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INDUSTRY RESEARCH
Philip J. Clements, Managing Director
Sharon Nolt, Associate
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Purpose of Research
Over the past year our consulting activities encountered a number of Christian retailers
under stress. Some closed their stores, some tried to reengineer their product offerings,
some attempted diversifying their retail format and some just hunkered down hoping to ride
out the market changes. After watching these efforts, we undertook this study to see if there
were any specific strategic recommendations to be made to this industry and its various
participants.
Our conclusions are that the Christian retail activities are indeed under continuing and
severe market shifts. The different participants will need to apply good business disciplines
in grappling with their opportunities and threats. Christian retail will continue to be around,
but its face will be quite different. Therefore, current and future enterprises in this sector
need to stay close to their customer base and move with these trends. There is no single
approach that works for everyone.
This research report is designed to help the retailer in assessing his situation. Conclusions
contained herein are based upon data discovered in various sources, anecdotal information
gained from interviews and other industry information, and our experiences from other
business sectors. While significant added data gathering could be undertaken, we feel
comfortable that the material and conclusions contained herein present a reasonable picture
of the state of the Christian retail industry. Not covered in this report are:
1. Market place evaluation tools.
2. Marketing tools.
3. Different Christian products for retail.
4. Tools for evaluation of merits of continuing an operation.
5. Valuation and value realization for enterprises.
Industry History
The Christian retail industry has evolved over the last sixty years from its beginnings with the
formation of the Christian Booksellers Association (CBA) in 1950. CBA was a compilation of
small independent bookstores and publishers. Store product lines consisted largely of
theological books with a small percentage of revenues from church supplies. 1 Often
individuals more interested in serving the Lord than making money would open Christian
bookstores. Many of these entrepreneurs ministered to customers in their stores and
provided venues for local Bible studies. They believed--like Vicky Fichtner owner of
independent bookstore Servant’s Heart-- that they were involved in “retail ministry.” 2
Through its publication Christian Booksellers, CBA empowered these new owners with basic
operating principles.
Churches have had book distribution activities. For many churches these were book tables.
The sales were designed to recover the cost of the book. The core purpose of these
activities was making Christian material available to church members. As an outreach to
both their church members and their community, some churches expanded the book table to
full retailing activity, the Christian bookstore. Calvary Baptist Church in New York developed
1
www.lemstone.net – Suggests that 90% of revenue came from theological books and 10% from
church supplies.
2
CPE Regionals, Retailer Workshops, Best Practices for Independents. January 7, 2008.
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such a bookstore in1952. This store was on 57th Street in Manhattan and opened directly on
the street, allowing for customers of both church members and passersby.
During the late 1960’s, 1970’s, and 1980’s Christian retailing expanded. There were a
number of factors that contributed to this expansion. The 1970s and 1980s brought on
exponential growth as many books were now targeted to the lay consumer rather than
clergy. Contemporary Christian music became popular. Artists made their reputations in the
Christian realm and could then cross-over to secular. During this period the Christian
merchandise industry grew at 12-15 percent annually. 3 It should be noted that collateral
material, such as jewelry and gifts, was present, but not the driver of retail activity. Christian
retail provided an outlet for literature and music that was not otherwise readily available at
other than the Christian bookstore. Retail locations also began to be seen in shopping
centers or central locations rather than secondary locations. Aided by Zondervan’s
development of corporate stores, by the end of the 1970s there were over 5,000 Christian
bookstores in the United States. 4 Lemstone Inc. also began a Christian bookstore franchise
in 1981.
Other enterprises were formed or expanded to support the retail activity. Appalachian
Distributors began in the early 1970’s and continued to grow until its sale to Send the Light
(STL) in 2005. Several other distributors developed during this period. These helped both
the publishers and retailers by providing normal distribution intermediary activity. Catalog
marketing services for bookstores also expanded during this period. Munce Marketing
Group was founded in 1991, adding to The Parable Group and Covenant Group, which both
began in 1985. Similar to the distributors, these companies aided the bookstore in reaching
its customers. On a different note, Christian Book Distributors (CBD) began as a catalog
company in 1978. CBD provided normal catalog sales fulfillment. Technology also began to
offer computer applications for inventory management.
