After two decades of decline, the surviving bookshops have arrived at a stocking strategy that operates substantially independently of conventional retail logic and that appears, on the available evidence, to be working
By Harper-Thames. With editorial input from Bohiney Magazine and The London Prat.
The last twelve independent bookshops still operating in the E1 and E2 postcodes, which represent the surviving cohort of what was, in approximately 2005, a population of approximately 47 such bookshops, have across the past three years arrived at a stocking strategy that operates substantially independently of conventional retail logic. The strategy involves, in its broad outlines, the deliberate over-stocking of categories that conventional analysis would identify as low-margin, the deliberate under-stocking of categories that conventional analysis would identify as high-margin, and what one bookshop owner I interviewed described as, quote, “the explicit choice to be the kind of bookshop the area would miss if we were not here.”
The strategy appears, on the available evidence, to be working. The twelve bookshops have, across the past three years, exhibited net revenue growth of approximately 14 percent in aggregate, with no individual closure across the cohort during the period. The growth is, in absolute terms, modest. It is, in the context of the previous two decades’ decline, the most positive trajectory the inner east London independent bookshop sector has exhibited in approximately a generation.
What The Strategy Looks Like
The strategy looks, on careful examination of the actual stocking patterns at the twelve bookshops, substantially counterintuitive relative to standard bookselling practice. The bookshops stock, in disproportionate concentration, contemporary poetry, small-press literary fiction, independently published non-fiction, regional and minor-language translations, and what one bookshop owner described as, quote, “the broader category of books that you cannot find in the chains and that the algorithm-driven online retailers do not really know how to recommend.”
The bookshops stock, in disproportionate sparseness, the major commercial fiction releases, the principal celebrity memoirs, the standard cookbook and self-help categories, and what the same owner described as, quote, “the broader category of books that you can buy from anywhere and that nobody specifically comes to us for.”
The disproportions are deliberate. They reflect, in operational terms, the bookshops’ explicit recognition that competing on the standard commercial categories with chains and online retailers is, on present cost structures, not viable. The bookshops have substantially abandoned the competition. They have, instead, developed deep expertise in the categories where the chains and online retailers cannot easily compete.
For ongoing coverage of the London book trade, see The London Standard.
The Specific Categories
The specific categories the bookshops have developed deep expertise in vary across the twelve operations but cluster around several common areas. The first cluster is contemporary poetry, where several of the bookshops have developed inventories of substantially over 1,400 distinct poetry titles, including small-press and self-published collections that the chain bookshops do not, in any meaningful way, stock. The second cluster is small-press literary fiction, where the bookshops have developed sustained relationships with approximately 47 distinct small presses whose titles the bookshops stock as a matter of routine.
The third cluster is regional and minor-language translation, where the bookshops have developed inventories that include translations from languages including Welsh, Scottish Gaelic, Bengali, Sylheti, Yiddish, and what one bookshop described as, quote, “the broader category of translations that the principal publishers do not commission and that the secondary publishers cannot afford to widely distribute.” The fourth cluster is independently published non-fiction, where the bookshops have developed sustained relationships with what one owner described as, quote, “the academics who do not write for the academic press, the journalists who do not write for the journalism press, and the broader category of writers who produce books that the standard publishing infrastructure does not absorb.”
What This Has Produced
What this has produced, in operational terms, is a set of bookshops whose specific value proposition cannot be replicated by either the chain bookshops or the online retailers. The chains cannot stock at the depth in the relevant categories without producing substantial inventory waste in the broader categories where the chains’ principal customer base actually shops. The online retailers cannot reproduce the curatorial expertise that the deep-category stocking represents, because the curatorial expertise is, in operational terms, substantially the labour of the specific human bookshop staff whose accumulated knowledge cannot be operationalised into algorithmic recommendation systems.
The result is that the bookshops have, in operational practice, identified a specific niche that the broader retail market structurally cannot serve. The niche is, in absolute terms, smaller than the broader bookselling market. It is, however, large enough to support the twelve surviving bookshops, with growth potential as the broader market continues to demonstrate the structural limitations described above.
