Books Are They Facing Extinction?
The recent financial demise of Australian book retailers, Angus & Robertson and Borders Books, is a timely reminder to have another look at the effects of the Internet and digitalisation upon the book industry. Coupling this local retail failure with the bankruptcy of the Borders Group in the US, shines a light on how books are now being sold in these developed markets. Time now to see, just what is the long term impact of Amazon and other online suppliers of books on the bookstore concept and retail book chains.
Of course A & R had stopped being an example of a good bookshop years before. Even before it was purchased by the private equity group, Red Group, it was a chain of substandard stores offering a very average range of titles. Indeed that is why it was snapped very cheaply and the new managers accentuated all that was mediocre about A & R, and then had to operate with enormous debt levels . Many will say that bad management is always the true cause of business failure in the marketplace and an inability to respond to technological challenges within your industry is merely an example of this. Borders introduced the super store concept to Australia and in the process contributed to the demise of many small bookshops around the nation.
So we can now purchase a huge range of titles online, relatively quickly and affordably. In Australia we do not pay any GST on books purchased through Amazon or some other overseas online supplier, unless we are spending over a A$1000. Many retailers are now voicing their complaints about this unfair playing field and I would posit that books are one area that the Internet is taking a sizeable chunk of sales, somewhere in the vicinity of 15 to 20%. Retailers do pay proportionately high rents in Australia and then they have to pay staff and all the other infrastructure costs associated with retailing. So how are they going to be able to compete on price with a GST free online supplier? The consumer gets cheaper books if they are Internet savvy and or have access to online suppliers but they lose a sizeable retail presence in their local shopping precincts.
As a community we lose jobs in the book sector, which is a shame, because having personally come from a family retail book background I can tell you it is a great area to work in – very stimulating and people are passionate about their books. It is in my opinion a bit like the wine industry on many levels, the level of knowledgeable service that customers require is intense and like the wine business you cannot hope to survive as a small retailer without providing this. Fosters has been discovering this in its disastrous foray into the wine business, with massive write-downs on the Penfolds and Rosemount businesses. A & R were treating books and more importantly their customers like they were selling stationary – and they have paid the price. The amount of time in a bookshop spent researching titles for customers on a quest for a specific book, which may indeed be out of print, is enormous and you have to have people who love books working in bookshops. Of course much of this research can now be done online if the customer has access and is trained to do so.
The digital supply of books on tablets like Amazon’s Kindle will be an interesting phenomenon to watch and see whether the take-up will move beyond the initial very small percentage of the reading market. Again however this is something which moves book buying into the home and out of the shoppingcentre, removing jobs and the physical social interaction of the book buyer with the book seller. Passion will have to stay at home and sit in front of that flickering screen and book lovers will have to be satisfied with joining online forums. It is sad to see the demise of a wonderful profession, the book seller, and likewise the continuing eradication of book publishing here in Australia. The life of the mind is moving online.
Posted on March 11, 2011, in Culture, Eco Living, Latest Blog, News, Uncategorized and tagged Angus & Robertson, bankruptcy, book business, book industry, books, Borders, cultural change, digital technology, technology. Bookmark the permalink. Leave a comment.