GEOFF DENNIS is at COO and executive vice president at Crossway. Guest Editor George Thomsen, CBA chairman of the board, continues his "In Conversation" interview from the July 2012 issue of Christian Retailing with him here.

How does Crossway decide what to publish?

What we publish comes directly out of our mission statement, as we seek to publish those projects that would build and equip the body of Christ. Each potential project is reviewed by our publishing committee, and we have a formal evaluation process, including ministry impact, distribution potential, writing quality, value of content to the church, return on investment and so forth.

MARK SCHOENWALD is president and CEO of Thomas Nelson. Prior to joining the company, he was involved in the private equity business, primarily on the operating side, having served as president of three portfolio companies that focused on home furnishings, gifts and distribution. He began his career at Lenox Brands, where he served in various sales, marketing and operations positions. Guest Editor Michael Briggs continues his "In Conversation" interview from the June 2012 issue with him here.

Physical product is what so many in our industry are dependent upon for their living—retailers and publishers alike. Self-publishing appears to be coming on strong, both with unknown writers and some brand-name authors, and digital is a primary format for them. Will this have an adverse effect on the production of physical product?

No, not at all. Because we have changed the way we develop and manage our content assets, we have the flexibility to take advantage of such opportunities. More importantly for retailers, Thomas Nelson is positioned to share this capability with our retail partners in a couple of ways.

MICHAEL BRIGGS, owner of Briggs Creative in Nashville, has been active in the Christian market for nearly 33 years. Briggs is a former retailer with a family-owned regional chain—Dicksons of Royal Oak, Mich.—and a former producer, writer and host on Christian radio. His clients have included more than 40 CBA and ABA companies, major ministries, trade associations and authors on corporate strategy, product development, marketing and sales.

What are some of the biggest changes you have seen in the industry?

Addressing change starts with a little history. We live with the consequences of ideas implemented decades ago as well as those we embrace today. Retrospectively, a big change happened as our industry’s suppliers reached out to new markets and sales channels, increasing focus on our “hit” products. The biggest authors and music artists captured the attention of general market retailers and for good reason.

Concurrently, shifts in our culture made “time” more important to the American lifestyle. Sales to the general market weren’t so much the result of “taking the cross over” as it was reaching the core audience where they shopped. It is about convenience. Although there’s lost shelf space (Borders), much of this continues today.  We can all cite the titles and they’re as sought after as any before them.

The general market uses its strengths to push our leading titles to the best-seller lists, which fuels demand. If we’re honest with ourselves, during the growth years we weren’t as adept at creating such visibility. Increased awareness promotes wider accessibility to consumers. Ergo, the CBA retail landscape changed and finds itself competing with entities as large as our entire industry. Because many CBA stores also relied heavily on “hit product,” they found themselves contending in an arena that is more costly. Profits weaken, cash flow suffers, anxiety increases, and to some degree, walls of separation start to build between supplier and retailer.

Can CBA retail rebound from this?

Our industry has always been message driven. The proclivity for gifting our products has always championed sales. It’s this uniqueness that provides a future for our stores and suppliers all. There really isn’t “backlist,” given customer turnover; it’s new to many consumers. Once we discerned focusing on the “hits” could be ruinous, we shifted toward core products as a staple for maintaining distinction and validity. The general market carries some core, but they don’t specialize in it—and that’s a distinct CBA advantage.

Over time we realized the need to talk straight to each other, engaging the concerns and opportunities for growing the category, rather than appearing to evade and dissimulate. Dialog today enjoys a more open strategy for supporting our channel and the future growth of Christ-centered products in the marketplace.

What about changes that impact the stores?

A change in pricing is unfolding. General market is discounting less, even online. Some chains are abandoning sale-pricing altogether. Is this a reaction to difference between an online customer versus a brick-and-mortar customer? This will be interesting to see unfold.

Consumer expectations are changing dramatically, and meeting those needs has altered nearly everything about how retailers relate to their customers. From now on, the relationship between store and customer is going to look very different from the recent past. Retailers must reach their customers by all means possible: inbox, mailbox, Facebook, Twitter, newsletters, etc. There are too many stores that don’t mail a catalog, don’t collect email addresses and don’t interact with their customers the way the customer wants to be embraced. By providing an experiential relationship, you build loyalty that transcends your marketing efforts and builds a sense of community.

To quote Gary Vaynerchuk from his compelling book The Thank You Economy [HarperBusiness]: “People embraced social media because communicating makes people happy; it’s what we do. It’s why we carved pictures into rocks. It’s why we used smoke signals. It’s why ink won. Companies of all stripes and sizes have to start working harder to connect with customers and make them happy, not because change is coming, but because it’s here.”

What are two things a retailer must change in order to see growth and profitability?

One, retailers must—must—find a handle on their data. Cash flow is more critical today and “investing” in products requires more science than it does art. Accurate data is key because that compels action as basic as consistently changing the endcap. Customers want to see what’s new on each visit.

Two, to not have a website today is akin to never having had a phone book listing in yesteryear. I am most familiar with the Covenant Group website program. It provides stores the ability to sell e-books direct, offers a “pick me up” option, there’s iPhone and Droid apps, e-blasts and more—all designed to drive traffic. There are other providers and regardless of which a store decides on, the key is to get online—it is tantamount to growth, if not survival.

Any specific changes that impact published products?

Not too long ago an associate and I did an extensive study for a major publisher on their archives (I love mining archives). We walked away from that project with the realization that product perception by consumers has changed. That which was once considered lay-oriented is now considered academic. That which was academic is viewed as professional.

