How Have Independent Bookstores Survived Amazon?

After months of speculation and hype, Amazon launched its Australian website last Tuesday to plenty of fanfare.

While some users complained that about product range and prices, their disappointment didn’t stop the launch from becoming Amazon’s most successful ever.

Such success serves as a reminder of the scale of disruption that Amazon is expected to bring to the Australian retail market, though the company’s potential impact has mostly been dismissed by its competitors.

Regardless of retailer’s reactions, the change that Amazon is set to create as its offerings expand is something they should all be acting to combat. If they are to survive, they need to look at the actions and priorities their international colleagues have implemented to ensure they remain viable.

Particularly, they should look at independent bookstores.

When Amazon.com went live in 1995, Jeff Bezos’s goal was to make it the largest bookstore in the world by offering better prices and a greater range than any one brick-and-mortar operation could.

It succeeded. At least, it seemed to. In the five years that followed, 43% of independent bookstores in America went out of business, according to the American Booksellers Association.

By 2011, Amazon had toppled Borders, and done significant damage to other international companies. The days of the large-scale bookselling chains looked to be over.

But the indies weren’t done yet. Digital retailers and eBooks were presumed to be a death warrant for these smaller operations, so it wasn’t until 2009 that it became clear a resurgence was in the making. Between then and now, the ABA reports that over 700 new independent bookstores opened across America.

How was that possible?

Because they focused on their strengths.

Ryan Raffaelli is an assistant professor in the Organisational Behavior unit at Harvard Business School. He’s spent the last five years researching how the industry has redefined itself to deal with the Amazon juggernaut.

After conducting 200 interviews, analysing 915 news reports, and spending 91 hours observing customer and staff activity at stores in 13 states, Raffaelli has noted that ‘Three C’s’ define what makes an independent bookstores successful:

Community

If you’ve ever frequented a local bookstore, you know the kind of community mentality they encourage, almost by default. After all, it’s hard to imagine anyone starting an indie store if they’re not passionate about what they offer.

There’s a real sense of shared experience; something that will appeal to just about any customer base.

Curation

Amazon draws customers by offering them a huge range of publications. Indie bookstores do the opposite.

Rather than highlighting bestsellers, staff use community to build a relationship with those who enter their doors, and then make custom selections to best meet their taste.

Curation also means there’s more space for lesser-known authors on the shelves. Indies know that readers looking for bestsellers are going to look at price as the deciding factor for where they choose to buy it from, and they know it will never be them. So why bother stocking them?

Convening

Indie bookstores aren’t just shops. More often than not, they also serve as industry hubs, establishing book and writer’s clubs, book signings, speaking events, and even game nights. Raffaelli notes that some of the stores he visited hold up to 500 events annually.

It’s hard not to see how many independent companies could benefit from applying the Three C’s to their own business, regardless of their industry.

By building a community structured around trust and understanding, tailoring their offerings rather than trying to appease everyone, and finding ways to inform and celebrate their customers, businesses will find a little less to fear in Amazon’s arrival.

In fact, the strategy has proved so successful that even Amazon is following it. This year, they opened ten brick-and-mortar stores in the US…though responses have been mixed.

Ultimately, it feels like that comes down to authenticity. Amazon is the antithesis of what’s driving customers back to indies.

And it will be the same in Australia. If small businesses find authentic, engaging ways to appeal to their niche, they won’t be the ones who have to worry about what happens as Amazon continues to expand.

Raffaelli’s full study will be available in 2018.
You can read an overview of his findings here.

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