Established in 1994 as a simple online bookstore, Amazon has grown to become one of the world’s largest retailers. In 2012, The Codex Group found that 41% of new book unit purchases came from Amazon, as well as 65% of all new book units worldwide; highlighting the online giants’ dominating force in the book industry. The Bookseller revealed 2012 to be the first year in which book purchases online were higher than from high street outlets. This highlights a drastic change in the retail environment, marked by a consumer shift to online shopping that is extremely threatening for high street booksellers. Many see trends such as this as the long awaited curtain call for booksellers, as customers flood to Amazon’s extremely low prices and convenience. However, there is evidence to suggest that the local bookshop is not quite finished yet.
The largest thorn in the side of high street books shops is Amazon’s extremely low pricing. Just one example is David Walliams’ new book The Midnight Gang; sold at Waterstone’s for £9.99, whereas Amazon offers it for just £5. On average, according to Slate magazine, you can expect to save between 30-50% if you buy books from Amazon, rather than a high street outlet. Effectively, Amazon has made buying from high street shops a luxury.
Another element is the availability of customer reviews, one simply has to scroll down to see a list of reviews for a book, and this influences buyers immensely. Stock limitation is a major issue for physical bookstores as there is only so much space available. An article from Bookmasters notes that as a result, popular titles may have sold out or the outlet may just not have what you want. Buying from Amazon avoids this issue completely.
The E-book Market
An explosion in e-book readership in recent years, influenced by the presence of tablets and e-readers (especially the Kindle) has had a very detrimental effect on the high street bookshop. This is simply due to that fact that the vast majority of booksellers do not trade in e-books; therefore, any reader who moves to e-books is effectively money out of their pockets. A survey taken in 2016 by The Codex Group found 32.4% of the participants were e-book readers. 30 years ago, this 32.4% would have been just another part of the print market. When you consider that the same study found that Amazon accounts for 74% of all US e-book purchases, you realise the scale of the company’s influence in the phenomenon.
Amazon Books: Amazon’s Physical Stores
In 2015, Amazon unveiled the first of the three currently open physical bookstores known simply as Amazon Books. The stores are stocked with titles selected based on data collected from Amazon.com and Goodreads. The sentiment of the stores are to merge the online and physical shopping experience. Aside from buying items there and then, you can also order them online from the store, download a book to your Kindle, or add a product to your Amazon wish list. This has created a completely new way of shopping where Amazon has used its online advantage against regular bookshops. Interestingly, aside from an about page, Amazon has said little and less regarding the new venture; not even so much as a press release regarding their intentions for this move, which is widely speculated.
An article featured in New York Times in 2016 begged the question “So why does [Amazon] need physical stores at all?”. A distinct prevalence of electronic Amazon gadgets throughout the store was mentioned, raising the possibility that the stores are merely fronts to showcase these electronic products in the same manner as Apple Stores.
According to a source for Bookmasters, Amazon has plans to open 300-400 stores across the U.S. Tech Reporter Greg Bensinger, states that if these plans came into fruition, then it would put Amazon as the number 2 in the U.S behind Barnes & Noble in terms of physical outlets. This is a very threatening image for bookstores, as the online giant would transform into a high street giant.
Amazon’s Expansionist Growth
Part of Amazon’s success stems from its refusal to be pigeonholed to a specific area and this makes bookstores nervous. The New Yorker noted in 2014 that of Amazon’s annual revenue of 75 billion dollars, only 7% came from book sales. This lack of reliance on the book trade draws into question whether Amazon truly cares about the industry, unlike traditional booksellers who rely on it utterly.
Amazon’s expansion over profit-orientated growth is another cause for concern. According to figures from The Wall Street Journal between 1995 and 2015, Amazon amassed over $400 billion in sales, however less than $2 billion in profit, which may account for the huge product discounts. Some are concerned that this is part of a long-term strategy to price the competition out of business, then amp up their prices when consumers have nowhere else to shop.
