Transformation in Action:Sourcebooks

Digital Book World 2016 Dominique Raccah, Publisher and CEO

4 sections

1. why transformation 2.  transformation at Sourcebooks 3. critical ideas 4.  some tools we use

transformation in the book industry

Online Distribution/Retail

Print

Digital

Brick and Mortar Retail Online Retail

Form

at/C

onte

nt

digital transformation

eBooks Growth: 2008 – 2013

retail transformation

Online retail is still around

10% of retail $ in America

Shoppers’ Top Priorities

ü  Spending as little as possible ü  Feeling like I got a good deal ü  Having a stress-free experience ü  Doing all/most shopping in one place ü  Completing my shopping quickly

Omni-Channel is shaping what’s important:

Average  Number  of  Retailers  in  Shoppers’  Networks*  

Shoppers Eliminate Retailers from Their Networks Streamlining,  simplifying,  and  engaging  in  “retailer  ra?onaliza?on”  

Green: Total Retailer Portfolio; all retailers shopped in any given month

Blue: Core Retailer Portfolio; retailers shopped every month, at least once a month, on an ongoing basis

*Inclusive of visits to stores and online shopping Web sites

Source: Kantar Retail ShopperScape®, January–September 2007, 2013, 2014

Total  

12.4   5.8  

Core  

10.7   5.0  

Total   Core   Total   Core  

9.7   4.6  

Online, Especially Prime, Resets Shopper Expectations Across Retail

Penetration of Amazon Prime Membership (among all U.S, primary household shoppers)

How Prime Membership Changes Shopping Patterns

(among all Prime Members)

Source:  Kantar  Retail  ShopperScape®,  December  2011–2014,  Kantar  Retail  es?mates  

Source:  Kantar  Retail  ShopperScape®,  December  2014  

Today, book retailers are

working hard to buildout

their ecommerce

capabilities to compete with

Amazon

Book Publishing today is fundamentally a Red Ocean

And it’s only going to get more crowded

2. transformation at Sourcebooks

The Strategic Problem—need to add more value

Publishers

Retailers

Don’t compete with our retail partners

Creative Partners

Our Strategic Thinking: Creating New Kinds of Value Through Direct to Consumer in Every Vertical

Exclusive channels that provide more marketing mojo and increasing revenue in a crowded ecosystem

Publishers

Retailers

Readers

Don’t compete with our retail partners

Creative Partners

Using digital and ecommerce to add real value for authors and

retail partners in ways they can’t do for themselves

What’s drives transformation at Sourcebooks

From Sourcebooks new hire orientation

“

”

…nothing says 'transformation' more than revenue sources you didn’t used to have. —Mike Shatzkin, ideolog, Nov. 5, 2015

Sourcebooks Sales by Piece of Business 2015

Driving Innovation + Transformation in 4 ways

Physical books (units)

eBooks ($) Put Me In The Story ($)

Simple Truths ($)

Core business   Direct to consumers/ eCommerce  

creating new revenue streams for authors + partners

The #1 Personalized Books Site in

America

NEW revenue for bestselling books + licensed content partners

Put Me in the Story adds significant value

0.00%  

10.00%  

20.00%  

30.00%  

40.00%  

50.00%  

60.00%  

70.00%  

80.00%  

90.00%  

100.00%  

0   10   20   30   40   50   60   70   80   90  

PMITS  %  of  Sales  

PMITS  %  of  Sales  

AVERAGE  36%  

On average Put Me in the Story adds

36% NEW units

3. transformation at Sourcebooks — how

4 critical ideas

1Defining strategic model

“”

innovation is

iteration Michael Cader BISG Making

Information Pay 2008

The Lean Startup Model

The experimental model we use…challenging to implement

this model makes you think about experimentation differently

And what’s critically important is that we rethink our whole

view on FAILURE

In this model: failure is an event. It’s about the facts.

It’s not about you.

Your goal is to…

a change in our frame

These were all things we believed would work…

These were all things we believed would work…

2Understanding the customer experience

“

”

You’ve got to start with the

customer experience and

work back toward the

technology—not the other way

around.

Steve Jobs

2. transformation: what? Look to what your customers are

already doing with your content and books. What are your authors

telling you about? What do they need?

Started by enhancing existing "customer experience

Marianne Richmond

Greg Lang

Started with app built to replicatewhat customers seemed to already be doing

Incredibly easy-to-use interface in the app…

The #1 Personalized Books Site in

America

Customer experience—Visualize the user and the

purpose

3Create the culture

“

”

…always tension between control and

innovation…transformation is about

cultural change within an organization

— John Ingram, Digital Book World March 2016

New Model

Mindset

How a transformation changes our work

4Data Data Data

Need more and better data, better processes, and more transparency around every

step in the publishing process

Innovation => the gritty stuff

4. transformation at Sourcebooks

the tools we use

All of the tools we use at Sourcebooks were organically created

The Tools We Use

Management Team Quarterly Offsite

SMART Outcomes (SMART Goals)

Bimonthly Breakthrough Meeting

Questions? Thoughts? Comments?

dominique.raccah@sourcebooks.com @draccah