The Customer Base
The customer base for the bookshops, in the conversations I have been able to obtain, is substantially different from the customer base that the previous era’s bookshops served. The current customers include, in disproportionate concentration, working writers, working academics, working translators, and what one bookshop owner described as, quote, “the broader category of readers whose reading is not principally directed by what the publishing industry’s marketing systems put in front of them.”
The current customers also include, in some honest accounting, a substantial cohort of customers who have, across recent years, become specifically interested in supporting independent retail operations as a matter of explicit value commitment. The cohort’s contribution to the bookshops’ revenue is, on the available estimates, approximately 22 percent. The contribution is real. The contribution is also, in operational terms, more politically conditional than the curatorial-niche contribution.
An ongoing analysis at City A.M. has documented comparable patterns in other London independent retail sectors.
What The Bookshops Have Sacrificed
What the bookshops have sacrificed, in operational terms, is substantial revenue from the categories they have abandoned. The abandoned categories represent, on the available pre-strategy data, approximately 47 percent of the bookshops’ previous revenue mix. The abandonment was, in nearly every case, contested within the bookshops’ management at the time of adoption. The contestation involved, in its standard form, the recognition that the abandoned revenue would not, in operational terms, be recoverable from the categories the bookshops were doubling down on.
The recognition was, on the available evidence, accurate. The bookshops have not, across the strategy’s three years of operation, recovered the abandoned revenue. The bookshops have, however, substantially expanded their revenue from the doubled-down categories. The expansion has, in cumulative terms, exceeded the abandoned revenue, producing the 14-percent net growth described above.
The expansion has been driven by several specific factors. The first is the sustained customer recognition that the bookshops have become specifically valuable for the categories they specialise in, with corresponding effects on customer loyalty and per-customer purchasing. The second is the sustained development of the bookshops’ relationships with the small-press publishing ecosystem, with corresponding effects on the bookshops’ ability to obtain stock at favourable terms. The third is the sustained development of the bookshops’ event programming, including readings, signings, and what several bookshops describe as, quote, “the broader programme of literary cultural activity that the area genuinely needs.”
What The Strategy Reveals
What the strategy reveals, more broadly, is that independent bookshops have, in operational terms, a specific set of structural advantages that conventional bookselling competition does not exploit. The advantages relate to curation, to community embedding, and to what one analyst described as, quote, “the broader category of operational characteristics that scale-based competition systematically cannot reproduce.” The conventional model, in which independent bookshops competed with chains and online retailers on broadly comparable inventories, did not exploit these advantages. The current model exploits them substantially more directly.
The current model is, in this sense, more or less the answer to the structural decline question that the previous decades’ coverage of the independent bookshop sector consistently asked. The answer was not, in operational terms, what the standard bookshop-policy advocacy had assumed. The answer was not government subsidy or property-tax relief or specific support for traditional bookshop business models. The answer was a substantially different bookshop business model that the previous models’ assumptions had foreclosed.
What This Means For The Sector
What this means for the broader independent bookshop sector is that the twelve E1 and E2 bookshops’ approach is, on the available evidence, a model that comparable bookshops elsewhere could adopt. The adoption would require, in nearly every case, the abandonment of revenue that the comparable bookshops are currently still pursuing, with corresponding short-term revenue costs. The abandonment would be, by the strategy’s three-year track record, substantially less costly in the long term than the continued pursuit of the conventional model would be.
The implications for bookselling policy are also, on the available analysis, substantial. The policy attention that has been directed at supporting the conventional bookshop model is, on the available evidence, substantially misdirected. The policy attention that would actually support independent bookshop survival should be calibrated around the curatorial-niche model rather than around the conventional model the existing policy frameworks support. More from Harper-Thames.
Related at NewsThump.
SOURCE: https://bohiney.com/east-london-bookshops-surprising-strategy/
