How the e-book and the bookstore can co-exist.
by Michael Edwards, CEO, Borders
We’ve heard it all before: digital content means the end of physical media. As consumers flock to the convenience of instant gratification and on-the-go content, traditional business models will be overturned, commerce will move online, and traditional retail outlets and the products on their shelves will go the way of the typewriter.
Or maybe not.
There’s no question that both books and bookstores are moving an increasingly digital direction. The e-book is the biggest thing to hit the publishing industry since at least the paperback -- if not movable type itself. Even with just 3% to 5 % of the market, e-books are already forcing retailers and publishers to change the way they do business. Industry consultant Mike Shatzkin of the Idea Logical Co. projects that e-books will account for 20% to 25% of unit sales by 2012 -- and he calls that a conservative estimate.
It’s easy to understand the appeal of e-books. Because they don’t require paper, printing presses, storage space, or delivery trucks, they typically sell for less than half the price of a hardcover book. But price is only part of the picture; after all, the combined efforts of paperbacks, libraries, and used books have yet to drive the $25 hardcover to extinction. For consumers, the lure of new releases at $10 apiece is at least equaled by the appeal of being able to download exactly the book you want, when and where you want it, and carry dozens of titles around with you in a package that weighs less than a single hardcover.<!-- more -->
This demand for easy-to-enjoy, on-the-go-content is part of a broader mobile revolution which is transforming lifestyles and business models alike. Commerce, advertising, and applications are now increasingly focused on smartphones and the new wave of tablets -- and generating tremendous growth and revenue for companies who can give consumers what they need, the way they want it: anywhere, any time, in real-time.
Does this mean the end for traditional books and bookstores? While the business has certainly become more challenging -- due in part to new pricing models which put downward pressure on retail prices -- the story is far from over. Even as people become increasingly reliant on digital content, “real” books remain ubiquitous on planes, trains, and public transportation; stacked by the bedside; and given and received on birthdays and holidays. The bookstore remains a popular destination even for the youngest generation, fully digital native and presumably immune to the allure of “dead” media. Indeed, the increasingly digital nature of daily life only accentuates the appeal of books as physical artifacts offering a unique tactile experience. There will always be plenty of people who welcome the opportunity to read words on paper rather than staring into yet another glowing screen.
Similarly, the increasing amount of time we spend in virtual spaces -- online meetings, social networks, video games, e-commerce sites -- places a premium on time spent with and around actual people. Brick-and-mortar bookstores have always served as community gathering places and venues for author readings, writing workshops, book release parties, gift-wrapping drives for local schools, and other special events. The introduction of cafes within bookstores has given people another reason to stay and linger, sharing space with fellow readers in the kind of environment that both encourages and rewards book-buying. Wi-fi, magazines, gifts, and other types of content and products all enhance the draw of bookstores as a hub for activities well beyond simply browsing and buying books. And, of course, retail booksellers will increasingly offer digital products and experiences of their own to buttress their brands and strengthen customer loyalty.
More fundamentally, it’s important to understand what’s driving the rise of e-books in the first place: the strong-as-ever desire of consumers to read books, in one form or another. After all, what’s a device without content? As e-books, readers, e-bookstores, and specialized apps make it easier for consumers to enjoy books, they’ll buy more titles, and read them more quickly. This expandable consumption drives growth across the category while increasing reading in general -- a true win-win for booksellers of all kinds as well as our customers.
Ultimately, there’s no reason traditional bookstores and digital booksellers can’t co-exist; for all their common ground, each offers a substantially different value proposition. Of course, the onus is on booksellers to prove their continued relevance in the digital age. If they continue to innovate in the services and experiences they offer and the ways they engage the community, consumers will continue to make bookstores a vital part of their lives. If they fail to adapt to changing market conditions and consumer needs, they’ll deserve the empty aisles -- and cash registers -- that result. The next chapter is up to them.