While many department stores and fashion retailers desperately search for ways to appeal to customers, bookstores are somehow attracting large troops with little effort.
Digital media may continue to disrupt retail and the media, music and entertainment industries, but research suggests that its impact on book retailing specifically seems to have climaxed. With consumers still showing a clear appreciation of physical books, does this mean the era of ebooks is over?
“The book remains a wonderfully tactile physical object that has not been bettered,” Waterstones chief operating officer Kate Skipper told Retail Gazette.
“You can share and pass on a physical book so it has a social function that a book in the ether does not.
“Anyone who has the pleasure of sharing a book with a child knows that the experience cannot be beaten.”
Over a decade ago, Amazon introduced the Kindle, a black electric device which enables users to browse, buy, download and read books and magazines in a digital format.
However, ebooks have been experiencing a rapid decline in sales in recent years. TGI consumer data released last year shows that just 8.5 per cent of adults in the UK purchased an ebook, compared to 38 per cent purchasing a physical book.
“In the early 2010s we thought we would soon see the death of physical books, with Amazon replacing bookstores and iPads removing the need to lug around dog eared, hefty novels,” M&C Saatchi strategist Jacob Colman explained.
“But after a (brief) rapid rise in digital book sales, the growth curve has slowed to almost flat. It’s unlikely we’ll see digital books sales overtake physical in the near future.”
Earlier this month, Waterstones reported an increase in annual sales for the first time since 2016 in its full year report.
Accounts filed at Companies House showed that pre-tax profits came in at £27.7 million for the full year to April 27 2019, up from £19.9 million achieved in the year before.
While Waterstones remains steady in its efforts to drive sales, WHSmith – which is also recognised for selling books – appears to be falling behind.
In the 20 weeks to January 18, WHSmith’s sales dropped by five per cent on a total and like-for-like basis.
Colman argued that WHSmith’s self-scan machines are to blame for its decline. He also said the retailer’s self service motivates customers to leave the store as fast as possible.
“It’s Waterstones which is now growing, while WHSmith is perilously close to disappearing forever,” he said.
Last year, almost a year after acquiring Waterstones, hedge fund firm Elliott Management announced it would acquire US bookstore chain Barnes & Noble, and would install Waterstones chief executive James Daunt to lead both chains.
Waterstones itself also made the notable acquisition of Foyles in 2018, effectively removing control from the Foyles family for the first time in the book retailer’s 115 year history.
Foyles’ results were filed separately to Companies House, showing that sales in the period ending April 27 2019 dropped to £22.6 million against a pre-tax loss of £257,000. The chain blamed the “lack of good publishing” on the decline at the time.
Daunt himself said that development works around the iconic flagship Foyles store on London’s Charing Cross Road have also been a challenge, but the business expected to make more money in the current year after its head office was merged with Waterstones.
Retail Reflections director Zana Busby argued that despite this, physical book sales will continue to beat digital book sales for at least another decade.
“On average, physical book growth is strong and digital revenues remain fractional,” she said.
“A few years ago, many believed that logic dictated a total digital takeover in book sales and elsewhere in retail, but there is still consumer demand both for physical books and the whole physical retail experience.”
Skipper said the Waterstones business was working on the basis that digital books will continue to exist.
“Conversely, the physical book offers a respite from screen time and provides a much more pleasurable way of consuming both fiction and non-fiction,” she said.
While consumer attitudes are – as ever – continuing to shift, Waterstones is fundamentally not changing. Instead, it is tapping into that nostalgia of physical ownership. But this doesn’t necessarily mean the retailer hasn’t made an effort to expand its offerings. In fact, the retailer has doubled down on its role as an old school bookstore, encouraging consumers to spend hours in stores, browsing and chatting to expert staff while relaxing at its in-store Cafe W.
“Many bookshops are incorporating comfortable areas or opening up coffee shop concessions within the store, building brand equity,” said Richard Willis, vice president of software firm Aptos.
“Ebook sales from mainstream publishing flattened and began to decline some years ago”
“By tapping into consumers’ hobbies, passions and interests, brands can build a loyal customer base that keeps coming back.
“Brands such as Waterstones are recognising that their audience will appreciate a quiet and comfortable place to sit and read after they browse the shelves.”
Skipper added that Waterstones aims to offer customers something different from clinical online algorithms.
“Many of our customers come into our shops to browse, knowing they want a new book or gift but not knowing exactly what they want,” she told Retail Gazette.
“At Waterstones, our aim is to create a chain of bookshops firmly rooted within their local communities, offering a selection of books tailored to their specific customer-base.
“Plus there is simply pleasure in browsing and shopping in physical shops, that the online experience cannot satisfy.”
Independent booksellers have also continued to appeal to consumers. Last year, the Booksellers Association found that the number of independent bookshops on UK high streets has grown for the second year running.
In 2018, the number rose by 15 to 883. There were 1894 independent bookshops across the UK in 1995, but that number dropped to a low of just 867 in 2016.
It could be argued that the local community, a dedication to physical books, accessibility to author tours, and a business model that includes other revenue streams have helped to keep the lights on for many independent book retailers. Many also supply second-hand books, allowing customers to access loved or classic novels at a cheaper price – sometimes even cheaper than ebooks.
Skipper told Retail Gazette that there is nothing to suggest that digital book sales will override physical book sales in the future.
“E-readers have been around for over a decade and after an initial surge of sales, ebook sales from mainstream publishing flattened and began to decline some years ago,” she explained.
“There is something inherently satisfying about turning the physical page – screens cannot compare as a reading experience.
“Readers also love to fill their houses with bookshelves full of their favourite books which is impossible if the book only exits in a cloud.”
Although Amazon is now arguably the world’s biggest retailer, it started off as an online store for physical books well before the Kindle came into the picture. And while the evolution of smartphones and tablets have simplified the process of reading a newspaper or magazine without having to turn the pages, consumers are still swaying towards physical copies of books.
Online book retailers such as Hive, Wordery and The Book Depository will certainly continue to exist given their speciality in physical books, but the book’s quality of being tactile, engaging and nostalgic lends itself well to a in-store experience for bricks-and-mortar book retailers. Booksellers can even replicate libraries in a bid to lure in eager readers.
Given the increased appetite for book stores and actual, physical books, it’s pretty clear that the Kindle and ebooks in general has not had the same impact on the written word as the iPod or Spottily had on music, or as Netflix had on film and cinema. It appears that high street bookstores will always have an important role to play in modern society.
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