Within 5 years it is estimated that digital books will represent 40% of book sales. At $10 each, digital books yield less than half the gross profit of hard cover books, which creates a huge problem for traditional book stores.
How do you develop a new marketing strategy when your market collapses? What do you do if you have dozens of huge physical stores dedicated to selling product fewer people want?
You can downsize, embrace “online”, close shop or change your product portfolio and marketing strategy. Whatever you do, you can’t do nothing. Chapters Indigo, in the face of growing digital book sales, is changing its product portfolio and increasing its offerings of tableware, trinkets and toys in its book stores. Its non-book sales are planned to become 40% of its business over the next couple of years, up from 15% today. That’s a lot of trinkets.
According to an article in The Globe & Mail, Indigo’s Reisman faces digital reckoning, Borders in the US is closing hundreds of stores and letting go thousands of employees after filing for bankruptcy protection in February. Barnes & Noble, the world’s top book retailer, has been searching for a suitor since last summer – unsuccessfully so far. Borders is trying to shift its sales mix to just 40 to 45 per cent books in five years from about 70 per cent today. Borders’ president, Mike Edwards, envisages Borders morphing into a “community centre,” expanding its café and adding other food franchises to bring in traffic.
The Marketing Thought
There’s a wave of change in the book industry. There’s no sign that people are reading less, only that they are buying fewer printed books. There is still a huge role for authors and publishers, but retailers are getting squeezed out. Their survival depends on their ability to recreate themselves. It’ll be interesting to see how successful they are.
Tim’s Pick of the Month: The Pleasures and Sorrows of Work by Alain de Botton, which I chose while killing time, not doing any work, in an Ottawa Chapters. An entertaining, thought-provoking read.
Just a thought.
Tim
Blog post link: Another Product Marketing Failure
Blog post link: Does Kodachrome define failure?
The photo was taken and licensed by Jan.
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