Challenges for Bookstores in the U.S. in 2017
Bookstore closings are spreading across the U.S. as the industry struggles to adapt to e-books, online shopping portals, and Amazon.com, Inc. (NASDAQ:AMZN) taking up space with brick-and-mortar stores. Smaller stores like Aardvark Books, Seattle Mystery Bookshop, Library Bookstore Inc, and Thrift Books Global, LLC will be shuttering alongside several Barnes & Noble, Inc. (NYSE:BKS) stores.
Across the country, no matter the model that both independent and chain bookstores employ, they are having difficulty keeping up with the changing shape of book sales.
E-book popularity has long been a drain on physical bookstores. Much like retail has taken a substantial hit due to the growth of e-commerce, e-books have allowed consumers to select from thousands of titles from the comfort of their own home, oftentimes at a discount. Another challenge is that with the prevalence of tablets, owners can store dozens of titles on their gadgets instead of having to lug around dozens of weighty, physical books.
Having said that, data has revealed that e-books sales have actually declined in recent years, with sales down by 18.7% in the first nine months according to the Association of American Publishers. Paperback sales were up 7.5% over the same time, while hardback sales increased by 4.1%.
But much of that increase in sales is being canceled out by people purchasing through online portals instead of their local bookstores.
In Mount Airy, North Carolina, Between The Covers bookstore will be closing its doors for good come November, after the bookshop was created in order to raise funds for the local library.
The Seattle Mystery Bookshop has also shuttered.
“E-books, and higher prices of books, and deep discounting by the corporate stores, to the economy collapsing in 2008, and the city just making life impossible in Pioneer Square,” owner JB Dickey said to KUOW. “It’s an awful lot of stuff and it’s just more than we could deal with.
“The city certainly does not have the wide variety and great number of independent bookstores that they had before Barnes & Noble, and certainly before Amazon started.”
Aardvark Books of San Francisco is also on the chopping block, with the store up for sale and a closure likely.
Brownstown Township lost 51 jobs when Thrift Books Global closed down its warehouse in the region.
While these represent closures on the local level and for primarily independent bookstores, the bigger chain stores have not fared much better.
Barnes & Noble, one of the largest booksellers in the U.S., closed eight stores between March and April of this year. The year before, it also closed eight locations. But the eight closings were considered a relative success; it was the fewest closures since 2000. The company also had planned to shutter an additional five but was able to ward off those bookstore closings.
Barnes & Noble has also sought out ways to help expand its business and diversify in order to adapt to the changing landscape of book retail. The company has opened three concept stores, which included attached restaurants.
Whether the change will be enough to help rescue the book retailer from an industry struggling against the online realm has yet to be seen.
Amazon Bookstores Impact on Bookstore Retail Market
Barnes & Noble is not the only company experimenting in the physical space.
Amazon has gone full circle; initially beginning as an online retailer for consumers to buy books from, the company has now opened many physical bookstores across the country, with its first non-costal store opening in Chicago earlier in the year.
The company plans to open seven in total throughout 2017.
This is just the beginning of the future challenges that bookstores will face from Amazon. The company is looking to not only expand in the physical space, but also increase its brick-and-mortar presence in a variety of other ways.
The company is looking to partner with Kohl’s Corporation (NYSE:KSS) in order to provide another physical space where consumers can purchase Amazon goods or facilitate returns.
The company recently acquired Whole Foods Market, Inc. (NASDAQ:WFM), giving the tech giant dozens of locations that it can use to further expand its physical presence.
The company has opened a total of 11 bookstores across the country since 2015.
Dozens of pop-up stores have also been found in cities, alongside mobile Amazon trucks.
The overall effect is to have Amazon extend its presence beyond online interactions. The company is also experimenting with high-tech concepts like Amazon Go, a grocery store with no checkout lines. Instead, users sign in to an app and grab the items they want, with the app registering what they’ve taken and automatically charging them when they leave the store.
Even the brick-and-mortar bookstores are trying to up the technological game by allowing consumers to log in on the app on their phone and therefore facilitate searches and provide real-time information on the store.
Amazon physical bookstores offer a challenge to the industry and one that independent and larger chains may not be able to face. Bookstore closings may only increase before Amazon is finished.
Not to mention that Amazon’s increasing reliance on tech in physical retail spaces means that many jobs may be eliminated. If the company adopts its Amazon Go model for its bookstores, for instance, then current bookstore workers may find themselves without a job if the company continues to expand its brick-and-mortar presence at the expense of other bookstores.
“What Amazon’s physical bookstores say about the future,” CNBC, April 4, 2017.
“Amazon is firing on all cylinders to grow its retail presence,” CNBC, September 19, 2017.
“For nearly every bookstore Barnes & Noble loses this year, Amazon will open a new one,” Quartz, March 28, 2017.
“Death of another Seattle bookstore is not a mystery,” KUOW, September 26, 2017.
“Thrift Books Global to lay off 51 in Brownstown Township warehouse closure,” Crain’s, October 4, 2017.