LA CASA DEL LIBRO

In 2001 La Casa del Libro was the 2^nd bookseller of the Spanish market behind El Corte Inglés (ECI). One of its main and strongest characteristics was that it was a “cult place for readers and bibliophiles” and proposed more than 3 million references in its 12 different shops in Spain… nothing less than double the number stocked in ECI.

La Casa del Libro started to sell books over the Internet in 1995 through a very simple platform that required important manual processing. In 2002, with the partnership of Grupo Planeta, the nº1 book editor in Spain, they decided to become first players in the emarket of books and created a new platform which was more complete, secure and fast.

Unfortunately the Internet crisis didn’t allow the project to reach its objectives and only 6 months after, they were forced to face a difficult tradeoff: keep developing the platform or switch to a new and cheaper one but that offered less quality and options.

What should La Casa del Libro do?

In business it is very common to face the difficult decision of choosing between quality and “low cost” so, to answer the question, it is important to take into consideration the economic situation of the company in those times. We know from the case that Casa del Libro’s sales in 2003 were over 50 million euros, so we can assume the company had some margin to stick to the plan and continue developing its platform, at least for a few more years.

Another important point to take into consideration is the objective of the company starting this initiative. Again, we know from the case that Casa del Libro and Grupo Planeta wanted to win the battle against El Corte Inglés and become leader of the book selling market. An ambitious objective that required important investments they had, for sure, planned when they took the decision to go on with the project. Actually, in order to reach this objective, they invested a lot setting up a modern platform that had the most expensive equipment and software available in the market and hired a prestigious consulting company to design the business plan.

Like we said before, one of the main characteristics of La casa del Libro was to offer an important selection of books to its customers (twice as big as that offered by ECI) so, to keep this reputation, it was important to offer the same options in their Internet platform. For this it was necessary to have a complete platform that could guarantee high performance, security, availability and scalability and this was only possible with their initial platform and not the new, simple but less costly one.

So my final answer to the question would be to continue developing its platform and not switching to a new one even if it’s cheaper. When starting a project like this it is important to have faith in what you’re doing and to not change to a smaller and less ambitious objective after only 6 months, even more so if you have the budget to keep trying for a year or two.

I believe that changing to a simple platform could even be dangerous for the company as it would break with its image of being the shop that offers a good selection of books and could even have bad repercussions on their core business: selling physical books.