It’s been announced today that McNally Robinson is closing two of its stores and have entered bankruptcy protection for restructuring.

For those not in Winnipeg, it’s worth mentioning that the independent bookseller is a local success story, having started here in 1981 and grown to have stores not only in Winnipeg, but also in Saskatoon, Toronto, and New York as well as online. Many Winnipeggers have a “feel-good” sense about supporting this local option for their book purchases, and it’s a popular spot for book launches as well. Most locations also feature a (non-Starbucks) café/restaurant of some sort, the Prairie Ink Café. To be clear, I like McNally Robinson as a bookstore. The locations I’ve been in are all large with a good selection of titles and special promotion for local authors.

But.

One has to ask what forces them into a restructuring mode at the edge of bankruptcy, with 175 jobs being cut with the two site closures. Pundits have been tossing out ideas — the rising popularity of the eBook, the recession, and similar “obvious” ills. Yes, I think they may have expanded in the wrong way at the wrong time, but the eBook is has not yet become popular enough to have that kind of impact, if it ever will. The recession will likely have had an impact, but I doubt it was that major. Books are not a big-ticket item, and those who cut books from their entertainment budget are likely to be replaced by those who have reduced their entertainment budget to now include books.

Primarily I see a different story, one that has to do not with how we read, but how we shop. The major issue is in my mind McNally’s failure to appreciate the extent to which the Internet has change book-buying habits on average. There will always be a loyal group of supporters who will buy from a local bricks-and-mortar bookstore, or those who mistrust the Internet for financial transactions, or those who prefer to browse, then purchase “in the moment.” But I strongly suspect these are not the bread-and-butter of the bookbuying crowd.

The book is one of the best physical products you can find for online sales, and was one of the first to be sold successfully online. Amazon is associated foremost with books for this reason, despite the fact that they have branched out to a myriad of other products. Books don’t require sizing or colour selection… at most you pick the hardcover or the paperback, and either way you know exactly what you’ll get. Even those who are going to confirm their purchase by reading the cover blurbs are easily accommodated — often along with reviews, which you don’t get at most bricks-and-mortar retailers.

Book retailers nowadays are competing with Amazon, Barnes & Noble, Indigo, and perhaps a few others. McNally’s competition in Canada is primarily Amazon.ca and Indigo Books. Avid readers who know what they’re planning to buy and are able to plan a few days ahead to allow for shipping will purchase online for the price discount everyone knows and expects will be available. And this is the problem with the McNally’s online strategy — the website serves the audience most likely to buy from McNally Robinson, in their stores. The problem is that these audiences are quite distinct, and are not served in quite the same way. The online purchase needs to be cheaper and convenient, and not in any way “homey.” Make the product easy to find and purchase — exactly what Amazon excels at.

When I’ve been in the McNally Robinson store and asked for a title that wasn’t in stock, they’ve offered to order it in for me. But I’m used to buying online, which means I’m not about to make two trips to the same store in order to complete a purchase. I’ll order it online and it’ll show up on my doorstep in less time, and this is the experience that online shoppers have come to expect… and they expect to save money in the process. McNally’s website pricing is, whenever I have checked, too close to the pricing in the store and too far from the pricing at Amazon and Indigo. As the market of people who make the extra effort to buy books in a bricks-and-mortar shop decreases in size, it becomes increasingly important to understand how best to serve the still-growing market of people who buy online.

The bottom line is what’s at stake for the retailer, and I begin to wonder if the days of the big-box bookstore are numbered, unless that bookstore is backed by an effective strategy for online sales. And in my mind, this is where McNally Robinson has failed, and needs to make the greatest investment in order to get back on track. They founded their mini-chain in 1981 and built it with a solid strategy for a bricks-and-mortar crowd. Sadly, they missed the major plot twist that is the Internet, and have failed to adapt sufficiently. I’m sincerely hoping they’re able to make the depth of change necessary to thrive in the post-plot-twist business environment.

• McNally Blames Expansion for Woes