Christian retailers adjust to maximize their strengths

For those involved in Christian retail, the recent economic crisis was just the latest in a series of major challenges that continue to change the face of the industry.

Christian retailers begin another year not only in the midst of a global financial slump, but also with a new national political climate that some suspect may not be as accepting of many of the conservative values they hold dear.

But while veteran industry retailers, suppliers and support organizations predict 2009 will be a very tough year, each segment of the industry remains hopeful, looking for bright spots and planning to make it through.

“While there is great doom and gloom in the media about the economy, we know that people are looking for places to have authentic, meaningful, memorable, relational retail experiences,” said CBA President Bill Anderson. “Christian retailers need to keep looking for fresh ways to create compelling experiences in their stores that attract customers and keep them coming back.”

That challenge is not new. Many Christian retailers have faced years of steady declines in traffic and sales, in part due to a loss of customers and revenues when Christian best-sellers like the “Left Behind” series and The Purpose-Driven Life gained attention—and shelf space—in the general market.

While the increased availability heightened awareness of Christian products and increased overall sales of the biggest titles, it was a Catch-22 for Christian retailers.

As more books and music became available at Wal-Mart, Barnes & Noble and airports everywhere, Christian stores found it hard to match their convenience and visibility.

Christian retailers suffered another blow when technology made Internet buying so easy and convenient that many of their customers stayed home—or came into their stores to look around, then went home and ordered what they wanted online. The music industry’s turning digital impacted in-store sales of Christian CDs as well.

These combined trends have seen a huge shakeout of independents closing, comparable to the historic shifts in other industries such as hardware and grocery stores. In Canada, R.G. Mitchell Family Books, the largest distributor-retailer of Christian literature north of the border, went bankrupt last September. A string of longtime U.S. retailers have closed their doors or sold to chains.

National and larger retail chains comprised a third of CBA’s 1,731-member store numbers at the end of 2008. A further 46% were single-store and small-chain independent retailers, with 20% church, camp, campus, direct mail or online retailers.

Big picture, bright spots
Christian retailers experiencing struggles are certainly not alone. In 2008, major chains such as Mervyns, Linens-n-Things, Levitz, Sharper Image, Circuit City and Lillian Vernon all filed for Chapter 11 bankruptcy protection. Big bookstores Barnes & Noble, Borders and Books-A-Million posted losses in late 2008 over the same sales period of a year before.

But it is not all bad news. The buffeted Christian retail industry is taking steps to move forward, with new growth being seen in the church-store segment and online sales. Meanwhile, brick-and-mortar stores are also finding creative ways to bring traffic back in the doors and cutting costs to maintain their presence in the market.
The general consensus: Stores just have to work harder and smarter.

“The next year or so will be very challenging for all retail, including the CBA industry,” said Mark Scott, president of LifeWay Christian Stores, which opened several new locations in 2008, ending the year with 152 stores. “(But) given the difficult economic climate, products which inspire and encourage consumers will do well.”

Perhaps the biggest bright spot in the Christian retail landscape is the fact that the extreme pressure is molding retailers into savvy businesspeople. Although ministry remains a key aspect, retailers are also becoming marketing experts, promotions directors, accounting whizzes and cost-cutting pros.

“In terms of our stores, there are bright spots and there are dark spots,” said Parable CEO Steve Potratz, who himself owns two stores. “If a business is built on sand/credit, it’s going to be in trouble right now. If it was built with cash and has cash reserves, then the storms are just part of life and it can weather them.”

Potratz said he has seen a lot of stores doing some “really wise cost-cutting” in order to stay afloat. In his own two stores, Potratz has saved tens of thousands of dollars by re-examining his expenses and making changes, such as changing to voice over Internet protocol for his phone service and renegotiating his rent contracts.

“When a lease comes up, I can move out or they can give me a lower rate,” Potratz said. “Things like that have helped me save. I’m not hearing this from everybody, but there definitely are stores that are down in sales, but profit is actually up because they have managed their expenses well and had a good foundation.”

LifeWay’s Scott said that sticking to the basics and responding quickly has been keeping LifeWay stores in business.

“We are very focused on doing the basics of retailing well, meeting our customers’ needs, being more agile,” Scott said. “In such a dynamic marketplace, we are working even harder to monitor product performance and customer behavior—then respond quickly. If something is working, we want to build on it fast.  If not, we want to adjust or abandon more quickly.”

Controlling inventory
Retail consultants agree that reducing expenses needs to be a major strategy for staying viable in 2009 and beyond.

“Retailers should take a harsh look at cost reduction,” said Philip Clements, managing director of Cathedral Consulting Group. “This is a harsh environment, and we must be rigorous in our evaluation of costs,” said the former Coopers & Lybrand senior executive whose consultancy last year offered advice to Christian retailers in a special report on the industry.

“Another critical item is orders to be put in place,” he said. “Retailers need to reduce inventory and sell everything possible at the end of the year and January. The re-orders must be very selective against what customers really want in the coming year. Inventory should no longer be carried just because of bulk discounts. Inventory carry is very expensive and a part of cost reduction.”

Inventory is a constant hot topic among retailers because carrying too much depletes resources, while not having the right mix on hand drives customers away. CBA last fall tested a “Custom Model Inventory Tool,” whose goal was to help stores reset inventory to increase sales, profitability and customer satisfaction.

“A key component is enabling retailers to provide broad assortments controlled by available cash to maximize ‘long-tail’ or backlist sales while ensuring the right product is on the shelves to increase sales,” Anderson said.

While results varied, one store with $700,000 annual revenues participating in the test experienced a 12.8% increase in book sales last August over the same month in 2007, and a 16% increase in store sales overall using the new tool, Anderson said.
At press time, testing was still underway, but Anderson hoped stores would be able to try the program in 2009.

Another way Christian retailers can win is to take their penchant for ministry and use technology to touch base with their customers inexpensively and often, as well as schedule creative, inexpensive promotions that drive traffic back into the stores.
Potratz said some Parable-franchised stores and others that belong to the marketing group have started holding drawings for laptops or small electronics where customers have to be present to win. Stores have seen an increase in traffic because of the giveaways. Other independents are also trying to be creative in drawing consumers in the doors.

