July 16, 2007
Retailers Have Faith, Seek Sales
Many Christian book and product retailers got into the business because they saw it as an extension of their faith and ministry. Now, however, these same individuals are finding that faith alone is not enough to deliver success as consumers are increasingly turning to secular marketers to purchase religious goods. The result, as a Washington Post report points out, is that many businesses founded on faith are going out of business or being gobbled up in a wave of consolidation hitting the Christian products industry.
According to CBA (formerly the Christian Book Association), sales of Christian products grew from $4.3 billion in 2004 to $4.63 billion last year. Christian retailers accounted for 52 percent of the total with general market retailers (mass merchants, clubs and big box bookstores) capturing 33 percent and the balance being split between direct-to-consumer, church and non-profit ministry channels. While Christian retailers grew sales 2.4 percent over the two-year period, it is clear that other secular channels are grabbing share at a much faster rate.
Bill Anderson, president of CBA, said any who are tempted to write-off retailers associated with his group are making a mistake.
“This channel sells more Christian products than all the other channels combined. Christian retail’s unparalleled assortment means increased choice for the customer and greater exposure for the supplier,” he said. “Suppliers understand that Christian retailers are joined with them in their mission, and are committed at a heart level. For us, ‘Christian’ is not a category; it’s a storewide commitment.”
CBA members, according to the association’s website, are focusing efforts on increasing sales to the channel’s core consumers as a means to grow business and hold off the secular competition.
The association’s “More from the Core” program has placed emphasis on turning browsers into buyers in Christian stores. “Conversion rate is a measure of our ability to serve our customers and, in the process, grow our business,” said Mr. Anderson.
Other elements of the “More from the Core” program focus on improving vendor relations, inventory management and associate training/customer service.
In an indication that secular retailers are serious about the religious market, Wal-Mart announced that next month it would begin selling faith-based toys from One2believe in 425 stores across the country.
Melissa O’Brien, a spokesperson for Wal-Mart, told USA Today, “We’re seeing interest from parents in faith-enriching toys.”
Discussion Questions: How are secular companies affecting Christian product sales? Do consumers care whether they buy from a Christian retailer or one that sells Christian goods? What does this mean for retailers that use a Christian identity to market to consumers?
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Faith based retailers will always feature a greater breadth of product. When the Christian consumer is searching for a product recommendation, or for a specific faith based product, the Christian retailer will be the destination of choice.
At the same time, the Christian consumer, like all other consumers, looks for convenience, and the opportunity to save money. If the product is popular, and hand-selling is not required, the Christian consumer will purchase the product at a secular store.
“A Purpose Driven Life” was a great example of this phenomenon. When the book was first published, it was recommended by clergy, who encouraged their congregations to purchase the book from Christian bookstores. As the book gained popularity, sales exploded at Barnes & Noble, Borders, and Costco. They were selling the book at a discount, and always had inventory, which made it convenient for purchase.
For Christian retailers to survive, they will continue to need to reinvent themselves as the box stores sell more and more of the faith based products. Christian retailers should encourage discussion groups to be held in-store, seek out unique, niche manufacturers of products that will help differentiate itself from the box stores, and stay true to their calling.
At the end of the day, Christian retailers are no different from anyone else. They need to generate profits to stay alive, and profits come from differentiation.
I actually have some experience with the CBA. I addressed one of their meetings, not because I write Christian books but because they asked and my publisher “strongly suggested” I comply. They are a very, very powerful force in publishing. To some degree, religious titles are what’s keeping publishing afloat. Net dollar sales were $2.3 billion in 2005 with six plus percent increases due in 2006 and again in 2007. Now, of course many of these sales are through conventional retailers such as Borders and Barnes & Noble, but there is a loyal cadre of shoppers out there who believe they should only buy from the faithful. My sense is that’s the minority of that market, but it’s still a powerful force.
Christian retailers often have to achieve higher margins than secular retailers, so they’re at an economic disadvantage. Who pays less rent per square foot: Wal-Mart or a sole proprietor Christian book store? Who is more likely to get a high-traffic location in a major mall: a secular chain store with a triple-A credit rating like Hallmark or a mom-and-pop Christian gift store? Who can borrow money at less than the prime rate? Who is likely to have better computer systems? Who is likely to be a more convenient place to shop because secular as well as nonsecular merchandise is carried simultaneously?
Christian merchants need to leverage their community circles of influence (special events, mailing lists, special staff training and outreach). That’s their #1 competitive edge. Pricing is their biggest weakness. If they have the space and the merchandising skills, dominant wide assortments can also be a lever.
