BookTrends Study Shows Independents Buck Trend & Gain Market Share

Recently released findings from Ipsos BookTrends brought good news to independent booksellers. In 2003, independent bookstores fared well on a unit basis with demand outpacing the overall trade book industry. As a result, the independent/small chain bookstore channel's market position reached a five-year share high of 16 percent (vs. 15 percent in 2002).

This increase comes at a time when overall consumer demand for general trade books held steady during 2003, as compared to 2002. Americans bought nearly the same number of books in 2003 as they did in 2002 -- 1.176 billion books versus 1.177 billion books in 2002.

Additionally, in 2003, independent bookstores captured 18 percent of total spending for trade books, up from 16 percent in 2002. Overall spending on books dropped 2 percent in 2003 to $11 billion from $11.3 billion the year before.

"This is wonderful news for independent booksellers," said Avin Mark Domnitz, ABA CEO. "Recognizing that these remain challenging times for booksellers, to have achieved this growth demonstrates just how highly consumers value both all the hard work of independents and the unique retail attributes they find at their community's independent bookstore. Coming in the fifth anniversary year of Book Sense, these numbers are especially gratifying, as we are hearing from a wide range of booksellers nationwide how the program continues to help contribute to their success."

In terms of the overall numbers, BookTrends reported that the spending decrease is partially explained by the growing popularity of used books, and the increased traffic at used bookstores and online retailers. "Sales from the ever-widening used book distribution channels, including online options, are beginning to impinge on new book sales," Barrie Rappaport, chief analyst of Ipsos BookTrends, said in a statement. "The challenge for publishers and traditional book retailers will be to devise effective strategies to leverage and preserve their backlist sales, which have, up until now, largely been exempt from heavy discounts and provided better gross margins."

Between April and December 2003, the number of used books purchased by consumers increased by 5 percent over the same period in 2002, while demand for new books fell 2 percent. Overall, BookTrends reported that the used book market accounted for 14 percent of general trade book sales, gaining one share point since April 2002.

Moreover, continued discounting on new hardcover books contributed to the decline in dollar expenditures per book. In 1998, the average amount spent per new hardcover book purchase was $23.73; in 2003, that amount was $22.75. Furthermore, the average list price of a hardcover title in 1998 was $24.20; in 2003, it was $23.87.

Meanwhile, the study reported, list prices for both mass market paperbacks and trade paper titles have increased since 1998 -- by 9.6 percent and 1.9 percent, respectively -- and the total per-book spending after discount has increased, by 13.3 percent for mass market paperbacks and by 4.8 percent for trade paper titles.

"Whereas once the hardcover was a prestige item and contributed significantly to publishers' and bookstores' gross margins, competition between price clubs and chain superstores has put the squeeze on publishers and independent and small chain bookstores," Rappaport said, and added that, at the same time, lower prices have made hardcovers more accessible to consumers. "So we're seeing more non-traditional titles in hardcover, such as crossover juvenile fiction novels."

Concluded Rappaport, "Publishers and retailers need to take a close look at their pricing and discounting structures to ensure that they can compete with the growing used-book segment and the shrinking margins on hardcover titles. If per-book spending is decreasing and discounts are increasing, publishers and retailers will need to find new ways to increase their overall sales volume and share-of-wallet."

Ipsos BookTrends data are compiled from information gathered monthly from a panel of 16,000 nationally representative households that maintain daily purchase diaries. --David Grogan