By Lee Karl Palo
© 2013 Lee Karl Palo
Disclaimer: The following represents the opinion of Lee Karl Palo, and does not necessarily reflect the views and opinions of Cokesbury or the United Methodist Publishing House.
In the previous post I talked about some of the reasons why the United Methodist Publishing House (UMPH) made the hard decision to close its Cokesbury brick-and-mortar retail stores. The United Methodist Publishing House (UMPH) is a self-funded, non-profit organization dedicated to providing “quality resources and services that help people know God through Jesus Christ, love God, and choose to serve God and neighbor.” That said, businesses are not sustained on well-wishes and prayers alone. As previously mentioned, there has been a consistently unfavorable year-on-year sales trend over the last decade. Despite management’s best efforts to reverse this course, the decision was eventually made to close the Cokesbury bookstores. Cokesbury is continuing with Direct Sales (the call-center in Nashville: 1-800-672-1789) and Cokesbury.com. In this post, I‘ll discuss what UMPH did in the preceding months and years to avoid the elimination of the bookstore chain.
One technique to help keep the Cokesbury stores financially viable was to find ways to save money on operating costs. UMPH made many cost saving changes in the past few years, including some significant alterations to everyday store operations. Centralized ordering, negotiation of better rates with Fed-Ex, the consolidation of shipments from UMPH’s warehouse distribution center to the various Cokesbury stores, and computer system upgrades are just a few examples.
Since it has been discussed elsewhere, I want to expand upon the adoption and implementation of centralized ordering. Many, if not most chain stores utilize some form of centralized ordering because they can negotiate better discounts with producers and distributors. By ordering a book or other item to be sent to all stores through centralized ordering, Cokesbury could get deeper discounts, as well as bundle their shipping to improve wholesale expenses and distribution costs. For the majority of the 12 plus years I worked there, Cokesbury did not utilize this type of system. Stock replenishment and special orders were predominantly placed by individual store managers, while orders placed by UMPH in Nashville primarily related to new publications. Store managers could also order pretty much anything we wanted to for additional store stock. We could supplement our inventory with new publications that may have been overlooked, particularly publications thought to have more of a regional interest (James Wellman’s book Evangelical vs. Liberal: The Clash of Christian Cultures in the Pacific Northwest is a good example). There were also certain product lines that were necessary for managers to be proactive about ordering, like pulpit robes, stoles, communionware, and gifts. You need to have a sampling of custom products like pulpit robes, but you don’t want the exact same robes every time one sells. It isn’t possible to keep every size and variation of all the different styles in stock.
Having the freedom to order what I wanted was nice, but not necessarily cost-effective. As a store manager, you could find ways to save money and get better discounts. Some vendors give better discounts or free shipping for ordering a certain quantity of products. Many also have sales on new or backlist titles at various times of the year that you can watch out for. That being said, the best I and a few other managers could do would not compare to what an automated system could save across the chain. When Cokesbury switched to centralized ordering a couple years ago, I missed the ability to order things myself, but two things made me feel better about it. The first is that Ed Kowalski, vice president of sales for UMPH, said that centralized ordering did in fact save a lot of money. The second is that they allowed us to request products to be ordered. That meant I could still supplement my inventory as I thought appropriate, though it would take longer to get what I requested. Without the implementation of centralized ordering, UMPH would have been facing a very unfavorable financial situation even sooner than anticipated. In the end, there are only so many system improvements that can be made, and those improvements could not compensate for continuing sales declines.
