How I Built This with Guy Raz - How I Built Resilience: Emily Powell of Powell's Books

Episode Date: December 10, 2020

Emily Powell is the third generation owner and president of Portland, Oregon's iconic independent bookseller, Powell's Books. After having to let go of 90% of her staff in early March, Emily is focused on bringing people back and showcasing Powell's Books' unique in-store experience online. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating turbulent times. Order the How I Built This book at:https://smarturl.it/HowIBuiltThisSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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into their businesses during this very challenging time. And today, we're going to hear from Emily Powell. She's the owner and president of Powell's books. Powell's is based in Portland, Oregon, and it's one of the largest family-owned independent booksellers in the world. Emily is the third-generation owner of Powell's books, and she knew early on that she wanted to take over the business her grandfather started in 1971. My grandfather used to drive a really beat-up Chevy pickup truck, and I thought it was the coolest thing to go riding in his pickup truck. It was the first company car.

It had the Powell's logo on the side, and I would say, you know, the age of three or five, oh, when I grow up, I want to drive the bookie truck. That was my grand aspiration to drive his pickup truck. So, yeah, I had a pretty good sense from an early age. When you grow up in a place that's as magical as Powell's, you know, it was big early and fast. I don't know anyone who would have turned that down, I think, is an opportunity. It's pretty wonderful. I also read something that you said that you don't think that Powell's would have survived or thrived anywhere else except for Portland.

Yeah. Why? Why do you think so? Well, a couple of reasons. You know, my father was always really involved in the city community, in our politics, and the streetcar that runs through downtown Portland. He was a port commissioner. So we talked a lot around the dinner table about what makes a city work, what makes a city vital and vibrant. And Portland's done a lot of things right since the 70s.

They've been very deliberate about how they planned the city and how it might look in the year 2000, or in this case, 2020. there aren't a lot of cities that have the same makeup that allow for that kind of vibrant downtown pedestrian environment. So we say to be successful, we need 9 a.m. to 9 p.m. pedestrian traffic. Not a lot of cities have that. They have portions of that. But we have it in spades.

And then we have our weird, you know, at this point everyone knows Portland is a little weird. It's a little different. We have a very vibrant arts and literary culture here, which I think we've helped participate and contribute to grow. I think this is a city that believes it has. has to support itself in order to keep going. And that's allowed us to survive. And I think other cities maybe missed that point occasionally.

Yeah. So again, for anyone who's been to Portland, you probably have gone to Powell's because it's also a tourist attraction because it's such a huge, well-known landmark in the city. And I imagine that, you know, starting in March, February, March, April, when it started to become clear that this COVID thing was real, kind of walk me through what was going on at the store. and what you started to notice?

Well, it's easy to forget at this point in the year that Oregon actually had one of the first cases in the United States. So we were tracking the virus pretty early. I remember being away in February going, oh, maybe we want to stock up on soup or something, you know, thinking about it. We were watching it. We were talking about it in our management team. And Friday the 13th, you know,

was when things started to sort of grow in the Portland area. We were hearing from customers. We were hearing from employees. but more importantly, we were thinking, oh, this isn't going in a good direction. So on Sunday of that weekend, you know, we had been talking as a management team on the phone most of the weekend. And the county library is closed. And we are so large and such a safe interior space in March and Oregon that a lot of people look for places for shelter. And so the folks who might have spent their afternoons in the library came to Powell's,

which is great, except that now we had a lot more people in the store. than we would have. And Sunday 11 a.m., we made the decision. Maybe it was even earlier, we have to close right now. You know, this is starting to feel unsafe, no matter what, we cannot participate in spreading this virus in our community. The governor hadn't moved yet to close us down. I think a lot of folks thought we were responding to, you know, a demand. But no, we felt really the compulsion that we need to do what we have to, to protect Portland. And so we shut down in the middle of the day. We moved everyone out of the store. And then unfortunately laid off most of our employees, you know, within 24 hours. Because if people aren't buying books, we don't have the ability

to keep operating. So you shut the store down entirely, I mean, because it's just totally unprecedented. Yes. You probably didn't have a plan for what to do. I mean, the answer was just let's just shut down. But it wasn't like, let's shut down and move online, right? I mean, you didn't. 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, palace.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. But I was in touch with her team and they said, no, we want you to keep your internet business going.

