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[15 comments]

Bookstores Are Not Dead!

December 27, 2013

"Bookstores are not dead." That was the exuberant tweet on December 24th from Strand Book Store, the iconic New York City institution, as it wrapped up a record holiday selling period.

"Yesterday we had our best sales day in the history of 86 years at the store," the tweet read. "So thankful for all of you."

Strand's announcement followed other positive news for independent book stores and the printed books category overall.

In November, the Association of American Publishers, which collects monthly data from about 1,200 publishers, reported that e-book sales had been flat or in decline for most of 2013, a sign to some that the novelty of e-books may be wearing off for American consumers.

"I don't know if it's a saturation point with digital," Len Vlahos, the executive director of the Book Industry Study Group, told the New York Times in an article that ran in mid-December. "But all the data we see suggests that we've hit a state of equilibrium. The trend lines have flattened out. Three years ago, it was a nascent market, but now it looks like a maturing market."

While pointing out that independents were seeing "a nice renaissance," Jennifer Enderlin, the publisher of St. Martin's Press Paperbacks and Griffin, likewise told the Times that e-book sales were finding their level, and would soon "start affecting print books in a good way."

E-books, which surpassed sales of physical books in 2012, have been long touted for their convenience and their lower cost.

In an interview with The Atlantic in early December, Oren Teicher, CEO of the American Booksellers Association, pointed to a few other reasons why independent book sellers have bounced back over the last three years. They include:

  • Being able to tap into the overall "shop local" movement, much like farmer's markets;
  • Publishers recognizing their value and working more closely with indies after the exit of Borders and challenges of Barnes & Noble, and;
  • Technologies that help stores with out-of-stocks, labor, and social-media outreach.

Strand's performance came despite the absence of a strong lineup of blockbuster titles this holiday season, such as "Fifty Shades of Grey" or "Hunger Games" in 2012. Ironically, some saw this paucity helping independents compete against Amazon, known for its sharp pricing on best-sellers.

FINANCIALS:     [NASDAQ:AMZN] [ ]

Discussion Questions:

Are prospects improving for independent booksellers and sales of print books overall? Are e-book sales reaching some level of maturity? What are the biggest threats to indies?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Are you more or less optimistic about the prospects of independent book shops today versus two years ago?

Comments:

Similar to grocery, there is a visceral aspect of a physical book and a store full of them, that remains attractive to readers. The same is true with groceries, especially, produce, meats and deli items.

With e-books continuing to thrive and offering readers easier and faster access than their printed counterparts, I still see some growth in the future of the e-book market.

Nonetheless, in my view, independent bookstores will remain viable so long as they continue to create a "reader friendly" atmosphere in their stores and offer the depth of books and companion products that Strand and other large book stores are smartly merchandising.

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Mark Heckman, Principal, Mark Heckman Consulting

I am happy to read about Strand's successful selling season. I am an avid reader and want brick & mortar to remain an important piece of book selling's future. It is still fun to go in and browse through potential purchases.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Browsing through an online selection to find a book of interest is not as easy as browsing in a store. Online books can not be shared or passed around like physical books. If the local bookstores know their customers, provide relevant products and services, and work with suppliers to have efficient inventory processes, they can succeed as demonstrated by the example in the article. Since books are used differently by consumers, there will be room for both online and local bookstores.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Indie bookstores are remarkably resilient, whether the competition is malls, national chains, club stores, or online. They will survive if they offer a differentiated experience and follow the consumer.

A differentiated experience is in the nature of indies. Browsing in a bookstore is inimitable online. This puts bookstores in a better position than video or toy stores facing similar challenges.

Following the consumer is exemplified by Powell's in Portland, OR, which has built e-commerce websites and partnered with Kobo to sell e-readers and e-titles. Since most consumers are "hybrid readers," enjoying print and digital for different occasions, this partnership grows wallet share.

A bad example of this is shunning e-commerce and e-books, as some of the quotes above suggest. Many indies have brands with high recall and loyal customers - and this extends to online channels. E-book revenues already far surpass hardcovers in the US, making this a "niche" indies do not want to ignore.

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Dan Frechtling, Vice President, Global Product Management, hibu, PLC

While I enjoy reading pulp books on my Kindle (other books I prefer physical copies), I find browsing for ebooks exceptionally frustrating - far preferring physical stores to online. It's beautiful theory to suggest a balanced level will be reached due to these benefits of each. I'm concerned, though, that the small margins available to these stores make this unlikely.

That said, for publishers, this browsing problem may so badly reduce the total size of the market that publishers will demand a solution.

