Book Trade – ICRS, American Christian Publishing and UK Distribution

A view from CBA’s International Christian Retail Show 2014 in Atlanta, Georgia … Evangelical Christian publishing in the USA is clearly not in great shape …

After a gap of well over 10 years, I returned to what I knew as CBA, now called ICRS, and was shocked by what I found. This was the 65^th anniversary of the show but it’s a shadow of its former self. The rump of an industry that once covered several exhibition halls rivalling the Frankfurt and London book fairs, is now reduced to a few aisles in a single hall easily covered in one day.

To me, the booths were smaller, the visitor numbers lower, the aisles seemed quiet and the delegate ‘buzz’ felt decidedly restrained. However, products did appear a little less ‘trashy’; perhaps suppliers are more focused as a result of the downturn.

Such major industry shrinkage is salutary.  Publishers Weekly reported this year’s attendance as ‘flat’ with 3,722 delegates (against 3,739 in 2013), 1,520 of whom are classed as ‘Buyers’. To put this year into context; at CBA’s 50^th anniversary only 15 years ago, there were over 15,000 attendees!

What has happened since the heyday of CBA in the late 90’s, when the turnover of American Christian publishers hit $3bn?

Well, for one thing, the States are now a vastly different place to that of even five years ago. Evangelical churches are haemorrhaging numbers especially from its younger demographic. Churches are extremely exercised by how many young people are leaving. Barna Research suggests that 61% of ‘once churched-youth’ are now ‘spiritually disengaged’.  Politically, evangelicalism is not the force it once was (for good or ill, depending on your point of view), and as Philip Yancey observes in his forthcoming book, ‘Vanishing Grace’, American evangelical Christianity find itself on the back foot culturally.

The largest Christian product market in the world is clearly struggling to make the numbers work. This year ICRS was held in Atlanta, and next year in Orlando, Florida (28 June 28 – 1 July 2015). But where then? Those close to the decision-makers predict a much reduced fair with a smaller and possibly more relational format. A reinvention along the lines of the UK’s CRT event would seem sensible.

The plus point is that ICRS presents a really good networking opportunity and continues to work for the international community. I counted well over 20 Brits present in Atlanta and there were a good number of other nations represented. The weather’s better as well!

Several US houses were celebrating their own special anniversaries this year:

Baker Publishing Group; 75 years, Send the Light Distribution; 40 years, Harvest House; 40 years and Gospel Light; 80 years.

American Christian Publishing and UK Distribution

One publisher told me the talking point of the convention was the distribution situation in the UK.  US Christian publishers are in a state of considerable flux following the recent  upheavals in the UK, with the demise first of STL and more recently of TMD. Distribution infrastructure is therefore hugely reduced, and many US publishers currently find themselves without a home.

Those left – IVP, CLC, Marston, Norwich and JTD – have only so much capacity and the days of easily finding a UK distribution partner are gone. This is a disrupted market and likely to remain so for a while. What to do?  Ingram and Send The Light Distribution have been a good ‘second string’ for UK retailers for some time. This solution is likely to develop further, pulling in an even wider range of shops. However, for US publishers this is not the best solution, as it does little to satisfy their very real demand for wider title visibility and full range availability.

In the UK, distributors and wholesalers are still scrambling to cope with the continuing disruption caused by TMD’s closure. It’s unrealistic to take out around £2-3m of USA turnover from the supply chain and expect everything to sort itself out in a few weeks! In my view, the current situation has a long way to run, and it could be well past Christmas before anything remotely resembling stability returns. I sense that this approaching autumn sales period will be very challenging indeed. I further suspect that some well known American names will not actually find a home in the UK.

This market has changed so much in such a short space of time. However, let’s not kid ourselves as even in the TMD days, too much imported product was already chasing far too few buyers. In some ways, the new non-exclusive model of distribution may only make matters worse, resulting in a false sense of security. More product is being brought in, but the danger is of larger unit numbers simply sitting on even more UK warehouse shelves. These arrangements are unlikely to solve the broader problem. Traditional retail has contracted and online retail is far more demanding of the supply chain.