“We keep in touch with our customers,” said Dennis Lovvorn, co-owner of New Covenant Christian Bookstore in Shelby, Tenn. “We do several events a year to keep our name in front of our customers. We have ‘Moonlight Gladness,’ instead of ‘Moonlight Madness,’ and on that night only, we offer specials, exclusive purchases and discounts. We also have other events throughout the year to keep reminding them that we’re here.”

For Lovvorn, sales maintained in 2008 and may even be up slightly once holiday numbers are tallied. It has taken “long hours and bending over backwards to take care of our customers,” he said, but he believed that the tough times could actually be good for Christian retail because customers concerned about what’s happening will seek out Christian books.

“I think it will drive a lot of people to the Word because they’re so concerned about what is happening in our culture,” Lovvorn said. “In tough times, the church does better.”

Retail support tools
The squeeze has also pushed many in the industry to take more seriously the need for better training and good data, veterans said. Historically, retailers enjoyed being more ministers than business people, and the industry was behind the times in terms of technology and statistics gathering.

Anderson said CBA’s new industry e-learning platform coming this year, which will deliver training and product knowledge directly to stores and frontliners via the Web, “will create significant cost savings for suppliers and welcome product sales training for retailers.”

The retailers trade association is also offering the CBA Consumer Intelligence program that will provide ongoing and in-depth looks at consumer behavior and attitudes. Developed in cooperation with R.R. Bowker’s new consumer research resources, this program “will help retailers see customer and product trends developing,” Anderson said.

The Evangelical Christian Publishers Association (ECPA) is creating new tools to heighten awareness of Christian products among consumers, such as more open access to its best-sellers lists—which authors and others can now post on their own Web sites and blogs—and promote greater attention for award-winning products.

For Christian retailers who want to stay in business, finding ways to stick together could be the key. Branding, franchising, joining marketing groups and networking are crucial elements for success.

“I anticipate that we will see independent retailers, chains and retail groups coming together in unprecedented ways,” Anderson said.

“Connecting with other retailers in ways where you can maximize your efficiency through groups like Parable or Munce or with CBA is vital,” ECPA President Mark Kuyper agreed. “Anything you can do so it reduces the amount of energy you have to put in is going to be imperative because there are limited dollars for staffing and marketing.”

The Munce Group based in Indian Rocks Beach, Fla., provides marketing support for nearly 600 stores in the U.S. and Canada and has seen its number of stores remain “fairly consistent over the past three years,” according to Chief Operating Officer Kirk Blank.

While there was no magic bullet, he said, “we have unique strategies that allow independent stores to compete online and in-store,” Blank said.

“We are currently seeing a shift in consumer behavior to purchasing at their local store,” he added. “We have been promoting the importance of  ‘the local Christian retail store’ proactively on our Web sites, our promotional catalogs, proprietary items, and in-store.“

The group has also enlisted the help of authors and artists such as Max Lucado, Karen Kingsbury, Stormie Omartian and Third Day “to spread the word that local independent Christian retailers make a significant difference to communities.”

Blank said Munce was operating from a “position of strength” in representing “the most independent Christian stores, the most regional chain accounts and the most church bookstores.”

In addition to making connections, stores also need to figure out what they offer beyond the best prices and top-selling products, Kuyper said. “One of the best things a Christian retailer can be doing is communicating to their audience what is unique in terms of who they are.

“High customer contact is going to continue to be important. Without that, you lose some of your distinctive.”

Customer connections
Technology also plays a role in connecting well with customers.

“I think we’re going to see increased attention given to using new technologies to reach potential customers, connecting them to the product and the stores,” Anderson said.

Still, retailing in 2009 is likely to remain an uphill battle.

“When even longtime customers come in and say, ‘I believe in you, I support you, I just can’t continue to buy from you,’ that’s a reality that is hard to face,” said leadership author and industry consultant Jim Seybert.

“However, there are other industries of specialty items that have moved off to general market retail that still have a good collection of strong independent stores—health foods, for example, or auto parts. You can buy most at Wal-Mart or online, but there is still a good collection of independent stores that have bucked the trend.

“Even with the current trends, I don’t see an end to independent Christian retail, but I see it continuing to look different.”

How much do you remember of the headlines from 2008?

It was a year dominated by the race for The White House and an economic collapse, but 2008 also saw big news in the Christian products industry. Test your recall of the last 12 months by answering these questions, drawn from Christian Retailing’s news coverage.

1. Christian Trade Association International’s first Marketsquare International was held where?
A    Indianapolis
B    London
C    Toronto
D    Miami

2. Best-selling author Ted Dekker announced plans for a special Christian retail edition of which book, including an additional chapter?
A    Target
B    Adam
C    Skin
D    The Gatherers

3. The Shack author William P. Young identifies himself as:
A    Bill
B    Mack
C    Paul
D    Willie

4. Which Christian comedian became a YouTube sensation?
A    Chonda Pierce
B    Barbara Johnson
C    Miss Pattycake
D    Anita Renfroe

5. Thomas Nelson’s new retailer event in Nashville was called:
A    Homecoming    
B    No Show
C    Open House
D    Retailer Reception

6. Which Bible marked its centennial during 2008?
A    Revised Standard Version
B    Thompson Chain-Reference
C    New International Version
D    Good News for Modern Man

7. Who was named Male Vocalist of the Year at the Gospel Music Association Dove Awards?
A    Mark Hall
B    Aaron Shust
C    Bill Gaither
D    Chris Tomlin

8.  NFL coach Tony Dungy’s kid’s book, You Can Do It!, was released by:
A    Tyndale House Publishers
B    Little Simon Inspirations
C    Thomas Nelson
D    Zonderkidz

9. CBA’s Operation Worship campaign reached its 100,000 Bibles for troops goal within what period?
A    30 days
B    60 days
C    100 days
D    120 days

10. The Supplier of the Year named at the International Christian Retail Show was:
A    Baker Publishing Group
B    David C. Cook
C    Thomas Nelson
D    Zondervan

11. Which publisher marked its 70th anniversary during 2008?
A    Barbour Publishing
B    Crossway Books & Bibles
C    Moody Publishers
D    NavPress

