How Dymocks has survived 140 years in retail

A drive to innovate, experiment and invest in its brand and business has helped Dymocks outlast some of Australia’s most venerable retailers since it was founded in 1879.

The bookstore chain is celebrating its 140th anniversary with in-store events this month and throughout the rest of the year. It’s a milestone that few Australian retailers can say they have reached, and Dymocks has done it in a shrinking sector.

According to IBISWorld’s 2018 report, annual revenue growth in the bookstore industry is expected to decline at an annualised 3.1 per cent over the five years to 2023-24, after contracting at an annualised 6.7 per cent over the five years to 2018-19.

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Like all retailers, bookstores have struggled under difficult trading conditions and diminished consumer sentiment in recent years, as well as increased competition from discount department stores and international online players.

But unlike other sectors, bookstores may be uniquely impacted by changing consumer lifestyles. The rise of Netflix and Instagram means consumers are spending more of their free time doing activities other than reading, which has likely impacted sales.

That is why Dymocks has spent the past few years positioning itself for growth in new areas. The chain acquired stationery distributor Telegram in 2015 and now sells Moleskin journals, Lamie pens, cards and wrapping and other ‘book adjacent’ products that people tend to buy as gifts.

Non-book products make up around 40 per cent of total sales in some of Dymocks’ largest stores, and 20 per cent in many other stores. And Dymocks managing director Steve Cox believes this is where the business will derive much of its growth in the future.

“We’ve got books on every subject and topic, so it makes sense to have a complementary range of products. That whole gifting piece is really important,” he told Inside Retail.

“At the end of the day, customers should be able to come to Dymocks and fulfil all their gifting needs, from wrapping paper to book-related to educational toys for children.”

A recent example of this diversification strategy was Dymocks’ partnership with The Daily Edited on a pop-up in its George Street store in Sydney. Customers could shop a range of the leather brand’s desk and tech accessories and personalise them on the spot.

“That was a great example of us bringing non-book products into the retail environment and surprising and delighting customers,” Cox said.

“It did incredibly well… We’ll be doing more and more with brands we have as part of our stable, but also other brands.”

Investment in digital

At the same time, Dymocks has invested in its digital capabilities and in January, the brand relaunched its website to improve its search function and make it easier and more effective to sell non-book items online.

Dymocks has also invested in machine learning and artificial intelligence to tailor its product recommendations and communications to customers on a more individual level.

“A big part of our growth over the past five to seven years has been from our investment in our Booklovers loyalty program,” Cox said.

“We’ve gone from not knowing what we didn’t know to having much better customer segmentation, where we understand their needs and where they are in their lifecycle. Ultimately, we will start communicating with them as individuals as opposed to groups.”

Like many omnichannel retailers, Dymocks’ investment in technology is about driving customers into its bricks-and-mortar stores. The chain currently has 60 stores across Australia, 55 of which are owned by franchisees.

While the e-commerce site is run by Dymocks’ head office, Cox said franchisees understand the way the two channels work together.

“We use search information from the website every week to better identify what

we may be missing so we can put buys in place or change the way we merchandise,” Cox said.

“It gives us live and daily feedback.”

As long as Dymocks continues to adapt to changing consumer wants and needs, Cox believes there’s no reason the bookstore chain can’t be around for another 140 years  – or longer.

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