I was at a Bed, Bath & Beyond over the weekend shopping for a shower rack when I noticed that at the checkouut counter they were selling copies of the Harry Potter books. This brought to mind an important trend that I've mentioned before and appears to be growing: the boundaries between categories of retailers is blurring. Retailers are increasingly stocking select items that go beyond their focus. This means that these days your competition is everywhere. If you are a small book-store, you are not only competing with the big chains like Barnes & Noble and Borders, you are also competing against stores you may not even imagine are selling what you sell.

Notice that Bed, Bath & Beyond stocked the Harry Potter books, one of the best-selling set of books in recent times. They were also selling Atkins for Life, another blockbuster. Of course they did not stock books that might sell well. They are only stocking a handful of books, but they are the books they know will sell, the kind of books that are supposed to drive customers into your book store. The low-hanging fruit, leaving you to sell the occassional copy of Dickens or Dostoevsky. The competition is getting fiercer, but you don't need me to tell you that, do you?

What can you do? Cultivate customer loyalty among your big-spenders. Make your store a place to be, not just a place that carries merchandise. And, if you can get away with it, perhaps you can discreetly stock a few best-sellers that are outside of your focus area. A $20 bill is the same whether your customer is buying a Harry Potter book or vanilla-scented candles (to improve the reading ambience, of course).