Book Retail
The Hope for Book Retailing
Section I – Industry Overview
The United State book market is estimated to reach $62.3 billion in sales by 2011, a compound annual growth rate (CAGR) of 3% (Datamonitor). This represents a deceleration from the 3.9% CAGR experienced during the period of 2002-2006 (Datamonitor). While still experiencing positive growth, the growth rate is on a decline. Exhibit 1 details the forecasted United States book market value.
Traditionally, the book retailing industry had three major components in the supply chain: publishers, wholesalers and retailers. The town corner book stores, that long were the center of the book retailing industry, gave way to larger chains beginning in the 1970s. First it was mall shops like B. Dalton Books, but then in the 1990s book supercenters like Barnes & Noble or Borders Books began to emerge (Ghemawat). These supercenters offered not only more titles in one place, but also a fresh book buying experience.
The late 1990s saw a radical change in the book retailing industry. Many book retailers were appearing online selling books through the internet. Amazon.com emerged from this group as the driving force of online book retailing. Supercenter such as Barnes & Noble and Borders Books were forced to enter the world of online book retailing or risk being left behind. Book buyers were now able to shop at any time from any location. The book retailing industry hasn’t seen a disruptive change of this scale since.
The latest innovation is that of E-Books. E-Books are digitized versions of traditional books that can be read using a display device such as the Amazon Kindle or the Sony Reader. E-Books have not been able to reach the tipping point of being accepted by the critical mass.
Section II – Proposed Innovations
The book retailing industry is in dire need of innovation in order to reverse the declining growth trend. The following innovations...
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