Why Independent Bookstores Have Grown in the Face of Amazon

Bookstore

By Tricia McKinnon

The independent bookstore industry in the US has proved to be resilient over time. Many thought that independent bookstores would be made irrelevant by Barnes & Noble, now Barnes & Noble is the one that is struggling.  Then came Amazon, such a formidable competitor that it was predicted that few would survive. To an extent some of the dire predictions did come true, but only for a point in time.  The number of independent bookstores in the US decreased by 40% between the mid 1990s and 2009 (Amazon launched with books in 1994).  But independent bookstores have experienced a resurgence in recent years. The number of independent bookstores in the US has increased 31% since 2009.  Sales are also up with a 7.5% CAGR in revenue over the past five years. 

Before going into the details of why independent bookstores are growing some context is important.  Contrary to popular belief many people still buy books in person and in print format. For example, for the first time in the US in 2017 the percentage of books sold online was nearly equal to those sold in physical channels. Sales of books in physical channels were $7.6 billion in 2017 and sales of books online were $7.5 billion.  Hardbacks had the highest category growth in 2018 at 6.9%, behind audio books which grew at a rate of 37.1% but from a significantly smaller base.  Sales of eBooks which for many years were expected to takeover actually declined in 2018 by 3.6%.  Furthermore, eBooks sales plateaued over five years ago when they reached 23% of all books sold in the US but in recent years that share has declined further.  

Despite the introduction of new technologies that have both changed the way we read books and how books are sold independent bookstores are thriving thanks to a focus on the basics of good retailing.  These basics are curated content, friendly personalized customer service and a focus on the local community.  

1. Providing curated content and excellent customer service

While online shopping continues to redefine what convenience means, it looks like a new challenge is cropping up…too much choice.  A search for leadership books on Amazon.ca brings up over 100,000 results.  If you search only for books that have at least a four-star rating there are over 20,000 leadership books. How is one supposed to discern what leadership book they should read as they get prepared to land a promotion?  Expert in person advice can help to solve that problem.  

Going into an independent bookstore and having knowledge staff provide recommendations that are specifically targeted to the problem the customer is trying to solve has provided a level of value that is unlikely to go away.  While ratings provide great insight into the general popularity of a book a great sales associate can help a customer to choose a book that is unique to what they are looking for.  

While retail is evolving it is also sticking to its roots as a place for people to come together on a Saturday afternoon to enjoy time with friends or family.  Many independent bookstores know their customers by name. This level of personalized service creates stronger customer relationships and an additional reason for customers to frequent their local bookstore.

In addition to providing knowledge able staff independent book stores are also able to provide curated content.  If a book seller only has a relatively small amount of space it had better get its assortment right. This can help customers to find the best books on a particular topic and discover new ones that they might not have thought about.   Personalized service also provides a better customer experience.

Even Amazon recognizes the importance of curated content.  Last September it opened its first Amazon 4 Store.  The store only sells products that have at least a 4-star rating on amazon.com. Amazon also has 19 bricks and mortar bookstores signalling that it too sees the importance of bricks and mortar stores.

Oren Teicher, CEO of the American Booksellers Association has said: "I'm not trying to compete with online retailers. I'm trying to compete on what I do best." "When you come into a store like this and you don't know what you want and you browse these shelves, you're gonna find books that you didn't know existed. If you are ... engaged in your community, curating your content, having people work the store that are knowledgeable and passionate about books, there absolutely is a formula for success."

2. Making connections within the community

Humans still crave connection. Speaking about the Apple store, Apple’s now departed head of retail, and former Burberry CEO, Angela Ahrendts said: “I think as humans we still need gathering places.” “And when you are serving digital natives, the thing they long for more than anything is human connection. Eye contact.”  As a result, under Ahrendts’ rein Apple stores were redesigned to include features such has boardrooms for entrepreneurs within the community to host meetings, large screens and stages called “forums” for local artists and movie showings, and educational programming for customers to learn more about how to use Apple products.  

Taking a page from Apple’s playbook, some independent bookstores have as many as 500 events per year. These events include author discussions and book signings, speed dating, trivia nights, happy hours, craft writing discussions, calligraphy writing workshops and story time for kids.  A localization movement across the US has gained momentum with people preferring to spend money within their local community.  This is also helping to drive the popularity of independent bookstores. A great locally relevant assortment also helps. 

Speaking about the resilience of independent bookstores, James Daunt, a former banker and CEO of Waterstones book chain said: “there are limits to the online experience. In the world of books it is as good as it can be.” “Now other retailers are going through what we went through. We endured the fire and it forced us to dramatically improve our shops and raise our game.”  Waterstones is owned by Elliot Management the hedge fund that recently purchased Barnes & Noble. Daunt was also recently named as CEO of Barnes & Noble. He will run both book chains.