Inside the Australian and New Zealand book industry

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The state of bookselling in America: Tom Hoskins on attending the American Booksellers Association Winter Institute

This year’s American Booksellers Association Winter Institute conference in Memphis was the largest gathering to date: 680 booksellers from around the world were joined by more than 130 authors and numerous members of the publishing industry. In this edited excerpt of Readings State Library Victoria shop manager Tom Hoskins’ report on the event, Hoskins shares his take on the rebound of American independents, Amazon’s influence and embracing new technologies.

Indies rebound

The overarching mood at this year’s Winter Institute was one of optimism, and with good reason.

Across the US independent sector in 2017, sales were up three percent and over the past five years the indies have experienced a compound growth rate of 5.4%. This increase, while modest, has been coupled with a decrease in the cost of goods sold, leading to increased profitability in the sector. Ebooks are no longer seen as a significant threat to sales. Since 2013, ebook sales have decreased every year, particularly fiction titles, dropping a further five percent in 2016-17.

Print books are up two percent in unit sales, spearheaded by board books (+11%). Romance, detective and fantasy books have all seen print sales increase markedly as customers have returned from ebooks. Conversely, physical audiobooks are down significantly (-13%) but digital sales have taken off (+20%).

Nonfiction has had a small drop but this is mostly attributed to the end of the colouring-book phenomenon. In fact, booksellers have officially declared 2017 as ‘the year the crayons quit’. Despite the downturn of the category, personal development and biography have seen some gains.

In addition to the turnaround of growth in the sector, there has been a surge in younger bookshop owners either opening stores or taking over existing businesses. Until recently, older bookshop owners and those looking to exit the industry had been finding it increasingly difficult to sell their businesses, leading to stores closing rather than changing hands. The past few years have seen new owners come into the industry, usually with high levels of education about both business and the book industry. These stores have been thriving.

The ability to adapt and be open to change has also lead to success for US indies, and appropriate sidelines in non-book items have been selling well. Socks, cards, candles, book-related plush toys and science kits are all strong sellers alongside traditional stationery items. Similarly, shops have also found great success by operating effective social media channels that embrace the global nature of books but emphasise the local nature of bookshops.

Amazon: By volume, the world’s largest river

Unsurprisingly, the largest threat to booksellers and retailers continues to be Amazon.

Despite the hugely publicised yet largely whimpering launch of Amazon Australia (news received with much glee by American booksellers), Amazon’s share of the US market is mind-boggling. Amazon is responsible for 70-80% of all ebooks and a startling 40% of total book sales. In fact, estimates show that 50% of sales for the major publishers are through Amazon (the remaining 25% go to libraries, wholesalers and specialty accounts, 17-19% to B&N and six to eight percent indies).

Amazon has now opened a number of bricks-and-mortar stores. More worryingly, these stores (currently standing at 13, with three more confirmed) are being operated as a Trojan horse. Amazon is hyper-aware of the importance of vendor lock-in and its subscription services include Kindle Unlimited for ebooks, Audible for audiobooks and for general retail, the jewel in its crown, Prime, a $99 annual subscription service that offers free expedited (usually two-day) shipping, as well as access to TV and film streaming networks.

Amazon bricks-and-mortar locations are medium-sized bookstores, around 5000 square feet (464 square metres). However, they only stock around 5000 titles, all face out and ringed by various electronic gadgets from Amazon’s catalogue. The prices are not marked on these books; instead they are accessible via scanning the book on the Amazon smartphone app. This is where the lock-in occurs. For regular customers, there are no discounts at all on these titles, they are sold at RRP. If, however, you are a member or sign up to be a member of Amazon Prime, the in-store prices are heavily discounted. It appears Amazon is using their bricks-and-mortar stores as a gateway to their subscription service.

This approach, while devious, may actually be slightly self-defeating for Amazon. Prime has wide adoption—it is currently estimated that there are around 65 million US Prime accounts. However, as the Amazon shops are geared so heavily towards these subscribers, the limited range of titles and products available offer little benefit above the online service. In fact, of the indie booksellers who have had an Amazon store open nearby, none of them have reported a drop in sales.

Regardless, Amazon will continue to be a formidable competitor, and if left unfettered by the US government it will continue to work tirelessly towards total domination of the retail sector.

Keynote speaker and futurist Amy Webb noted that Amazon is spending huge amounts to research and develop artificial intelligence, robotics and retail automation. In the fight against labour laws and the minimum wage, Amazon’s ultimate answer appears to be to not employ at all. This is exemplified in the opening of the first cashier-free Amazon Go store in Seattle—a convenience store that uses tracking technology to charge customers for goods as they leave the store, requiring no interaction with a checkout.

Amazon is also looking at replacing its last-mile delivery services via heavy investment in drone technology and is constantly improving its machine-learning recommendation algorithms.

Finding the future of retail

These technologies should not be overlooked by booksellers. While it is impossible for individual stores to compete with Amazon’s research budget, booksellers should still endeavour to monitor these developments to predict retail trends. By staying abreast of changes in consumer behavior and expectations, and collaboratively embracing new platforms, independents may remain competitive.

Customer data and purchasing habits are a huge commodity, and much of this data is locked in the databases of store POS systems and customer service staff. Finding a method of collating and quantifying this information would be invaluable to the retailer of the future.

In Australia, one method of unlocking and sharing some of this data would be via the deployment of Treeline Analytics on the Edelweiss platform. Technology also begets efficiency, evidenced by the UK-based payments system Batch. This system promises to speed up and simplify the reconciliation of invoices and credit claims, freeing up valuable time for staff and preventing the halting of supply due to mistakenly unpaid accounts.

Booksellers should also consider broadening their community offerings. While bookstores are seen by many as a welcome relief from the screen-heavy tyranny of modern life, the online world is also reshaping the way people interact within communities.

Webb points to the success of HQ Trivia and on-demand group exercise platform Peloton as indicators of how people are now demanding a community experience on their own terms, in their own time and own space. By taking advantage of online streaming audio and video platforms and continuing to cultivate their social media followers, bookshops may expand their communal offerings beyond their walls and opening hours.


There are inevitably many takeaways from a conference as vast and as rich as the Winter Institute, probably even more for a visitor from overseas. In fact, the opportunity to speak to other overseas guests was just as important as the conference itself, as it lead to insight into their industries too.

Both UK and Canadian booksellers were similarly bullish on their future, and in Canada’s case this is despite their not having an independent booksellers association.

The annual informal gathering of ELBA (the English Language Booksellers Association) brought forward the idea of creating an international network for travelling booksellers who may wish to drop in on overseas bookshops, either in a formal working capacity or in an informal fashion, to learn about the way shops operate in other markets. ELBA also proved enlightening regarding shop operations in different countries. New Zealand booksellers found their supply chain very disappointing over the Christmas period as much of their stock comes from Australia and yet was held up at the docks by customs at that critical time. UK booksellers, on the other hand, were very vocal about the benefits they had found by working with Batch and how the third-party platform had greatly sped up and simplified their payments systems.

This is an edited extract from Tom Hoskins’ report. Read his full report here.