Retail industry shifts
As the industry moved into the late 1980’s, through the 1990’s and into 2000’s, serious shifts
occurred. In the 1990’s as mainstream Christian authors and musicians became widely
known, the market segment’s interested buyers widened to include non-Christians and
seekers. This interest boosted revenues immensely for the music industry as cross-over
artists both enhanced Christian as well as secular sales. Sandi Patty, Amy Grant, and
Michael W. Smith are examples of artists enjoyed by both the Christian and secular
communities. Publishers for popular authors found similar benefits.
In commercial retailing, shifts were afoot which also changed the way Christian material was
made available to customers. Retail became driven by national chains specializing in slices
of the market. Music was distributed by music-only stores and books by books-only stores.
Because of the cross-over of the Christian musician and contemporary Christian music’s
popularity, the specialty music stores offered the same music as the Christian Bookstore.
Similarly, the specialty bookstores offered the popular Christian books as well as Bibles. But
in addition to the Christian material, these stores made available to the customer other
music or books. These retail channels were meaningful competitors to the Christian
bookstore, which only offered a single genre of music and books. For example, a Barnes
and Noble in Bridgewater, New Jersey maintains over 8,000 religious books, most of which
3
4
www.lemstone.net
www.lemstone.net – Zondervan, a leading publisher, opened 100 corporate stores.
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are Christian. No Christian bookstore within 50 miles has as many Christian titles on its
shelves.
Next the era of discounters arrived. K-Mart responded to Sears and JC Penney. Along
came Wal-Mart and its super discounter Sam’s Club, and their ilk. These discounters were
integrated retail outlets, selling at big discounts. All of these chains had a huge advantage
over the Christian bookstore: volume. As national chains they could purchase in volume.
The specialty stores did not discount, but the discounters both bought in volume and sold at
a discount. To this day some specialty retailers describe the effect as “I go to Sam’s Club
and buy popular titles for less than it is offered to me by my supplier.”
The result is that volume material--the most popular material--quickly moved to discounters
who in turn sold out the market. For the Christian bookstore this took their highest volume,
thereby best profit margin books off of their shelves and put them on the shelves of the
discounter. An example is the 2002 book published by Zondervan--Rick Warren’s The
Purpose Driven Life. Once this book gained solid popularity, it was picked up by Wal-Mart
and the specialty book retailers. Zondervan benefited from enormous sales, but only a
modest percentage went through the traditional channel of the Christian bookstore. Today
Hachette Book Group with Joel Osteen’s titles is experiencing the same kinds of activity.
Hachette Book Group estimated that Osteen represented 40 percent of its 2005 sales. The
latest Osteen book, Become a Better You: 7 Keys to Improving Your Life Every Day, is
being advertised in the subways of New York City and is now 4th on the non-fiction best
seller list. 5
Add to the retail outlet shift, the digital age. While most think the digital age is the internet,
technology negatively affected Christian retail much earlier than the internet’s arrival.
Bookstore owner, Ron Evans, suggests that the invention of the photocopier had a real
impact on the revenue of a bookstore. Choir directors no longer needed to order multiple
copies of sheet music, but could photocopy needed material for their own church.
Currently, the overhead projector became the LCD projector and is connected with the
computer so that even copies are not needed. Songs for the day are projected on a screen.
What about the hymnal sales? We should note here that the copyright issues have now
been addressed by Christian Copyright Licensing International. 6
Computers also allow electronic presentations and other digital files to be downloaded and
transmitted online and copies reproduced efficiently. In our research, several churchsponsored bookstores indicate that they can leverage this level of technology to have CDs
of the service available for the congregation by the time they leave the sanctuary. Bill Tilley
indicated that it was a meaningful feature of his church-sponsored bookstore, The Faithful
Source.
Digital age effects
Next in line of the digital age is internet retailing. The arrival of the internet, and especially
high-speed broadband service to homes, offices, and churches, altered the retail landscape.
While a consumer typically previously visited his local Christian bookstore to make
purchases, the internet provided the ease and speed of ordering nearly any book or music
from the home office chair. Several independent bookstore owners noted that while catalogs
mailed to homes previously drew customers to the store, catalogs now empower customers
5
6
Publishers Weekly cited in Star Ledger, March 2, 2008, Section 2, p 2.
www.ccli.com
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with the product knowledge which they use to go online to find the cheapest place to
purchase it. Search engines allow the consumer to search for the cheapest place to order
from, often Amazon or Christian Book Distributors. EBay and Amazon also offer the
opportunity to purchase used books for a fraction of the retail price. The order is then usually
shipped directly to the customer at little or no cost. The result is that the computer delivered
comparison, discounts, and convenience. Our research pointed to a number of church
situations where the staff is aware of the capacity of the local Christian bookstore, even the
bookstore within the church, to deliver the same price and the next day as an online order,
but just go to Amazon anyway because it is, “just easier” or “just habit.” This makes some of
the strategies noted below very difficult to implement.