We want as many people employed as we possibly can have an on health insurance during this time. And I said, okay, we can do that. So we pivoted as quickly as we could to bring some people back, not knowing if we'd have any business to pay them, 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 get and get our wits about us. So, I mean, within such a short period of time, you had to lay off a huge number. Because I think you've got seven physical stores in Portland, right? We did have, I get the math, we had five. We're down to, we just closed our airport store and our home and garden store permanently. So now we have three.

this point. I'm sorry to hear that. 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 hunker down. Now we're, you know, sort of nine months into this. Tell me where things stand right now. I mean, presumably Powell's, the bookstore, you are allowing people in, but a limited number of people in? 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. 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 in thinking through how to open those stores. But we did open 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. 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. And how much of your overall sales and revenue depends on people actually walking up and down the aisles versus the e-commerce side? Well, of course,

the numbers are all over the place at the moment. Originally, you know, pre-pendemic, we would have said our internet business was maybe 20% of our overall sales. So substantial portion of our business is still in person, very tourism dependent at this point in Oregon's history. Now, all of our sales, you know, collectively we're down about 75 to 80%. So the bulk is now online, but we really depend on what's happening in store because internet can't support 200 people back working for us now. We need both of those legs under the table. as the CEO of the company, are you currently the CEO of the company? I just hired a CEO this fall, actually.

There was just too much work, and it's sort of a bizarre time to add to headcount and bring someone on, but we were all buckling under the weight of the challenges, and so we've brought him on. It's been a great addition. I mean, I know that you led the company through the end of the last financial crisis, and so you've dealt with crises before. That's right. I mean, it sounds like initially it was about sort of stopping the bleeding. Yes.

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? You know, if I could show you my fingernails, you'd see how short they are. You know, first I would say just to back up, we're in the independent bookselling business. That's never been an industry in which we're used to either being very financial. 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, 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. 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 certainly taught us a lot more nimbleness. Oh, this bill is here today. Where's the money, you know, for that coming from? We'll worry about next week, next week. But at the same time, we have to look ahead. So we're doing that. We're trying to find strategies to get us. I think, you know, we have to get another six to 12 months under our belts before we can breathe a sigh of relief. Emily, how are you? I mean, one of the things that Powell was known for were events you had in-store events. And, I mean, it wasn't just a place where you bought books, you have a community, and that's the value proposition. It's not just going to Amazon and clicking and buying a book. Like when you go to Powell's,

there's all of this other stuff that you get great sales folks and these events. And so have you been able to migrate some of that to the virtual space? Like, have you been able to do virtual events and things like that? We have done virtual events. We've had a good turnout for those. 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. 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 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. One of the decisions that you made was to pull Powell's from Amazon. Amazon is no longer a sales channel for Powell's, which, you know, I think you compared it to like quitting smoking.

that, you know, it's an addiction that you kind of relied on, but you decided it was an important decision to make. That's right. Has that been, you know, has it been challenging to try and maintain that this year? Or, I mean, how has that worked out so far? Well, it was an interesting conembrum in the spring because we had a huge sales bike. 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 your money. That doesn't make a lot of sense. So it was 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.

