Online bookseller ThriftBooks had a successful holiday season in 2023, vice president of sales and marketing Barbara Hagen said. Holiday sales were up 20% year over year, with no discounting during the typical Cyber 5 period between Thanksgiving and Cyber Monday. Hagen attributed much of the growth in sales to ThriftBooks embracing new technology like generative AI.

ThriftBooks ranks No. 319 in the Top 1000, Digital Commerce 360’s database of North America’s largest online retailers by web sales.

ThriftBooks, generative AI and LLMs

Using generative AI and large language models (LLMs) to improve the ThriftBooks.com experience is a top priority this year, Hagen said.

“Generative AI is a big focus. And so is using the large language models to find a new way to connect our customers with books that they might not have known they were looking for,” she said. 

The online bookseller uses AI to make relevant recommendations on books to customers, she said. For example, the proprietary technology learns that customers who read a specific recent bestseller tend to purchase other subgenres, which it can then recommend to them. As more customers purchase through ThriftBooks’ website, the recommendations become better because they have more data to draw on.

“This customized approach helps to create a ‘surprise and delight’ customer experience, ultimately leading to increases in customer engagement and retention,” Hagen said, without sharing specific figures. 

Recommendations are important because ThriftBooks has a vast inventory of books. It sells 19 million titles, Hagen said.

“It’s a lot of information for a human to be able to process,” she said. With LLMs, though, they can “make that experience that much more succinct and manageable without having to add costs to the system.”

The LLMs generate summaries of books based on product descriptions, author biographies, and reviews to present the information in a digestible way for consumers. That’s particularly useful for less popular books, like out-of-print titles that ThriftBooks sells, she said. 

The retailer started rolling out these tools in early 2023, with plans to continue experimenting in 2024. It uses open-source machine learning libraries and is experimenting with various LLMs, Hagen said without revealing more.

ThriftBooks’ loyalty program

ThriftBooks has a few other tools to engage with customers. Its loyalty program, ReadingRewards, is also key to customer retention, Hagen said. The program contains three tiers:

• Reader: free to join
• Bookworm: $75 in annual spending
• Literati: $150 in annual spending

Members earn points for shopping with ThriftBooks, and members in higher tiers earn more points per dollar spent with the retailer. 

“The best thing about the loyalty program is we give out free books. So it’s not like you’re redeeming points for dollars off,” Hagen said. “Our customers love to get free books, and so it’s really been a way for our customers to engage with us and get excited about their free books when they arrive in the mail.” 

The free book rewards also provide a low-risk way for members to experiment with AI-generated recommendations.

“Part of using large language models is helping customers find a book that maybe they didn’t know existed. There’s a book you’re not familiar with, and you try it, and then hopefully it’s something that they really enjoy,” Hagen said.

ReadingRewards members are more likely to return to ThriftBooks, she said. The top Literati tier grew 30% year over year in 2023, and the middle Bookworm tier grew 20%.

ThriftBooks and social media

An active social media presence is keeping ThriftBooks in touch with a younger audience of consumers, Hagen said.

“What we’ve seen in the last several years is Booktok, and the whole TikTok space has really taken off, and it’s really helped us create some resonance with a younger generation, a younger set of consumers,” she said.

Booktok refers to TikTok videos about books, which publishers credit with selling 20 million copies in 2021.

ThriftBooks sees gains from social media without directly selling there, Hagen explained. The retailer does not sell on TikTok Shop and has no current plans to. Instead, it capitalizes on videos created by customers, reposting unboxing videos, for example. ThriftBooks has more than 166,000 followers. That’s also why ThriftBooks doesn’t spend much on influencer marketing, she said. There’s simply enough organic content out there for free as consumers create their own videos about ThriftBooks and engage with the retailer’s videos.

One exception was in celebration of ThriftBooks’ 20th anniversary last year. The retailer invited BookTok influencers to tour one of its processing centers and share videos with their followers. That was particularly popular, she said.

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