DVDs, magazine and other
products. Some 30% of book titles are foreign, with the vast majority
English-language; most of those English-language titles come from the
U.S. and U.K., although for the moment the U.S. is the more attractive
source because freight is cheaper and the U.S. dollar is weak.
Perhaps because of his respect for technology--Herz said, "We invest in
two main areas: technology and human resources"--Livraria Cultura was
one of the first booksellers on the Internet, with a site since 1995.
Some 17% of the company's business is on the Internet, and "it keeps
growing," Herz continued. "When a store opens, there's a slight drop,
but then it picks up again."
The company's stores "supply" the Internet business. In 10 cities,
Livraria Cultura provides same-day delivery service (with various
partners providing the delivery) of many titles on its Web site.
Several partners deliver the books from the stores to the buyers. A
rocket symbol next to a title indicates that the book can be delivered; each
title has a minimum quantity that must be in stock in stores to be
listed as available for same-day delivery. If there are fewer copies on
hand than required, the rocket disappears--apparently shot into space.
The Web site includes a section written by customers, I Read, I Liked,
I Recommended and many publisher specials (recent ones include Penguin
and Wiley). The database contains 1.7 million books, and the company
adds 250 new ones a day.--John Mutter