Innovation.

One of the things that all the hoopla surrounding Amazon vs. Hachette is obfuscating is that the internet isn’t just changing publishing–it’s changing every type of commerce. I’m not all that interested in the controversy surrounding the negotiations, for all the same reasons that I wasn’t interested back when Barnes and Noble did the same thing to S&S… we cannot know what’s really going on, who’s doing what, who’s pulling PR stunts to sway the public vs. who’s the “victim” here. And honestly, if a corporation has to resort to “victim” status to win the war, they’ve already lost. Not necessarily because their customers will leave right away, and not necessarily because they’re going to lose money immediately… but because “victim” status means they have not innovated. They have not gotten out ahead of the curve. In the world of business competition, there are thousands of businesses who fail because their business models are stagnant. They fail to innovate, they fail to see that others are innovating and take advantage of that, and they fail to see that the customer base’s expectations are changing. You cannot stay in business in today’s technological world by doing everything the exact same way you did it forty years ago. Not if you really want to be here forty years from now.

I read a couple of interesting articles yesterday in Entrepreneur Magazine about innovation, and one specifically about three brands that are dying — Quizznos, Sbarro, and Radio Shack, and of the three, the two latter brands depended heavily on mall traffic — traffic that is down by more than half in a lot of malls. And it’s not just Amazon that’s the culprit. People buy online directly from the companies, now — they buy their Apple or Dell computers online. (No one screamed that we should boycott them and stick with Radio Shack.) Sbarro’s sales have fallen through the floor (they’re in bankruptcy) because pizza-by-the-slice has gone by the wayside; people can call in for delivery, or go online for delivery, or buy plenty of very good cook-at-home options. Or they’re eating healthier. The world changed around Sbarro–offering better quality, better ease-of-use–and Sbarro failed to change with it. Worse, they failed to anticipate change and did not innovate within their own model.

Yesterday, I picked up my mail and had tennis shoes from Zappos, a yoga mat from the mat maker, a t-shirt from a small Etsy vendor, a gift for someone that I ordered from a printer in Michigan, and some gadget that my husband wanted from a binocular store. All purchased directly.

Now that the malls are dying off, a lot of small towns are seeing the resurgence of mom and pop stores, because when people can get all of the generic stuff from online shopping, and they save money, they have more to spend locally. (At least, that is what I’m seeing here.) Those stores which are doing really well have a unique service angle to them, that lagniappe (something extra) that keeps their customers coming back. There’s my favorite children’s store in the Quarter (NOLA Kids) which always has unique toys / clothes for kids that I can’t find elsewhere. Her prices are slightly higher, but I think it’s worth it for the unique factor.

There are some fine indie bookstores that (at least, from the outside) seem to be holding their own — like Seattle Mystery Bookshop, and Murder by the Book in Houston, and here in NOLA, Garden District Book Shop. They have all carved out a voice for themselves, offer unique services, and really pay attention to their customers. They are innovating within their models, and they’re catering to their customer’s needs.

That’s the only really interesting thing about the Hachette vs. Amazon battle going on–will Hachette come out of this having figured out how to better innovate, how to improve their own model, to better serve their customers, the readers. (Their customers used to be the bookstores–especially the big chain stores. They had to satisfy one buyer from B&N, one from Borders, etc., and then buyers from the smaller chains. Now, they have to think more globally–the customers, the readers.)

I like Hachette. I particularly like Grand Central, one of their imprints–they put out a lot of good books. They have terrific editors there. I want to see them last. But “winning” against Amazon isn’t where the focus should be, in my humble opinion. It should be, “how can we do what Amazon is doing, but better, smarter, within our own model?” And again, we don’t know–maybe they are trying to innovate to better serve their customer without destroying their own producers. That’s their challenge, now, and I think the outcome will signal a sea change for the industry as a whole.