At the same time, we are experiencing HarperCollins Christian’s introduction of their New York mandated 360-supply programme, requiring that their Christian titles (Zondervan and Thomas Nelson) are sourced via the Glasgow warehouse. Those of us with longer memories will remember something similar from some while back; a move which resulted in the then HarperCollins Religious titles moving to Carlisle due to Glasgow being unable to cope! The jury is out on whether this will work again second time around. For our niche trade, with its requirement of the long tail of titles, especially from the Thomas Nelson Bible range, somehow I have serious doubts but I’m willing to be proved wrong. Anyway, it’s yet another piece of unhelpful trade disruption for bookshops and their customers to navigate at a time when all of us need as many sales as possible.

What does this all mean for the trade, whether publisher or retailer? In my estimation, further consolidation here seems highly likely, as well as even more upheaval to the status quo. We cannot under-estimate the scale of the unprecedented industry and market changes that we are presently living through. Retailers have been coping with this particular storm for years and now it seems its the turn of the publishing community to feel the heat. At the same time, suppliers have to deal with an increasingly bellicose Amazon demanding ever increased terms for doing business in the UK.

As many readers will know, I continue to remain positive about the future of the printed book despite the onset of digital product. The key risks to print sales rest with quality and content. For the retailer, selectivity is the name of the game, together with an ability to curate relevant books to appeal to a specific customer base. Long gone are the days when retailers, wholesalers and distributors would take everything a publisher produces.

Good relationships with customers, stock availability of key lines and fast, same day despatch are what count now.

The game has changed completely. Marketing and promotion remain the Holy Grail. Title discoverability is key. It is one thing getting a title into a warehouse; it’s another matter entirely to get that same title into the hands of the consumer. This point requires far more attention from all aspects of the trade; the Christian trade in particular has a way to go here. A total rethink to advertising and promotion is required.

I look forward to navigating the next set of rapids that lie ahead. Years ago, I particularly enjoyed canoeing through white water – which is just how the book trade feels at present.

Eddie Olliffe is Consulting Editor for Together Magazine.

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Book Trade – Stock, stock and yet more stock

Working on Together magazine and through my involvement with CLC Wholesale, I see a huge variety of product. In fact, far too much product in my opinion. Publishers and distributors are continuing to push out new titles into a fundamentally changed sales environment and a shrinking physical market. This cannot continue. The economics don’t add up. Internet retail copes poorly with new product as recent debates over ‘Discoverability’ show. In my view, the jury remains undecided on whether the Internet will ever fully replace the ‘lost’ B&M sales from the many, many shops that have closed in recent years.

And yet still the titles keep coming. Suppliers have yet to react intelligently to such a radically changed marketplace. I doubt anyone can continue to keep publishing at current levels into an already saturated market. I fear further fallouts. Mergers could follow. Self-publishing is already making inroads into the traditional model and publishing is feeling the cold draught of reality. I applaud publishing start-ups, like Edinburgh’s Muddy Pearl, that are probably nimble enough to make it, but they too face an uncertain future.

There is way too much mediocre product, much of it destined to remain unread – a major challenge for authors as well as for publishers. Put simply, way too much is being published and a market correction is surely due. Publically quoted Lion Hudson PLC has taken a large stock write-down for two years running; £924,000 in 2013 and £550,000 in 2012 (Source: annual company accounts). Many other publishers have similar challenges providing for high levels of dead or slow-moving stock. Quite whether all are as strong as a PLC to cope financially with such savage action is a moot point. Over the longer term, publishers will profit from the shift to digital as they will benefit significantly from higher sales but with far lower stock management costs.