Christian Bookstores face all of the same problems that any independent faces when competing against big box retailers. The Christian bookstore, however, has a great advantage when dealing with big box customers. When books like “Purpose Driven Life” hit the bestseller list, the Christian Bookseller has a super opportunity to capitalize on the thirst this book and other Christian philosophy books create. Retailers have the opportunity to help quench this thirst by offering complementary books, and books that extend the consumer’s education.
How about an advertisement–“Now that you have read ‘Purpose Driven Life’, get the purpose driven calendar, read how the POWER of the Purpose Driven Life has been applied through the ages,” etc. The Christian Bookstore has the ability to surf interest waves generated by the big box. For each copy of “Purpose Driven Life” sold, the CB should be able to offer 6-10 items that would be of interest to this reader. Are they doing this–not many are! The question here is why!
Christian retailers are missing an incredible opportunity to differentiate themselves in significant ways from their secular competitors. We have noticed that Christian retailers of all kinds and sizes conduct business the same way their secular counterparts do, and do not embed their stronger values into their business processes (except be evangelistic — but evangelism is not a value, it is an activity). The only way you can tell you are in a Christian shop is the titles of the books. This is understandable, since Christian retailers have never seen how to live out their values through their businesses, and those who guide and instruct this industry have never seen it either. This is the same problem other sub-cultures with stronger values have in business, such as the Orthodox Jewish community, the Amish and Mennonites, and Native Americans.
Living in an area that is heavily Christian, crowded by churches, and thus the local culture being dominated Christian and church related activity, the ‘book’ and ‘product’ marketing is very curious with relation to why the choice is made to shop at one versus the other.
Purely from an observation point of view, the ‘Christian’ based retailers seem like more of a ‘have to’ destination than the destination of choice. Why? From my view, they simply don’t feel much like a destination. On any particular Friday night or Saturday morning, a simple drive by or short visit will tell you that Barnes & Noble and Schuler’s Books (a local Barnes & Noble-like retailer) are very busy. A trip inside tells you why. There’s a feeling upon entry. It’s a buzz. Could it be the coffee? Could it be the atmosphere? I can’t really tell you. However, at the same time, visiting Family Christian Book Stores or Baker Books (a local Christian retailer), the ‘feeling’ isn’t there. It’s there slightly more at Baker Books than others.
Whether it’s Christian retailing or any form of retailing, consumers want a ‘destination’. They want that elusive ‘reason’ for making the choice. Many of the ‘Christian’ retailers may choose to take some Sunday morning tours to some of the most modern and crowded churches. There’s a ‘reason’ that these types of churches are attracting hundreds and in many cases thousands on Sunday morning. What is it? Church goers of late are much the same; they are consumers. They are looking for a ‘destination’ of choice. They have a ‘reason’ for filling one church over another by the hundreds and thousands.
While I enjoy Christian reading as much as other forms of reading, I tend to be drawn to a place where there is a ‘buzz’. And, certainly a Starbucks-like doesn’t hurt either. My guess is that the ‘secular’ based reader would not be any different.
The best example I have seen of this type of a blend was on a small island in Florida. The location was called Go Fish and The Island Coffee Shop (which served Seattle’s Best and Haagen Dazs – a wonderful combination!). The store was totally unique. The atmosphere was welcoming and there was a ‘buzz’. And, incidentally, unless you made the connection to the name, it took a few minutes of shopping to actually realize you were in a completely Christian based shop. They sold books, gifts, incredibly unique art, apparel, etc. It remains one of the most memorable retailers on my list. It can be done. They were placed right among the shops and stores in the small island town. They were also the two most busy ‘destinations’ in the shopping section. Imagine that.
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Faith based retailers will always feature a greater breadth of product. When the Christian consumer is searching for a product recommendation, or for a specific faith based product, the Christian retailer will be the destination of choice.
At the same time, the Christian consumer, like all other consumers, looks for convenience, and the opportunity to save money. If the product is popular, and hand-selling is not required, the Christian consumer will purchase the product at a secular store.
“A Purpose Driven Life” was a great example of this phenomenon. When the book was first published, it was recommended by clergy, who encouraged their congregations to purchase the book from Christian bookstores. As the book gained popularity, sales exploded at Barnes & Noble, Borders, and Costco. They were selling the book at a discount, and always had inventory, which made it convenient for purchase.
For Christian retailers to survive, they will continue to need to reinvent themselves as the box stores sell more and more of the faith based products. Christian retailers should encourage discussion groups to be held in-store, seek out unique, niche manufacturers of products that will help differentiate itself from the box stores, and stay true to their calling.
At the end of the day, Christian retailers are no different from anyone else. They need to generate profits to stay alive, and profits come from differentiation.
