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World E-Reading Congress: Legacy, bookshops and the future

The Bookseller has run a piece on the speech I gave to the World E-Reading Congress earlier this week, so I’m reproducing the text in this blog entry.

Whilst I’ve edited out some of the more obvious “lecture” elements (eg “Good afternoon, my name’s Philip Downer”), this is still a talk, so in places you may find it (even) more rhetorical than some of my usual writing; similarly, the grammar and syntax will be a little sketchy or forced in places!

My audience consisted of publishers, and those who provide publishing services – distribution, analysis, technical support, media coverage, plus a smattering of creatives (writers, illustrators, designers) and some online sellers of books and/or content.  There were no bricks and mortar retailers present.

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My theme for this afternoon is Bookselling: The past is another country, but the future is another planet.

This is a bit clunky, but on an agenda full of brave new worlders, keenly identifying opportunities and breakthroughs for the future of eReading, I am the lucky person who has elected to talk about shops.

I’ve given a few talks over recent months, and as I approach each one, the news for specialist booksellers appears to have got a little bit more challenging.  At Frankfurt last year, I observed that “We are entering a world where a handful of corporations own proprietary formats through which all the books, and a great proportion of all other creative content, are channelled.  New technology can do great things, but it can also damage supplier diversity and consumer choice.”

I stand by these words.  The bigger and more powerful the mega-corporations become, the more entrenched they’ll be.  They operate out of highly protected walled gardens, and their goal is to tie you, very tightly, into their specific eco-system.  It isn’t in their interests to allow this situation to change – even though I would argue, it is clearly not in the best interests of every author, publisher and reader, for a handful of tech-driven organisations to own books and reading.

I’m talking to you today about retailing, rather than the broader outlook for publishing.  However, the old author/agent/publisher/bookseller/reader model is significantly fractured and everyone in this industry needs to decide whether monopolies or diverse markets are more appropriate for its future.

As this is an eReading Congress, I think a show of hands would be appropriate.

Who uses an electronic device in their leisure reading – an eReader, a tablet, a smartphone?  [Practically everybody in the room.]

Put your hand down if your principle device is a Kindle.  [Around half of those present.]

OK.  Now, lower your hand if your principle device is an iPad or iPhone.  [The other half of the room.]

Sony?  Kobo?  Nook?  AN Other?  Samsung phone?  PC?  [No, no, no.  Everybody used Amazon or Apple devices.]

Although they play very different roles, there are of course two, big dominant players in our new world, a retailer and a consumer electronics company.  But Amazon and Apple are an odd couple

Amazon: is setting a course to becoming the world’s biggest retailer, and en route laying waste to the established author/publisher/bookseller ecosystem.

Take a look at its performance for the first quarter of this year:

Q1 2012

Revenue:      $13,180,000,000

Profit:          $      130,000,000

Margin:         1.0%

Amazon sells ebooks and pbooks at low margin, break-even or a loss.  This (we are assured) benefits the customer.

Amazon has very patient investors, who support a high P/E ratio, currently running at over 90x.  I assume they work on the principle that, once world domination is assured, the profits tap will be turned on.  Otherwise, where’s the value?

How many sectors and countries does Amazon have to dominate before this happens?

Apple:  is producing the products that everybody wants, selling phones, tablets and other hardware and content at a spectacular profit.

Notwithstanding Samsung, it pretty much leaves all its competitors in the dust.  It also, by-the-bye, runs a highly successful and much-respected retail chain.

Looking at its quarter one performance:

Q1 2012

Revenue:      $39,200,000,000

Profit:           $11,600,000,000

Margin:         29.6%

This extraordinary margin, we understand, also benefits the customer; so Amazon’s 1% is a good thing, and Apple’s 29.6% is also a good thing.

Naturally, Apple’s investors are as happy as can be, and they’re even being promised dividend payments in the future.  Oh, and Apple’s P/E ratio is a rather more rational 10.5.

Jeff and Steve have made this world for us in which consumers are happy to pay top dollar for the best hardware, and the lowest conceivable prices for content.

In the past month, of course, a new alliance has been formed – something of a 1990s supergroup.  Is the Microsoft/Barnes & Noble alliance strategically brilliant, or a last throw of the dice?  Microsoft has a track record of alliances with previous cycle winners, like Yahoo! and Nokia.

