Quote:
Originally Posted by mldavis2
I'm not so sure the eBook revolution is as rampant as some think.
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Retail stores will have time to turn themselves into specialty outlets if they wish to survive.
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eBooks aren't the primary reason the superstores are at risk; they are merely the final nail in a coffin long in the making.
The retail stores have *had* 15 years to adjust to the new market reality and have frittered away 14 of them.
Amazon.com was founded in 1994.
The PalmPilot was introduced in 1996.
The Rocketbook was introduced in 1998.
Even the Kindle is already 3 years old.
It is only recently that Borders and B&N have setup online *print* book stores; for years Borders.com was actually a mirror site run by Amazon. (People forget there is a whole lot more to Amazon than books. They do a ton of business hosting online computing, for example.)
Borders and B&N simply thought that online shopping was a fad and that what worked in the 90's would keep on working until the end of time. The problem is, unlike certain european nations that will go nameless, the US book marketplace is open and competitive; consumers dictate what works and what doesn't by voting with their wallets, not bureaucrats and politicians and publisher associations.
In the past 15 years, people have gotten used to online shopping; they appreciate that it is a safe, economical way to shop for dry goods and commodities. And over that same time, the BPHs, so enamoured of volume have shifted away from balanced revenue streams towards high-volume "blockbuster" sellers which are, in effect, commodities.
It isn't ebooks that are killing the bookstores; it's the BPHs.
It takes no skill or added value to sell the latest James Patterson novel. You just put up a sign, fill up a rack, and sit back to collect the money, right? Well, guess what? WalMart can do that. Target can do that. Buy.com can do it. And Amazon can really really do that and more.
The more the industry relies on the monster sellers, the more money goes to the commodity books, the more comfortable buyers get used to the competing channels. And the more space the megastores devote to the Bestsellers the less space they offer to the midlist and backlist.
Add in that the online vendors (Amazon, yes, but also buy.com, Powells, and others) offer deeper catalogs than even the biggest megastore could possible stock and you end up with the current scenario where the stores are too big to live off commodity, low-margin bestsellers, and too small to carry a customer-satisfying catalog that can compete with online.
Going to a bookstore for anything but a bestseller or recent release these days is a hit or miss proposition. You could drive 20-30 minutes to the nearest Borders or B&N (because most of the mall stores are being shut down) and get lucky and actually find a copy at something close to list price. Or you might have to special order it and wait a week or so to get it, at something close to list price.
Alternately, you could just go online and order it with next day shipping at something close to list price, or get it a week or so later at a significant discount.
A lot of people are choosing to save themselves the russian roulette number and just going for online. It is a faster, more predictable shopping experience.
Of course, there are those who are into instant gratification. And for those we have ebooks: ebooks also offer a vast catalog, lower pricing (when dealing with rational publishers, anyway), *and* instant access.
The modern book market is schizophrenic; the BPHs have made it so.
You have a high-volume, low margin, high-turnover business built off "surefire" bestsellers that command massive up-front advances and get enormous publicity campaigns.
And you have a low-volume, slow-moving, higher margin midlist/back catalog business that commands little if any respect from the BPH execs but really makes the backbone of the industry.
The megastores are suited to neither.
Their overhead means they can't match the dept stores on the commodity bestsellers *or* the online vendors on the deep catalog slow movers.
The thing to remember is that the bookstore's problem isn't that they don't have a *lot* of customers. It's that they don't have *enough* to cover their costs. These stores have been hanging on by the skin of their teeth (or their latte and pastry counters) for years now. Each year things got slightly worse and they looked to trim costs a bit here a bit there; hire cheaper labor, feature less copies of the back catalog, send unsold bestsellers back quicker...
And now you have ebooks syphoning away some of the more afluent prolific buyers. In absolute terms it's not a big number of customers. In sales volume, it is a significant number, because of the buyer's habits. (Word is ebooks might rack up a billion dollars in sales this year.) Some of it is coming from the online print sales side of the ledger, some is new customers, some if coming from the dept store side of the business. But some of it *is* coming out of the megatores' customer base. And right now they can't afford *any* defections.
It's a house of cards just waiting for the faintest of breezes.