I actually have some experience with the CBA. I addressed one of their meetings, not because I write Christian books but because they asked and my publisher “strongly suggested” I comply. They are a very, very powerful force in publishing. To some degree, religious titles are what’s keeping publishing afloat. Net dollar sales were $2.3 billion in 2005 with six plus percent increases due in 2006 and again in 2007. Now, of course many of these sales are through conventional retailers such as Borders and Barnes & Noble, but there is a loyal cadre of shoppers out there who believe they should only buy from the faithful. My sense is that’s the minority of that market, but it’s still a powerful force.
Christian retailers often have to achieve higher margins than secular retailers, so they’re at an economic disadvantage. Who pays less rent per square foot: Wal-Mart or a sole proprietor Christian book store? Who is more likely to get a high-traffic location in a major mall: a secular chain store with a triple-A credit rating like Hallmark or a mom-and-pop Christian gift store? Who can borrow money at less than the prime rate? Who is likely to have better computer systems? Who is likely to be a more convenient place to shop because secular as well as nonsecular merchandise is carried simultaneously?
Christian merchants need to leverage their community circles of influence (special events, mailing lists, special staff training and outreach). That’s their #1 competitive edge. Pricing is their biggest weakness. If they have the space and the merchandising skills, dominant wide assortments can also be a lever.
Christian Bookstores face all of the same problems that any independent faces when competing against big box retailers. The Christian bookstore, however, has a great advantage when dealing with big box customers. When books like “Purpose Driven Life” hit the bestseller list, the Christian Bookseller has a super opportunity to capitalize on the thirst this book and other Christian philosophy books create. Retailers have the opportunity to help quench this thirst by offering complementary books, and books that extend the consumer’s education.
How about an advertisement–“Now that you have read ‘Purpose Driven Life’, get the purpose driven calendar, read how the POWER of the Purpose Driven Life has been applied through the ages,” etc. The Christian Bookstore has the ability to surf interest waves generated by the big box. For each copy of “Purpose Driven Life” sold, the CB should be able to offer 6-10 items that would be of interest to this reader. Are they doing this–not many are! The question here is why!
Christian retailers are missing an incredible opportunity to differentiate themselves in significant ways from their secular competitors. We have noticed that Christian retailers of all kinds and sizes conduct business the same way their secular counterparts do, and do not embed their stronger values into their business processes (except be evangelistic — but evangelism is not a value, it is an activity). The only way you can tell you are in a Christian shop is the titles of the books. This is understandable, since Christian retailers have never seen how to live out their values through their businesses, and those who guide and instruct this industry have never seen it either. This is the same problem other sub-cultures with stronger values have in business, such as the Orthodox Jewish community, the Amish and Mennonites, and Native Americans.
Living in an area that is heavily Christian, crowded by churches, and thus the local culture being dominated Christian and church related activity, the ‘book’ and ‘product’ marketing is very curious with relation to why the choice is made to shop at one versus the other.
Purely from an observation point of view, the ‘Christian’ based retailers seem like more of a ‘have to’ destination than the destination of choice. Why? From my view, they simply don’t feel much like a destination. On any particular Friday night or Saturday morning, a simple drive by or short visit will tell you that Barnes & Noble and Schuler’s Books (a local Barnes & Noble-like retailer) are very busy. A trip inside tells you why. There’s a feeling upon entry. It’s a buzz. Could it be the coffee? Could it be the atmosphere? I can’t really tell you. However, at the same time, visiting Family Christian Book Stores or Baker Books (a local Christian retailer), the ‘feeling’ isn’t there. It’s there slightly more at Baker Books than others.
Whether it’s Christian retailing or any form of retailing, consumers want a ‘destination’. They want that elusive ‘reason’ for making the choice. Many of the ‘Christian’ retailers may choose to take some Sunday morning tours to some of the most modern and crowded churches. There’s a ‘reason’ that these types of churches are attracting hundreds and in many cases thousands on Sunday morning. What is it? Church goers of late are much the same; they are consumers. They are looking for a ‘destination’ of choice. They have a ‘reason’ for filling one church over another by the hundreds and thousands.
While I enjoy Christian reading as much as other forms of reading, I tend to be drawn to a place where there is a ‘buzz’. And, certainly a Starbucks-like doesn’t hurt either. My guess is that the ‘secular’ based reader would not be any different.
The best example I have seen of this type of a blend was on a small island in Florida. The location was called Go Fish and The Island Coffee Shop (which served Seattle’s Best and Haagen Dazs – a wonderful combination!). The store was totally unique. The atmosphere was welcoming and there was a ‘buzz’. And, incidentally, unless you made the connection to the name, it took a few minutes of shopping to actually realize you were in a completely Christian based shop. They sold books, gifts, incredibly unique art, apparel, etc. It remains one of the most memorable retailers on my list. It can be done. They were placed right among the shops and stores in the small island town. They were also the two most busy ‘destinations’ in the shopping section. Imagine that.