However, publishers and many readers are looking for alternatives to Amazon’s hegemony.  The deal enables B&N’s Nook and College divisions to separate themselves from the old superstore business, and provides the firepower for the Nook to be launched worldwide, with a solid retailer base in the US.

Are Barnes & Noble the future, or is this just a coming together of legacy businesses?  And what is a legacy business, anyway?

Ten years ago, if I’d said “legacy” to you, you’d have understood it in the old sense – “Something handed down from an ancestor or a predecessor or from the past”.  A legacy was a good thing – real value created by previous generations, and a solid foundation for the present and the future.

Today, the word “legacy” is used as an unthinking term of abuse – essentially, any business that has a history longer than a few years is a “legacy” business, and thus unfit for purpose, and ripe to be taken down.  Established publishing houses are described as “legacy businesses” by teenage entrepreneurs seeking to discredit them.  Perhaps they fail to distinguish between a business that has a valuable inheritance, and has the capacity and the drive to embrace the new world, with one that isn’t in control of events.  Or perhaps they confuse all established businesses with the fireworks of the tech sector, the Netscapes and MySpaces that crashed and burned; the Yahoos and Research In Motions whose innovation has been eclipsed by other, newer stars.

It’s inevitable that what appears to be change-making today will become – necessarily – protective and fixed tomorrow.  Perhaps, in this sense, “legacy” simply means “grown-up and responsible”.  Well, there are worse things to be, and, companies that once behaved radically will start to behave protectively instead, in order to maintain their primary income streams.

But let’s talk about retailing, because this is where a physical legacy can become really toxic.  In the 1930s, Woolworths opened nearly 400 brand new stores across the UK.  When I say “opened”, I don’t mean “rented a tin shed and screwed their name to the front”.  I mean, they acquired freeholds, and built big, brand-new stores.  This was a massive investment of cash and confidence in the market.  The crowning glory was the Blackpool store, which opened in Spring 1938.  Five storeys over 75,000 square feet, including two vast restaurants.  Woolworths was one of the biggest and most powerful consumer brands in the world.

Building all those stores guaranteed Woolworth a strong presence in every town in the country.  This was the legacy of its period of supergrowth, but as time passed, the retail offer lost its focus; the freeholds were sold, and the legacy of great stores was no longer a valuable inheritance, it was a millstone of failing retail premises.

Historically, this is what retailers have done – opened stores, and carried on opening them until sometime after the market cries “enough”!  Clintons Cards and Game are two of the most recent examples in the UK – and then, of course, there are the challenges facing the remaining booksellers.

Right, here’s a scary prospect for you.

Imagine you’re running a chain of bookshops.  We may be talking about hundreds or a handful; we may be talking about any country in the developed world.  Two or three years ago, the era of the superstore came to an end.  Now, I would argue, the era of the chain bookshop is going to follow, unless the model is radically reinvented.

So, if you’re running a chain of bookshops today, you have to do two impossible things.

The first is to deal with your straggling real estate, because, as I’ve discussed, the single biggest challenge for any bricks and mortar retailer is their legacy of old stores.  However carefully that estate has been built, however appropriate it was five years ago, it is now shot through with toxicity.  All of those shops are tied to long leases, with upward-only rent reviews.  Landlords are operating in a shrinking market, so are in no position to give concessions to any business that wants to close a shop while the lease still has years to run.  This leads to pre-packs and CVAs (company voluntary arrangement), but these acts of desperation are usually the prelude to administration.

All retail businesses have an unproductive tail, and any location that’s bad at the moment has the scope to get worse.

Archie Norman, Asda’s former CEO, has observed that retailers should close 5% of their estate every year, and he’s absolutely right – but I can think of no retail business that has heeded that advice until it’s much too late.

As a bookseller, your bricks and mortar shops have to be super-viable.  You must close today’s loss-makers, and tomorrow’s loss-makers too.

Plenty of retailers are facing this problem right now – Argos, French Connection, Mothercare and Thorntons have all been in the news in recent weeks.  However, although they’re vulnerable to online sellers, it’s still difficult to digitise a romper suit or a box of chocolates.

