The recent news of the opening of an independent bookstore on Manhattan’s Upper West Side was greeted with surprise and delight, since a neighborhood once flush with such stores had become a retail book desert. The opening coincides with the relocation of the Bank Street Bookstore near Columbia University, leading the New York Times to declare, “Print is not dead yet — at least not on the Upper West Side.”
Two stores don’t constitute a trend, but they do point to a quiet revival of independent bookselling in the United States. They also underscore the shifting sands of physical bookselling, where the biggest losers are not—as was once assumed—the independent booksellers, but rather the large book chains.
Only a few years ago, observers projected that the rise of chain stores and Amazon would lead to the vast shrinkage of independent bookstores.
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The short answer is that by listing their shares as public companies, both Borders and Barnes & Noble were drawn into a negative vortex that destroyed the former and has crippled the latter. Not only did they become public companies, but they positioned themselves as high-growth companies, focused on innovation and disruption. That forced them to compete with the growth company par excellence in their space: Amazon. It also forced them to pursue high sales volume at the expense of inventories. Those strategies, as it turned out, were precisely wrong for the actual business they were in: selling books to a selective audience. Which is precisely what independent bookstores are good at.
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Barnes & Noble opened more superstores as well, but it also decided to challenge Amazon by developing the Nook at a cost of more than $1 billion.
The results were disastrous. Barnes & Noble bled money; it just announced earnings with yet another quarter of losses and declining revenue. Amazon dominated because it could spend far more money on technology than the chains, and because its core competency was in the disruptive technologies of e-readers, distribution, and inventory management. Amazon was never seen primarily as a retailer, and hence it could carry massive inventories that were a drag on its earnings and then spend billions on research and development because investors accepted Amazon’s narrative that it was a disruptive technology company redefining how everything is sold, not just books.
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Independent bookstores never had to answer to the dictates of public markets. Many of their proprietors understood, intuitively and from conversations with customers, that a well-curated selection—an inventory of old and new books—was their primary and maybe only competitive advantage. In the words of Oren Teicher, CEO of the American Booksellers Association, “The indie bookselling amalgam of knowledge, innovation, passion, and business sophistication has created a unique shopping experience.”
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Amazon’s sales have been strongest in mass-market fiction. No independent bookstore could thrive on mass-market softcover sales. Instead, they do well with hardcovers, illustrated children’s books, cookbooks, and the like. And while indies cannot compete with Amazon’s inventory, Amazon evidently cannot supplant indies as shopping and social experiences.
The independent stores will never be more than a niche business of modest sales and very modest profitability. But the same is true for many small businesses, which makes them no less vital.
Link to the rest at Slate and thanks to Larry for the tip.