Over at MediaConact there’s a blog post that puts the blame squarely on high prices for Hughes & Hughes’ failure:
In the analysis of the failure of the business in the media today there is mention of high rents, and the move by consumers online as the main reasons for the closure of the chain. The truth behind the collapse is a little more simple. Their books were just far too expensive, with many titles being more than twice the price they are on Amazon. It maybe the prices were a direct result of the high running costs, but there is no way they could have survived by continuing to over charge customers.
Just before Christmas we wanted to buy 60 copies to the wonderful “Tribes” by US marketing Guru Seth Godin to send to customers as a thank you present. I phoned around and the price in Hughes & Hughes was €16 per copy. We ended up getting the books on Amazon.co.uk for just €7.50 per copy. The price was the same on Amazon whether we were was getting one copy or 70.
Do you see now why Hughes & Hughes is gone out of business?
I responded because I really felt that the post was far too simplistic in its analysis:
I agree and disagree with you on this. On the one hand H&H had a real challenge on Price in that Amazon and other internet retailers have a very impressive price advantage. But that can be easily explained.
* Amazon get a much higher % discount from publishers than even a chain like H&H did. That is one reason for the price differential.
* Secondly H&H sell much fewer books and unlike Amazon couldn’t make up for cheaper prices by relying on volume sales, especially in a small market like Ireland (Amazon buys and sells internationally).
* Thirdly and perhaps most importantly, H&H had bricks and mortar stores which Amazon does not. When you add in the distribution network that a Bricks and Mortar chain imposes and the redundant stock it very quickly becomes obvious that the kind of expenses imposed by real world bookselling is what made up for most of the price differential. It was unavoidable.
BUT, and this is important, many independents simply refuse to compete on prices and are doing pretty well. They tap customer need in their locality and provide services that a chain or Amazon simply can’t. So Price alone is not the reason why H&H closed. It didn’t help, of that I am sure, but given the thriving stores that sell at the same price or higher, I think it’s the wrong focus.
Not a good weekend for the Irish Publishing and Book Trades