So, close your under-performing stores.  Then define your customers and their interests, and close any further stores that don’t match that profile.

Your second impossible challenge, and one that is at the heart of this conference’s purpose, is that you have to compete in an omni-channel marketplace, and you have to do so against some of the richest corporations the world has ever seen.  Logically, this is impossible, because it requires huge resources, and your chain of bookshops can’t do this alone.

This is where the book trade needs to pull together.  This industry is at a crossroads where it either allows the global corporations to progress from being walled gardens to becoming super-fortresses; or it fights to ensure plurality.  I salute unreservedly the stand that Macmillan and Pearson are taking, alongside Apple, in the Department of Justice case regarding agency pricing.  A couple of weeks ago, Amazon decided to give away the Hunger Games eBook free of charge.  Now, maybe I’m just losing it as I get older, but can anyone explain to me how giving away the best-selling book in the world helps to secure current income, or to create a future value proposition, for anyone other than Amazon?  It may be that the publisher and thus the author still got paid, but at the long-term cost of proclaiming their work to be without value.

Booksellers today need the freedom to participate in the omnichannel world, and it is in everyone’s interests to lower those barriers.  That means removing DRM, so that content becomes device-agnostic; customers can buy the hardware that suits them, and the content, at an appropriate price, from the retailer who can do the best job for them.

I would love to see thinking of this sort emerging from Microsoft and Barnes & Noble’s NewCo.  If B&N thinks it now has the firepower to challenge Amazon without also changing the ground rules, then they will find that Amazon can always out-gun them.  Anybody else with a stake in ebookselling needs to do likewise.  You won’t beat Amazon by being a pale imitation of Amazon, pleading with consumers to do what’s best for the long-term health of the book trade.  Consumers have enough to worry about.  They will respond, though, to a different, better offer.

Your retail goal – because you’re running a chain of bookshops, remember? – has to be an integrated ebook and pbook offer, with full online visibility of stock by branch for your customers.  You’ll need a financial model that supports “showrooming”, because it’s a fact of life.  You’ll offer Click and Collect, targeted social marketing and all the rest of it – everything a sophisticated pure-play online retailer does, with a shop attached.  You’ll need to understand more about your individual customers than ever before.

Your online and ebook offer can of course cover all categories.  Your pbook offer must be reshaped to reflect the new reality.  That means fewer fiction paperbacks, and fewer reference books, because the day of the “general bookshop” is over.  You need to be known for doing a few things extremely well, not everything tolerably competently.

All of this sounds scary, and you will all be aware that the number of specialist bookshops in the UK has declined by over 20% since the credit crunch kicked off.

Booksellers – and, by extension, our suppliers and our customers – invested far too much energy in worrying about supermarkets, and not enough in recognising that Amazon wasn’t just another specialist competitor in a healthy eco-system, with a novel twist.  Today, if we take all the UK’s true specialists, the Waterstones, the Foyles, the academic chains, all the independents, and add them together, I don’t suppose their unit sales are as great as Amazon’s are now.

There’s a school of thought that says, well, you pesky booksellers, you should have done more.  Should have done it sooner.  More fool you.  I think this is a little like acknowledging that a fine historical building has caught fire, and saying “they should have installed a better sprinkler system.  I’m not calling the fire brigade” – when there is still plenty of merit worth saving, and plenty that you’d miss if that magnificent building was gone.

Specialist booksellers – including independents – are now barely competing with each other at all any more.  They’re competing with Amazon and Apple; they’re competing for time as well as spending.

However, here’s the interesting thing.  At the risk of sounding like Clement Freud on Just A Minute, I’m going to run through a diverse list of retailers.  Here goes:

Anthropologie • Argos • Asda • B&Q • Bentalls • Blacks • Comet • Conran Shop • Cotswold Outdoor • Dobbies • Eden Project • English Heritage • The Entertainer • Fortnum & Mason • Habitat • Halfords • Hamleys • Harrods • Harvey Nicholls • HMV • Historic Royal Palaces • Hobbycraft • Homebase • John Lewis • Lakeland • Morrisons • Mothercare • National Gallery • National Trust • 99p Stores • Oliver Bonas • PC World • Pets At Home • Poundland • Royal Horticultural Society Wisley • Ryman • Sainsbury’s • Selfridges • Tate • Tesco • Toys ‘R’ Us • Urban Outfitters • Wyevale Garden Centres

Most of these businesses are thriving, successful enterprises.  Some are struggling – but all of these chains are also booksellers.

