Mass Merchandisers and Non-Traditional Accounts in the United States: The Players

In today’s excerpt of our 2018 market guide, Selling to Mass Merchandisers and Non-Traditional Accounts in the United States: A Guide for Canadian Publishers written by expert Michael Johnson, we list some of the largest mass merchandise booksellers in the US and provide tips on how to access these potentially lucrative shelves.

The wide variety of reporting information available means that determining the exact potential value of the book market in these stores remains difficult. Not all firms report books/media as a separate sales category, so details can be hard to come by. Usually books fall into the “Other” or “Miscellaneous” category. In most cases, this is because books/media do not represent a significant enough portion of the firm’s overall sales total to merit being reported separately. Nevertheless, with total sales at these merchants being so enormous, each fraction still represents millions of dollars’ worth of sales. One percent of $1 billion dollars is $10 million dollars, after all.

Walmart: Approximately 10% of Walmart’s overall revenue comes from its entertainment category. This covers books, movies, games, and cameras.

Kroger: Kroger reports 3%–4% of its overall sales in the “Other” category.

Costco: Costco puts many items into its “Softlines” category, which represents 12% of total revenue. Some of those items are apparel, jewelry, small appliances, and media.

Home Depot: Home Depot does break out categories small enough to indicate book sales.

Walgreens: Walgreens reports only three sales categories. Prescription drugs (67%), non-prescription drugs (9%), and general merchandise, which covers all of the remaining non-drug revenue (24%).

Target: Target groups its book sales into “Hardlines” along with several other items such as music, movies, toys, and video games. The “Hardlines” category accounts for 18% of Target’s overall sales.

CVS: Similar to Walgreens, CVS has very few categories. In this case, four. The first three— Prescription Drugs, Non-Prescription Drugs, and Cosmetics—cover 90% of sales. The category “General Merchandise and Other,” represents the final 10%.

Lowes: While Lowes does not identify the components of its named categories, it does report an “Other” category, which likely includes books and similar merchandise. “Other” represents 1.2% of Lowes’ overall revenue.

Safeway: Safeway does not specifically list books/media within a sub-category; however, their “Other” category represents 1.7% of total sales.

Best Buy: Best Buy has an “Entertainment” category that includes books, movies, games, and video games representing approximately 10% of overall sales.

As we pointed out in a previous post, these retail outlets are not focussed on the business of selling books. So how does a publisher go about solving the twin problems of getting past the gatekeepers and having the right merchandise mix available at any particular time (and in enough volume)? By having the right sort of firm to act as shepherd and sherpa to help navigate these labyrinthine organizations and understand the myriad rules and procedures associated with doing business with these behemoths.

Every company trying to sell just about anything wants to be in these Bix Box stores. The number of locations, the number of potential customers, and the potential financial impact is just too appetizing not to shoot for. The central buyers of these firms, therefore, are heavily layered and protected from most suppliers, especially small or unknown ones.

This is where the US-based wholesaler network comes into play. Unlike a pure distribution company that focuses on order fulfillment and shipping, these wholesaler firms can provide full sales and channel marketing support as well as the usual warehousing, order processing, and returns handling work.

The three largest and most consistent performers for these services are Ingram, Baker & Taylor (now part of Follett Corporation), and the Independent Publishers Group (IPG). Each of these companies has specialized sales and marketing operations for each segment of booksellers they service. Each has resources dedicated to the mass merchandiser market.

These wholesalers work with a wide variety of publishers and offer a wide variety of services, often developing special catalogues for each specific market area. The wholesalers will make suggestions on titles to promote and may even offer specific placements for advertising delivered directly to buyers. However, it is important to understand that the burden of publicity and marketing still falls to publishers themselves.

The best path available to any publisher (regardless of national origin) is to enter into the mass merchandiser market arena via these wholesalers. They have the dedicated resources to serve these markets and, more importantly, they have the relationships with the central and regional book buyers within these enormous companies. Further, the wholesalers can also handle all the day-to-day machinations of marketing campaigns, order processing, warehousing, shipping, and returns.

Of course, there are fees and discount percentages required to make all of this happen. Publishers should research each firm to investigate how to start a relationship with a wholesaler and better understand the financial terms of such a relationship.

Want to learn more about this market? Download the full version of our guide on selling to mass merchandisers and non-traditional accounts in the US.

 

06/20/2019 | Export, Market Guides