Book Retail is Changing

The retail landscape in which books are sold is changing quite dramatically and quickly. The changes are, I think, permanent.

Borders entered bankruptcy earlier this year and the last bits of the chain are being closed and sold off. For the most part, the people buying the stores are not booksellers.

Barnes & Noble has announced that it wishes to be more like Amazon, selling ereaders and ebooks, and by implication, less of a bricks-and-mortar retail chain selling print. Earlier this year the ownership sought to sell control of the chain, but that deal fell through. While it is not likely that Barnes & Noble will follow Borders into receivership any time soon, it is equally unlikely that they will be expanding the chain. What is far more likely is, the chain will reduce shelf space for books to make space for digital products.

The other large U.S. chains, Hastings and Books-A-Million, have been reporting declining revenues for a while and they are clearly having difficulty as booksellers. Both chains have done better selling things like used DVDs.

Causes

I have no doubt that the causes of the sudden and precipitous decline of brick-and-mortar bookstore chains will be analyzed and debated for a long time. The daily press tends to place the blame on the advent of ebooks, but I think that is only a small part of the problem.

Like the big three Detroit automakers, book retailers got themselves into the habit of discounting new and best-selling items. One can argue whether or not this was forced on them by the discounts offered by companies like Amazon, Costco, and Sam’s Club, but the fact is that the big book chains regularly discounted the latest and most heavily promoted books from the day they were released. I doubt they made up by volume the margins they sacrificed to do that.

Another issue was the shrinking space given to backlist titles in the large chains. Many avid readers (myself included!), having discovered a new author will proceed to buy and read everything written by that author. Not long ago, I could go into any large bookstore and at least find most of the works of an author I had just discovered; today it is rare to find anything but the latest title by an author (a handful of consistent best-selling authors being the exception). If you cannot find what you want in a store, and (increasingly) the store is unwilling to order a copy for you … well, then yo buy online, probably at Amazon because they have the most complete backlist. And once you start doing that, why bother trekking to a store which likely will not have what you want to buy?

The economy has certainly also been a factor. The American economy has been a mess for a while now, and isn’t showing signs of recovery. Buying books is a discretionary expenditure, and one which is likely to be trimmed or put in abeyance when finances are especially tight.

Where To?

Ebook sales are growing very rapidly in North America, roughly doubling each year. That growth is from a tiny base three years ago and it is unlikely that ebook sales will overtake print sales for a few more years. It is also worth noting that ebook sales are strongest in conventional fiction, and quite weak in almost all other categories. That will change, but it will also take a while because ereading devices (and he software they rely upon) mostly lack the formatting and presentation controls needed by poetry, cookbooks, and (to some extent) the kinds of structured non-fiction books we publish.

Online vendors are replacing brick-and-mortar stores. This is true not only for books, but also for many consumer goods. CD and DVD shops have been replaced by iTunes and Amazon. Amazon is increasingly coming to resemble the Sears catalog of about a century ago, offering a huge range of items, very competitive pricing, fast delivery, and stellar customer service.

As a business, we are adjusting to the new realities just as fast as we can. We are not abandoning sales via bookstores, but we are very aware of how the landscape is changing and we are trying to ensure we change with it.

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