In today’s post, we provide an excerpt from our updated market guide, Selling to Mass Merchandisers and Non-Traditional Accounts in the United States: A Guide for Canadian Publishers (2018), in which market expert Michael Johnson outlines some of the major changes in the US book market in the last 10 years, covers some new opportunities for publishers in the current market, and the role of mass merchandisers and non-traditional accounts.
Just about every aspect of publishing, bookselling, technology, and retail has changed dramatically over the last decade. The way books are written, laid out, formatted, printed (including ebooks), distributed, and sold have all been subject to enormous technological and commercial change. Although an entire report could easily be written comparing the publishing and retailing industries over this period, we will just highlight some key factors here.
A Decade of Change in the US Book Market
- Amazon: In 2007, total sales at Amazon (all categories and all markets worldwide) were just under $15 billion USD. This compares with the $80 billion USD in media sales in the US only during 2017. In 2007, Amazon Web Services (AWS) was less than a year old, having been re-launched as a full service during 2006, after being completely rethought and even renamed. By 2017, AWS had become a very strong, flourishing part of Amazon’s overall corporate structure, recording over $17 billion USD in sales. A decade ago, Amazon had no physical stores of any kind. In 2017, Amazon owned and operated over 450 Whole Foods grocery stores and several physical bookstores, with plans to open at least three more bookstores. When the new stores open, Amazon will be one of the top five physical bookstore chains.
- Digital: A decade ago, ebooks were still settling in as a concept, with file formats, rights management, and software/hardware readers in a state of tumult and confusion. There were too many standards, too many rights fights (authors/publishers and digital asset protection), and too many physical devices. Pricing was all over the place. In addition, in 2007, Amazon released its first Kindle. In 2017, the vast majority of ebook issues have stabilized, including taming the wildly varied predictions of both doom and opportunity that ebooks generated. Consumer appetite for ebooks has settled in somewhere between 18% and 20% of all book sales. In the US, Amazon is basically the ebook market. Various reports place their market share at anywhere from 65–85% of all ebooks sold.
- Physical Retail: Storefront retail in the US has changed dramatically since 2007. Over 20% of the mass merchandise firms listed in the 2007 report either have closed completely or been merged into other retailers. In fact, the bulk of all major US retailers, regardless of product type, are either reducing their expansion plans or euphemistically “growing smaller” by closing stores. The combination of some firms closing and remaining firms reducing their store count led to a net closure of over 3,500 stores for the ten-year period ending in 2017.
On a positive front, more books than ever are being published and many of those are coming from independent presses. More positive news is that more independent bookstores continue to open. Between 2009 and 2017, there was a 40% increase in the number of independent bookstores in the US.
The vast changes in these very important aspects of book publishing and bookselling— including significant file format changes, a massive adjustment in the overall retail landscape, and the addition of more bookstores and more publishers, just to name the key factors—have completely altered the US book business.
The Role of Mass Merchandisers and Non-Traditional Booksellers
A mass merchandiser can be defined as a physically large retail store, as either a stand-alone or a key anchor store for a shopping mall, with a very large amount of merchandise available. The merchandise mix could be very broad across a wide variety of product categories (e.g., Walmart) or very deep in product specialty category with supporting sales from other categories (e.g., grocery for Kroger or prescriptions at Walgreens). US mass merchandisers typically have hundreds, if not thousands, of physical stores.
These mass merchandisers often have an online presence intended to complement and perhaps extend their physical retail efforts. However, very few of these firms have accomplished much with their online sales. Walmart, for instance, does less than 10% of its total sales online.
With over 5,000 stores, Walmart’s physical storefront presence in the US is within a 10-minute drive of close to 90% of the entire population. With a position like that, Walmart is an ideal sales channel for most goods.
While all mass merchandisers should be considered non-traditional booksellers, other store types that are nowhere near as large still do sell a fair number of books. These are not usually chains, but rather location or specialty type retailers such as museum gift shops, stationary stores, and gift shops with themes like golf, sewing, hunting, or pets. The key to being successful with this type of non-traditional bookseller is to find an outlet that closely matches your content. These stores usually start with smallish orders but can build a steady flow of business with titles that catch on with their staff and clients.
It is also useful to look closely at both America’s cultural centres and to the open road across its massive highway system. On the cultural side, there are thousands of museums in the US, many of which have dedicated book and gift shops. These are excellent bookselling outlets if you can match your content to the general theme of the institution or to any special exhibits.
On the highway side, there are two main options: truck stops and Cracker Barrel. The over 1,700 franchise-owned truck stops serve as resting place, repair shop, refuelling station, and overall retail operation to serve the over 1.8 million truck drivers in the US (see Bureau of Labor Statistics 2018). These truck stops sell a fair number of paperback books and physical audiobooks. The main themes/genres are westerns, detective stories, Christian themes, and biographies.
Beginning as a single restaurant in Lebanon, Tennessee, back in 1969, Cracker Barrel now covers a large percentage of the US and serves breakfast, lunch, and dinner every day. Cracker Barrel is so popular that their customers consume over 200 million country biscuits a year. Of course, many of those meals come with a nice side of shopping. Books are sold here in four main areas: children’s, cookbooks, instructional, and inspirational. Cracker Barrel also offers a wide range of physical audiobooks via a sort of rental model in which customers pay full price for the audiobook and then get all but the rental fee (approx. $5 USD) refunded when the book is returned. The audiobook titles are mostly bestsellers and children’s books.
Want to learn more about this market? Download the full version of our guide on selling to mass merchandisers and non-traditional accounts in the United States.