The Exchanges

Q You probably didn't have a plan for what to do. I mean, the answer was just, let's just shut down, and, but it wasn't like, let's shut down and move online, right? I mean, you didn't.

A Right. We have our e-commerce business, which is successful, but in the moment we fully expected that the governor was going to require all, you know, non-essential businesses to shut down. And for us, that meant our warehouse that operates Powell's.com. So we laid off quite a number of employees in large part because we expected we were going to zero. We expected we were turning all the lights off. We would not be shipping anything out. Um, but I was in touch with her team and they said, no, we want you to keep, you know, your internet business going. We want as many people employed as we possibly can have on health insurance during this time. And I said, okay, we can do that. So we pivoted as quickly as we could, um, to bring some people back, not knowing if we'd have any business to pay them. Um, but we had a pretty big spike in orders within the first couple of weeks of the shutdown in March. And that allowed us to kind of plow through the first month or two before we could kind of get our wits about us.

AI assessment note: “Right. We have our e-commerce business, which is successful, but in the moment we”

Q that. Um, so let's kind of talk through, you know, there was an initial spike in online sales because for a variety of reasons, people were staying at home and were hunkered down. Um, now we're, you know, sort of nine months into this. Tell me where, where things stand right now. I mean, presumably Powell's, the bookstore, you are allowing people in, but a limited number of people in?

A That's right. So we closed all of our stores. We kept our internet business going over the summer. Towards the end of the summer, we were able to open a suburban store. That's one very big space. So we felt much more comfortable just opening that store to a limited number of people as a sort of test place to practice. Um, our other stores were sort of known for, well, this room leads to that room and there's this little hall and that's there, there's this corner. And so we had to be a lot more cautious and thinking through how to open those stores. Um, but we did open, um, this fall. Limited days, limited hours, a much different experience. The downtown store, which is our flagship, it's a whole city block. Parts of it are four stories high. Um, we just have a few select rooms open there. And of course we're limiting the number of folks in the store. So it's a much different feel than you would normally have encountered if you'd come shopping at Powell's even a year ago.

AI assessment note: “That's right. So we closed all of our stores. We kept our internet business going”

Q channel for Powell's, which, um, you know, I think you compared it to like quitting smoking that, that, you know, it's an addiction that, that you kind of relied on, but you decided it was an important decision to make. Um, that's right. Has that been You know, has it been challenging to try and maintain that this year? Or, I mean, how, how has that worked out so far?

A Well, it was an interesting conundrum in the spring because we had a huge sales spike. We needed to service our direct Powell's customers first and foremost. And at the same time, Amazon was having the same experience. And so they weren't prioritizing our orders on Amazon either. So it was an appropriate moment to part ways. It was not an appropriate moment in the sense of cash flow. I mean, who in the middle of a pandemic in which you've lost 80% or more of your sales would say, no, thanks. I won't take, you know, your money. I, that doesn't make a lot of sense. So it was a logical, but painful at the same time. That being said, it was a pretty straightforward and easy choice for us. We need to focus on our business. We need to focus on our customers. And Amazon is never going to help us be successful in the long run. They're going to help Amazon be successful, and I don't believe that's good for Powell's. It's certainly not good for our community, so it wasn't something we had to put a lot of brain power behind, to be perfectly honest.

AI assessment note: “So it was a logical, but painful at the same time.”

Q Given that you are an independent business, and given the, the economic crisis in the country, are you seeing more consumers, um, making conscious decisions to support businesses like yours versus an Amazon or, you know, a Walmart? Are you seeing that kind of very deliberate pattern among consumers?