Some, like the supermarkets, are big, important players.  Others offer books as a value proposition, or as part of the lifestyle offer they’re promoting, or as a souvenir of a day out.

But they all believe that there’s a place in their shops for physical books.  Most of these retailers have a much clearer understanding of their brand, and of their customer, than general bookshops have.

The physical bookshop struggles, but the physical book can thrive.

We tend to look at the problem from a “growing online, declining physical” standpoint.  But if the solution is to ensure that all physical stores have multichannel capability, surely the same applies to pureplay online retailers?

As Sarah Wilson of the Egremont Group has argued persuasively, without a high street presence, without the ability to see and touch the goods you want to buy, online sales will plateau.  After all, if we all really wanted to, we could stop using bricks and mortar shops tomorrow, and just buy everything online – it’s all there, after all.  But we don’t.  Consumers of the future will be looking for an “integrated experience… as they choose to shop across channels and increasingly look on pure plays as employing yesterday’s model”.

OK, this is where it gets interesting.  You’re running a chain of bookshops, remember?  But chains are inevitably bland.  Chains are corporate.  Chains are bound by process; necessarily managed to lowest common denominator standards.

I’d posit that more good managers leave book chains and open their own bookshops than happens in most other sectors.  They do it because they love what they do.

So, at this stage in the development of the bookshop, I think it’s time to acknowledge this.  You could create a partnership model, like John Lewis’s.

Or you could be bolder, and create a franchise model.  The centre would provide the technology, the systems back-up, the buying power.  The managers acquire ownership of the stores, buying an interest in them or purchasing them outright, customising their shops as appropriate for their markets.

You cease to have a chain of stores.  Instead, you have a network of individual specialists.  They may go down the children’s route, open cafes, build non-book sales.  Or they may, like the Harvard Bookstore, invest in Espresso Book machines; providing a real specialist service, with same-day delivery to local addresses, and next-day around the world.

That network of stores doesn’t have to be restricted to your core business.  You can sell your chain’s expertise to other independent bookstores, and reinvent yourself as a bookshop service organisation.

We have a number of good businesses supporting UK booksellers.  Gardners’ networked Hive website, offering pBooks and eBooks online; the Bookseller and Nielsen, providing news and reliable data; and of course the support of the Booksellers Association.  I’d like to see all of these organisations – and others – committed to supporting everyone who is a bookselling specialist, whether they’re primarily selling eBooks or pBooks, online or instore.  If anyone could pull this together it would be the BA, but the organisation would have to repurpose itself appropriately.

There’s a way forward for individually managed and owned shops that have full access to ebooks, and yet can localise their offer to suit each physical location, each local residential, business and academic population, in a way that chains inevitably struggle to deliver.

And funnily enough, your carefully tailored local offer could be exactly what individual customers around the world are looking for.  And today, you can reach out to any potential customers.  You can identify where there are similar populations, elsewhere in the country, elsewhere in the world, and serve them too.

Of course, this means that you and your shop need to have to have an opinion.  A point of view.  A personality.  All of these things rolled up into a specific and saleable competence.  Please some of the people most of the time, because you can’t be all things to all people.

Supermarkets have done their damage, and will reduce their book ranges as the mass-market transitions away from paper books.  This is an opportunity for our industry’s specialists, who need to improve in quality and consistency.  Some of our best bookshops are among the smallest and most independent, in every sense of the word.

Customers will still seek out good, well-run shops, and I suggest that the distinction between “independent” and “specialist chain” is a whole lot less important to everyone’s future, than the distinction between “specialist” and “non-specialist”.

A healthy bookselling sector is in the best interests of everyone in the trade – authors, agents, publishers, readers.  Bookselling needs to remodel itself for the future, and do so in partnership with all the other key players in the publishing business.

But books and bookshops still matter, and there are still people who want to sell books.  If those specialist bookshops focus on competing with each other for ever diminishing returns, they might disappear altogether.  The more effectively they can work together, the more robust our retail offer in the future.

