Why Dymocks chief Steve Cox is bullish about bookstores

In June 2011, then federal small business minister Nick Sherry made a bold prediction.

“I think in five years, other than a few specialist booksellers in capital cities we will not see a bookstore, they will cease to exist,” the senator said in Canberra.

The assessment came shortly after the collapse of private equity-owned REDgroup Retail, the owners of booksellers Angus & Robertson and Borders. It left the people behind plenty of surviving bookstores fuming.

Now, nearly two years later, Dymocks managing director Steve Cox says any assessment of the impending collapse of Australia’s bookstores is off the mark.

Dymocks is a 130-year-old chain of booksellers owned by Rich Lister John Forsyth. A privately-held company, it doesn’t release its accounts. However, it says it’s outperformed the industry, selling more books in 2012 than it ever has before, despite a 6.3% drop in national book sales over the period, according to Nielsen Bookscan. This followed a 9.3% drop in national book sales in 2011.

Dymocks managing director Steve Cox tells LeadingCompany the company isn’t retreating. It’s opening more stores this year, on top of several it opened in late 2012. The company has 74 stores in Australia along with 12 in Hong Kong.

The last chain standing

Talking to Cox, there’s little sense of impending doom. But he does admit there are challenges for the business.

“Retail as a whole has been in a tumultuous period,” he says. “The book industry is no exception to that.

“But my focus has been on our customers, and on better understanding them through this time, as we continue to evolve to stay relevant.”

Some of the challenges facing the industry are of the government’s making. Online rivals based overseas can avoid Australia’s parallel importation restrictions, which force Australian booksellers to buy from local publishers even when overseas ones are selling a book more cheaply. Unsurprisingly, Cox is opposed to the restrictions. “We’re constantly trying to ensure the prices we offer customers are globally competitive,” he says. “As such, we’d like to see the parallel importation restrictions removed. The world’s moved on.”

Cox took over from long-serving CEO Don Grover in March last year, after a career at department store David Jones. He believes the company is well placed to keep delivering, and stresses some crucial differences between Dymocks and its now departed rivals.

“We’re locally owned and operated book specialists,” he tells LeadingCompany. Dymocks uses a franchising model, with local stores owned by local businesspeople. Cox says book-buyers love talking about books with their local bookshop owners and their staff, and that’s something the franchising model helps maintain. “Our customers know we’re passionate about our product, and come to us for local advice and local service. That means we’re well positioned in a challenging market.”

And as competitors Borders and Angus & Robertson shut their doors, Dymocks was an obvious beneficiary. “As the market has consolidated, that does present opportunities for Dymocks stores,” Cox says.

Dymock’s online plays

In recent years, the company has made a number of online plays to capitalise on the changes in the ways customers buy and write books.

Most famously, Dymocks launched D Publishing in December 2011. The platform allowed authors to self-publish books in partnership with Dymocks. Dymocks took a portion of the royalties, and selected books were made available in its stores.

Earlier this month, Dymocks announced it was closing the platform.

“The platform didn’t match up with what we needed to deliver for our customers,” Cox says. “When we looked at the detail, we realised it wouldn’t be sustainable in the longer term. We learnt some things along the way though.”

Other innovations have proven more permanent.

Dymocks’ Booklovers loyalty-card program is the largest of its kind in Australia. Cox says the goal for the program is for it to operate as an online portal for readers to share their opinions and look at what others are reading.

A key benefit of the program, which has 700,000 members, is that it allows the company to target customers with exactly the books they are likely to want to read. “It’s about marketing to the single person – instead of broad-brush communication, making it relevant to the individual. We’ve got a long way to grow to be truly successful, but we’ve made huge progress on that.”

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