A GOLDEN OPPORTUNITY

Success in the booming children's book industry isn't child's play.Retailers and distributors are relying on a variety of strategies to play on consumers in order to help maximize profitability in this high-impulse category.Children's book sales are about 30% ahead of where they were this time last year for the Georgia division of Cub Foods, which has 17 stores with up to 110,000 square feet. Said

Success in the booming children's book industry isn't child's play.

Retailers and distributors are relying on a variety of strategies to play on consumers in order to help maximize profitability in this high-impulse category.

Children's book sales are about 30% ahead of where they were this time last year for the Georgia division of Cub Foods, which has 17 stores with up to 110,000 square feet. Said Ray Wallace, director of nonfood merchandise, "Children's books are a nice, profitable, low-maintenance category that all supermarkets should carry."

Industry sales data supports his assertion. According to the Association of American Publishers, with offices in New York and Washington, D.C., in 1999 book sales totaled $24 billion in the U.S., a 4.3% increase over 1998. Juvenile book sales, which totaled 1.7 billion, showed double-digit increases in 1999 with paperbound sales up 23.5% and hardbound sales up 11.1%. Children's book sales make up 14% of all books sold. It's estimated that 16,000 supermarkets carry children's books.

The sales boost in the children's book category is attributed to several factors, the main one of which is television, movie and merchandising tie-ins. Additionally, during the last few years, the Harry Potter series has worked its magic to single-handedly turn the industry on its ear. With more than 35 million books sold, the series is largely credited with helping to boost children's book sales above the $1 billion mark for the first time ever.

"As far as our product mix, many say that licensing rules the category, but for us, it's been a mixed bag. I wish I had a crystal ball to determine what will definitely sell. During their peak, I couldn't keep Pokemon and Harry Potter books on the shelves. On the other hand, there have been many other book properties that were considered 'hot' that didn't do so well," said Wallace.

What does work well for the chain are traditional pre-school titles, and multi-packs that include books with stickers, crayons and other add-ons. Combining books, toys, videos, plush items and games with the same characters or themes together in high traffic areas has also proven successful. Integrating book departments within the cereal aisle and merchandising hot new and best-selling book titles together near checkstands and in the stores' book centers have helped to boost sales. By wing-stacking comic books in automotive and hardware departments, the chain captures young male traffic, the primary connoisseurs of comic books. "With everything we do in this category, we strive to project a good visual impact that makes it virtually impossible for customers to pass up," said Wallace.

Kroger-Atlanta, which operates 164 stores in three states, allocates anywhere from six to 30 feet for books, including magazines. In some of the chain's newer, larger stores, book centers have been built that include sofas and comfortable chairs for browsing.

The children's book industry relies heavily on point of purchase displays, and it's viewed largely in the supermarket channel as an incremental sales opportunity. Research shows 65% of sales are incremental purchases. In Kroger-Atlanta, some of the hotter children's book titles are merchandised and out posted in sections such as the toy aisle and at checkouts. During seasons such as Christmas and back-to-school the chain carries out cross-merchandising by tying Barbie books to Barbie dolls and Pokemon books to Pokemon cereal.

"Consumers don't have time to buy groceries, and then go to a store to buy books, and then to another one to buy toys. By selling books and other impulse items in our stores, the time-starved consumer really benefits from the one-stop shopping concept," said Judy Burge, manager of community activities, Kroger-Atlanta.

Year-round, the chain does a lot to promote literacy, including monthly read-ins, a customer loyalty program where a percentage of purchases are donated to Atlanta schools and an annual lending library event, where shoppers swap books. Golden Books often donates product to the chain for its reading-focused events.

Golden Books, New York, sells products featuring today's popular licenses such as Pokemon, Powerpuff Girls, Scooby Doo and Barbie, as well as children's classics such as The Poky Little Puppy, Rudolph the Red-Nosed Reindeer and Pat The Bunny. In supermarkets, one of every three children's books sold is a Golden Books product. Supermarkets make up 7% of the publisher's sales.

"It's important for supermarkets to optimize opportunities by adding value to enrich the book purchasing experience," said Rich Maryyanek, senior vice president of marketing for the company. Golden Books does so by selling crayons in the shape of bones with Scooby Doo books, merchandising glitter pens with Powerpuff Girls activity books and selling heart-shaped stick-on jewelry and clothes with Barbie books.

Another way the company is adding value to the category is by hosting its popular Big Little Golden Books Read-In, now in its second year.

Kroger will participate in the Read-In by hosting a weekend of literacy-based events in Atlanta's Centennial Olympic Park in October. "Participating in Read-In 2000 is our gift to the Atlanta community. We think it's important to encourage literacy. It fits in perfectly with our corporate culture and mission, and supports our philosophy of promoting children's health, wellness and education," said Burge. The community-based nationwide Read-In 2000 event, which begins this month and runs through mid-November, consists of read-ins featuring popular celebrities at 6,000 locations nationwide.