Book Trade – Booksellers Association Conference 2013

Here’s a flavour of the delegate sessions (lifted from my Tweet stream) at last week-end’s very positive Booksellers Association annual conference held over 24 hours at Warwick University, near Coventry, England.

Sunday 22^nd September

• Heading to #BA13 Warwick this w/e. Should be good fun, representing #CLC Bookshops. Trade is on top form after success of @booksaremybag

• So warm. Like a summer’s day here in Warwick. Actually l think we’re probably nearer Coventry. Good to catch up with old friends. #BA13

• Great start to #BA13. Warwick is almost tropical. Excellent Bookseller debates earlier: Thx @unicorntreebks @storytellersinc & Andy Rossiter

• #BA13 ‘Selling’: three fast-paced practical cameos – Effective selling online, Maximising Christmas sales, Promoting books to schools

Monday 23^rd September

• #BA13 underway in Warwick. 250 delegates in conference. Sense of positive energy palpable this a.m. @booksaremybag judged a big success

• #BA13 68% of people prefer to discover books in physical shops. Discoverability is key. Need to place emphasis on physical environment

• #BA13 James Lowther: Shop environment – more sofas, cafe/coffee/wine, singles night, in-store book clubs. Employ best people you can

• #BA13 James Lowther: Shop loyalty is created through having good staff. Important to have an ability to sell without hassling customer

• #BA13 James Lowther: Amazon is not going away! If you can’t beat them … digital interaction and information gathering is vital in-store

• #BA13 James Lowther: Keep @booksaremybag going. Use your shop, your window, your counter. Use big bold messages. Not end of the campaign

• #BA13 Neil Best/Waterstones: Your brand can be defined as what your customers think of your bookshop. It’s their experience of YOU

• #BA13 Neil Best/Waterstones: Best search engine is you, the bookseller. Curation of stock should be an expression of bookselling skills

• #BA13 Jo Henry/Nielsen:Data suggests that ebook sales are plateauing (consensus emerging). 7 in 8 books still bought in physical format

• #BA13 Joe Henry/Nielsen: Why people buy from bookshops? Strong evidence of impulse purchase. 1 in 4 bookshop purchases are pure impulse

• #BA13 Jo Henry/Neilsen: Bookshop strengths: curated stock selection, customer ability to browse stock. Note scepticism of online reviews

• #BA13 Miriam Robinson/Foyles: Onus should be on bookshops that empower customers to do discovery for themselves, not spoon-fed reviews

• #BA13 Keith Butler/Easons: 60 shops across Ireland. Books equal 50% of turnover. Challenges of past 5 years; economic + trade volatility

• #BA13 Keith Butler/Easons: Changing the face of Irish bookselling. New shop design implemented in Cork and Belfast. New bright colour scheme

• #BA13 Keith Butler/Easons: In an Internet age, range is no longer the key selling point in-store, it’s now all about relevance to the customer

• #BA13 Bill Bryson closing keynote: It’s a great chance for me to say thank you to booksellers. Keep going and don’t quit!

• #BA13 Thanks to @BAbooksellers for an excellent conference; full of warmth, great information & practical advice

To sum up – as I posted on Facebook yesterday:

‘Just back from a brilliant Booksellers Association conference in Warwick over the weekend. Good to spend time with Melanie Carroll and John Keble amongst others. Good energy and a positive buzz, much of it down to the very good ‘Books are my Bag’ Saatchi campaign. People are now talking about AA (after Amazon) i.e. in the the sense that Amazon, digital and ebooks are a reality and here to stay so we need to get over it, move on and go for the sales that are still there for those who are adapting in order to do business in the new environment. It’s now very clear that whilst Amazon is not going away, neither is the independent bookshop sector. The evidence of the weekend is that we are a hardy lot! I agree with Melanie that it would be good to see more of our Christian colleagues at the event. Sometimes our niche works against us and makes us look like we inhabit a religious ghetto. I learnt a lot and was very glad I attended’. 

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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.