Look at our best-seller lists today. No disrespect to the titles there, but you can see a change in consumer demand over recent years by the types of books that land there. I would characterize them as accessible rather than intellectual and experiential over didactic.

The largest traffic-driving category is fiction and also the fastest growing digitally. The e-book impact has yet to be fully realized and some kind of solution is needed. If fiction drives consumers to the stores, all categories realize greater exposure. Without the traffic, all suffer. Perhaps the answer is to release physical books first or an enhanced edition—but then there’s risk in offending the rabid e-book buyer. It’s a conundrum that needs cooperative dialog. Thankfully all stores now have a viable opportunity to sell e-books and won’t have to give this over to competition.

What about change influencing how publishers are conducting business?

There’s only so low you can go on price. There’s only so much you can do to improve product. There’s only so far you can stretch your marketing budget. While the desire to do it all may be boundless, the elasticity of reality is stretched.

Cost of goods, cost of representation, diminishing shelf real-estate, decreasing channels, increasing demand for advances, demand for digital format—the landscape has changed exponentially. It dictates a focus on being a content provider in many forms, not solely ink-on-paper or sound-on-plastic. The ramifications are myriad. The days of “put it out there and see if it sticks” are gone. This intensifies the burden to provide better books, better music CDs, better products overall.

Also there’s the issue of risk. Risk aversion necessitates a closer look at co-publishing, print-on-demand and even packaging issues. My right brain battles the left when it comes to cover treatments. I see more focus on better design, less costly treatments and favor newer UV coatings. I would rather have a customer say, “I love the feel of this book in my hands” over “This foil looks nice.”

Do you see changes in the way publishers create awareness?

Stewarding primary and secondary marketing budgets is increasingly challenging because there are more channels vying for a share of support. There’s significant focus on social media although I haven’t read any report nor heard of experience where it actually produces sales. When I hear “what are you doing with social media?” I also hear, “We have no marketing budget for this.” Nonetheless, social media is an important avenue for exposure. The sense of community is conducive to building awareness.

While an ad can be placed anywhere, hoping someone will check out your big new product, a catalog mailed directly to the home of a proven CBA customer provides the best opportunity to have your product taken to the checkout. The combined mailing list of chains and independent marketing groups is multiple millions. It is by far the largest route directly to qualified consumers. They’ve been around for decades because they really are a primary means for reaching buyers.

What would you say are the top five issues the industry is facing right now?

I’m sure if you ask five people this question answers would differ. In brevity, I see five important issues:

1) Traffic and cash flow. Retailers need to see more customers coming in the door. A direct result of slower traffic and lower sales is reduced cash flow, which subsequently impacts payment history—a longtime challenge of our industry.

2) Digital products. If you’re reading this article, chances are your career and family rely on the ability to sell physical product. Digital is here to stay, but we need to discuss ways to keep physical a mainstay of our industry.

3) Gatekeepers. There are many stories of retailers that refuse to carry select categories, authors, music genres, Bible translations or books that differ with personal theology. If the customer can’t find the Christ-centered product they want, they will shop where they can—including the general market. Stores are unwittingly telling those people to shop elsewhere, and if they find it, they won’t be back.

4) Fairness. More suppliers are selling direct. Most cite nominal responses. Add digital products and the adverse impact on retail increases. There is a need here for cooperative dialog and understanding to avert future tensions. We’ve lost enough stores.

5) Greed. (Did he just say that?) Yeah, I did. This article simply doesn’t allow the space to expand on this, but it is one of the issues I pray about most for our industry. No matter the area you’re employed, you get it.

What trends are you seeing?

One of my favorite questions—I get this a lot. What many call trends are really just fads. Use Bibles, for example. Color and style have introduced fashion to the category. The fact that this creative, engaging packaging meets the consumer’s desire for individuality, uniqueness or convenience is the trend. The product itself is the fad. Or in the case of Bibles, the cover is the fad.

Some product trends we’re tracking include the increased demand for DIY healthy living, increased interest in the supernatural and the experiential books. Consumer trends include the “F factor” (friends, fans and followers) and what I call “info-gratification.” The use of smartphones provides consumers with the power to learn everything in advance of their purchase, including the best deal. I’m also waiting to see which CBA retailer works with Groupon and Living Social first.  I think there are ways to maximize these for exposing our products.

What’s your most radical idea for change in the industry?

Combine CBA, ECPA, GMA and whatever “A” might exist for the gift companies into one association called the CPA. The Christian Products Association. Pool the efforts and budgets and focus on the category. I can hear sabers rattling now. LOL!

Do you have any closing thoughts?

Our industry needs to think long-term just at a time when long-term thinking has never been more difficult to achieve. Optimism or pessimism about CBA’s future cannot simply be a function of our capacity to do great things—or our history of having done great things. It has to be a function of our will to actually do those things again. What CBA needs most is collective action on a large scale. We cannot let our past palliate the need for a cooperative future.

Many of us recall the old adage: It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change. Winston Churchill once said to his British compatriots: “We have not journeyed across the centuries, across the oceans, across the mountains, across the prairies, because we are made of sugar candy.” The same could be said of our industry. We’ve been at the crossroads of change before, and if we humble ourselves and turn our face toward God, He will surely show us the way through.

BY GUEST EDITOR TESSIE DEVORE, EXECUTIVE VICE PRESIDENT, CHARISMA HOUSE

Look around and take note: The Latino community is changing the face of the United States.

The composition of the Latino population is undergoing fundamental changes—but not because of immigration. Rather, births to Latino couples and Latino/Anglo couples are outpacing immigration as the key source of growth, according to the Pew Hispanic Center.