Doug Garnett, Founder & CEO, Atomic Direct

While I admit I like the convenience of my Nook for use while traveling, I still like reading and owning physical books. I expect there are a number of segment of the reading public who utilize both types of books for various purposes.

Perhaps the balance has been reached between the two types of readers and we will see the current balance be maintained. I, like many others, would definitely miss the pleasure of going to a bookstore and browsing and selecting a book.

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Steve Montgomery, President, b2b Solutions, LLC

I hope for the best as I shared in and enjoyed the experience of browsing and reading and spending pleasant hours in bookstores growing up. Online book sales and the convenience of e-readers will continue to siphon off sales. But the biggest threat is that younger age groups have not experienced and participated in the bookstore experience.

To stay alive, these stores will have to sell more coffee, more magazines, more digital, and run lots of programs to bring in younger readers early and often. I do hope that there are some stalwarts that keep the independent bookstore format alive.

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Larry Negrich, Vice President, Marketing, nGage Labs

In looking up Strand's website, it appears they are a 2 store shop with a seasonal kiosk in Central Park. While they may have had a great year, it's impossible to extrapolate that to saying all independent bookstores prospects are improving.

That being said, here's a recent article detailing how Barnes & Nobles struggles could benefit the indies. And while I personally hope independent bookstores see a revival, they are facing similar pressure to what local retailers faced when Walmart started opening everywhere and we know how that ended.

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Bill Davis, Director, MB&G Consulting

I'm not sure the prospects for independent bookstores were ever quite as grim as they were for their chain peers. I love my local independent (Book Beat in Oak Park, MI) and they seem to be doing just fine. Of course they also don't try to do a big business in discounted bestsellers.

My fear is that this isn't a renaissance however, but just a plateau in the generational shift in retailing. Hard to imagine that children starting school today will be accumulating large non-digital libraries.

So, no, I don't think e-books have peaked.

As to the threat to independents, I guess it's the same threats there always are - undercapitalization, attacks by ruthless and/or irrational competitors, no succession opportunities, etc.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Let's just be blunt. The hole is dug. Amazon will bury Barnes & Noble. This will open many more opportunities for struggling but surviving indies who play it smart and sell the story, place, and oh yeah, the really good books.

Sid Raisch, President, Advantage Development System

Bookstores aren't dead! Then again neither is the calculator or the buggy whip. What we have here, at least for the time being, is a limited market potential with few interests from investors and even less from the consumer. I see tablets and smart phones everywhere I turn and people using them for profit, pleasure, limitless communication, and education all day. The consumer doesn't even have to read any more. The e-machines will read information to them in any language they choose privately through an earpiece.

Who knows, if this keeps up trees might start to live longer lives feeding us more oxygen in cleaner air.

'gjarnoldjr'

My reading habits extend to my Kindle for long trips where battery life matters, my Samsung tablet most other times, and when I go to the local Barnes & Noble, it's to showroom to find more stuff to download. I am happy to give up the physical book for the convenience of having a full library that weighs a few ounces at my disposal on the Kindle. That and the fact that my now geographically disbursed family shares the entire Kindle library on their variety of devices.

How can you beat that kind of convenience with a physical book?

Eventually convenience will win and the chain book stores will have a tougher time. The indies will probably continue to do okay, and we will return to the "pre-chain" world where there wasn't a mega book store on many corners. The one exception to this trend seems to be Indigo in Canada. They re-merchandised to be a bookstore that is much more that books. Last time I visited one in Toronto, they were absolutely mobbed. Coffee, books and lots of related products to buy as well.

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Peter J. Charness, SVP America, Global CMO, TXT Group

No, e-book sales are not going to decline or flatten out any time soon. Pause, perhaps, but this is a technology driven result, not a product. So long as we have electronic visualization, we will have e-books (or some other technology) that makes printed paper books as we know them today, obsolete.

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Kai Clarke, President, Kowa Optimed, Inc.

This strikes me as a supply and demand issue. There will likely always be a segment of the population that prefers to browse bookstores, or pick up and flip through pages prior to buying. There was an over-supply of those types of stores for a while, and now that capacity has been significantly reduced, the supply-demand curve is at or closer to an equilibrium. This does not mean that e-book sales are necessarily reaching maturity, as there may be new innovations in future, or the segment of the population that appreciates physical books may be reduced in future as they age.

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Alexander Rink, CEO, 360pi

I'll be happy when I can browse the shelves of physical books, choose the titles I want, and effortlessly download them there and then to my Kindle - knowing that the store, not a distant if price-competitive e-commerce outfit, is getting the sale.

Plus, there'd probably be half a dozen purchases each visit, compared to the one or two books I might lug home.

'barnabypage'

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