12. Zondervan’s new e-book gift card program was named:
A    Inspirio
B    Ratio
C    Symtio
D    Zymtio

13. The Evangelical Christian Publishers Association’s (ECPA) Christian Book of the Year award went to:
A    3:16 by Max Lucado (Thomas Nelson)
B    Quiet Strength by Tony Dungy, with Nathan Whitaker (Tyndale House Publishers)
C    The Word of Promise New Testament (Thomas Nelson)
D    Inspired by… The Bible Experience: Complete Bible (Zondervan)

14. Greetings card company Life Publishing was sold by Dicksons Inc. to whom?
A    Gregg Gift Co.
B    DaySpring
C    Christian Art Gifts
D    Marian Heath

15. Which best-selling author gave the closing convocation at the National Democratic Convention?
A    Henry Blackaby
B    Max Lucado
C    Donald Miller
D    Jim Wallace

16. “Left Behind” co-author Tim LaHaye settled a long-running legal dispute with which company over movie versions of the books?
A    Cloud Ten Pictures
B    Left Behind Films
C    Apocalypse Entertainment
D    Nicolae Productions

17. Best-selling author John Eldredge announced he was leaving publisher Thomas Nelson for:
A    Atria
B    Doubleday Religious
Publishing
C    Free Press
D    Zondervan

18. The last name of the moviemaking brothers behind Fireproof was:
A    Coen
B    Jonas
C    Kendrick
D    Lalonde

19. Which music artist was honored for a 25-year career at a Nashville gala event?
A    Amy Grant
B    Sandi Patty
C    Michael W. Smith
D    Marvin Winans

20. After a six-year writing hiatus, The Prayer of Jabez author Bruce Wilkinson signed a two-book deal with:
A    FaithWords
B    Harvest House
C    Thomas Nelson
D    The WaterBrook Multnomah Publishing Group

21. Tyndale House Publishers took on distribution of a Sarah Palin biography from which publisher?
A    Alaskan Books
B    Northern Publishing
C    Epicenter Press
D    Moose Press

22. The best-selling Fireproof movie tie-in, The Love Dare, was published by?
A    B&H Publishing Group
B    Crossway Books & Bibles
C    Thomas Nelson
S    WaterBrook Press

23. R.G. Mitchell Family Books, the Canadian distributor that filed for bankruptcy, also had stores in which area?
A    Toronto
B    Vancouver
C    Quebec
D    Ontario

24. Which publisher offered a free-swap, good reading guarantee on its fiction?
A    Barbour Publishing
B    Bethany House Publishers
C    David C. Cook
D    Moody Publishers

25. The Spanish Evangelical Products Association named whom as Publisher of the Year?
A    Casa Creación
B    Editorial Unilit
C    Grupo Nelson
D    Tyndale Español

26. What magazine did LifeWay Christian Stores pull from its shelves because the cover featured female ministers?
A    Charisma
B    Christianity Today
C    Ministry Today
D    Gospel Today

27. What is the name of the Bible to be released in March by Free Press that will feature notes from pastor and author Joel Osteen and his wife, Victoria?
A    Hope for Today Bible
B    Your Best Bible Now
C    Faith, Hope and Love Bible
D    Your Best Life Now Bible

28. At what event will the ECPA announce its Christian Book Awards in 2009?
A    CBA Industry Conference
B     International Christian Retail Show
C    The Gathering
D    Christian Book Expo

Quiz of the Year answers: 1-C; 2-B, 3-C; 4-D; 5-C; 6-B; 7-D; 8-B; 9-C; 10-D; 11-B; 12-C; 13-C; 14-D; 15-C; 16-A; 17-B; 18-C; 19-C; 20-D; 21-C; 22-A; 23-D; 24-C; 25-A; 26-D; 27-A; 28-D.

Grade: 25-plus correct answers: Industry Expert. 19-24 correct answers: Well-informed. 14-18  correct answers: Average. 9-13 correct answers: Newcomer. 8 or less correct answers: Where were you last year?

‘Christian Retailing’ editors and writers reflect on what mattered most in 2008 and why

Books: Grass-roots marketing propels surprise best-seller
By DeWayne Hamby

The book that grabbed all the headlines and sold the most copies last year was William P. Young’s The Shack, the little book that could—and did. Originally self-published and energized by high-profile endorsements from Eugene Peterson (The Message) and singer Michael W. Smith, the novel found its real strength from grass-roots, word-of-mouth efforts before major publisher Hachette Book Group USA pushed it to an ever higher level.

“Have you read The Shack?” became the question of the year, while publishers who originally passed on it lamented publicly at the summer’s International Christian Retail Show (ICRS).

Nearing 4.6 million copies in print by year’s end, the book had stood on the New York Times Paperback Trade Fiction best-seller list for nearly half the year and been translated into more than 20 languages. Readers can look forward to a discussion guide, a DVD documentary on the author and even a major motion picture arriving in the near future, proving there is still steam in this unexpected engine.

Fireproof, the latest film from Sherwood Pictures (Facing the Giants) and Provident Films, was not only a smash on the big screen, but saw ancillary products fly off the shelves.

The marriage book The Love Dare (B&H Books/B&H Publishing Group), featured prominently in the film, debuted at the top of the New York Times Paperback Advice list and soon had more than 1 million copies in print.

The novelization of the movie, Fireproof by Eric Wilson (Thomas Nelson), also benefitted from the film’s success, selling more than 80,000 copies, hitting the New York Times Paperback Trade Fiction best-seller list and going back to print eight times.
Other big promotions at ICRS centered on study Bibles, as Crossway Books & Bibles and Tyndale House Publishers rolled out the ESV Study Bible and NLT Study Bible, respectively. Crossway quickly announced second and third printings of the new ESV after selling out of its original 100,000 units. Tyndale President and CEO Mark Taylor, noting that the NLT Study Bible was the second-biggest launch in the company’s history, said the Bible was “off to a great start,” although sales figures were not disclosed. In addition to new Bibles, milestones were celebrated for The Thompson Chain-Reference Bible (100 years) and the New International Version (30 years).