Despite their current success, there are signs that Amazon cannot keep up what they are doing forever. Amazon often offers free or discounted shipping especially to Prime Members. NYU Professor, Scott Galloway, notes the Amazon cannot sustain this practice, dubbing it “an Achilles heel of Amazon” as by offering free delivery, Amazon must pick up the bill themselves.
What State is the High Street Bookstore in?
High street bookshops have taken a big hit in the past decade. According to The Guardian, in 2005 independent bookstores witnessed a 40% drop and are still declining today. Book selling chains have also suffered, James Daunt, Managing Director of Waterstone’s, oversaw major cutbacks; the closure of underperforming shops and many staff redundancies were the only solutions.
Daunt stated to Management Today, that a major issue is that financial setbacks of the past have led to the online presence of Waterstone’s to suffer. This appears to be a widespread trend, making it no wonder that the sector suffers so much in today’s online orientated retail environment.
The Benefits of High Street Bookshops
Miriam Sontz, CEO of Powell’s Books, argues that Amazon’s interest in brick-and-mortar stores highlights the value and relevance physical bookstores hold in today’s world. This may very well be true, as selling through this avenue does hold a number powerful draws. The ability to look and feel through books cannot be underestimated; it is a very enjoyable process for book lovers, evoking an emotional response to the store. Bookshops also create a great sense of community, bringing together readers and creating face-to-face dialogues between them; something that Amazon is currently incapable of replicating.
Bookshops are great places to discover new books; in 2013, Enders Analysis estimated that random discovery of books produces as much as two thirds of the UK’s total book sales, most of which took place in bookshops.
The Importance of Bookstores
Features editor at The Bookseller, Tom Tivnan stresses that authors hold huge value in bookshops for the discoverability of new books. This especially speaks to mid-range to fresh authors who lack an existing following. Resultantly, authors and publishers alike want to keep bookshops alive.
Joe Henry, the director of Book Market Research, determined at the 2012 Bowker’s annual conference that the value bookshops brought to the book industry was around $450 million in that year alone. Furthermore, The Bookseller noted that consumers over 35 (60% of the population of the UK) value bookshops over online outlets; this is important as wealth is increasingly being pooled in older demographics. The magazine also estimates that when a bookshop closes, around a third of its sales move to another bookstore and the rest disappears from the industry completely. This professes dire consequences for the printed book industry if the high street bookshop died.
Waterstone’s and other booksellers have been countering Amazon by adopting one of their tactics, selling more non-book products. These usually include; post cards, maps, stationary and items to that extend. James Daunt notes that the trick is to sell items that complement the general selection of the shops and encourages book sales.
Offering bonus material is another strategy. In 2013, booksellers including Waterstone’s and Mr B’s Emporium of Reading Delights in Bath, have signed exclusive deals with publishers to obtain bonus material for copies sold in their stores.
Another way that bookstores have been able to one-up Amazon is by holding special events for reader-author interaction. For example, the independent store Booka has become a point of attraction for many book lovers across the Midlands, who come to hear writers such as Michael Morpurgo and Martin Bell giving talks and answering questions.
The effectivity of this technique for booksellers has been in persuading readers to turn away from Amazon remains to be seen, however, it is an interesting example of how high street bookshops can exploit the physicality of their outlets in a way that Amazon cannot.
Why Bookstores are not dead
Though high street bookshops have suffered massively of late, the damage seems to be plateauing. Flavourwire noted a level of growth in bookshop sales in 2015 which was the best in recent history and according to a study by The US Census Bureau in January 2015 this was a growth of 2.5%, totalling at $11.17 billion, compared to $10.89 billion of the previous year. Although bookstore sales are not quite back to their former height of $17 billion as they were in 2007, The Guardian states that amount of closures has decreased from a rate of 7% to 5%.
Unless Amazon has any other tricks up its sleeves it is clear that the local high street bookshop is, at least for the time being, not finished yet and very much alive and kicking still with much to offer the modern reader.