Road to Renaissance

How Bookstores Survive in a Digital Age

by Zihan Song

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Prologue



Bookstores always remind me that there are good things in this world.

--Vincent Van Gogh






In the Spring Arts Tower at Los Angeles downtown, there is a place where you can find a labyrinthine collection of books, new or used. You can spend the whole day in this cool but cozy place with a novel from the 1980s, or just wander around looking at its wheel-equipped bookshelves and old style paintings. As California’s largest new, and used book and record store, The Last Bookstore has over 250,000 books and thousands of records and magazines. It also has a large space for book signings, literature lectures, music book reading, and all sorts of social connection events. The store encourages selling and trading books and records based on its fluctuating inventory needs, as part of a mission to keep the paper and ink book business alive in an era of e-readers and digital downloads.

The life of The Last Bookstore was not always smooth: the rent in downtown L.A. has been rising sharply. And there was even a gun incident just across the street several days before its opening. Josh Spencer, the owner and operator, chose the name The Last Bookstore because it was founded during the time when Borders and other bookstores were going out of business. But it’s not facing the same fate as it’s competitors. On the country, it’s thriving. The store is in its third incarnation after it began in 2005. With over 10 years’ history, it has grown quickly to 22,000 square feet and it is now one of the most famous tourism landmarks in the city.

The Last Bookstore

The store is in downtown L.A.


People just don’t want to lose something they loved for centuries. -- Josh Spencer

Chapter 1

Fading Bookstores




However, not every bookstore owner has the good fortune like Josh does. Also in South California, two longtime bookstores — one in Laguna Beach and the other in Pacific Palisades — announced they'll be closing, and Metropolis Books in downtown L.A. was put up for sale by its owner in the summer of 2011. In the same year, Borders filed for Chapter 11 bankruptcy, closing hundreds of stores nationwide. As a matter of fact, most bookstores have been going through hard times. Let’s take a closer look of U.S. bookstores:




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In 2013, the state with most bookstores per capita is Montana. Wyoming and Vermont came in second and third in terms of bookstores per capita. Although there are over 64 bookstores per million people in Montana, this number is still smaller than the 10th largest bookstore per capita city in the world, Seoul, Korea, where there were 90 bookstores per million people.

In fact, the downward trend of U.S. bookstores has continued for years. The number of bookstores in the U.S. has been decreasing since 2004. In 2005, there were 37,705 bookstores in the United States, but this number had declined 30.3% by the end of 2014. The number of independent bookstores has fallen by 50% in the past two decades. Two decades ago, there were more than 4,000 independent bookstores operating across the United States. Today, there are fewer than 2,000. Big chain bookstores are facing this problem too. In 2011, Borders announced it was running out of business. Barnes and Nobles, the largest retail bookseller in the United States, had 640 stores in 2016, but this number was 705 five years earlier in 2011. This also happens outside the U.S. More than one-third of the independent bookshops in Britain and Ireland have disappeared in the past decade, including one of England’s oldest, the Ibis Bookshop in Banstead, Surrey, with 78 years’ history. In China, the most famous chain bookstore O2 Sun Bookstore closed its last store in the 2012.

For those bookstores still open, their sales are declining too. The annual sales of bookstores in the U.S. in 2016 is $10,440 million, which sounds like quite a lot, but this number was $ 15,442 million in 2010. Bookstore sales have declined over 30% in six years. During the same time, independent bookstores were also trying to get by as Amazon accounted for a third ofmajor publishing house’s retail sales, independent bookstores only accounted for less than 10%. Big chain bookstores had to change their marketing strategies and transferred most of their sales online, but it still couldn’t stop the decline of revenue. Barnes and Nobles’s total sales in 2016 were $ 4,163,844, and it has declined 41% compared to five years ago, when it was $ 6,998,565 in 2011.

Stores closed, sales dropped, physical bookstores were experiencing the coldest winter.



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Borders

Borders store closing



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O2 Sun Bookstore used to be the largest chain bookstore in China



Chapter 2

Who Killed Them




The change of reading habit

Although it’s hard to confess, our reading habits are changing, especially for the younger generation. First, we read less. With the fast pase of society, it’s hard to have a chunk of time to sit down and read a book. Everyday life is filled with overtime working or thinking about how to get a promotion. Even when we finally have time to entertain, there are options which seem more appealing. Increasingly young people (including myself) choose to open Instagram or Snapchat for killing time on the subway or at bus stops instead of reading a paper book. Funny kitten’s videos on YouTube seem more interesting than Voltaire or Hugo. According to the data provided by Statista, 26% of U.S. Millennials (aged 18 to 36) stated they now read less than they used to six months earlier. 40% of U.S. readers stated that they read less than weekly for pleasure and the most common daily reading purpose (25%) is reading for research use. Worldwide, 59% of young females (18-29) and 63% of young males (18-29) read printed books less often than weekly in England. 36% of French readers found they read less printed books than before, and 46.1 million German read only once a week or less in 2016.