Still going strong from its release in 2007, Thomas Nelson’s The Word of Promise New Testament had what CEO Mike Hyatt called a “breakthrough” in 2008, winning the Evangelical Christian Publishers Association (ECPA) Book of the Year Award—marking the first time an audiobook had received the organization’s highest honor. The company plans to release the Old Testament and the complete Word of Promise audio Bible in the fall.

Thomas Nelson also generated other buzz during the year. In addition to its new Open House retailer event and its withdrawal from ICRS, the company announced the slashing of its book publishing for the foreseeable future, with CEO Mike Hyatt commenting, “We don’t need more books, we need better books.”

One book that did get published by the company was Stephen Mansfield’s The Faith of Barack Obama, one of a large group of politically oriented books that also included Jesus for President by Shane Claiborne and Chris Haw (Zondervan), Personal Faith, Public Policy by Tony Perkins and Harry R. Jackson Jr. (FrontLine/Strang Communications), Ronald J. Sider’s The Scandal of Evangelical Politics (Baker Books/Baker Publishing Group) and Sarah Palin biographies from Zondervan, Tyndale and Bridge-Logos.

Rob Bell didn’t shy away from politics in his latest book, Jesus Wants to Save Christians (Zondervan). The author, who headlined the 25-city, sold-out The God’s Aren’t Angry Tour, appealed to large crowds of young adults embracing fresh new voices, a growing trend that also included Erwin Raphael McManus’ Wide Awake (Thomas Nelson), Doug Pagitt’s A Christianity Worth Believing (Jossey-Bass) and Mark Driscoll and Gerry Breshears’ Vintage Jesus (Crossway Books & Bibles), among many others.

Best-selling author Rick Warren, who was quite visible in major media during the year, saw a Purpose-Driven follow-up released from Howard Books. In November, the publisher released The Purpose of Christmas with an initial print run of 1.8 million and a major media campaign for the holidays.  The same month saw Warren announce a partnership with the Reader’s Digest Association to develop the multi-media Purpose Driven Connection, including a quarterly magazine.


Music: Hopeful signs add some  life to a declining retail market 
By Cameron Conant

Continued declines in music revenues and layoffs at several record labels indicated that the music industry was still searching for a new financial paradigm in a digital music world. Throw in a troubled economy and the fact that Christian music fans continued to illegally download (and burn) music in large numbers, and things looked downright nasty for traditional retailers and labels.

But there were a few bright spots, not the least of which was the number of Christian songs used in prominent TV shows and advertisements. With overall album sales in decline across the music industry—even with the increase in digital music sales—licensing music to film and television has become an important revenue stream. “Make Some Noise,” the title track from the 2008 album by Krystal Meyers, was used in a commercial promoting NBC’s fall lineup, while Pillar’s “For the Love of the Game,” the title track from the band’s 2008 album, was featured on Major League Baseball’s Web site as well as on several ESPN programs, including SportsCenter.

But some Christian music was still thriving by appealing to the core churchgoing listener, with no one doing this more effectively than Casting Crowns.

The unlikely seven-person band, made up of men and women and fronted by a 39-year-old youth pastor, continued to make news as it finished a national tour and promoted its highly successful 2007 album, The Altar and the Door (the band also released a Christmas album—Peace on Earth—in 2008). Fittingly, the band won three major Dove Awards in 2008, including Group of the Year and Pop/Contemporary Album of the Year.

Other acts had a successful year as well, especially Natalie Grant, who became the first artist since Twila Paris in 1995 to win three consecutive Dove Awards for Female Vocalist of the Year. She released her latest album, Relentless, to strong reviews in February.

But it wasn’t just industry veterans who made news in 2008. Twentysomething newcomer Brandon Heath had a breakthrough year. Heath won the Dove Award for New Artist of the Year and saw his sophomore effort, What If We, strike a chord with audiences. The album’s first single, “Give Me Your Eyes,” sold more than 100,000 units as a digital download and was the top song on the iTunes Christian chart for more than three months.

For all of the new acts that come along each year in Christian music, it seemed that stories like Heath’s were increasingly rare in a crowded music market where the pie kept getting smaller and labels were hesitant to spend big money in marketing the newcomers.

That’s why acts that already have cache with audiences remained so valuable. One such group, Third Day, released one of the better Christian albums of the year with Revelation, proving that even after 15 years, a band can still sound fresh and re-invent itself.

Other top albums from 2008, from an artistic perspective, included Make Some Noise by Meyers, Resurrection Letters Volume II by Andrew Peterson, Dance or Die by Family Force 5, Around the Bend by Randy Travis, Love Out Loud by Jaci Velasquez, Roots by Shawn McDonald, Ring the Bells by Travis Cottrell and Salvation Station, the debut album from Canadian newcomers Newworldson.
Finally, it was a busy, and in one case, tragic, year for one of Christian music’s best ambassadors, Steven Curtis Chapman, who lost a child.

The year ended with Chapman and Michael W. Smith, who has a new worship album (A New Hallelujah) released in the fall, touring together for the first time—an uplifting ending to the year for Chapman, whose adopted daughter, Maria, died in an automobile accident in May.

More than two months after the accident, Chapman and his wife appeared on Good Morning America to discuss the tragedy. “Grieving with hope … that’s what’s kept us alive,” Chapman told ABC’s Robin Roberts in the interview, which was not only moving, but also redemptive.

The tragedy also brought new depth to one of Chapman’s best—and most recent—songs “Cinderella,” a beautiful ballad about a father savoring every moment with his daughter. Chapman didn’t know if he would ever sing the song again after Maria died, but he later decided that he would. ”

Gifts: Gift companies focus on strengths in tight economy
By Rhonda Sholar

All in all, 2008 was a quiet year for the gift industry as companies focused on maintaining the market share they had at Christian retail while looking at testing new categories or marketing strategies that would attract new shoppers.

While news of consolidations and mergers was frequent in 2007, similar major announcements were slim in 2008. In July, Life Publishing (formerly Lawson Falle) was sold by Dicksons to veteran general market company Marian Heath. In October, Roman Inc. merged with Cottage Garden Collections, both fiscally strong, family-owned companies that concluded that working together with common practices and values would further their businesses in today’s uncertain economy.