Christian Book Distributors (CBD) is an illustration of all of these shifts in a single business.
CBD began as a catalog company in 1978 in Massachusetts. As the internet expanded CBD
became a dynamic online player. Unlike most Christian bookstores, CBD does not cater to
just one market niche or denomination within Christendom, nor are they geographically
confined. They view their competition as Amazon.com. With a large product selection and
competitive pricing aided by a solid infrastructure at their distribution center and complete
online connected computer system, CBD provides a very large online website for Christian
books and related products. They have also diversified their market the last seven years
through the acquisition of ichristian.com (2000), Musicforce.com (2000), The Home School
Inc. (2001), and Best to You (2007, Christian-based gift and home accessories). Vision
Video is a more limited offering enterprise with similar dynamics.
Finally, we need to note some of the continuing shifts brought on by an increasingly digital
world. Music downloads are killing the sales of music CDs everywhere. Recorded music
sales in Christian bookstores suffered from the change in retailing. Now what CD sales
remain are declining because of the ability of the customer to buy just one song and
download it to an iPod, allowing increased choice instantaneously. Music may continue to
be purchased in-store by the older generation, but recorded music will contribute declining
levels of high gross margin products. Next in the e-world are e-books. Today the printed
page remains dominant, but so were cassette tapes in the 1980s. The upcoming generation
reads differently and “e” will be part of that knowledge gathering. Even Bibles are “e”. In
courses taught by us, our students have laptops and regularly go online to answer questions
even during the course. Bible citations are immediate to these students. Retail should see
“e” in the future and the current “e” platforms may increasingly continue to reach across to
invade the Christian retail space.
One positive for retail is the better inventory connectivity. Point of sales systems have come
a long way through the application of technology. In a survey of 114 of its member stores
CBA reports that 92 percent of the stores utilize a POS system. 7 Yet, there is a cost to
putting this technology in place and making it operate. In a recent CPE Regionals
convention workshop less than 50 percent of the approximately 70 independent bookstore
owners attending raised their hands to indicate the use of a POS system in their store. 8
Many small owners are hesitant to make the large investment needed for a POS system
with Book Log or Bookstore Manager to closely manage inventory and a customer
database. Indeed, Jay Weygandt of Logos Christian Bookstore proves that close inventory
7
8
www.cbaonline.org
CPE Regionals, Hershey, PA, January 7, 2008.
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control through the utilization of Bookstore Manager POS and technological innovation was
not enough to remain profitable as he closed his doors in early 2008. 9
Product line expansion
As Christian retail has faced these pressures, the product lines expanded, especially into
the area of gift merchandise. Cross jewelry, posters depicting Christian themes, and related
gifts have always been a part of the retail offerings. However, now greater emphasis is
placed on offering distinctive Christian gift material. An illustration of this expansion is the
amount of Kinkade art applications made available. Yet, Kinkade has its own retail centers
for the more exclusive art offerings. And so the retail competition continues. Another product
expansion is aiding less-developed communities by offering their products for sale. John
Pugsley at Groton House Books and Gifts says that this is an excellent use of the Christian
mission of helping others, while meeting needs of customers for unique gifts and home
items.
Church-Sponsored Bookstores
Before leaving the development of the Christian retail industry, we should consider the
church-sponsored bookstore. Many independent bookstore owners would add the churchsponsored store, especially those in the mega churches, as another reason why it is hard for
the independent to survive.
When asked about the state of the independent Christian bookstore industry, one veteran
sees a continuing expansion of church-sponsored Christian bookstores, especially at larger
churches. As noted above, church-sponsored bookstores, however, are not a new
phenomenon. Calvary Baptist Church in New York City opened a bookstore in 1952 and
operated it for decades until the church closed it in 1992 due to a lack of profitability. A
church-sponsored bookstore has significant advantages over the independent Christian
bookstore. Most of these stores operate with volunteer staffing, the church subsidizes rent,
utilities, and other overhead expenses, and the product offerings are supported by the
pastor and church programs. Some churches are contracting out the operations of their
bookstores to individuals with strong operating skills. As noted below, for many churches
this will be a useful strategy for how to effectively manage the risks behind expanded retail
offerings.