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Despite the fact that we read less, our reading habits have also changed due to the boom of e-books. E-books are appealing because they are lighter to carry. We can download the latest novels and start reading immediately without waiting for a bookstore to open. We could just leave the fictions in a folder in Kindle without worrying if the books we finished reading would take up too much space in the living room. In 2013, 38% of U.S. readers read equal or more eBooks than print ones. In the same year, the sale of eBooks in U.S. was $2.03 billion and annual growth was 5%. There were 91.9 million people in the U.S. that identified as eBook readers in 2016. In France, a slight increase (+3% from last year) in the number of e-book readers, who accounted for 18% of the French population in 2015. And 20% (+2% from last year) of eBook readers buy at least 4 e-books per year. Only 7.3% of the total population in the U.K. were eBook readers, and in this past year, this number was 22%. Amazon realized this worldwide trend quite early and a new Kindle book is added to its book section every five minutes. By 2014, 19.5% of all books sold in the U.S. were Kindle titles. E-books now make up around 30% of all book sales.


Less profits

Bookstores are a crucial part of our culture, but running a bookstore is just like any business, it needs to make money to stay alive. But after looking at the average business rent in major cities last year, seen on the map below, we see that it’s difficult to find a nice place for having a bookstore.






Starting a money-making business is hard. The rent in major cities has increased $1.8 per square foot per year since 2014. The price of renting space for a business in New York City was $72.6 per square foot annually in 2016. Assume that you want to open a small (maybe only 2,500 square foot) bookstore in Brooklyn. You need to invest at least $183,000 on annual rent, and this price will be even higher in Manhattan. With other expenses like employee’s salaries, inventory, and management fees and other expenses, the annual costs for this small bookstore could be around $250,000. You might say, “Why not just open the bookstore in a smaller city like Cleveland where the rent is lower”. However, the number of potential buyers would decrease by opening a bookstore in this smaller city.

Even if you get all the money for starting your bookstore business, you have to watch out for your rivals. The large chain bookstore right across the street sells more categories of books, but it won’t be your largest threat. Online stores like Apple and Amazon are the new threats to bookstores. Amazon has a 65% share of U.S. eBook sales, and its current annual revenue from book sales is $5.25 billion. There are several reasons why these types of online retailers have the advantage over bookstores in making money.

First, the cost of selling physical books as through online stores is lower, as these online stores don’t need to spend money to rent a space or hire dozens of employees. Second, buying books online is more convenient. Just sit in your apartment and click a button on the webpage and the books you want will be delivered the next day. Third, these online stores have more complete collection of books than a physical bookstore. You could easily get the special edition of a Dan Brown book without having to run to five different bookstores when it is out of stock at the first four.


Last but not least, online books are cheaper. Amazon can get 53% effective discount from Random House, which is the largest general-interest paperback publisher in the world. It could get up to 60% discount from other smaller print houses. That’s why you would always see sale advertisement on the Amazon Books front page. Sometimes the sales could be up to 40% off during holiday seasons or the start of the semester. unfortunately, physical bookstores (especially the smaller ones) couldn’t get as large of discounts from print houses as Amazon does, so the prices of books are higher in bookstores. That’s why people call physical bookstores “the show room of Amazon”: you find an interesting book in a bookstore and then go back home to buy that online at a cheaper price.



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Amazon's threat on French bookstore business

We face the extra challenge from digital and the big online retailers.

-- Morag Watkins, co-owner of Chorleywood Bookstore in Hertfordshire, England



Chapter 3

Tomorrow is Another Day




While bookstores can't compete with online retailers on price or selection, the truth is that they don't have to. A bookstore could fully take advantage of its most unique feature to survive or even thrive in this digital era: humans.


1. Offer an experience


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You probably couldn’t find the best price of a book in a physical bookstore, or buy a book as conveniently as clicking a button. The reason book lovers keep coming to a bookstore is that they aren't looking for a bargain, they're looking for an experience, and the more unique, the better. "Indeed, that's all that remains is the retail experience they have going in," says Thad McIlroy, a publishing analyst based in Vancouver and San Francisco.


Wandering around in a bookstore is an adventure. It is not just a place to pick up whatever book you need, it's a place that people for the experience. People get a unique experience with a bookstore they can't get online. That has been the real valuable part of a store. If you bought a book online, you probably would forget the contents of the book read on your device or how you got the book years later. But you would never forget how spectacular those antique stacks and tunnels made entirely of books in a bookstore are, and the excitement you feel when you walk into a store with curiosity and hope of finding a good book. It is those memories that will never fade away.


I definitely wanted to create an experience.