The summer months revealed the fragility of the greeting card industry, as Dickons’ sale of Life Publishing was followed by DaySpring’s announcing 80 layoffs and a subsequent cutback of its sales force. Divinity Boutique’s announcement that it would begin offering greeting cards further divided an already heavily fractioned pie.

The gift industry lost two larger-than-life icons with the April passing of Wally Bronner, founder of Bronner’s CHRISTmas Wonderland in Frankenmuth, Mich., and the October death of Anthony DeMasi, longtime editor of the general market magazine Giftware Business.

Two trends that continued in popularity were the creation of products whose sales benefit those who are less fortunate and suppliers promoting a green environment. From Gregg Gift Company’s “God’s Green Earth” line of totes and T-shirts to Jeramie’s use of recycled steel drums from Haiti to create crosses, companies looked out of the box to capture dollars to be spent by eco-friendly consumers. Retailers also learned of a bath and body line that benefits women in a residential home owned by Thistle Farms and scarves from Abbey Press that support battered women in Chile.

A number of gift suppliers made debuts or delved more deeply into the juvenile product category. DaySpring expanded its Really Woolly brand into baby products. While Kerusso had tried toys in the past, the introduction of “God’s Girlz” poseable fashion dolls was its first foray into the popular doll category. Christian Art Gifts entered the category with backpacks, water bottles and floor puzzles.

Companies benefited from working together in the area of distribution, seen as larger companies took smaller ones under their wings and provided a channel for products in places not possible when acting alone.

DaySpring was the leader in this with ceramic décor from Art of the Spirit, jewelry from Remember Me, baby clothing from His Gem and home décor from Creative Faith Place. Cactus Game Design stretched its borders by taking on a new category—dolls and action figures. The company distributed talking biblical character dolls from Messengers of Faith and action figures from Angel Wars.

The gift book category was still relying on well-known authors. Joining Max Lucado, Beth Moore and Billy Graham with gift books based on their other writings, sermons or seminars was Rick Warren. In October, Howard Books published The Purpose of Christmas, based on Warren’s most famous Christmas sermon.

The general market continued to be interested in introducing products into the Christian market. New Day Christian Distributors stepped up to the plate to help make the connection, signing on to distribute Jibbitz, the popular shoe accessory, and several Fisher-Price toys, including the iconic ViewMaster now with Christian discs.

With general market companies still trying to make inroads into the Christian market, Christian retailers and suppliers were being forced to look outside their own market for new business. The termination of CBA Advance, the long-running winter trade show, led stores and suppliers to seek other opportunities to buy and sell Christian gift products.

Some suppliers were turning to their own, more cost-effective, in-house sales events. Others looked to shop and sell at the smaller, more economical shows such as the Munce CPE (Christian Product Expo) regionals and Strang Communications’ annual The Gathering, now open to independent retailers as well as church bookstores. Others, working in conjunction with CBA sought to find a place in the middle of the general market gift industry at the winter AmericasMart gift show.


Children: Publishers expand multimedia content for youngsters
By Karen Schmidt

Taking into account the fact that children’s and tweens’ brains have been saturated with multimedia input, Christian publishers were presenting book content in nontraditional ways. Instead of longer blocks of text opposite a picture, many book products used factoids, blurbs or short text blocks in color to attract and hold visually oriented readers’ attention.

Fact and trivia books also showed their popularity. Betsy Schmitt, project manager for children and youth with Livingstone Corp., noted that kids love almanac-style books with images and bite-sized facts, such as The One Year Did You Know Devotions from Tyndale House Publishers, The Amazing Bible Factbook for Kids from the American Bible Society published with Time Inc. Home Entertainment, and Mary Manz Simon’s fact-punctuated The Anytime Bible, out this month from Scholastic.

It was heartening to see authors strive to produce creative books to instruct and reinforce spiritual truth in youngsters, spanning the topics of salvation, God’s nature, creation, heaven, prayer and relationships. Likewise, writers and illustrators kept up the flow of Christian titles that inspired and excited new readers—a worthy endeavor.

With the potential to attract non- or marginal readers, the manga art style and graphic novel format persisted in their upward growth in the Christian market, with Tyndale House distributing a three-volume manga New Testament from NEXT Inc. The company was also behind the publication of what was dubbed an “illustranovella,” a type of book that blends the fiction and graphic novel genres. The first such product, G.P. Taylor’s “The Dopple Ganger Chronicles” series, was expected to be a harbinger of more such visual product to come.

While growing in the general market, multiplatform experiences that hinged on kids’ involvement with digital media were only nascent in the Christian realm. Books morphed from being a destination for readers to being a launching pad or part of a sequence of experiences in learning, entertainment or adventure. Online time continued to increase, with a Symantec study revealing that while parents believed their kids were online about two hours a month, the children actually spent closer to 20 hours on the Web in that period.

Publishers continued to rely on celebrity names and already-popular authors to get interest rolling for new children’s titles. Super Bowl-winning coach Tony Dungy, country singer Tim McGraw and Jungle Jack Hanna debuted as children’s authors.


DVD: Growing home viewing   market continues to look good
By Andy Butcher

DVD was one of the hot categories of the year again—at least on paper. Two significant research reports spotlighted the recent and predicted big gains in the faith-based home-viewing market, though that potential still had to be fully realized at retail.

DVD sales in Christian stores grew 20% between 2005 and 2007, it was revealed in a movie-focused session at ICRS.

Belief in the growth of the market was reflected elsewhere at the event, with suppliers and distributors downplaying music in favor of DVD promotions. Preview screenings of Fireproof, the follow-up movie from the church-based makers of surprise hit Facing the Giants, were one of the big special-event attractions of the week.

Another popular draw was Fox Faith’s concert-reception promoting the coming Mama, I Want to Sing!, highly anticipated after a quiet year for the early runner in the inspirational movie market.

The switch in emphasis from music to movies evident at ICRS was underscored soon after the event with a prediction of more to come by market research group Packaged Facts. Its latest guide to The Religious Publishing and Products Market in the U.S. placed audio, visual and software (AVM) products collectively second in sales volume only to books—pushing inspirational gifts to the third spot.