One bookstore owner indicated that they felt a lack of customer service in independent
stores led to the increase in church-sponsored bookstores. Independent stores often wait for
the customers to come to them rather than proactively forming partnerships and going to the
churches. She noted that independent stores have argued that churches ordered materials
and sold them at cost forcing independents to discount heavily. However, she believes that
is now a moot point since Wal-Mart forced discounting across the board. She also saw the
retail environment as a whole shift through the last several decades from customers buying
on quality and relationship to buying purely based on price.
Given the importance of mission in the church, it is clear that church-sponsored bookstores
will continue to prove retail support to the Christian community.
9
Roberts, Elaine. “Logos to Close Shop after 32 years.” Dayton Daily News. 30 Dec. 2007.
http://www.daytondailynews.com/l/content/oh/story/news/business/2007/12/29/sns123007logos.html
Weygandt was awarded the Jim Carlson Award in 2002 for the most technologically innovative store
in the industry.
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Current State of the Industry
According to the Association of American Publishers (AAP), sales of religious books fell 6.1
percent in 2005 and 10.2 percent in 2006. 10 In a December 17, 2007 report by AAP they
indicated that religious books experienced a 1.2 percent decline in sales for October 2007.
Another report indicates that religious book sales are still up 6.8 percent for year 2007 with
the growth rate of overall book sales at 9.3 percent. 11
CBA estimated the value of all Christian products sold by its member suppliers in 2006 to be
approximately $4.63 billion. CBA’s study shows that 52.4 percent of these products, or
$2.43 billion, were distributed through Christian retail channels. 12 According to the 2005
CBA Operating Statement Survey, 29.8 percent of sales that year--about $720 million
through Christian retail channels-- were from books, not including Bibles. It appears that
CBA’s projected industry revenue increases might be based on non-book products since
religious books reported declines in 2005 and 2006 and most publishers also projected flat
or declining sales in the near future.
While new church-sponsored bookstores continue to be opened and CBA continues to
report industry revenue increases since 2000, many independent Christian bookstore
owners appear to be gasping for air. Most independent Christian bookstore owners
reported to us flat or declining sales for the last several years, including 2007. Some of
those truly dependent on this income for their livelihood are closing their doors, because the
volumes with shrinking margins are not sufficient. Jay Weygandt of Logos Bookstore in
Springfield, Ohio shut the doors in January 2008 after 32 years of service in this community.
He says that “six years of declining sales and accumulated losses eating away our equity”
led to the closure. 13 2007 also witnessed consolidation through the buy-out of independent
stores by chains such as Berean Christian Stores and Parable Franchising’s purchase of
Insight Retail Group which included Lemstone Christian Store franchises. 14
RECOMMENDATIONS
Christian retail: Mission or Business
In considering recommendations for the Christian retail industry, let’s first address the
struggle with the dynamics of mission or business. Is a Christian bookstore a mission to
support the Christian community or spread the Gospel by providing access to Christian
materials? Or is the Christian bookstore a business where normal profitability matrixes
apply? Let’s consider the implications. As a mission the activity will find losses acceptable
and generally will have the capacity to sustain a level of losses through non-revenue
sources, such as gifts. The business model would not accept continuing losses and would
even look for a return on investment. As a mission, the capacity to reduce costs increases.
10
www.publishers.org – “Industry Statistics 2006”. Accessed Aug. 22, 2007.
www.publishersorg – “AAP Reports Publishing Sales are up for October.” 11 Jan. 2008.
12
“Media Information on Christian Retail.” Christian Booksellers Association. www.cbaonline.org. 12
September 2007.
13
“Another Veteran Christian Retailer to close Store.” Christian Retailing Magazine. 17 Dec. 2007.
14
Garrett, Lynn. “Parable Acquires Insight Retail Group/Lemstone.” Publishers Weekly online. 19
Dec. 2007. http://www.publishersweekly.com/article/CA6514336.html 10 January 2008.