This summer, we caught a glimpse of what happens when a tectonic shift takes place. The Kingsway–DC Cook distribution upheaval has left a drastically altered landscape, especially for many USA houses. The reality has dawned that the UK no longer has the distribution capacity required to handle the vast amount of Christian product looking for a home. Not all of those suppliers originally with KW/DCC will be racked here again. Some are still looking; others have withdrawn from the UK. Distribution is not for the faint-hearted. It costs. Lots. Especially if you are intent on the deep stocking of all lines listed. Something has to give as the financials are becoming harder and harder to get right. New product is replaced by even newer product in an ongoing frenetic cycle – and then promptly forgotten. Ask yourself, how many of the recent titles you have been shown have ‘made it’ and are still earning their keep? In my view, the only way for retail to survive is to become ever more selective – to the severe frustration of publishers (and authors) who nurse the fervent belief that every one of their titles is both ‘key’ and ‘core’ to your business.

Where does this leave the Christian retailer? Those who survive will be those shops that choose stock wisely, prudently and are selective in the extreme. The game has completely changed.  For publishers to succeed, the key issue is ‘discoverability’ whereas for the retailer the absolute priority is ‘selectivity’. On what are you spending your money? No longer can it be about stocking anything and everything. To do so is impossible given such a huge product range and the relative size of most UK stores; insane given the investment needed in stock that could be here today and gone tomorrow; and unnecessary in a digital world which demands physical retail to be distinctive and unique if it is ever to make it through to the end of this decade.

I contend that selectivity and discoverability really do lie at the heart of this debate. You and I have the power to move the market if we truly believe in a product. The art is finding the book that really moves you to want to handsell it to as many friends, family, colleagues and customers as is humanly possible. When did a title last grab you like that? What was it? How good did it make you feel when it started to move off the shelves? My colleague, Chris Magee did just this with ‘The Circle Maker‘ (Zondervan). Its message touched him deeply, so he sent one copy to many of the retailers that CLC works with – and it remains one of their top sellers. Without such action, many books will sink without trace.

Most of us came into this trade to make a difference to people’s lives. Recommending – suggesting – handselling a title that has absolutely got to you is just the most fulfilling aspect of what we do. Hype and PR have no place in this trade and yet seemingly it’s all around us. Do we truly believe all the claims that we make for much of the product that we promote? Is it not high time we looked again at the ‘how’ and ‘why’ of the sale as well as our need to shift stock? In a few short years, we seem to have gone full-circle. There was a time when our shops were expected to stock in both width and depth. No longer; the new trading reality allows us to be ourselves and stock what we wish to sell, what we believe in and not those titles which have no place in our shops, as their claims are often far too spurious and their content questionable. It’s time for a rethink right across the trade on this matter.

Moving from the negative to the positive, I’d like to highlight a couple of areas that certainly warrant our attention – Children’s books and Bibles. I’ve written previously about the continuing growth in the sale of children’s titles, especially for the younger age group (pre-school and picture books are up 5.5% in five years according to new Nielsen figures). However, the one area that merits serious profile is Bibles. Sales continue to rise year-on-year. The appetite for Bibles seems to grow and grow. The range of styles and colours has never been as wide. Pink Bibles sell! This is the area that we do know about. It’s our specialism and no one can compete with us in our knowledge of the Bible market. Even the reinvigorated Waterstones doesn’t really cover this section that well.

Christian retailers know Bibles better than anyone (or at least I hope we do). Translations, bindings and fonts are what we do. It’s truly a skill to manage a good Bible department – and it pays off. This is the one area on which we must concentrate effort – through high stock investment, in-depth staff training and knowledgeable customer engagement. I’ve always enjoyed selling Bibles; that passion has never gone away. This is the one genre that makes this trade special – very special – distributing the very word of God is not given to everyone but you and I get to do it as part of our day job – wow!

Here are four stand-out Bibles that have impressed me this autumn. This is a personal selection (no publisher was involved in this choice!) but I would be proud to promote and handsell all of these Bibles to any customer (or friend) I might come across!