Despite such positive reviews, most retailers continued to pursue the category somewhat cautiously. Each of the major Christian chains featured DVDs in special offers during the year, while a number of independents reported steady if not stellar increases in sales as they gave more time and attention to movies.

In the features arena, there were more gently “inspirational” or family-friendly films released than specifically Christian, such as the acclaimed pro-life drama Bella. Notable exceptions, with strong biblical content, were a well-received adaptation of Robert Whitlow’s novel The List and Saving God: One Soul at a Time from “Left Behind” moviemakers Cloud Ten Pictures.

The demand for a clear faith message was emphasized with the September theatrical release of pro-marriage drama Fireproof. The movie took in an astonishing $30 million in its first few weeks, surprising Hollywood and exciting retailers about the forthcoming pre-Valentine’s Day DVD release.

While some expressed concern about possible flagging in the children’s viewing area, category pioneer VeggieTales continued to dominate, bringing back to stores its popular “3-2-1- Penguins!” series after its revival on kids’ television. Meanwhile, Thomas Nelson and Tyndale House Publishers saw growing interest in their “Gigi” and “Friends and Heroes” series, respectively.

Movie companies hoped to add some weight to 2008 receipts with end-of-year DVD releases for earlier theatrical releases The Pirates Who Don’t Do Anything: A VeggieTales Movie from Big Idea and Expelled: No Intelligence Allowed from Premise Media. Christian retailers also hoped for interest in Walt Disney Pictures/Walden Media’s December release The Chronicles of Narnia: Prince Caspian.


Catholic: Political season offers publishers media attention
by Terry Walsh

A resurgence of interest in Catholic tradition was further fueled by 2008’s contentious political season that thrust Catholic doctrine onto front pages and into the blogosphere, sharpening the focus on who Catholics are and how they live out their identity.

Most Catholic publishers took a nonpartisan approach to the election with titles that stuck closely to educating on doctrinal issues to form faithful citizens, faithful Catholics. Liturgical Press’ pocket-sized Vote Catholic? Beyond the Political Din by Bernard F. Evans first sold through bookstores, but closer to the election, parish groups did most of the buying.

On the other hand, non-Catholic publishers chose to promote prominent Catholic personalities and published distinctly partisan titles. A notable example was Can a Catholic Support Him? Asking the Big Question About Barack Obama (Overlook Press/Penguin Group (USA)) by noted legal scholar Douglas W. Kmiec.

This, along with interviews of Catholics Nancy Pelosi and Joe Biden on their views on the Church’s abortion teachings, gave the general media, from Newsweek to blogs, the opportunity to address Catholic social teaching, including abortion, immigration and welfare. Many sides weighed in and offered Catholic publishers opportunities to promote their books covering these topics.

Politics aside, Catholic tradition garnered attention with documentaries on the monastic life. Soul Searching: The Journey of Thomas Merton, with a book of the same name by Liturgical Press, aired on PBS in December. Perennial interest in this spiritual leader’s life and writings became fodder for many other titles.

With the Catholic Church naming June 28, 2008, to June 29, 2009, the Year of St. Paul, marking the bi-millennium of the apostle’s birth, publishers have responded  with titles ranging from the exploration of Paul’s epistles to his use of imagery. Many of these are expected to make good crossover titles into Protestant readership.
The popularity of books on more contemporary exemplary Catholics, such as Our Sunday Visitor’s Mother Teresa’s Secret Fire by Joseph Langford and books on the two most recent popes, showed the public’s interest in the lives of those who follow Catholic teaching as a steady compass in turbulent times.

An uncertain economy did not keep retailers away from the two prominent trade shows. The Religious Booksellers Trade Exhibit, located outside Chicago, drew the same number of retailers as last year. Lutherans, Episcopalians, Catholics and others from a wide swath of the country attended.

On the East Coast, the Catholic Marketing Network (CMN) International Trade Show returned after four years to Somerset, N.J., for its annual August gathering that drew slightly more attendees than the previous year.


Spanish: Christian market expands south of the border
by Harold Goerzen

Despite turbulent global economic conditions, the Spanish evangelical products industry again experienced solid growth in 2008—especially in Latin America. A weak U.S. dollar early in the year combined with emerging Latino economies and a reticence on behalf of independent Christian bookstores to embrace Spanish products resulted in a growing proportion of business going south of the border.
“We experienced double-digit growth in all of our sales channels,” said Jim Cook, vice president of international sales at B&H Publishing Group.

One of the company’s top sellers this year was Diccionario Bíblico Ilustrado Holman (Holman Illustrated Bible Dictionary), the result of a four-year translation project specially edited to fit the needs of the Spanish market.

The jury is still out on how the recent economic downturn and rising U.S. dollar will affect the industry as a whole. Attendees at ExpoCristiana Mexico in October concluded it could be six months before Latin American economies feel the impact. In anticipation, Spanish publishers are taking measures to cut costs, reducing the quantity of products they’re releasing while emphasizing quality.

Although there was no single top-selling title that drove the market in 2008, Jentezen Franklin emerged as a leading author with translations from Casa Creación, Strang’s Spanish imprint, such as El ayuno (Fasting) in March and Crea que usted puede (Believe That You Can) in October.

The year also saw the launch of a new Bible translation as Grupo Nelson, Thomas Nelson’s Spanish division, released the easy-to-read Nueva Biblia al día.
Produced by the International Bible Society, the translation was an updated version of Biblia al día, based on Ken Taylor’s paraphrase, The Living Bible, which was published in Spanish in 1979.

Editorial Portavoz, Kregel’s Spanish division, saw brisk sales of its La Biblia cronológica, a translation of the best-selling The Daily Bible from Harvest House Publishers.

Casscom Media also launched the 63-CD audio Bible featuring the 2000 Reina-Valera version of the complete Bible, narrated by Juan Alberto Ovalle.  This was one of the company’s many audio releases in 2008 in response to the growing demand for Spanish audio products.

The industry said farewell to David Vila who died Sept. 22 at the age of 74. A pioneer in the publishing and distribution of Spanish Christian literature in the Americas, he also founded the publishing house Editorial CLIE with his family in Barcelona, Spain. Today, it is one of the largest and most respected Spanish-language publishers.