To comment on this blog post, just click on “leave a comment” in the Tags block above.

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My eBook, A Year at Front of Store, is available in these Amazon Kindle territories –

United States, United Kingdom, Germany, France, Italy and Spain

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How to sell an eReader – Barnes & Noble vs WH Smith

My monthly column in The Bookseller is now available online.  This time around, I contrast the American multi-platform strategy of Barnes & Noble (stores, bn.com, Nook) with the less three-dimensional approach to eBooks that WH Smith/Kobo are pursuing in the UK.


Key points from Frankfurt

I flitted in and out of a busy Frankfurt last week.  For anyone who hasn’t been to the Messegelände, the scale is spectacular – vast hall after vast hall, interconnected with numerous escalators, corridors and security checks.  A dead whale full of Audis and antiquarians was parked in the centre of the complex, and wifi support (notwithstanding the BlackBerry Crumble) was lousy.  Earls Court is being demolished next year, but if it ever saw Frankfurt, it would die of shame.

From the perspective of this blog, the big buzz was eBooks, and the point at which their penetration of English-speaking markets will extend to the rest of the world.  Kobo’s new partnership with Fnac (as well as their new relationship with WHS as a UK-exclusive partner) suggests both that Europe will start to feel the eBook hurricane through 2012, and that there may be some alternatives to the Amazon hegemony starting to emerge.

My presentation at Tools of Change has been extensively (and sometimes sensationally) reported, though my determination to rouse my audience with touches of revivalist preaching meant that I got what I deserved – anyway, I thought it would be useful to reprise my key points, then we can move on to the next chapter of this brave new world.

1. Bookshops cannot survive as economic entities

UK bookshop chains, a few years back:

UK bookshop chains, 2010s:

Progressively, most of the businesses on the first slide disappeared over the past ten years – they were acquired and subsumed, or they failed and closed down.  In a more benign economic environment (less price competition, less online competition, less severe banking crisis) more of them might have survived; of course, some were more robustly structured or better managed than others.

These bookshops (and the hundreds of indies that have also folded) didn’t disappear because no one wanted to buy from them any more; however, in a world of upward-only rent reviews, rising utilities costs, and very tight net margins, bookshops can only survive losing, say, 20% of sales before they become uneconomic, and plugs get pulled.

This leaves the remaining 80% of their customers unhappy and disenfranchised; it speeds the drift to Amazon and supermarkets (and in due course Kindle), or it causes those customers to stop buying books altogether.

The “eBook Revolution” (one for the cliché file) will accelerate this process.  I’ve never prophesied the death of the physical book (or pBook, as the eBook-people prefer), but publishers need strategies for a bookshop-free world, and I’m not yet convinced they’ve found them.  One strategy might be to support bookshops with more equable terms, of course, but retailers and publishers would have to be very honest with each other about outcomes, so that publishers’ profits weren’t ploughed into supporting failing enterprises, or bookshops given a false sense of their own robustness.  Interesting to read Hachette Livre Chief Executive Arnaud Nourry’s views on these matters.

2.  Retailer diversity matters

Regular blog readers will have seen my “Amazon takes over everything” sketches before.  Click here for the Fantastic Dystopia.  I used these old sketches to illustrate the peculiarly British phenomenon, whereby Amazon has emerged as the sole credible online bookshop, and the sole credible eBook seller, in the UK.  I’m concerned that the publishing community hasn’t done enough – collectively? – to ensure that there are alternatives to this level of domination.

There is a limit to the amount of business you can do with a “frenemy”.  John Ingram, whose family owns the dominant American book wholesaler (and much more) defined his company’s relationship with Amazon – on a Tools of Change panel discussion – something like this:

Amazon will make use of our services and expertise for as long as it makes sense for them.  But as soon as they can do it themselves, they’ll shoot us in the head.

I had something of a Damascene conversion over the summer, shopping for books in the regulated French market, where book discounting is limited by law to 5%.  I saw a greater choice of books in mass market stores, and a greater choice of interesting bookshops.  It started to look as though price protection might be assisting plurality, and helping to keep good bookshops in business.  Consumers may pay more for their books – but (beyond academia) no one has to buy books.  More realistic pricing would be a benefit to everybody.