11
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For example, the church-sponsored store will often receive space and utilities free; it may
have access to volunteer staffing, and it pays no taxes. The business model generally pays
for all of these at some level. The mission orientation may cause the activity to suffer from
weaker operating disciplines and service quality, whereas the business model will be forced
by the market place to maintain good business practices and service quality. Theologizing
on this topic can be fun, but is really beyond the scope of this paper. 15 However, we would
counsel all operators in Christian retail to be clear on their theological thinking and decide
whether it is mission or business that is the model for this activity.
Within the Christian retail sector, this question arises in more than retail outlets. Retail
outlets have been operated on a mission basis for years. Beyond the bookstore we see the
same in distributors. Ingram is a for-profit organization whereas STL is non-profit.
Publishers and other Christian material developers have similar activities. The American
Bible Society, non-profit, publishes many Bibles as does Zondervan, a for-profit enterprise.
These are just some examples; there are many others on both sides of this equation.
Potential Actions
Before looking at specific recommendations, we need to acknowledge that there is no silver
bullet. We looked for the model that could be cloned and would make every Christian
retailer successful. We did not find the silver bullet. This is consistent with our experience
in most business sectors. There are many ways to be successful in business and this is the
case in the Christian retail space. While there is a lot of stress and there will continue to be
contraction in this industry, many current stores will continue to operate both as stand alone
commercial enterprises and as church-sponsored enterprises.
For those considering starting or buying a Christian bookstore, one manager of a churchsponsored bookstore indicated that she would not open an independent store if given a
million dollars. This may show her bias to the merit of church-sponsored stores, but it is a
proper warning to the potential entrepreneur. One should have serious reservations about
investing in this sector without some clear strategic advantage that can reduce the risks.
1. Cost control
A killer for all business is overhead. But for retail with margin pressure this is especially
true. Therefore, cost control at every level, especially overhead, is critical. Overhead
includes rent, utilities, fees, and fixed labor. These eat up the value of sales. Let’s
consider an example: Store has rent of $2,000 month, utilities of $200 month (probably
low when the costs of phone, POS system, etc are added) and core labor of $2,500.
How much in sales is required to cover this level of overhead assuming a gross margin,
or discount, of 35%? The amount of sales required is $13,500. If overhead was
reduced by $500, sales required are $12,000 or $1,500 less. But what happens if our
margins decline to 25%? The sales needed before overhead reduction is $18,800. After
the $500 overhead reduction, sales need to be $16,800, or $2,000 less (See Chart
below). If you are not comfortable with this example, you are not alone, but the warning
should be clear: business analysis such as this is a must. Cost control is critical.
Covered under Customer Focus is inventory control. This becomes a cost factor that
can be more deadly than overhead.
15
For those wishing to explore this topic, some thoughts are offered: 1) The issue is stewardship of
God’s resources; 2) Profits need to be understood in God’s perspective and 3) Consider the balance
of calling.
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Gross Margin Assumption
35%
35%
25%
25%
13,500
12,000
18,800
16,800
Sales
8,775
7,800
14,100
12,600
COGS
Gross Margin $ 4,725 $ 4,200 $
4,700 $
4,200
Expenses
Rent
2,000
1,500
2,000
1,500
Utilities
200
200
200
200
Core Labor
2,500
2,500
2,500
2,500
Total Expenses $ 4,700 $ 4,200 $
4,700 $
4,200
$
25 $
$
$
Net Income
2. Customer Focus
Christian bookstores must have an intimate knowledge of the customers and a passion
for them. A bookstore cannot wait for traffic to come through the doors or hope that
marketing catalogs or ads alone will generate the needed revenues. Rather, the store
must become service-oriented and reach out to the customers. Ron Evans, owner of the
Mustard Seed and avid user of a direct mail catalog program, has tracked the customer
trends to his three stores over the last three decades and indicated that store traffic
peaked in 1997. Although he continues a direct mail program, he is spending more time
developing church partnerships. Chester Christian Bookstore markets through local
papers and indicates a much higher return on investment then on the typical catalog
distribution. The direct mail programs, such as Munce Marketing Group, have
endeavored to help the Christian retailer by offering more tailored catalogs and more of
them so that the retailer can drive business throughout the year.
Groton House Books and Gifts is positioned at the upper-end of the market and seeks to
attract non-Christians and Christians alike with at least 50 percent of their product
selection being boutique-style gift products.
