Click here for an excellent analysis of Amazons strengths (many!) and weaknesses (few) and the threat it poses not only to other retailers, both online and bricks and mortar, but also publishers by Mike Shatzkin – one of the most insightful of commentators of trends and developments in the book retailing and publishing industry.
My thinking is as follows:
There is much debate on both sides of the pond about how to compete with Amazon. Barnes & Noble are doing an admirable job in the US while Waterstones are trying to re-inventing themselves as a “local” bookshop.
Nevertheless, it is an irrefutable fact that increasing numbers of consumers are buying books online – whether physical books or ebooks, as a recent KPMG survey confirms and that the market share of online sales will continue to rise. As far as traditional brick & mortar bookshops are concerned, a good bricks & mortar bookshop should continue to attract customers provided they meet the following 3 key success factors:
- Location, location and location;
- Quality of products, i.e. book selection; and
- Knowledge and experience of staff.
It is clear that chains such as Barnes & Noble or Waterstones do, or should be able to, possess or create these factors. What is less clear is whether many traditional independent bricks & mortar bookshops can do the same – they need all three to at least have a chance of surviving the double whammy of internet retailers and the attempted revival by the leading chains (and not forgetting deep discounting of best sellers by supermarkets).
However, the internet enables an independent bookshop to address the three key success factors, and more, with much lower overheads than operating one or more physical stores.
From my experience over the last year of developing Books4Spain (www.books4spain.com) it appears to me that publishers are beginning to grasp the internet nettle via a number of initiatives to raise their profile and that of their authors. However, I see less “movement” from independent bookshops – sure many have websites and no doubt attract a loyal following but I see very few that are seriously developing their internet presence with innovative websites, value added content etc. which are designed to attract and engage customers. It seems to me that it’s more of the fact that “the internet is there so we had better have a presence but lets not undermine our physical store”
A good example of this thinking is the UK Booksellers Association whingeing on about how the government should protect independent bookshops from online retailers. Please – since when is it the UK government’s role in recent history to control, assist or directly influence the book retail trade (the Net Book Agreement was abolished many years ago). They should be looking at ways to help their members compete more effectively with online bookshops such as Amazon.
I established Books4Spain not only in response to the explosive growth in online mass market ‘soulless’ book retailers, such as Amazon (and Waterstones for that matter) but also to the continuing decline of the traditional independent bookshop with knowledgeable staff and an interesting collection of books. It meets a number of key criteria which I believe are vital for success in competing against Amazon:
- A user friendly site which has been designed to re-create the experience, attractions and benefits of a traditional bricks & mortar independent bookshop;
- Specialisation – in this case “local” = Spain;
- Books which have been classified and categorised correctly (or is the word “curated”!) to enable customers to find relevant books easily and quickly whilst also drawing them into a browsing experience;
- An interesting selection of books, e.g. modern best selling Spanish writers in translation; and
- Added value information such as Book Reviews by people knowledgeable in the subject area, e.g. Wine, Flamenco, Food etc.
All with the added convenience afforded by the Internet. So from our perspective we have very low overheads which enables us to focus on customer service and identifying and curating relevant books whilst giving us global reach.
We are getting very good feedback from users, publishers and authors – the last two being as keen as The Booksellers Association and James Daunt of Waterstones to try and break Amazon’s dominance and aggressive discounting of mass market books.
In summary, while I think independent bricks & mortar bookshops do have a future, only a small number will survive the onslaught of the Internet giants such as Amazon and I believe to do so effectively they need to embrace the Internet and use it to their advantage.
However, for James Daunt of Waterstones to complain vehemently about a highly successful company that is successful precisely because they provide customers with an excellent service, albeit a “soulless” experience, and to call Amazon a ruthless, money making devil and the consumer’s enemy (they did lose hundreds of millions of dollars for many years) is to me a sign of jealousy and fear, an insult to consumers and an implicit acknowledgement of past failures to develop successful strategies to cope with the growth of online shopping and Amazon in particular.
7 December 2011