Here’s a table of pricing that Rüdiger Wischenbart presented at the TOC wrap-up.  Rüdiger calculated the average RRP and discounted price of six major nations’ top ten fiction books, and benchmarked them against their eBook equivalents.  The results confirm that we get cheap books in the UK – though we have got ourselves into a “high RRP, big discount” mentality that favours the most powerful merchants, and disadvantages the small specialist.

3.  Keep books special:

I’m worried about books being subsumed into “the seduction of colour, movement and noise” represented by tablet devices.  My slide showing all the things you can stuff into an iPad looked like this:

Of course, the tablet environment is ideal for many non-narrative formats, but I fear for the distinctiveness of long-form narrative if it is left to fight all of this miscellaneous (and often more seductive) content.  I believe that standalone eReaders are important – indeed, I’d like to see the focus move away from what is a fairly basic and straightforward piece of technology, to a point at which the eReaders are free of charge, and the content – the stuff that really matters – is ascribed the value it merits.

4.  A couple of contentious observations:

a)  Publishers need to promote more, younger firebrands to positions of real responsibility.  My generation grew up with paper (and telephones, vinyl, 35mm film and all the rest), and we are inevitably “translating back” – subconsciously – much of the time.  The bigger the publishing house, the more disruptive new media will be to their established business model, and thus the more disruptive the people they should be hiring to ensure they prosper.  We’re saying goodbye to our bookshops; professional publishing is economically and culturally essential.

b)  It’s great coming to Frankfurt, and talking books, books, books, to all and sundry.  But most book buyers (the actual customers that publishers need to get much closer to) don’t eat, sleep and breath books.  They have other things to worry about.  Publishers will have to fight for their attention, so they need to ensure the public still value what books give us, and their fundamental role in a strong society – the ideas, the knowledge and the power that they ultimately confer on us all.

If you want to talk to me directly about any of these matters, you can contact me at philip@frontofstore.co.uk.

Afterword: Apologies to the long-established and very fine booksellers John Smith & Sons, whose name should have appeared on both of the “bookstore” slides above.


Kingston University blog link

My friends at Kingston University, where I am a member of the Publishers’ Advisory Board (Publishing MA) have very kindly splashed me on their blog, following yesterday’s rhetorical burst the the Tools of Change Conference here at the Frankfurt Book Fair.

You can read their comments, with links to The Bookseller, here.


The primrose path turns steep and thorny

Moira Benigson, who heads up the executive search company that bears her name, distributes a daily digest of retail, marketing and media news that is always worth a look – you can read it here.

In Friday’s edition, Moira herself writes about topics familiar to readers of this blog:

I am beginning to think that in the world of retail, apart from independents, who have to be outstanding to survive, we are moving towards one (or, maybe, a very few) of everything: think about chains that sell electricals, music, video games, books and even wine. The majority are struggling for survival, many are in the intensive care ward and some are on their way to the angels.

What prompted me to think about this was that I really like to support my local book store, Primrose Hill Books . Jessica, one of the owners, is extremely knowledgeable and very helpful. Lately though, I find myself increasingly buying more and more books (and other things as well) on Amazon, or else I download books onto my iPad. Interestingly, I have noticed lately that the number of packages arriving at the office has increased dramatically. Who needs to go to stores when you can buy with such ease online?

Anyway, I bought a book from the store this week and, as printed on the sleeve of the book, I paid £20 for it. When I got to my computer, I checked on Amazon and the very same book was… £8. What chance does Jessica have of surviving, I ask myself? And all the conversations I have had this week about HMV go exactly the same way – punitive rents, all those staff to pay and other overheads – why bother, when you can just download the music on iTunes? The big issue is, then: what is the role of a store, and is it possible to survive the storm that is brewing for high-street retailers today?

Primrose Hill is about as bookshop-friendly a street as you’ll find in London – a variety of mostly independent retailers with individual offers, well-presented to a clientele that has both money and time to spend.  PHB is a lovely store, and in a better world its prosperity would be assured.