A I think so. You know, I, I have a, I have a viewpoint of one business alone, and it's mine, so it's a little bit hard for me to say. It's also a little hard for me to say because we, I think, have benefited from that kind of support for a very long time. You know, we've certainly heard from customers for decades that that's one of the reasons they shop with us because we're not always going to be price competitive. We're probably going to ship your book slower than, you know, somebody else might. So I know that that's a big reason people support us at the end of the day, but I do think that there's been an uptick in that. We hear from folks more and more. This is my choice this year more than any other year. I don't go to my office very often these days. I try to keep my body out of, you know, one less head count in our office space, but when I do, I've usually got a pile of letters waiting for me from people around the world saying thank you for what you're doing, or thank you for standing up to Amazon. So that tells me something. That certainly tells me this matters to people. Being an independent bookstore matters.

AI assessment note: “I think so... but I do think that there's been an uptick in that.”

Q Um, here's another question, um, this is from Ian. Ian asks, what do you think it is about Powell's that continues to draw crowds and devotees year after year, which it has, despite the fact that there's been a decrease in print media readership, you know, over the past decades compared to digital readership? What, what do you think explains it?

A You know, I think one of the wonderful things about books is you don't have to actually think of yourself as a reader or a book lover to find something in them. And as a retailer, you know, a lot of shops are for one gender or one interest level, or, you know, this is where you go for the sport, whatever. Books aren't like that. Everyone and everything can find something, uh, in a bookstore. And when you display the human experience more or less in its entirety on shelves and in a physical space and folks have the opportunity to explore that in a very tangible way. I think it's pretty captivating and compelling. And again, you don't have to say, oh, I need to find a book to read. You just have to say, I need to fix my car, you know, or I need to figure out how to lose some weight. You know, we've got a book on that. And once you've started your journey down one of our aisles, you get kind of sucked in. So in that regard, I don't think it really has anything to do with media. I think it has to do with being alive and being curious. And we try to keep that experience, um, as engaging as possible.

AI assessment note: “when you display the human experience more or less in its entirety on shelves”

Q Great sales folks and these events and, and so have you been able to migrate some of that, um, to the virtual space? Like, have you been able to do virtual events and things like that?

A We have done virtual events. We've had a good turnout for those. You know, the challenge I think so many retailers are facing right now is Our business in the year, 2019, let's say it was increasingly an experienced business. It's a place to go. You know, a lot of business people talk about the third place. It's something to go and you spend time with your friends or your family, you get a cup of coffee and you buy something and it's an experience. And Powell's is that of course, in spades, if you haven't been there, it is usually mobbed. There's usually at least one event happening at any given moment. There's a lot to take in and we can't offer that right now. So we haven't been able to replace that. And, and the reality is also a lot of folks are doing events online these days and they're very compelling and it's not the same for us as having an in-store event. There's just a different. You know, feel to it. So we're doing our best, but that's someplace we need to find some improvement.

AI assessment note: “We have done virtual events. We've had a good turnout for those.”

Q And, and where are you now? I mean, is it, do you feel like that's been stopped and that you are now on a more sort of stable footing, even though At a diminished level, diminished sales level?

A You know, if I could show you my fingernails, you'd see how short they are. Um, you know, first I would say, just to back up, we're in the independent book selling business. That's never been an industry in which we're used to, uh, either being very financially successful or seeing much, you know, continued success. We're used to being scrappy and creative. We're used to saying, oh, that snowed on that Saturday. What are we going to do? You know, that ate up our month. So it's not unfamiliar territory to be in a financially challenging time. This is, of course, an entirely different scale. I would say, uh, first of all, if not for the PPP program, we wouldn't be here today, you know, fundamentally our loan that we received. So we shut down March. 15th, we received our loan in early May. If not for that loan, we wouldn't have been able to bring people back to work and continue operating through the summer. And frankly, by time to figure out how we were going to do this. Um, at this point, of course, those funds are exhausted, but we've been able to open the stores that's helping internet business has remained somewhat steady, but no, it's not sustainable. You know, that's the bottom line. And so what we're just doing is trying to find ways to grab the little bits of business we can and think very creatively about how to manage expense. So in that sense, you know, this year has c…

AI assessment note: “no, it's not sustainable. You know, that's the bottom line.”