Good inventory control must be at the core of any successful store’s operations

To demonstrate the difference modern inventory tools make, Robbie Edgar reaches back to Billy Graham’s 1977 release, How to Be Born Again. After a first printing of several hundred thousand copies, Word ordered a second run—not realizing many first editions were still sitting on store shelves.

“A year later you could buy the hardback at $1 (a) copy because all those second printings were returned,” said Edgar, senior vice president and chief distribution and logistics officer at STL Distribution North America. “There wasn’t that visibility in the system.”

Now, retailers can track sales of titles and other products daily, see what’s selling nationwide and regularly fine-tune inventory, reducing the need for a time-consuming annual review every January.

Such abilities are critical in dealing with today’s competitive realities: tighter margins, the Internet and everyone from Wal-Mart to Books-A-Million stocking Christian products, said former-retailer-turned-technology provider Randy Voorhees.

“You have to be more on your toes,” said Voorhees, founder of Bookstore Manager, one of the Christian market’s earliest P.O.S. and inventory control systems. “Twenty years ago a bookstore’s margins were large enough that you could make inventory mistakes.”

Various bookstores have made good use of these ongoing advancements.

At Parables in Omaha, Neb., the store uses its IBID P.O.S. system, inventory reports from The Parable Group, current cycle counts and various core lists to monitor stock monthly. If they haven’t sold at least two copies of a book in the last year, they return or discount it.

The previous owners did not do regular returns, said Bill Alford, business consultant for the store that he and wife, Dorothy, purchased in 1983.

“They kept titles on the shelf until they sold out,” he said. “Now we pull returns monthly if the titles don’t sell in a stated time. We discount any of those titles that may not be returnable.”

Parables believes in acquiring most of its stock from distributors, going back to a mid-80s CBA talk by distributor Spring Arbor’s founder, Jim Carlson. He advised retailers to purchase small quantities of books from distributors for faster turnarounds, even though publishers offered better discounts.

Despite the discounts, bulk buys from publishers meant carrying a 6-to-8-month supply of books and tying up considerable sums. Alford said ever since “buying in” to Carlson’s idea, they order daily ones and twos of items as needed.

“The Parable Group gives us reports of the best-sellers,” Alford said. “We try to keep those in stock. We also have several publishers who let us know about their core inventory so we can order the core titles. Gift merchandise is a little different. It all depends on the skill of your buyer, to pick items customers will want, both ‘never-outs’ and unique new items.”

At Trinity Gifts & Books in Richmond, Ind., owner Marcie Chamness started using Above the Treeline (ATT) in the fall of 2007 to help her get a handle on stock at her 35-year-old store.

“I’ve got 1,000 books in here, and I’d like to reduce that number,” said Chamness, who purchased the 2,200-square-foot store in 2006. “ATT has helped me tremendously. It helps tell me what’s selling in the industry. It’s taking inventory of everything and telling me what is selling on the Christian bookstore side and what I’m out of stock on.”

That helps the Munce affiliate do reviews once or twice a year, after seeing what books ranked in the top third of sales and what volumes need to be re-ordered. This system has filtered to the bottom line: after averaging 1.5 inventory turns in 2006, that number climbed close to 2 last October.

In addition, a $4,000 loss in 2007 had turned into a similar gain eight months into 2008. June was the only month of the first eight last year that didn’t register improvement over the previous year.

‘Better discounts’

When it comes to core lists, Chamness labels Tyndale House Publishers’ the best, saying it offers the best discounts and free freight with a certain minimum order.

“I am all about better discounts and free freight,” she said. “Every vendor has their list, but the Tyndale rep sees what I have in and sends me suggestions as to what I need to get in. I use (core lists) to help me sell in my gaps when I need it.”

Technology also helps Anita Eversole at On a Wing and a Prayer in Plano, Ill., about an hour southwest of Chicago. Her two major challenges are cash flow and the balancing act required at her store, which stocks 50% Catholic material and 50% evangelical.

In back is Daniel’s Den, a Christian coffeehouse and concert center that opened in 2001. The 4,000-square-foot, warehouse-type building hosts concerts on Fridays and Saturdays, with her daughter and son-in-law overseeing that venture.

Though she bought the 2,700-square-foot store in 1999, the last two years have proved the toughest. First Eversole got a near-fatal staph infection and was off work for three months in the summer of 2007. Then her husband died of heart failure early last year.

The loss of his income forced Eversole to take another job in the nursing industry, leaving her scrambling when she visits the store.

This makes the help she has received from ATT and CBA’s Cross:Scan that much more valuable. Without assistance from CBA Training Manager Mike Hockett in interpreting electronic feedback, Eversole said she likely couldn’t have summoned the courage to continue.

“When he first talked about (ATT), I said, ‘Mike, you’d be crazy not to do this, wouldn’t you?’ ” she recalled of their initial conversation a few years ago. “He said, ‘That’s what I’m trying to tell people.’

“When CBA came up with Cross:Scan (in October of 2006), it was invaluable. There was nothing like it available before. I know what’s selling in my store, but this gives me a look at a wider area. We go there if we need to re-stock or if it looks like we need to refresh an area. We go there and pinpoint what’s happening in the industry.”

Eversole especially likes the way she can filter out various data to look at particular Bibles’ sales or certain best-selling books. Since Cross:Scan primarily measures Christian stores, she likes it for an industry snapshot, while relying on ATT to examine regional trends.

These systems help her determine what Bibles to stock, such as how well a single version has performed. Still, the merchant’s awareness of local trends is important. For example, although the King James Version sells poorly in Plano, Eversole recognizes the need to stock some for customers wanting to give that Bible as a gift.

“Before we had this, you had to look at information in your P.O.S. and then guess,” she said. “The first month we used Cross:Scan to do Bible sales, we increased 38%. And this wasn’t in a key month, so we knew Cross:Scan had done that. We also did it in books.”

‘More understandable’

Bob Steele of ATT’s Nashville office said it has contracts with 300 Christian stores and 225 in the general market. The sales and business development officer said retailers’ success with the system varies, according to how each one uses it.