The price differential between the full price printed on the book (a price often pitched artificially high, in order to create a platform for discounting, but sold to independents on terms that preclude any meaningful price-cuts), and the price typically charged online (for the physical book or the eBook) is now insurmountable.  When Al Gore invented the internet, the £20 book was offered online for, say, £16, plus £3 p+p and an evens chance that someone would pinch your credit card data along the line.  Today, shipping is free, card security at least as bullet-proof as a chip-and-pin terminal instore, and the customer gets a saving of over 50%.  The physical store, on the other hand, is now paying higher rents, higher utility costs and higher national insurance (though it will have tightened staff costs, of course).

Retail Week has estimated that a store, or chain of stores, can shed about 15% of sales before it starts to get seriously troubled.  That leaves 85% of customers seriously incommoded when the store or chain goes belly-up, but margins are tight, and – as all physical retailers operate in the same world (HMV, British Bookshops, Borders, Zavvi, Woolworth…) – this is no longer a question of “inefficient” retailers being subjected to the usual Darwinian forces.  The trade goes online (with a few plums to the supermarkets), and has to reinvent itself totally.

In her piece above, Moira extends beyond books ‘n’ CDs to mention electricals and wine.  There are plenty of other sectors that will find that their business will be sufficiently eroded by the cheaper consumer offer online.  The coincidence of the shift to online and low levels of consumer confidence/disposable income, will alter the high street beyond recognition.

It’s London Book Fair this week – I’ll be at Earls Court for the next couple of days, and will share thoughts on interesting presentations etc on Twitter (@frontofstore).  Normal service will resume in due course, but in the meantime, enjoy the glorious weather, and let’s hope for a strong retail Easter.


A long World Book Day’s journey into World Book Night

Claire Armitstead reports today in the Guardian that 40.8% of teens aged between 13 and 18 have read a book on a computer, 17.2% have read one on a mobile phone, and 13.3% on a Tablet or iPad.  That last number is interesting – because tablet technology only entered the mainstream a year ago.

This Thursday is World Book Day (and for the first time, World Book Night as well).  As a former chairman of WBD, I think that it’s a hugely valuable asset in our national calendar – not so much for the PR that it generates, but for the individual potential of the gift of a book to every child in the country.  I may be getting sentimental and condescendingly Victorian about this, but I believe there are few more worthwhile things one can do than introduce a child to reading.  If the child’s house is book-free, if their school is not academic, then the effort is that much more important.

The basis of the World Book Day children’s offer has been the issuance of a £1 Book Token to every child in the country, redeemable for a £1 WBD special book, or redeemable against the purchase of any other book.  A passive gift does little good, however; schools and booksellers have to work together to bring children and books together, to explore what is available and make their choices.

Now, the number of specialist bookshops is falling inexorably, and children are – inevitably – spending more time on devices and less with paper.  Supermarkets like Tesco participate in WBD, but hardly offer the service or environment required to engender a lifelong love of reading.  Amazon doesn’t redeem WBD tokens.

I hope that serious thought is being given to the continuance of the children’s WBD principle in a future where paper plays an ever-smaller role.  I’d be happy to participate.

All of this is separate from World Book Day’s ongoing efforts to attract more adult readers.  This has always felt, to me, like an entirely separate project, and I was never too happy with the muddying of WBD’s child focus with various adult-orientated ideas – postcard schemes, customer surveys etc.  The thoroughly admirable Quick Reads programme, targeting lapsed readers, is a free-standing concept that I’d love to see escape from the WBD umbrella.

This year’s adult focus is World Book Night, when 20,000 volunteers will be giving away 1m full price adult books, at a nominal “cost” to the trade of, say, £7.5m in “lost sales”.  The motives for this event, and the support it’s received from authors, publishers and the media has been admirable.

But I do worry about “free” – I don’t think something with the inherent value of a book should ever be “free”.  Children’s WBD titles are exchanged for a token with a cash value; even multibuy promotions (3 for 2 etc) require a considered purchase from the customer.  Nicola Morgan blogged yesterday about an alternative approach to World Book Night, wherein members of the public are encouraged to buy a book as a gift (an idea much closer to the original, Barcelona-born WBD).

