"World of Books should leverage its key strengths: customer relationships, knowledge of local customer preferences and an experienced sales staff." Ranjan Banerjee, Director, Renaissance Consultants

There are two broad issues that world of Books needs to address on an urgent basis. First, the entry of high-calibre competition that offers a superior overall buying experience, particularly in terms of a more complete inventory, ease of browsing, customer-friendly hours, motivated staff and a well-planned loyalty programme. Second, issues of employee retention and the unsuitability of Siddhartha's management style in the changed context.

World of Books needs above all else to understand and leverage its key strengths: the relationships and goodwill that it has built over 17 years in the business, its insights into local customer preferences and readership habits and an experienced staff with strong merchandise knowledge.

The bookstore should realise that it cannot be all things to all people, and try to provide merchandise depth in its two key areas of strength-literature and business. A sharper focus will allow the bookstore to create more space for books in these categories, neutralising the merchandising advantages of competition. A complete benchmarking of inventory vis-a-vis competition should be done to understand the real gaps. Significant gaps within the two focus sections should be traced to the source, and appropriate changes in buying and merchandising need to be initiated.

The second step is to translate the customer insights of the store salespeople and Debabrot himself into improvements in World of Books' operations. Names and addresses of customers, along with their preferences and purchase history, should be captured in an electronic medium and used for the promotion of the store's merchandise. For the convenience of regular customers, telephone or web ordering could also be offered. Short-term inventory bottlenecks could be offset by re-engineering backend processes.

Parallel to this, steps need to be taken to improve the bookstore's performance in the areas of customer relationships and employee motivation. This requires a leader who can balance long-term relationship-building with task-orientation. Siddhartha should be moved to the sourcing side of the business and Debabrot should take charge of the store again. This will have a salutary effect on the employees' morale and provide much-needed reassurance to loyal customers. To give customers a more complete buying experience, Debabrot must also bring in top-notch professionals to enhance store merchandising and train his people in customer service.

To prevent share erosion, Debabrot must always have on his fingertips key performance indices such as footfalls per day, purchase conversion ratio (the percentage of visitors who actually buy) and average bill value, and constantly benchmark these figures against the best stores in the business.

"Debabrot needs to segment the book-buyer market and focus on catering to the sophisticated buyer by offering him additional value and personalized service." Ajay Kelkar, Head of Marketing, Shoppers' Stop

The challenge world of books faces is two-fold. On one hand, the Indian consumer is changing and, on the other, reading habits of people are changing (driven by fast-paced lifestyles and competition from television and internet). Shopping, whether for books, music, apparel or lifestyle, is becoming more of 'shopatainment'. Increasingly, consumers are becoming time-starved and there is an overlap between shopping and entertainment. The reading habits of people too have undergone a dramatic transformation. A combination of all these factors is causing a decline in the reading habit.

So, to rev up book sales and break out of the rut World of Books is in, the store must carefully segment the book-buyers according to their intensity of interest in books. Classified thus, you have the 'book devotee'-the guy who really adores books, is extremely picky about what he buys, buys widely across a range of genres, and reads everything he buys. Then you have the 'classical book lover'-who equates books with classics and literature and who doesn't consider a coffee table book a book. Then comes the 'book casanova'-one who has an intermittent affair with books. And finally the 'book user'-someone who is purely a need-based purchaser of books. Stores like Book Lovers' Den are more likely to attract more customers of the 'book flirt' and 'book user' variety than the serious buyers of the former kind, leaving more than enough space for bookstores of the kind Debabrot runs.

The heavy consumers-the book devotee and the classical book-lover-who spend serious money, are usually also extremely price-sensitive. The store owner Debabrot should use his buying skills to source books intelligently and aim at delivering superior value to this category of people.

Debabrot must also look for chinks in the large-format retail category-a large-format retail chain buys nationally and caters to pan-Indian tastes-that might have crept into the BLD armour. Debabrot must examine how focused buying and merchandising for the local consumer can give his store an edge. He could use his intuitive understanding of 'book-buying behaviour' to good effect here.

Large-format book retailers like BLD also usually seek to broaden their merchandise assortment to include allied categories like toys and music. This often results in their image of being pure-play bookstores getting diluted with the core book customer. Debabrot must capitalise on this.

Debabrot has built up his brand equity through 17 years of maintaining relationships with book lovers. Such relationships cannot be built overnight, even if competitors have deep pockets, in this market. Debabrot must enhance these personal relationships by connecting with customers on a personal level. Organising book-reading sessions and launching a loyalty program to reward his faithful customers would also help.

"World of Books needs to connect with the youth segment. This will automatically translate into higher repeat purchase rate and creation of a long-term customer base." Hemendra Mathur, Manager (Retail Practice), KSA-Technopak

The only way to grow in the retail business is to constantly differentiate yourself. To compete effectively, World of Books needs to innovate. This is the only way out for the bookstore, given the circumstances. Debabrot should embrace change instead of resisting it.

To differentiate WoB from the likes of BLD, a three-pronged strategy is in order. First, Debabrot must focus on stopping the exodus of customers. Second, he needs to think of ways to attract new customers to broaden his customer base. Third, he needs to identify two or three key areas that will give his bookstore a distinct edge over others.

His first priority should be to stem the exodus of customers to BLD. WoB has built strong ties with its customers over 17 years. It seems that WoB's customers are typically middle-aged people who are avid readers and have a clear preference for literary books. The bookstore now needs to innovate further to consistently provide them with an improved retail experience.

Debabrot needs to diversify his merchandise mix. He also needs to improve the non-literature section in his bookstore and use inputs from his existing customers while doing so. As far as literature is concerned, he should work towards bringing in greater depth. He needs to make sure that at least 20-30 per cent of the titles in this category are different from what is available at BLD or at least acquired by WoB before BLD stocks them. His goodwill in the publishing community should assist him in achieving this objective.

Debabrot's second task is to attract new customers and first-time purchasers to his store. It appears that WoB is losing out to BLD in the youth segment. He should begin by stocking other youth-related items like interactive CDs, games, and educational software to draw the younger customers. He should pick out the leading schools and colleges in the city and service their libraries through bulk orders of educational and other books.

Then, he could also attract the youth by participating in book fairs and other school or college events. Once the youth start identifying with WoB, it will translate into higher rates of repeat purchase and a stable long-term customer base.

Finally, WoB needs to work on building a sustainable competitive advantage. Debabrot should leverage the family publishing business and publisher-relationships to get access to a larger variety of books. To gain an edge over his competitor, he should consider introducing marketing techniques like customer clubs and in-store references, reviews and discounts (similar to those of Amazon.com). On the basis of its strong understanding of the local book-buyers' mindset, WoB should look at the possibility of scaling up the number of stores. A chain of bookstores will go a long way in checking the erosion in WoB's customer base.

These three things, if well implemented, will not only reduce the threat of WoB losing marketshare, but also open up new growth avenues for the bookstore.