What Is The Future of Independent Bookstores? | How I Built This with Guy Raz | NPR

TL;DR

Independent bookstores can survive severe disruptions by protecting their communities, maintaining online sales, reopening physical locations cautiously, and preserving both sides of the business. Powell's Books relied on an early e-commerce operation, a surge in online orders, limited store access, reduced hours, and difficult staffing decisions, but total sales still fell roughly 75 to 80 percent during the pandemic.

Transcript

hello and welcome to how i built this resilience edition from npr this is where we talk with entrepreneurs and other business leaders about how they are building resilience during these very challenging times um before we begin i want to thank npr sponsor hubspot for their support of this episode legacy crm platforms have made you compromise for fa... Read More

Key Insights

• Powell's Books is a large family-owned independent bookseller whose roots span Emily Powell, her father, and her grandfather. Emily grew up around the company and recalls wanting, from a very young age, to drive her grandfather's Powell's-branded pickup truck.
• Portland's urban environment is central to Powell's success because the business needs pedestrian activity from roughly 9 a.m. to 9 p.m. Deliberate city planning, a vibrant downtown, and strong arts and literary communities created conditions that supported the bookstore's growth and endurance.
• Powell's closed its physical stores before Oregon's governor ordered nonessential businesses to shut down. Management believed increasing customer traffic had made the interior unsafe and concluded that protecting Portland from further virus transmission was more important than continuing normal store operations.
• The initial shutdown caused Powell's to lay off most employees within 24 hours because management expected both stores and the online warehouse to cease operating. That expectation changed after the governor's team encouraged the company to maintain internet operations, employment, and employee health insurance where possible.
• Powells.com became an essential source of resilience because the company had maintained an online presence since 1994. A large rise in orders during the first weeks of the March shutdown generated enough business to help the company move through the first month or two.
• Physical reopening required different plans for different store layouts. Powell's first tested limited access at a large suburban location, while stores containing interconnected rooms, small halls, and corners required greater caution. The downtown flagship reopened only selected rooms with controlled customer numbers.
• Online sales cannot independently support the entire Powell's organization, despite becoming the majority of sales during the crisis. Before the pandemic, internet orders represented approximately 20 percent of overall sales, while the company remained heavily dependent on in-person shopping and tourism.
• Powell's combined sales fell approximately 75 to 80 percent during the disruption, even as online business became the larger component. The company permanently closed its airport and home-and-garden stores, operated three remaining locations, and brought approximately 200 people back to work.

Questions & Answers

Q: How did Powell's Books respond when the pandemic began?

Powell's monitored the virus early because Oregon had one of the first cases in the United States. As conditions worsened, management concluded that growing crowds inside the store posed a safety risk. The company closed its physical locations in the middle of the day before the governor required closure, moved customers out, and laid off most employees within 24 hours.

Q: Why did Powell's Books close before a government order?

Powell's closed because management believed it had a responsibility to protect employees, customers, and the broader Portland community. After the county library closed, more people began using the large bookstore as an indoor place of shelter. Leaders decided that the resulting traffic felt unsafe and that the business could not participate in spreading the virus, regardless of whether officials had issued a closure order.

Q: How did online sales help Powell's Books during the shutdown?

Powell's had operated Powells.com since 1994, giving the company an established e-commerce channel when its stores closed. Management initially expected the warehouse to shut down too, but the governor's team encouraged continued internet operations. A substantial rise in orders during the first weeks of the March shutdown helped Powell's sustain activity through the first month or two while leaders assessed the crisis.

Q: Why are physical stores still important to Powell's Books?

Physical shopping supplied most of Powell's business before the pandemic, when e-commerce accounted for approximately 20 percent of sales. The company also depended heavily on tourism and pedestrian traffic. Although online orders became the bulk of sales after stores closed, Emily Powell said internet operations alone could not support the approximately 200 employees who had returned, making both online and in-store business necessary.

Q: How did Powell's Books reopen its physical locations safely?

Powell's began with a large suburban store whose open layout made controlled reopening easier. That location served as a place to test and practice new procedures. Other branches required more caution because their rooms, hallways, and corners created complicated traffic patterns. Reopened stores used limited customer capacity, fewer operating days, shorter hours, and restricted access to selected rooms in the downtown flagship.

Q: Why has Portland been important to the success of Powell's Books?

Portland offered the sustained pedestrian activity, deliberate city planning, and cultural environment that Powell's needed. Emily Powell said the business depends on foot traffic from approximately 9 a.m. to 9 p.m., a pattern many cities provide only partially. Portland also has vibrant arts and literary communities, plus a civic belief that residents must support their own city to keep it thriving.

Q: What financial impact did the pandemic have on Powell's Books?

Powell's experienced an approximately 75 to 80 percent decline in combined sales during the period discussed. Online ordering became the largest part of the remaining business, but it could not replace normal store traffic. The company also permanently closed its airport store and home-and-garden store, reducing its physical presence to three locations while continuing limited operations and restoring approximately 200 jobs.

Q: Why did Powell's Books hire a new CEO during the crisis?

Emily Powell hired a CEO in the fall because the volume and difficulty of the work had become too heavy for the existing leadership team. She acknowledged that adding head count during such a challenging period seemed unusual, but said the team was buckling under the weight of the problems. The new executive provided additional leadership capacity and was described as a valuable addition.