1. The NLT Wayfinding Bible (Tyndale House)

This is quite superb and is probably my favourite newcomer this year – a very clever use of colour and graphics enabling the reader to find their way through the complexity of the Bible by navigating via three clear ‘routes’. Love it.

2. The NIV Journalling Bible (Hodder Faith)

Of the various covers available, the black cloth hardback is my favourite. Journals sell well in all shops and spiritual journalling is increasingly popular. This Bible has a lot of journalling space. It feels great and is a welcome addition to the range – but I’d use a soft pencil rather than ink when writing in it.

3. The NIV Every Day with Jesus Bible (CWR)

I loved the imaginative marketing campaign on www.onebible.co.uk Check it out. Selwyn Hughes’s hugely popular notes, allied to the Anglicised NIV 2011 text and presented in a chronological one year reading edition make this a ‘must-have’ stock item.

4. The ERV Youth Bible (Authentic)

At last – the text and notes in this perennial youth market best-seller have been completely reworked. It’s good – very good – and for a while at least, the price looks unbeatable. Impressive, and it’s good to add such a fine looking Bible to the shop youth section.

This article was written in late October for Together Magazine (December 2013 to January 2014)

Book Trade – Trends in the Wider Market

Canadian retail blogger, PaulThinkingOutLoud was upset recently by one publisher’s website and its aggressive discounting policy. Writing in his blog – which is well worth following – he saw this as

 ‘Another example of a publisher or distributor bypassing the brick and mortar stores. Although some of this might be legitimate overstock inventory, it raises the expectation of consumers for this level of discounting to be normative, which adds to the discouragement of already battered retailers’.

In another post, Paul writes movingly of competing emotions during the closure of one of his stores. He ends with an appeal to press on towards the goal of in-store ministry.

Do you feel battered by falling sales or emboldened by spiritual opportunity? Yes, Christian bookshops continue to close, footfall is in decline, competition from online is savage and at best support from churches is patchy. Yet we are not always that well informed of current trends in the wider publishing scene. In the same way as what happens in the USA often affects the UK, the same is true of events in the general market impacting the Christian trade.

Generally speaking, our grasp of the financials on both ‘sides’ is often lacking. Retailers operate on lower margins with high fixed costs (upward only rents, rising business rates – up 2.6% again in April) whereas publishing in the main has higher margins and a far more flexible cost base. Clearly there are worries on all sides and as publishers face lower physical sales, print-runs continue to fall making the viability of mid-list titles ever more tenuous. Many publishers struggle with storing high levels of physical stock, much of which will eventually be written-down. Ironically for publishers, digitalisation represents yet more cost and a growing overhead; this, coupled with falling average cover prices (ebooks sell at half the average price of a paperback: £3.21 v. £6.31).

Our industry is a torrid place. The physical consumer book market declined by 4.6% in value in 2012, with fiction down 4.5% and non-fiction down 6.3% – only Children’s books held steady. The value of print sales slumped by £74m last year. (It could be worse – in Australia their market fell 6.3%). The marketplace churns violently in a volatile landscape; over 200 libraries were closed between 2011/12 and in another sign of turbulence, Cambridge University Press ceased print production on their Cambridge site after 400 years.

Yet 2012 saw the continued growth in digital publishing, social media marketing and self-publishing. Hive became established. Amazon’s Kindle grew faster than ever and a number of other e-readers, notably Nook, Kobo, and Nexus gathered momentum. Controversially Waterstones began to sell Amazon’s Kindle, recognising that they had neither the time nor money to develop their own platform. The Fifty Shades publishing phenomenon came out of nowhere ending the year with sales of £47.3m.