When we come back in just a moment, more of my conversation with Emily Powell and how Powell's books handles the competition from bookseller giants like Amazon. Stay with us. I'm Guy Raz, and you're listening to How I Built This Resilience Edition from NPR. And one more thing, the New York Times best-selling book How I Built This is now available. It's a great read and a great gift for anyone looking for ideas, inspiration, wisdom, and encouragement to have the courage to put out an idea into the world. It's filled with tons of stories you haven't heard about how some of the greatest entrepreneurs you know and respect started out at the very bottom. Check out how I built this, the book, available wherever you've. buy your books. Hey, welcome back to how I built this resilience edition from NPR. And I'm talking

with Emily Powell. She's the owner and president of Powell's books in Portland, Oregon. In August, Powell's books announced they would no longer be selling their books on Amazon's marketplace. Emily says that local booksellers face an uphill battle staying competitive with big retailers like Amazon, especially when it comes to pricing. You know, there are a lot of different things going on that impact that price. One, if it's Amazon selling a new book, they're getting a different price. You know, they're buying that from the publisher at a much lower cost than we are. We can't buy as many units as they can, and so we don't get the same discount. On the other hand, you also have folks who are selling out of their home. I'm sitting in my home now. You know, they don't have

employees. They have to pay health insurance too or the same kind of local taxes. So there's a cost to doing business that folks like Powell's or any other independent bookseller, for that matter, have to put in before they can complete their day, essentially. So it's almost impossible for us to be competitive on a price basis for us or, again, any other independent retailer. I think it's worth it. I mean, if I didn't think it was worth that, I wouldn't be here, I suppose, but we employ, you know, historically 500 people. I think we can pay a competitive wage. We have a great benefits package. We support local community, nonprofits. We're engaged in the community. I think that means your dollar is going someplace that's really valuable as opposed to to Amble.

where it goes out of state. You know, we've all read the news these days. They're not the best employer. They're not taking care of their people. But they're also not supporting small businesses that allow our local economies to thrive. So I think we're competitive in a different way, I suppose. Given that you are an independent business

and given the economic crisis in the country, are you seeing more consumers making conscious decisions to support businesses like yours versus an Amazon or, you know, Walmart? Mark, are you seeing that kind of very deliberate pattern among consumers? I think so. You know, 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'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 books 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 headcount 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. Going back to your employees, you mentioned that you had to lay off like something like 90% of your employees in the first few days. How many have you been able to bring back? The number fluctuates a little bit, especially this year of COVID, but we're right around 200 employees. We were about 500 before this, so we still know we're close to where we'd like to be. And, you know, frankly, we don't know how this holiday season is going to go, and we will probably, we're expecting we'll have to contract again.

which is not something we want to do, but it's just how it is this year. Presumably, you've had employees who were worried about coming back, right? Absolutely. I mean, we have the whole range of, I think, emotions around this year. Some folks who are really eager to be back, who want to do what they can, who are eager to be out of their house, and we have others who really don't feel comfortable at all, and I completely understand and respect the situation we all find ourselves in,

depending on our personal situations. You know, just getting on a bus and going to work is suddenly a stressful thing. We took that for granted a year ago. Child care is hugely stressful. So it's a real conundrum. Emily, you know, one of the, again, like one of the things about the in-store experience is you read reviews from people who work at Powell's or Powell's will pick books that they like and people trust that. Have you been able to move some of that online as well to just kind of continue that? Well, in that way, we were well positioned.

I mean, we've always tried to translate the in-store experience of Powell's onto our website. And, you know, if this were a technology conversation, I'd say that's a little bit of a red herring, and there's a lot of work we can do there. But we were ready in that sense. We have a lot of content from our booksellers. And that's what we pride ourselves in is the books we've selected, the books we've read, the books we're ready to talk to you about. You know, my dad works in our warehouse almost five days a week. He's supposed to watch my kid out, but he'd rather be in the warehouse. he'll tell me pricing used books. That is our bread and butter, knowing these unusual items

that you're just not going to find easily anywhere else. And trying to connect those books to our readers is what gets us up at the morning. Here's another question. 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 over the past decades compared to digital readership? What do you think? What do you think? explains it? 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 in a bookstore. And when you display the human experience, more or less, in its entirety, on shelves 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 as engaging as possible. This is a question from Beth asking you to put on your entrepreneur's hat, which is what are ways that you helped keep costs down? As you got started in the business and you started to take over the business, what are some of the ways that you work to make sure that you could stay competitive? Yeah, the answers are really not sexy.