-- Josh Spencer, the owner of The Last Bookstore



2. Curate and recommend in a human way


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One of the most valuable resources bookstores offer are knowledgeable, well-read employees. They know the store's unique collection and can help a customer find a book just for her. That kind of human-customized shopping experience is hard to find, and creates loyal customers. "You cannot invent an algorithm that is as good at recommending books as a good bookseller," John Green, author of The Fault in Our Stars, said "And that's the secret weapon of the bookstore — is that no algorithm will ever understand readers the way that other readers can understand readers."

The arrangement and categories of bookshelves could also help to create this humanistic experience. One of the most famous independent bookstores in Beijing, “Yufeng Bookshop” organizes its collection after talking to female customers. On the shelves for girls in their 20s, there are collections about fashion, travel, and makeup. On the shelves for ladies around 30s, there are books about cooking, childcare, and housekeep. On the selves for ladies around 40s and 50s, there are books about health, psychology, and handcrafting. An employee can help a customer find a book she wants if those bookshelves didn’t satisfy her needs. This is very different than Amazon's machine-generated recommendations.




3. Foster community


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Author readings, kids events, and panel discussions all help make the independent bookstore not just a place to buy books, but a place to commune and exchange ideas. Customers can find a sense of belonging in the bookstore and form a special bond with the place and people they meet there. For so many book-loving families, those bookstores are like their living room. A good store is a reflection of the community, supported by the community, and a meeting place for people. On the weekends, this is always the place where people meet for sharing feeling about a specific book and talking about literature.

Most successful bookstores are good at fostering community. Prairie Lights is an independent bookstore in Iowa City, Iowa. Its "Live from Prairie Lights” is an internationally known readings series, which features some of the best up-and-coming and well-established authors and poets from all over the globe. Presented before a live audience and streamed over the world-wide-web, this long running series brings the spoken word from the bookstore to the masses. Librairie Avant-Garde, Nanjing, China held over 800 cultural salons in the past 9 years. The speakers include famous writes, directors, independent musicians, and literary critics. Here, readers have a chance to find another interpretation of a book, or even another way of life from their community. Both stores are on the list of the World’s Top 10 Bookstores .




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Prairie Lights successfully fosters community and is becoming the place where poet lovers regularly visit.


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Librairie Avant-Garde bookshop is the most beautify bookstore in China, and it’s built in a former bomb shelter.


As a result, they are coming back...

There are various signs show that bookstores are coming back and the future is quite promising. Although the total number of bookstores in the U.S. has been falling, the number of independent bookstores has increased in the past two years. It seems like bookstores have found their way to survive again. Moreover, according to the data from American Booksellers Association (ABA), bookstores sales increased in 2016 compared to 2015. Retail sales at bookstores were up in each month (except for July) in 2016 compared to 2015nd the sales were up by 10.5% in March of 2016 compared to March of 2015.

Another interesting fact is that Amazon is putting its attention to physical bookstores. It now has three physical bookstores in California, Oregon and Washington and plans to open more in Illinois and Massachusetts. As a physical extension of Amazon.com, Amazon’s bookstores choose their collection based on customers’ online rating, pre-orders, and sales data. Amazon’s physical bookstores are still part of its online service, so I would say it’s a new chain bookstore. Most of the book collections are based on statistical data from online sales instead of talking to customers or employee’s own experience. I personally think they lack a sense of humanity compare to corner bookstores which have lasted for years. But at least it’s a good sign: physical bookstores are increasing getting more attention, and are ready to be back in the public view.






Old school bookstore thrives in New York City


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Amazon physical bookstores: a mixture of tech with brick-and-mortar charm.



Epilogue



The name “The Last Bookstore” was chosen with irony, which seems more appropriate with each passing day as physical bookstores die out like dinosaurs from the meteoric impact of Amazon and e-books. Hopefully it’s not an indication of all bookstores’ fate. They have gone through dark and hard times, but I am glad to see that they are struggling, fighting, and coming back.

The best memories of my childhood are still the days when my mom and I spent the entire Sunday afternoon in a children’s bookstore near our house. I hope my kids can also have these awesome experiences, and those days can glow in their lives forever.



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I hope both the store's light and people's love of bookstores never extinguishes.





About this work
Bookstores are essential parts in my life, so I want to show the whole story about how they went through a hard time and how they finally survived by adapting this changing world.

Data
Most of the data in texts are from Statista and American Booksellers Association. Data for making maps are from Publisher Weekly, JLL, and L.A. Times. Other resources include Barnes and Nobles, Census Bureau, Forbes, Lunwenwang.

Acknowledge
Many thanks to Robert Roth, Nick Lally, Shelley Witte, Carl Sack, Kristen Vincent, Max Zeng, and my cohorts from Geog 572 for their invaluable help! This project was inspired by Snow Fall from New York Times.