YPO chats with Michal Meško, YPO member and country winner of the EY Entrepreneur Of the Year Award 2021, Slovakia.
Independent brick-and-mortar bookstores may be struggling globally, but one company in Slovakia, Martinus, is reversing the trend. Its CEO, YPO member Michal Meško, has built the country’s leading online book retailer while expanding sales from physical bookstores, adding two more in the past year alone. Driven by a vision to “connect people with books, so they can grow the good in them,” he has leveraged different channels and customer touchpoints in a holistic business model that withstood the struggles faced by most independent bookstores.
An early passion for books and bookstores
“When I joined the business in 2000, it was a small brick-and-mortar bookshop founded by two brothers, Miro and Jozo Santus, in the middle of Slovakia — one of the first private bookstores after the Iron Curtain fell,” recalls Meško. At the time, he was a 15-year-old high school student working part time as a coder to help build a digital presence for the bookstore. “I have always loved books and hanging out in bookstores. Anywhere I go, bookstores pull me inside. Especially with all the noise from social media, I think books invite creativity and the use of critical thinking, two key skills needed in today’s fast-changing world.”
By 2006, he became a partner and continued expanding the company’s online store while investing in enhancing the in-store experience with cafes and different activities. The multi-channel strategy helped build a community atmosphere in a sector that one big chain retailer had, until then, dominated.
In 2009, the company opened a second store in the capital, Bratislava, and gradually expanded across the country. Meanwhile, investment in the online store continued, allowing the company to fend numerous competitive threats and technological shocks. Cultivating the distinctive identity of Martinus in the community helped differentiate it from online retailers and large retail establishments.
Resilience in the face of pandemic disruption
The steady and organic growth of the physical stores hit a sharp halt when COVID-19 began to spread in Europe in April 2020. “COVID was like the fall of a grenade. During the first seconds, you can’t see the length of your hand, and there was no point in planning. Then, the dust gets settled. But for the first few months, it was like going through a void,” says Meško.
Before the lockdown was mandated, the management team took the hard decision to close all 11 bookstores. Although it meant a financial loss, as half of the company’s total revenue still relied on in-store sales, the company prioritized the safety of employees and customers. “We ended up closing for two months, with other stores following suit. We did not lower wages for our 200 full-time employees or fire anyone, but kept everything afloat.”
Meanwhile, with online business surging, employees from the physical bookstores went to the central logistic side to help pack online orders. Mesko recalls, “From the start, we acted as one integrated company. We had been building (these different) pillars for many years. So, when the pandemic hit, we were able to direct customers to online.”
The integrated approach paid off, and the company grew almost 15% over the previous year. And during this challenging period, the planned expansion of physical stores continued as physical sales gradually began to rebound.
One of the key things that helped Martinus navigate through the challenges is its corporate culture. “We have been creating an environment for self-managed teams, with a weak formal hierarchy. I believe inspiring people with a higher goal and giving them freedom and responsibility is much more interesting and fulfilling than binding them with set of rules and processes,” says Meško. “The culture is not something static and prescribed on the walls of the company, but it is always-evolving — a blend of company’s legacy, mission, core values and individualities of its people.”
The resurgence of physical stores
While Martinus keeps growing its online presence, Meško says the brick-and-mortar stores continue to be relevant for the company and community. “Today, roughly 30% fewer people come to our stores (compared to pre-COVID-19 times). But when people come, the conversion rate is higher, so this allows a more intimate experience and more time to spend with customers,” he says.
— Michal Meško, CEO of Martinus share
Martinus adds the vital role these stores play in building a strong connection with the local community, including providing a more personal and specialized customer experience and helping build an intellectual exchange by offering events that cater to local tastes and the specific interests of the community. “We can’t wait to relaunch the readings, debates and book signings at our physical stores soon. These experiences bring life into bookstores and have been an important part of the company’s success.”
Reflecting on the resilience of the physical stores over the years, he adds, “We started opening physical bookstores in 2009 when everybody was saying stores were obsolete. But I think the physical can grow together with the online. Instead of looking at the different channels separately, we look at the reader who has different needs at different times, trying to incorporate both touchpoints and making as many synergies as possible — thinking holistically about how people are interacting with the brand.”
Future growth plans: A higher calling
As for future growth strategy, Meško says, “there are two sides of growth. The business world talks about the growth in revenue, and we plan to continue to open new stores and services. But we are more interested in growing in impact.” He explains that in five years, even if revenue does not change but the company can connect more people with books, than its growth objective would have been achieved.
In line with connecting people with books, building customer experience and relationships takes precedence over transactional values. “It is not our job to only sell our books. If a customer comes and we don’t have the book, we expect (our team) to look at competitors’ inventory to see if they have the book. Short term, we lose a sale opportunity, but in the long term, we believe it is a good business strategy in line with our core values, including a passion for books, giving ‘wow’ service and building long-term brand loyalty.”
Meško adds, “A country of readers is a better country. We recognize our role in helping build the new generation. I am first a businessperson, but Martinus will never be a supermarket with books. We will never sell lawnmowers and bikes. We want books to be a major part of people because we love books, and we believe books can truly change their lives. After all, one book literally changed mine: the one about programming that I bought a few months before joining Martinus – in Martinus.”
Staying local is another intentional, strategic decision in the company’s plans. “We have no plans for global expansion. The company has always grown from what we have earned, and we have never had an external investor or relied on loans. This gives us huge freedom to make decisions quickly. For me, this is more important than growing for growth sake,” says Meško, adding that books are also difficult to export. “It is not easy to expand geographically with books. Books are ingrained in culture and daily lives. We will continue to compete primarily on experience and quality, catering to local tastes and enriching the cultural life of communities.”
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