Beyond The Mainline
In addition to decreasing costs, UMPH also implemented changes to boost revenue. One main way to increase sales would be to appeal to new customers. The selection of books and other merchandise in most Cokesbury stores catered to most mainline Protestant traditions. In addition to being the official supplier for the United Methodist Church, Cokesbury also partners with the Presbyterian Church USA, the Christian Church (Disciples of Christ), and the Episcopal Church in the US. The latter two partnerships are fairly recent. The mainline Protestant demographic comprised the vast majority of sales for Cokesbury stores. Eventually UMPH made efforts to expand its Cokesbury bookstore product offerings to reach those from non-mainline Protestant traditions as well. A couple of years ago Mike Hupp, an industry veteran, was hired to oversee the Cokesbury Merchandising department. His experience working with Family Christian Stores and Lifeway gave him insights into appealing to the more conservative evangelical Christian audience. I thought it was a brilliant move, as Mike really believes in the ministry of Christian retailing, and has the experience to broaden the Cokesbury customer base.
Under the direction of Mike Hupp, the Cokesbury stores expanded their product selections to reach out to the more conservative evangelical market. Overall I was excited to see this development, even if some of the theologies in the new products were outside my own personal beliefs. I believe in diversity within the Christian church; our purpose is to be resources for others’ Christian journeys, not evangelists for our own beliefs.. When my assistant manager Nancy Apple and I would interview candidates for an open position, we would ask “What would you
do if a customer requested a book when you personally don’t agree with the content of that book?” The answer we got on one occasion was, “I’d take them to where the book was and then I’d witness to them.” Needless to say, that person wasn’t hired. It isn’t always easy to recommend books to customers when you have difficulty finding value in their selections. As the Cokesbury market became broader, we were stretched a little more to overcome some of our personal biases as salespeople and managers, but not beyond what was reasonable.
Expanding one’s customer base without alienating the existing clientele is a difficult proposition. We did have some mainline Protestant customers come into the store and discover products that were out of character with their theology. My response was typically to tell them that Cokesbury was reaching out to a wider audience, but that our mainline Protestant customers would not be sacrificed. Once they saw that they could still get the resources they were looking for, most saw the expansion as beneficial. My staff and I were trained well enough to recommend appropriate resources based on the customer’s church tradition, interests, and priorities. That could also mean steering customers away from resources that were out of character with their tradition
Cokesbury is both a publisher and distributor of resources to help meet the needs of a changing church. Producing popular resources in-house that can be sold in the stores can also boost sales. The publishing division of UMPH, Abingdon Press, has published fantastic authors over the last ten years like Adam Hamilton and Michael Slaughter. Sales of their books are considerable, and UMPH has the benefit of profiting from both their publication and retail sales. Under the direction of Paul Franklyn, a new Bible translation was published in 2011: the Common English Bible (CEB). Rather than attempt to produce a parochial proprietary translation for the United Methodist Church (in the same vein as the Holman Christian Standard Bible is for Southern Baptists), UMPH acquired full ecumenical partners in the production of the CEB. The CEB was sponsored by major denominational publishing houses like Westminster/John Knox Press, Church Publishing Incorporated, Chalice Press, and Pilgrim Press. The partnership insures that the translation does not merely reflect the theology of only one Christian tradition, and it provides all of the partners with a Bible translation they can use in their own publications without having to pay to use any other contemporary translation. I have written about why I like the CEB already, and will revisit that on my blog soon. My point in bringing it up here is that the CEB is a resource that, business-wise, can expand Cokesbury’s customer base. It also demonstrates Cokesbury’s commitment to “the greater Christian community,” as well as the United Methodist Church. In the end, while products like the CEB helped sales in the stores, it’s not necessary to maintain a bookstore chain to sell cutting-edge resources anymore.
Although the above-mentioned factors were helpful in saving UMPH money in operating costs, expanding Cokesbury’s customer base, and bringing in revenue from new and innovative products, it wasn’t enough to compensate for store sales shortfalls. With projected store sales declines in the future and actual store sales coming in, more often than not, below the correspondingly reduced sales expectations, UMPH made the very difficult decision to close the Cokesbury brick and mortar bookstores. Could things have been done differently in order to avoid closing the book stores? The next post will explore the hypothetical questions of “what if” UMPH had done things differently.
© 2013 Lee Karl Palo