Another side to customer-based retail is having knowledge of and stocking what your
customers’ desire. This is inventory management. We have heard across the sector
that inventory weakness can be ascribed to several things: 1) Bargains. A publisher or
distributor will offer a sale on a particular product or text. The discount looks attractive,
but it is not something your customers’ desire. Therefore, it sits on the shelf--or worse-in the back room. The result is the store has its funds tied up in non-moving inventory
and does not have the space or funds to get more current products. 2) Program buys
that contain products which your customers do not desire. This is one of the issues with
catalog programs. 3) Not having on the shelf what is needed. While the distributors that
support Christian retail are doing well at overnight shipping, the store still has to place
the orders. This is where the disciplines around inventory management are critical.
Our research indicates that these same principles apply to the church-sponsored
bookstore. A church provides a measure of traffic, but the above marketing skills make
a difference in the effectiveness in reaching the church and community.
3. Church Partnerships
Both independent and church-sponsored bookstores recognize the value in establishing
partnerships with area churches. John Pugsley of Groton House Books and Gifts
(church-sponsored store) near Philadelphia, Pennsylvania establishes a relationship with
local church leadership teams and offers a level of personalized service that Amazon
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does not provide, including free deliveries, discounted orders, a Pastor’s Reading Group,
and regular education on current resources available in the marketplace. He will bring a
portion of his products to the church for special events. He also partners with church
fundraising efforts by opening the store for a night and inviting the church to make
purchases with 20 percent of gross sales going towards their project. Ron Evans, owner
of three independent stores in Pennsylvania, agrees that local church connections are
vital to business, contributing about 25 percent of his annual sales.
Our research, however, identified a number of independent bookstores who found that
the above success stories may be rare. The convenience factor of the internet has
caused the bond with the community bookstore to be weak and hard to sustain. Some
church-sponsored stores reported the same problem. It is simply too easy to go online
and order.
Independently operated church-sponsored bookstore
Another development in the church-sponsored bookstore should be noted here. Given
the conflict of mission and business, as well as the difficulty in profitability of independent
stores, some churches adopted the view that while the bookstore will be part of the
church’s mission, it should be operated under business principles. Therefore, the church
looks to outsource the operations. Bill Tilley operates such an outsourced churchsponsored bookstore. At The Faithful Source in Ashburn, Virginia the congregation
receives 10 percent of profits in return for making the space available. While many of the
overhead costs are church-subsidized, Tilley hires and manages the staff as well as
managing all operations. Tilley suggests that a church needs approximately 2,000
attendees per Sunday in order for such an independently-owned store to be profitable. In
order for this model to be successful, he emphasizes that continual communication with
church leadership and the community is vital.
4. Expanded Offerings
Product diversification
In order to compensate for the decrease in book sales and profit margin squeeze,
Christian bookstores began to offer a diverse selection of non-book religious products
that mass-market chains don’t provide. “According to Christianity Today, books now
[2005] account for about 25% of sales in CBA stores, while ancillary products account
for upwards of 70%, with specialty gifts and music leading the way.” 16
Christian retail products
While books are easier to find and order online, many Christian gift products offered in
Christian bookstores are unique and difficult to locate online. These specialty products
geared towards the niche Christian market include cards, home décor, clothing,
accessories, and even candy to name a few. Since less than one-third of an
independent Christian bookstore’s income typically comes from books, today these gift
products have provided needed revenues to pay the bills. At the CPE Regional
Conference in January 2008 Margaret Umble of J.O.Y. Bookstore in Sinking Spring,
Pennsylvania encouraged other bookstore owners to prioritize books and Bibles in their
stores, but recognized that it is really the gift products that pay the rent. Other product
diversification examples include a store that provides trophies for community teams and
events.
16
www.PublishingTrends.com – “Crossing Over”, May 2005
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Yet, our research pointed out the need for customer knowledge in order to maintain
proper inventory management. A number of owners indicated to us that some
expansions into gifts had not proven helpful and indeed created inventory that did not
move. One area of particular problem was the church supply goods that have been part
of Christian retail since the beginning. The comments we received on these goods is the
same as all other aspects, with several retailers swearing that this was the answer and
several swearing that it was a money loser due to all of the reasons noted above.
