Verso Study Sheds Light on Consumer Book-Buying Preferences

For 90 minutes on Thursday morning at the Winter Institute, booksellers zeroed in on the provocative aspects of consumer demographics and book-buying preferences offered by Jack McKeown, industry consultant and director of New Business Development for Verso Digital, as he reviewed the results of Verso's recent "Survey of Book Buying Behavior."

The survey, conducted in November and December of 2009, shed light on the profile and preferences of book buyers, including those whom McKeown characterized as "avid readers," approximately 62 million Americans who are "disproportionably buying books." The survey also offered insights regarding the effectiveness of "offline vs. online bookselling and marketing" and outlined the extent of the market penetration of e-books and e-readers. And, with tongue perhaps firmly in cheek, he kicked off his talk with a quote from William Goldman's Adventures in the Screen Trade, "Nobody knows anything."

Of those in the U.S. older than 18, avid readers (those who spend five or more hours a week reading) comprise 28 percent of the population. These readers skew older into the Boomer cohort, and 63 percent -- or approximately 39 million -- are female. Importantly, actual book purchase behavior showed a similar pattern in the Verso survey, with avid readers buying 10 or more books a year.

In McKeown's estimation, these numbers raise both an important question and a potential for industry growth. Older Americans represent two-thirds of the country's avid readers, but it is not yet clear whether this was a "function of their cohort" or a result of a change in lifestyle due to aging. While noting that it would take more study to ascertain whether younger Americans were likely to read and purchase more books as they age, McKeown said that the existing marketing potential to Boomer book buyers "could be an opportunity that is decades long." If avid Boomer readers "bought two more books a year," McKeown said, the result would be $1 billion "of top line growth."

However, indie booksellers do face challenges in capturing those sales, he noted. From a consumer's perspective, there is a clear gap between book buyers' appraisal of an independent bookstore's attributes and their dollar-and-cents buying decisions. Of those surveyed, 21.5 percent ranked a "local independent bookstore" as their favorite place to shop for books -- essentially equal to that of chain bookstores and online retailers. (And 39 percent said independents were either their first or second choice.) "I call this 'mind share' because it is obviously not what's going on at the cash register," said McKeown, underscoring that the figure outstrips the actual market share of indie booksellers.

Indie booksellers have both opportunities and challenges in closing mind share gap, according to the Verso survey. Regarding the key factors in "driving initial awareness" and selling books, indies scored very highly for both author publicity/in-store events and staff recommendations. "Curation [of titles] is what you already do, and nobody does it better," said McKeown, noting that two other key factors to leverage are community and convenience. However, "price" was deemed "very important" by 45 percent of those surveyed. "Price is an area of great sensitivity [for consumers], and I just put that out there," he said.

Regarding marketing, the survey showed that in the off-line world of retail such traditional tools as publicity, advertising, and in-store promotions were still the most critical components of book sales. Search engine marketing was the most important factor in the online environment -- more so that author sites/blogs, social networks, or online advertising, as of yet. The critical bottom line factors for both off-line and online purchases were author reputation, personal recommendations, and price.

Addressing the nascent market for e-books and e-readers, McKeown offered a slightly less bullish assessment than many. Many of the enthusiastic proponents of the e-market, he said, "think purely in terms of technology and devices and don't think from the perspective of the consumers, who they are and what they want."

Of those surveyed, only 9.8 percent said they were "very likely" to purchase an e-reader within the next six to 12 months, and, McKeown noted, 65 percent of Boomers and "seniors" were not likely to purchase an e-reader. While not discounting the emerging market, he said that demographic and other factors pointed to "a built-in limiting factor" to the growth of the digital market. McKeown said he did not believe the industry was yet near a tipping point for e-reader adoption and that "e-reader penetration could be 12 percent to 15 percent [of the market] within two years."

Regarding the pricing of e-books, 28 percent favored the Amazon.com pricing model of $9.99, and 28 percent accepted prices ranging between $10 and $20. Calling attention to "a point of indifference" borne out in the survey, McKeown said that there was strong evidence that consumers would purchase titles in the $12.99 to $14.99 range that was a part of the developing agency plan from some publishers, and a component of Apple's announced online e-book store.

One marketing opportunity highlighted by the survey was the bundling of hardcover and digital editions of a title, with 42 percent of those surveyed responding that they were either somewhat or very likely to buy a "deluxe" edition of a hardcover if it included an e-book version of the title for "a modest surcharge." McKeown saw the strong potential for "a hybrid market, where avid readers... will move between the 'paper reader' and the e-book reader and make their own decisions." --Dan Cullen