The market for ebooks was revised upwards to £300m late last year and continues to grow, albeit more slowly. Major publishers report e-sales of between 8% and 17% of overall revenue. In November, the ebook agency price probe in the USA and the EC brought a chill to the major houses as they battled against what felt like unfair external pressures. Now ebooks sell for an unsustainable 20p (a marketing idiocy pioneered by Sony) and most slots in the Kindle top 20 are populated by cheap ebooks. Nielsen data suggest that there are 7m UK ebook adopters, with heaviest use amongst ages 35-44, lowest in the under 20’s. However, the BBC reports that just as many UK adults, 7.4m or 15% of the population have yet to access the Internet.

Bookshop closures continue apace with The Booksellers Association figures documenting ongoing decline: down to 1,028 shops (2012) from 1,535 in 2005 – conversely Children’s bookshops are thriving with more opening this year. In the USA, the one surviving major bookstore chain, Barnes and Noble announced after Christmas that they expect to slim down store numbers by a third. B&N have 689 stores currently with 190-240 of these slated to close over the next decade. It’s a widely held view that the holy grail of ‘Discoverability’ is best achieved in a physical bookshop; browsing activity is their USP.

The debate over the future of our libraries is equally as fierce. The UK Government’s Sieghart ebook library lending review is yet to report but author, Terry Deary said recently: ‘Libraries have had their day. They are a Victorian idea and we are in the electronic age’. How to win friends! It’s worth noting that the PLR on printed books from library lending is more than £6m paid out to 23,000 authors. The debate remains live as people continue to ask if digital will trounce the physical book or whether in due course it will all settle down benignly?

There’s a lot of anger amongst booksellers towards the perceived lack of a level playing field. Writing in The Bookseller, Charles Tongue of the Stroud Bookshop said, ‘I believe Publishers are blindly colluding with Amazon and the result will be the destruction of High street retailing’. He was widely applauded.

I like Foyle’s of London advertising slogan; This Bookshop Will Change Your Life – no ambiguity there! Earlier this year, Sam Husain, CEO of Foyle’s sent an open letter to publishers arguing the need for better terms (an average of 60%) and increased support (promotional stock on consignment). He stated that the current bookshop model is broken, needing a complete rethink. This at a time as Foyle’s announced eight redundancies. Bravely, Foyle’s and The Bookseller have since conducted a two-day ‘Re-imagining the Future Bookshop’ workshop, held in London, allowing the trade to collaborate on what the bookshop of the future might look like. 

WH Smith continue to do a sterling job in showcasing books but even their sales fall year on year; down 7% to the end of August 2012 and down a further 6% in the 20 weeks to mid-January 2013. Another indication of the parlous state of the High Street trade is wholesaler Gardners sales results which dropped 3% to the end of February last year. Blackwell’s did improve their results last year but remain loss making.

Waterstones is far from being out of the woods with the release of poor results (admittedly pre-James Daunt) showing a £37.3m loss. I wish Waterstones well because if their 290 branches were to disappear from the High Street then it would be a very serious matter, and I might add, particularly for publishers. However, I’m encouraged for two reasons: anecdotally, people seem very warm towards the ‘W’ brand and some are switching their buying away from the mighty ‘A’. The question is, will it be enough? Waterstones iconic branding campaign last autumn was well received and this year it has plans for the refurbishment of another 60 shops.

My other reason is that when I visit Waterstones, they generally prove to be busy places and people are markedly buying books. It’s just a shame that Waterstones do not ‘do’ Christianity better and with more visibility. On a positive note, I welcome the announcement by Waterstones of the launch of its staff-training academy and Certificate in Bookselling (accredited by the University of Derby); surely a vote of confidence in its own future by a visionary book chain?

Maybe I’m pipe dreaming? After all, Amazon had overall sales in the UK in 2011 of £2.91 billion (on which they famously paid £416m UK tax). They reported Q4 worldwide revenue growth of 22% to £13bn last Christmas! Latest innovations include customer collection lockers in railway stations and newsagents. This is an immensely powerful online juggernaut and our small trade faces a very significant challenge indeed!