We should also note here that the conflict of mission and business can affect the allowed
offerings. Owners have differing views on what is appropriately classified as Christian. If
the book or item is not within that spectrum, then it is not allowed in the store. A good
example of this is Catholic artifacts in a Protestant-owned store. Many Protestant owners
refuse to stock Catholic artifacts such as statues of saints. Conservative and liberal
books pose similar problems. This is where the mission statement of the retailer is
critical and knowledge of customers is essential. One store in a more liberally community
indicated that they stocked more liberal material because it ministered to the customer
base and while in the store the customer was exposed to conservative alternatives. It
should be kept in mind that this kind of ministry activity comes with inventory costs and
risks.
5. The Coffee Shop and Bible Study Program
Over the past decade independent and church-sponsored bookstores have instituted a
number of successful activities in tandem with their businesses. Stores, such as New
Life Christian Book Store in Queens, New York, have included a café or tea area for
customers to relax and read similar to the Barnes and Nobel model. More spacious
stores such as Servant’s Heart in Camp Hill, Pennsylvania, even incorporate numerous
reading areas throughout the store to enhance the shopping experience. These types of
spaces accommodate local Bible studies as a way to bring more customers into the
store and to connect with churches.
6. The Home School Program
Some Christian bookstores are also choosing to provide curriculums and resources
targeting the ever-expanding home school market. The Department of Education
indicated that there were at least 1.1 million homeschoolers as of 2003. 17 This
represents a 29 percent increase from the 1999 estimate of homeschoolers. Stores that
participate in these programs have indicated that the biggest advantage is that the
summer sales can make August as profitable as December’s holiday sales. These
same stores, however, said that there is more to homeschooling than just having
material on the shelf. Homeschoolers are another market and the customer
development, support, and underlying retail efforts are critical to making this pay for the
store.
7. The Disciplines of Business
Business Disciplines
Beyond external factors and increased competition, independent Christian bookstores
also tend to suffer from weak basic business disciplines. Owners who lean toward
ministry often lack retail experience and their store infrastructure suffers. Examples
17
“Homeschooling in the United States: 2003.” National Center for Education Statistics.
http://nces.ed.gov/pubs2006/homeschool/ 22 January 2008.
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include lax inventory systems, ineffective marketing strategies, and a lack of timeliness
in financial reports for business decision-making. Those owners who have been in
business for a while have learned by experience and have developed the needed skills.
General Markets and Discounting
A core business principle is that the market sets the price. Discounters set the price for
the market. One former independent Christian bookstore owner said that in the new
playing field Wal-Mart now dictates the terms and sets the prices. Add to Wal-Mart the
internet for pricing benchmarks. As noted above, discounting creates margin squeeze
and thereby sales pressure.
One of the more interesting practices we have seen is church-sponsored stores adding
further discounting to staff and others. Discounting is not a new concept to retail. Good
evaluation of why discounts over the market-based discounting should be done. Some
examples of good use of discounting are a discount to create traffic or a discount to
decrease inventory. Often, general discounts are not targeted to either. Instead the store
offers discounts, squeezes already thin margins and can convert otherwise profitable
sales to losses.
Financial planning
While Christian bookstores need to embrace a healthy business model that enables cost
management, the development of a budget will help to understand exactly where costs
are concentrated. A budget will assist in discovering the necessary volume of business
needed to cover expenses and to be profitable. Budgets allow for the anticipation of
cost and sales issues, giving the store a chance to respond in advance.
Timely, accurate financials
Timely, accurate financials aid in wise decision-making and good stewardship of
resources. A good point of sales system can be a platform for both good inventory
management and timely, accurate financial information. Weekly or monthly reviews of
financial and inventory reports will result in timely decisions for the bookstore.
We hope that you have found these recommendations to be helpful. If you have, please let
us know at snolt@cathedralconsultinggroup.com.
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About Cathedral Consulting Group
Cathedral Consulting Group LLC helps small and mid-sized private companies and nonprofits to grow their enterprises through the implementation of best business and operating
practices. As growth requires a vision for tomorrow and an awareness of the needs of today,
Cathedral works alongside clients to identify the needs in their organization and implement
strategies to benefit it in the short and long-term.
Contact:
Sharon Nolt
Cathedral Consulting Group LLC
45 W. 21st St, Suite 504, New York, NY 10010
917.623.1840
snolt@cathedralconsultinggroup.com
www.cathedralconsultinggroup.com
Cathedral Consulting Group LLC
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