They're things like we didn't repair the roof. If you walked into the main entrance of our store for years, there were buckets hanging from the ceiling. You know, it's being really creative about what is essential this year. Is the HVAC repair essential this year or is it not? Can we spend money on a new search engine, you know? So we talk a lot about, you know, some companies might have a platinum standard or a copper standard.

We've got the duct tape standard. You know, we're just going to patch things together here because what's most important is the essential beating heart of the business. So that's what always gets the attention. Everything else can wait. You know, Emily, I imagine that over the years there have been opportunities to expand Powell's beyond Portland, right? I mean, I imagine you've been asked or been approached.

That's right, yeah. What's kind of kept you from doing that, kept you kind of focused only in the Portland area? Well, I'd say two things. One, it goes back to that urban planning conversation we had a little bit earlier. Most cities don't have a neighborhood that is an obvious fit,

and I know that probably sounds strange, think of so many wonderful places to be, but they have to have that morning to nighttime, you know, possibility for business. And then they have to have affordable rent. And if you could think about a beautiful part of, say, Manhattan or San Francisco, well, the rent's just not going to support a bookstore. So even just financially finding a place that would be viable is near impossible. But the more important piece for me is the value point. And that's, I believe books are a deeply personal product and a consumption process. And that means we need to know our community pretty intimately. And I don't want to presume to take my business into, say, Austin, Texas, and know exactly what that community is going to want and be able to to meet their needs where they are without being there for a good 10 or 20 years first. So we're going to stay in Portland. Have there been things that you've done this year that you think you will continue to do after the

pandemic ends? Hopefully not. By my nails quite so much. You know, I pride myself. I'm proud of Powell's and being a very, I would say, emotionally intelligent business in that we recognize that it's the full human being that shows up at work every day. And boy, this year has reminded us of that in spades. So I'd say that something will certainly be paying even more attention to. You know, everyone's got complex lives and they're played out in a daily basis. It doesn't turn off from 9 a.m. to, you know, 5 p.m. Being able to be more flexible, we're a 50-year-old company. We're about to be 50 years old. We're kind of a big ship for what we are, and we move pretty slow, but this year we've had to get comfortable moving a little faster and trying things

that we're not quite as prepared to try. I think we're scrappy, but certainly being scrappier, being a little more flexible, being a little more creative. It's just turned the heat up, that's for sure. Yeah. Before I let you go, I've got to ask you about some of your favorite books that you're reading right now because we're getting a lot of questions about that. I've got a huge pile. I'm the worst book buyer in the sense that I'm just probably like a lot of our customers. I go in and I buy five books when I've got, you know, 20 sitting next to my nightstand. Right.

You know, I've been reading a lot of poetry this year because it's short. I don't have a lot of time. I'm working more than ever. And I need something that's going to pack a pretty big wallop. So I picked up a couple of titles by Jericho Brown, who won the Pulitzer this year. It's pretty powerful stuff. And then I've got a Solomon Rushdie. You know, I need a novel.

I think a lot of folks are reading books about not right now. Any story that they can take you out of this moment. So I've got Midnight's children next to my bed. And then I'm always sort of dipping in and out of at least half a dozen other things. So they trail me around the house. That's an excerpt from my live conversation with Emily Powell, the owner and CEO of Powell's books. To see our full live interview, you can go to facebook.com slash how I built this. And if you want to see all of our past live interviews, you can find them there or at YouTube.com slash NPR.

And don't forget, you can join our live conversations every Thursday at 9.5. Pacific, noon, Eastern. If you want to find out more about the How I Built This Resilience series or other virtual NPR events, you can go to nprpresents.org. This episode was produced by Liz Metzger with help from Jacey Howard, Bruce Grant, El Manion, Gianna Capadona, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. Our intern is Farah Safari. Thanks for listening. Stay safe, and I'll see you back here in a few days. I'm Guy Raz, and you've been listening to How I Built this Resilience Edition from NPR.