When sales in a particular industry or retail sector decline by something like 40 percent in a decade, it becomes pretty difficult to continue on using the same methods. And so, even after they weathered the storms that took out some long-gone competitors, the remaining brick-and-mortar bookstore chains are facing a new tsunami of insufficient profits, as well as little choice but to shutter their doors.
The most recent victim is Book World, a 45-store chain that ranked as the fourth largest in the United States. It announced it was closing all its stores and liquidating all its inventory. That leaves Barnes & Noble, the largest bookstore chain, which itself closed approximately 10 percent of its stores in the past few years, and Books-a-Million, which underwent its own bankruptcy scare but remained in operations after being taken private.
The new name that now takes the fourth spot in the rankings of bookstore chains might come as a little bit of a surprise, considering that it widely blamed for the collapse of this retail sector. That is, in opening dozens of brick-and-mortar stores to complement its online operations, Amazon now counts among this group of retailers that sells hard copies of books to shoppers in its stores—even as most of the other members of this group mourn their inability to compete with Amazon’s provision of easy, quick book shipments.
This development may sound like more of the same, but it actually represents a shift in the book market. Several years back, prognosticators thought that digital readers and ebooks would replace physical books completely, such that book retailers would be left with nothing to sell. That prediction has not been borne out; many consumers still like the feel of a book in their hands, such that sales of ebooks have remained pretty consistent in the past few years.
But the difference is that those consumers who want to hold on to a book still are not visiting their local store to purchase it. Instead, they order it from Amazon and get it shipped to them, along with their household goods, holiday presents, and so forth. A few modern shoppers might visit a bookstore (including one run by Amazon) to enjoy the experience of browsing the shelves, but far more of them appreciate the convenience of getting the latest novel with a simple click.
Even if they survived the ebook revolution, the future for bookstores thus remains tenuous. One promising option might rely on localization. Rather than vast chains with centralized operations, which compete largely on price but cannot ultimately do better than Amazon on this value offer, small, independently run stores can differentiate themselves as local members of the community. They can offer personalized recommendations and a chance to interact with other book lovers who like to spend a few hours finding unexpected options stacked on shelves. That’s the sort of experience that scanning the pages on Amazon’s site can never recreate.
Discussion Questions:
- What is happening in the book store sector?
- Why is it happening?
- Which other retail sectors are vulnerable to similar trends? Justify your response.
Source: David Streitfeld, The New York Times, December 28, 2017