Monday, November 21, 2011

The end of bookstores?

During the past months there has been a lot of speculation about which e-book reader technology would become the most popular. Let us change gears for a moment and take a closer look at the book industry itself and at the future of independent bookstores more in particular.

Not only now do these independent bookstores experience significant competitive threats, but this has been the case for several decades. The first threat arose with the surge of large bookstore chains, which offered a larger selection of books. Afterwards, readers had the possibility to purchase their books cheaper via the internet. Consecutively, large brick and mortar companies started selling books at discounts. And most recently, it is e-book technology which challenges the existence of independent bookstores. What made these independent bookstores survive during the past decades and how can they remain competitive?

Identify your shop as a community cornerstone
The first option independent bookstores have, is to identify their shop as a key asset or centre point of the local community. To create community involvement, independent bookstore owners should organise book club meetings and arrange for appearances of bestselling authors. This larger community involvement will convince customers of the added value of paper books compared to e-books and will create a larger footfall to your shops and potentially drive sales.

Increase your product range to other products
If your core products, books, are in danger, leverage this exposure by offering other products. You should include convenience products, such as stationary products, near the counter so shoppers can look at them when they are queuing up. There even exist independent bookstores which offer almost completely different product lines next to their traditional ones. Other shop owners make their shop look unique or put nice sofas and coffee stands in it – assets which internet shops can’t offer. If your shop focuses on comic books, you can sell miniature versions of comic book heroes.

Control your costs
The major operating costs for an independent bookstore are labour and rental costs. It is important to control these costs as much as possible in difficult times. Next to this, take a closer look at costs related to your inventory and your book range. Define your shop image by determining the optimal inventory level and your selection of books by answering the next question: Will you attract more customers by offering titles which cannot be found in larger bookstores or does it make more sense for your shop to create a certain image by focusing on a particular genre of books?

Determine your optimal store format and image
It is funny how a decade ago, large bookstores out competed independent smaller bookstores because of their larger offerings and that now the situation has turned around because of the new competitive threats coming from large brick and mortar shops offering books at a discount, the internet and e-book technology. In this new competitive environment, it is not just the mega format which will be successful. As an example here is the bankruptcy of Borders earlier this year; this large bookstore chain operated with too large retail space while losing customers to e-book versions of many books. Clearly, nowadays there is also room for smaller store formats. In this way independent book stores can identify themselves as vendors of specialty books to attract a certain niche, while book stores in city centres still can afford to have a larger store format. What kind of niches are there? Basically all professions, hobbies and pastimes are documented in books. Organise your shop towards that particular niche.

In a nutshell, facing fierce competition of the book industry, independent bookstores can remain competitive by leveraging their importance to the community, by carefully assessing their location and its impact to the store size and lastly by identifying their shop as a specialty store focusing on a certain niche.

Finally it is useful to understand that the loss of independent bookstores will be detrimental for societies because they function as a cornerstone for general education and for social contact between community members. Next to this, I am sure that many of us have had the experience of wandering in a bookstore and, unexpectedly, finding a particular book which captures your strongest interests. Checking book titles on the internet can’t provide you with such a feeling. It is important for bookstores to emphasize these qualities in order to remain competitive.