Summary

In this interview, Emily Powell, owner and president of Powell's Books, discusses the challenges faced by the iconic independent bookstore during the COVID-19 pandemic. She talks about the initial decision to shut down the store, the transition to online sales, and the impact on revenue and staff. She also delves into the reasons behind the bookstore's success and the importance of supporting independent businesses.

Questions & Answers

Q: How did Powell's Books cope with the challenges of the pandemic?

Powell's Books made the decision to shut down the store and lay off most of its employees in order to prevent the spread of the virus. They were able to keep their internet business going and experienced a spike in online orders in the first few weeks of the shutdown. The store later reopened with limited hours and a different experience for customers.

Q: How has the pandemic affected Powell's overall sales and revenue?

Powell's overall sales and revenue have been significantly impacted, with a decrease of about 75 to 80 percent. While the internet business has become a more substantial portion of their sales, it cannot replace the in-person experience of their store. Both the online and in-store aspects of the business are needed to support the company and its employees.

Q: How did Powell's manage to bring back some of their employees?

Powell's received a loan through the Paycheck Protection Program (PPP), which allowed them to bring back some employees and continue operating through the summer. However, the funds from the loan are now exhausted, and the future remains uncertain. Powell's is trying to find creative ways to generate business and manage expenses during these challenging times.

Q: Why did Powell's decide to pull out of Amazon as a sales channel?

Powell's made the decision to end their partnership with Amazon because they wanted to focus on their own business and customers. While Amazon provided a substantial amount of sales, Powell's believed that depending on Amazon for success in the long run was not beneficial. They wanted to support the local community and contribute to the local economy, which Amazon does not prioritize.

Q: How has Powell's adapted their in-store events during the pandemic?

Powell's has shifted to virtual events, which have seen good turnout. However, the experience of in-store events cannot be fully replicated online. Powell's acknowledges the challenge of finding ways to replace the in-store experience and is continuously working on improving its virtual offerings.

Q: How does Powell's stay competitive with other online sellers, considering the potential price discrepancies?

Powell's acknowledges that it is challenging to compete on price with online sellers like Amazon. Various factors contribute to price differences, such as the discount given to Amazon and the costs associated with running a physical bookstore. However, Powell's focuses on providing value in other areas, such as knowledgeable staff recommendations and supporting the local community.

Q: What steps has Powell's taken to keep costs down during difficult times?

Powell's has taken measures such as delaying repairs and adopting a resourceful and creative approach to essential expenses. They prioritize what is necessary for the core operation of the business and look for ways to manage costs without compromising the essential parts of the bookstore.

Q: Why has Powell's chosen to remain solely in Portland and not expand to other cities?

Powell's believes that a successful independent bookstore requires a deep understanding of the local community, which takes time to develop. They also consider the financial viability of other locations, which often lacks the necessary combination of high pedestrian traffic and affordable rent.

Q: Are consumers showing a deliberate preference for supporting independent businesses like Powell's?

Powell's has received support from customers who consciously choose to support independent businesses, recognizing the value they bring to the community. This has been particularly evident during the pandemic, although Powell's has enjoyed such support for many years.

Q: What strategies will Powell's continue after the pandemic ends?

Powell's aims to maintain the lessons learned during the pandemic, such as being more flexible, creative, and emotionally intelligent as a business. They have discovered the importance of recognizing the full human experience of employees and customers and plan to prioritize this going forward.

Q: Can Emily Powell recommend any books she's currently reading?

Emily Powell mentions that she has been reading a lot of poetry due to time constraints, specifically mentioning books by Jericho Brown. She also mentions Midnight's Children by Salman Rushdie as a novel she plans to read and discusses the joy of having multiple books to dip in and out of.

Takeaways

During the COVID-19 pandemic, Powell's Books faced significant challenges as an iconic independent bookstore. They made the difficult decision to shut down their stores and lay off most employees. While their online sales helped sustain the business, overall sales and revenue decreased greatly. Powell's emphasized the importance of being resilient, flexible, and creative during these trying times. They decided to cut ties with Amazon and focus on their own business and community. Despite the challenges, Powell's received support from customers who consciously chose to support independent businesses. Looking ahead, Powell's plans to maintain lessons learned and prioritize the overall human experience within their business.

Summary & Key Takeaways

• Powell's Books grew alongside Portland's pedestrian-friendly downtown and strong literary culture. Emily Powell says the company needs foot traffic from morning through evening, while Portland residents understand the importance of supporting their own community. The bookstore consequently became both a major local institution and a destination for visitors.

• When the virus began spreading in Oregon, Powell's closed its stores before the governor required it. The company acted because crowded indoor conditions appeared unsafe and could contribute to transmission. Expecting operations to stop completely, management laid off most employees within 24 hours, then quickly reconsidered its online fulfillment plans.

• Powell's maintained its e-commerce business after state officials encouraged continued employment and health insurance coverage. A sharp increase in early online orders helped sustain operations initially. The company later reopened selected locations with capacity limits, fewer rooms, shorter schedules, and approximately 200 returning workers, although combined sales remained dramatically below normal.