Instinctively, I favour this approach – a gift is a considered transaction, that says something about the giver and the recipient.  However, I recognise that, to achieve “cut-through” in the media, the free splash probably has more traction.  I wonder how many of those free books will actually result in new readers?  I’ll be in Foyles tomorrow, looking for a gift…


My Nooky-Wook

Back in the olden days, around 2001, I started to hear this conversational parry at social events:  “I’ve always loved bookshops, and of course I particularly love [insert name of conversational partner’s store], but I’m afraid I do sometimes use Amazon  – it’s so convenient.”  (Convenience always being cited over value at the sort of fancy soirees I attended.)  Of course, one remained polite, but a change was under way, and it wasn’t going stop.  By mid-decade, domestic broadband was rolling across the land, and the tone of the same conversation started to alter – it would, after all, be foolish not to use Amazon, given its efficiency, and all the other pressures one had on one’s time.

Subtly, the message had changed from “I love bookshops, but I sin from time to time” to “I love those quaint old bookshops, but I’m not stupid”.

Funnily enough (I was laughing fit to bust), it was those same Amazon early adopters who went on to berate bookshops for trimming their ranges.  “We can’t carry the stuff if you’ve stopped buying it!” I restrained myself from snapping.  However, there was an underlying assumption that, whereas the speaker might be sinning or smart, the rest of the population would continue to support bookshops, and Everything would be All Right.  The market would continue to grow, and cake would be both had and eaten.

But Amazon didn’t grow the market significantly.  Supply chain innovations rarely do – there is a pretty fixed percentage of the population that buys books, and they read a pretty fixed number of them.

Now, the game has changed again.  Christmas 2010 saw a tipping point for the consumer adoption of eReaders and associated hardware in the UK.  The launch of the Kindle was accompanied by a blitz of advertising (were those ad cards in every tube carriage?), a few short months after the multi-purpose iPad had been launched and embraced across the world.

Early adopters had already had a while to determine whether this technology was of interest to them.  Borders introduced the first eReader into the UK, the iRex Iliad, just three short years ago.  Retailing for a perfectly reasonable £400, the Iliad gave users access to an eclectic variety of eBooks, and we sold many hundred units, somewhat in excess of our expectations, as we had no associated website at that time on which to sell content.  For a week or two I carried one around with me, and was marvelled at in restaurants and boardrooms.  (Happy memories of the HarperCollins sales force, a few years earlier, laying out their shiny new BlackBerrys on a negotiating table as if they were Star Wars enabled.)

The Sony eReader arrived on a wider market a shortly after the Iliad, and sold rather better, but throughout 2008-09, the market shrugged; this was left-field technology of no great interest to the mainstream buyer.  iPad and then Kindle changed all of this – and, of course, the availability of Kindle services and titles to iPad users helped to supercharge growth.  Self-supporting networks (as pioneered by iTunes) ensured that the great bulk of the new channel sales was being enjoyed by the two giant American corporations.

I am now becoming very familiar with the new version of the Great Booklovers’ Apology.  This is a statement made by friends, here and in the US, who “of course” are still committed to their physical books, but they “love” their Kindle/iPad/Nook – it’s so easy, convenient, fast, etc.  “I still love books – I’ll always love books, you can’t beat the feel of a book, its smell, its heft – but I love my Kindle/iPad/Nook”.  In many cases, they “never thought they’d be saying this” – but they are.

We are all deluding ourselves if we believe that the mass consumer is going to run two formats in parallel, because this doesn’t happen.  I buy CD, I stop buying vinyl and cassettes.  I buy DVD, I stop buying VHS.  I buy iTunes (or I just steal stuff online), I stop buying CD.  I start streaming movies, I stop buying DVD.  All of these markets (well, perhaps not VHS) leave a residue of hard-liner users behind them, but in broad consumer terms, don’t believe the colour supplements – there is (for instance) no broad–based “vinyl renaissance”.

Once the “six books or fewer per annum” customer (the one who buys the majority of all books sold) has switched to digital, s/he won’t be switching back.  To hope otherwise would be like assuming that my mother, on receipt of  her first automatic  washing machine in the early 60s, would keep the old twin-tub and mangle because they were such a pleasant alternative.

Like record shops, like electrical repair shops and like blacksmiths, bookshops and physical books have a future, but it’s a niche future.  Quite how that niche settles – and how diverse and various the product and the outlets selling it might be – we shall consider on another day.