“Some still use their P.O.S. to manage inventory and some use it to ring up sales,” Steele said. “Some use (ATT) actively and with others, when I go to conferences I hear them say, ‘I don’t use that enough.’ ”

The former store owner wished a system like this had existed when he was in retailing, though acknowledging he has always been an advocate of employing technology to simplify our lives. While it can at times complicate situations, used correctly technology can improve business performance, Steele insisted.

“(ATT) takes information they are used to looking at in one form and puts it in another,” Steele said. “It makes it more understandable and actionable.”

A cooperative venture with CBA, Above the Treeline is one example of how the industry has reached out to retailers. Another goes back to 1997, when former Spring Arbor President Larry Carpenter and Parable CEO Steve Potratz hit the speaking circuit to promote “Just in Time” delivery.

Now president and publisher of Standard Publishing, Carpenter said the two spoke at numerous industry events and visited as many stores as possible, creating slide shows and handouts.

Back then the concept was relatively unknown, but Carpenter said they ultimately showed store owners a new way to think about business and helped them lower operating costs.

“Where there is no question that the chains, general bookstores and mass merchants have negatively impacted independent Christian bookstores, compared to other retail segments ‘mom and pops’ have fared well,” Carpenter said. “They are still a strong segment of the marketplace.”

Meanwhile, Potratz’s company has developed a system for its 180 stores—including 60-plus franchises—known as Essential Inventory. Generating weekly reports based on sales throughout the Parable system, just over a third of its stores take advantage of it.

Data Manager Erik Ernstrom said there is a monthly fee to use Essential Inventory, with some stores choosing not to participate because they are too small physically, don’t carry enough stock to justify the cost, or think it will be too time-consuming.

However, he thinks it simplifies life for those who use it: “You can try to keep track of eight or ten vendors, or you can do one (core list) and get back on the floor. Why aren’t stores doing a promotion every month? They should be, but they’re not.”

Most industry surveys have shown that the average store is in the 40s or low 50s when it comes to the percentage of best-moving merchandise they stock. Ernstrom said Parable has been able to move participants in its inventory program into the 80s, helping them achieve three to three-and-a-half inventory turns annually, depending on the product list.

After seeing a 2% increase in profits and more products moving through her store, one participant told Ernstrom that she wished she hadn’t waited so long.

“Those are bottom lines that have proven themselves,” Ernstrom said. “Our stores sell 16,000 books a quarter. How do you decide what to sell? A new store doesn’t have a clue. I know a lot of stores who started the program and realized they had a lot of stock sitting on the shelves.”

‘Sales problems’

CBA has also played a role with initiatives that have helped retailers focus on key inventory as well as disciplines, customers and staff, according to President and CEO Bill Anderson. It recently launched a model inventory test program that takes the most recent 52 weeks of retail sales trends and matches it with a store’s to create a model inventory for each department.

“Invariably, when retailers call CBA with cash or sales problems, they can be traced to inventory management,” Anderson said. “Inventory makes up about 65% of any retailer’s store investment. Getting a return on that inventory investment is essential to remain in business (and) ministry and be able to serve customers.”

The challenge of what to stock is changing too, amid round-the-clock competition from the Internet. With customers able to buy any product at any time, price and place, and specialty stores delving into deeper niches, Christian stores must become a special place reflecting their customers, Anderson noted.

Not only is what happens inside the store important, so is maintaining that relationship afterward through Web and mobile technologies, Anderson said. He said communication gives customers reasons to return instead of losing them to competitors who “cherry pick” products.

“In the end, it is the inventory and customer experiences that contribute to success,” he said. “This is why exclusive products, backlist, special packaging, special services and special outreach and connection are important in retailing today.”

Despite multiple data collection services, publishers continue to offer core programs. A spot check by the Evangelical Christian Publishers Association (ECPA) showed that nine of 10 respondents maintain core lists, ranging from 25 to 600 titles.

CBA also maintains a core inventory report listing the top 1,000 titles sold in Christian stores, based on suggested retail price. Titles are ranked by dollar sales, alphabetically and Christian Product Codes (CPC).

Many of these efforts have only stirred a lukewarm response. A Christian Retailing “Vital Signs” industry survey last fall found that only 46% of retailers said they achieved better selection under the plans. Just 38% said they had seen sales increase as a result.

‘More vision’

Wayne Hastings, senior vice president and group publisher in Thomas Nelson Publishers’ Bible division, said his company’s core list gives retailers a target when deciding which of its products to stock.

“I think it gives them a way to look at what we do and let them know from national statistics what our best-selling titles are so they can make sure they are in stock,” said Hastings, formerly an executive with Parable.

“That’s always been the benefit of core—aggregating data at a national level instead of local, so it gives you a little more vision to how well products are doing,” he added. “Then, it gives you back reports that say, ‘OK, these are the holes in my inventory.’ ”

Although acknowledging that some retailers probably get frustrated with the number of core programs, Hastings said that at Parable a small number of vendors did the majority of volume. So, by managing six or seven vendors retailers can usually cover 80% of their business, he added.

The best thing retailers can do is rely on these reports’ tracking and re-order products when they perceive holes in their stock, Hastings said, since any core program will show stores what is selling. If in doubt, he suggests retailers trying one out for 90 to 120 days and seeing whether they achieve success.

However, he also advised paying more attention to inventory turns than vendor discounts, calling the latter the wrong reason to get into a core program.

“You can’t bank discounts,” Hastings said. “Between 40% and 48% discount does not matter to an independent retailer. They would be better off buying in shorter discounts and turning their inventory more frequently.”

The initial concept of core inventory was popular because everyone understands the importance of carrying a certain group of titles, said Michael Covington, director of information and education for the ECPA.

Most publishers understand the shared responsibility of reporting between their sector and retailing, which led to core lists becoming part of a collective inventory management, said Covington, also a former retailer.

Covington liked core lists when he made buying decisions, saying he would look at sales over the previous eight weeks and aim to keep 50% of the copies sold on his shelves. So, if a book sold eight copies in two months he kept four in stock.

No matter what technological resources used, though, retailers have to know their inventory like the back of their hand, he said.

“Not just in an academic sense,” Covington said. “I mean getting out on the floor. Know what you have. That’s what customers are looking for. They have questions, and they want someone to answer them. You’ve got to do better than an Amazon review. Inventory is the tool to do that.”