Meeting the Reading Revolution

KEN MOORE ASSOCIATES PRESENTS

Schenectady Gazette Op-Ed

Meeting the Reading Revolution

There’s a lot of discussion in recent business journals regarding the shift in book publishing from print to digital formats.  Borders has already filed for Chapter 11 bankruptcy. Barnes & Noble is feverishly rewriting its business model to focus more on e-books and less on printed books.  The textbook that I use in my college classes is now available in digital format, and at a substantial savings. Small bookstore owners and publishers are under pressure to establish and generate competitive advantages within its book-buying market while still turning a profit for the owners. Many do not make it.  According to the American Bookstore Association, store membership currently has 1,700 member stores, down from 3,200 a decade ago.

The long term economic effect of the shift from print to digital on publishers and bookstores is not yet clear.Demographics play a large part.Today’s Generation Y is wired 24/7 and demands electronic access to as much information as possible.  In my college business classes, it is next to impossible to get my students to read newspapers and magazines such as the WSJ and Business Week unless it is in a digital format.  Regrettably, access to the digital format is frequently restricted by subscription costs. 

My visits to the bigger bookstores are typically satisfying experiences.However, I find myself contributing to the demise of these stores. Last month, I went to my local Barnes & Noble and enjoyed my visit.  I selected three books from their best seller shelves, scanned five magazines in the rack, finished my cookie, went home - and bought all three books on Amazon.com.

The three books at the bookstore totaled $69.91 including the best seller discount and tax.  The same three books on Amazon cost me $43.50 including shipping and handling – a 38% savings.  Upon finishing the books, I sold them on my Amazon seller’s account.  My grand total for buying those three printed books and selling them back to another buyer in Amazonland came to $16.10. 

On Father’s Day I received a Kindle from my children.  Those three books on Kindle would cost me $42.97 – but I can’t resell them (yet).

Faced with aggressive competition from e-readers and retail discounters, what’s a bookstore to do?  Borders declared bankruptcy.  Barnes & Noble stated in their 2010 annual report: “To address dynamic changes in the book selling industry, we are repositioning our business from a store-based model to a multi-channel model centered in internet and digital commerce.”  Publishers are under pressure to provide similar cost savings to smaller retailers as they do to the large retailers such as Amazon and Wal-Mart. 

Advancing technologies opens doors for some businesses and closes doors for others.Railroads replaced stagecoaches.  Cars and airplanes replaced passenger trains & ships.  Now, e-books may supplant printed books.  The pleasures I derive from bookstore visits are conflicting with my willingness to pay bookstore costs, the efficiency of downloading selected books from home, and adjusting the font of the text to accommodate my eyesight.   Something has to give. 

Fortunately, small and independent booksellers are well positioned, but challenged, to take advantage of advances in technology. They are vital and necessary cogs in the publishers’ sales chain.  They are not saddled with the extensive inventories, overhead, labor and energy costs, and high volume demands of big box retailers.  However, they are challenged to participate in and master the e-book revolution. The Book House of Stuyvesant Plaza currently offers four options for e-books utilizing any device that supports Google e-books such as i-Phone, iPad & iPod.  As technologies advance, other Indies will also be offering e-reader options when the price is right and customer demand is established.

For now, while I mourn the significant downsizing - and perhaps eventual disappearance -   of Borders,I look forward to re-acquainting myself with the smaller bookstores and supporting local businesses. I’ll even bring my own cookie.

 

 

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Ken Moore Associates specializes in speaking engagements, and will travel anywhere in the world to help companies think more strategically.
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