The Fall and Rise of Independent Bookstores

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When Amazon entered the book market sometime around early 1995, it was only the beginning of a change that would take over the entire book industry forever. It would change the way we (consumers) think about books – be it reading or shopping them. It would lead to an economic as well as a socio-cultural change in the reading and book industry, completely revolutionalizing the access to books and the way we approach reading for pleasure.

What meant good news for millions of readers around the world, however, meant boding trouble for the thousands of booksellers with independent bookstores solely reliant on the sales of their books to generate revenues. With the launch of Amazon, consumers everywhere not only had someplace to buy books at extremely cheap rates, but they could buy these without even stepping out of their homes! The accessibility to books was what really made Amazon a big hit. In 2007, when the first e-reader was released, Amazon made it possible for readers to carry small, lightweight devices wherever they travel without having to compromise on their love for reading.

While all of this was a big plus for the reading community, it meant worse times for the bookselling community. When in 1995, Amazon first started its online bookstore, its’ revenue was $511,000, which reached $1.64 billion by 19991. All this revenue was good news for Amazon, but equally bad for physical booksellers. In the early 1990s, there were over 4000 independent bookstores in the USA alone, dropped to less than half within the next two decades. Borders, one of the largest books and music retailers, declared bankruptcy in 2011, and Barnes and Noble, another major player, ran into trouble in sustaining its thousand-plus bookstores when Amazon started gaining traction.

By slashing prices on their products online by a few cents, and continuously displaying discounted items as their ‘bestseller’/’top’ items – and hence creating a notion in consumer minds that Amazon means cheap discounts and lower prices – Amazon completely took over the brick-and-mortar stores, completely changed the revenue streams and cost structure of the book industry, and led to the closure of thousands of stores all over the world. 

However, by 2009, researchers started noticing a trend which again, took the book industry by surprise. In spite of the launch of the Kindle and the rapid increase in digital book readership, independent bookstores actually started rising 2010 onwards. What is often termed as ‘The Retail Apocalypse’, the number of rising bookstores has astonished many.

Source: Reinventing Retail: The Novel Resurgence of Independent Bookstores by Ryan Raffaelli

Extensive research by Ryan Raffaelli of Harvard Business School on the landscape of independent bookstores and their resurgence has shed light on certain things which might be far more important to the industry. It really calls to question how far can business be determined by economic factors and models alone? How much do things like cultural connection and social factors count for?

What Raffaelli’s research exhibited was that independent bookstores started thriving on and leveraging something that Amazon could never provide – a sense of community and belongingness3. What local and physical bookstores used and capitalized on was the ability to provide its customers with a wholesome experience – rather than just the exercise of dropping in and buying books.

Training staff to build personal relationships and bonds with their customers, stocking and building a collection based on personal preferences of book buyers, and getting to know their customers and dropping in book recommendations for when they come browsing books – these are just some of the ways that bookstores have started providing services highly valued by book lovers and much beyond what Amazon can provide. Between 2009 and 2015, independent bookstores grew by 35%4. The only reason this could happen in the presence of disadvantageous revenue streams and cost models that still favour the likes of Amazon, is if bookstores rose up to offer services that couldn’t be found elsewhere. More and more bookstores started featuring and organizing events – author signings, author talks, storytelling sessions – something which an online retailer would never organize. So many independent bookstores all over the world have been found to engage in activities that bring people together, that delve into human bonds, and have established a sales model that really helps them thrive.

What these trends are only showing, is that even if the regular revenue and cost streams are stacked against the way that you do business, gains can often be achieved, focusing on factors other than just economic. When bookstores all over the world were shut down owing to their rising losses and inability to run business, no one could have imagined that the secret lay in attracting customers using other methods – selling not just books, but selling the beauty of reading, the idea of community and connection. Once this idea was explored and delved into, we’ve been seeing bookstores come up with newer and more diverse innovations and ways of keeping their customers happy. From opening book cafes to forming book clubs, independent bookstores have adapted to the competition and have opened a whole new world to the way books are being celebrated all over the world now.


References

  1. Jim Milliot, “20 Years of Amazon.com Bookselling”, Publishers Weekly, Sep. 4, 2015
  2. Steve Wasserman, “The Amazon Effect”, The Nation, May 29, 2012
  3. Ryan L. Raffaelli, “Reinventing Retail: The Novel Resurgence of Independent Bookstores”, Harvard Business School, Jan. 2020
  4. Nisha Chittal, “Instagram is helping save the indie bookstore”, Vox, Dec. 19, 2018

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