This paper examines the major environmental and operational factors that influence the success of a new bookshop opened within a shopping mall. Drawing on sources in business planning, retail competition, and marketing, the paper covers access to capital and labor, competitive strategies such as cost leadership and product differentiation, the role of customers and suppliers, political and social considerations, and the growing importance of technology. The paper argues that thorough investigation of the competitive landscape and customer demands is essential for a new bookshop to establish a viable edge over existing retailers in the same environment.
Opening a new business is always a challenging prospect. Many factors can influence its success or failure, and environmental scanning is essential before any venture begins. Access to capital is one significant influencing factor; so too are the environmental forces that must be taken into account. Immediate competition in the environment, for example, can influence pricing and product differentiation. When starting a new bookshop in a shopping mall, the strategies adopted will depend on issues such as whether other bookshops already operate in the mall and what pricing strategies they use to sell their products.
According to Richards (2010), the first factor to consider when starting a new business is access to capital, and this is equally the primary consideration when opening a bookshop. Capital is required, for example, to purchase the books to be sold as well as to lease the premises. These costs will in turn influence the pricing strategy for the books being sold.
A further important factor is what Richards (2010) refers to as "access to people." For a bookshop, a specific type of worker is required. Workers must be willing to commit a set number of hours per day to selling books at a salary the store owner can afford. Such workers also need a particular skill set: in addition to being effective salespeople, they must possess broad knowledge of reading material and be able to answer customer questions about the books on sale. They will also need to liaise with authors to organize book readings and signing events.
Technology is a third important factor when starting a new bookshop, and it is closely related to the "access to people" factor. Workers will need a certain level of technological competence. Computer technology can, for example, be used to create a database of available stock, books to be acquired, and customer enquiries about titles not yet in store. The internet can also be used to liaise with book suppliers in order to maintain an up-to-date inventory that satisfies customer demand.
Richards (2010) also notes that unanticipated environmental changes—such as natural disasters or economic shifts—could affect the functioning and success of the bookshop. Being located inside a shopping mall can help to mitigate some of these unforeseen events, given the size of the building and the variety of products offered by other tenants. Customers who visit the mall to buy clothing, for example, may be inspired to buy books when passing the bookshop without having planned to do so, which can work to the advantage of the business.
According to Neblett (2010), competitors are also an important factor when opening a new bookshop. Before opening, owners should conduct a thorough investigation of the immediate commercial environment. The most important consideration is whether other bookshops already operate within the mall, and if so, what types of books they offer.
Where competing bookshops exist, the owner of the new store should investigate ways of differentiating its products or services. One approach is to run competitions or to specialize in particular types of books. The risk of specialization, however, is that the potential customer base may be considerably smaller than that of a general bookshop. To mitigate this risk, the owner can research the size of the potential customer base for a given book category before committing to that niche.
In terms of competition, Neblett (2010) identifies two specific ways to achieve a competitive edge: cost leadership and differentiation. Both are especially important when there is direct competition from other bookshops within the same mall. Before opening, therefore, the owner should investigate the pricing strategies used by competitors and use that information to develop a pricing strategy that secures a competitive advantage.
Product differentiation can be approached in a similar way. The central goal is to offer customers something different from the competition while still satisfying a genuine demand. To achieve this, both the competition and potential customers must be studied. Customers can, for example, be interviewed to identify demands that existing bookshops in the mall are not meeting. Another approach is to identify demands being satisfied by bookshops in other malls, and then to attract those customers by meeting those same demands locally. In this way, customers who previously traveled elsewhere to meet specific reading needs can be drawn to the new store.
"Understanding customer demand and supplier reliability"
"Political climate and social responsibility as marketing tools"
"Using technology to enhance sales and administration"
"In-store atmosphere, stock range, and summary"
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