Yet I dare to believe that localism can prevail, customer attitudes can change and that people continue to care about their local shops – you must just hope that I am right! The demise of retailers, Jessops and Blockbuster earlier this year followed by HMV going into administration shows just how tough conditions are. Incredibly, HMV was selling 27% of all CD’s and 38% of DVD’s at the time of its demise.

I would echo Philip Downer’s (ex-Borders) comment from last year;

 ‘The old days of Borders and Ottakars will not return … Coffee, carrot cake, cards and an ebook offer are now essentials for Indies who want to stay in business and thrive for the future’. 

We have to give customers a reason to come to our shops. Why should they shop with you? I was recently handed a forward-dated 15% off voucher for a national (non-book) retailer. It worked. I visited the shop on the stated date, I used my voucher … and I bought far more than I had intended. In the Christian trade we must start thinking more creatively and connecting with customers in a very different way to the past.

Church engagement is a hugely important topic that needs far greater attention and one to which we shall return in the next issue. Many shops find difficulty in communicating with ministers. An earlier church / retail compact has seemingly broken down as leaders shop around – usually online – driven by ‘best price’ owing to the Churches’ own financial constraints. Managers struggle to venture outside their own premises due to low staffing levels or sometimes, unwillingness. And yet, somehow, retailers have to get back in touch with their core customer base – the Churches.

The days of waiting for a church to contact you are long gone. It’s often a salutary task to record daily footfall and till data – but it may just serve as the severe jolt you need in order to take action?

This article was written in early March 2013 for Together Magazine (April – May 2013)

Book Trade: Pressing Issues facing the Trade: The PA Year Book 2011

Last week the deputy editor of The Bookseller described the Book Trade as ‘Bystanders watching a race that began before we were ready’. Is this apt or just plain wrong? He was writing about the global growth of the e-reading market where the statistics continue to astonish and possibly frighten us in equal measure.

The Bookseller postulated in its leader that same week; 50/50 digital-print parity could be with us by 2020. It also posed the chilling question, ‘How many Indie and chain bookshops will remain’? 

Why such gloom? Well, the Publishers Association had released its 2011 Yearbook, containing all the sales value and unit numbers for last year. You’ll need a strong stomach to read this as for most printers, publishers and terrestrial booksellers it makes for grim consumption. On the other side of that particular coin; for self-published authors and for publishers in the eBook market, particularly in Romance or Horror, the future looks very bright indeed. In 2011, digital accounted for a sharply growing 8% of the book market.

Physical book sales declined 4.8% to £2.9bn but when you factor in the growth of the e-Market (up 55%) at £243m, the overall decline falls to 1.9% (at £3.2bn). This represents the first drop in total book sales in more than three years – not the best place for the industry to find itself. When you take inflation into account, this fall is actually much more serious. We are going backwards, not forwards. Even export sales fell, declining by 3% (£1.2bn). It’s worth noting that exports remain almost a third of all UK invoiced sales.

Sales of print fiction – the largest category of print falling victim to the e-Reader – dropped over 10% in the year, a loss of £57m. e-Fiction popularity grew strongly to £70m but by not quite enough to cover the losses in print. Non-Fiction and Reference also fell (down 4%) but these categories were not compensated at all by additional digital sales. In fact, all print categories declined apart from some growth in School and ELT sales. The value of Children’s book sales fell by 8% on the previous year (post-Twilight).

According to the commentators these are now the pressing issues facing our trade:

(1) The speed of digital migration, (2) the vexed question of ‘discoverability’ (and the related importance of browsing in a physical shop), (3) whether DRM should or should not be embraced by the industry (with strong views either way), (4) the growing dominance of Amazon and (5) the steeply falling price of eBooks online, thus devaluing books in general.

Oh, and it’s raining as well!

Note – the PA figures as published here often differ from the Nielsen BookScan figures for the UK book market. Both are correct but each takes slightly differing approaches when compiling the data – apples and pears spring to mind.