Disrecognized Space

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Book retailing Australia: Rethinking the Models

The internet is a disruptive technology, and one area where this disruption is most noticeable, particularly due to its economic impacts, is retailing. The internet makes it an easy matter to bypass local retailers and order from overseas suppliers and, as internet penetration becomes almost universal in Australia, this becomes more significant for Australian retailers. More recently, for book retailers, the phenomenon of e-books is changing the way books are consumed.

Despite the calls from Gerry Harvey to add GST to overseas purchases (Ramli), it is clear that recourse to traditional methods of controlling retail trade, such as pricing and taxing, would be ineffective, not least because price differentials would still exist. Size, also, is no clear protection against these challenges, as evidenced by the recent collapse of REDGroup’s Borders and Angus & Robertson stores (Crikey). What then are book retailers to do if they are to survive in Australia in this environment? In an analysis at the time, Keane notes that shoppers want price and convenience, but retailers tend to respond with denial of the changing marketplace. Holtzer also notes that Australian retailers have historically resisted change and fallen prey to the short term view in making business decisions (20-21).

While retail book sales in Australia occur in businesses as diverse as newsagents to department stores, the Australian Bureau of Statistics states 78% of sales by value are through specialist bookstores (Canadian Heritage). E-book sales are increasing and, in some genres such as romance and crime it can be up to 50% of sales in Australia (Page).

Clearly, retailers need to be innovative rather than reactive. Page recommends embracing the e-book market, as well as actively offering online ordering. E-books utilise new publishing formats, and actively use the internet for sales and marketing, becoming a network-based economy, rather than a hierarchical one (Hillesund). An Australian retailer that is not online is losing sales, since it appears buyers still prefer purchasing from local suppliers online (Productivity Commission 100).

Li finds that the situation is less dire for specialist retailers as opposed to larger retailers (257). Specialist bookshops offer a number of factors which are missing from online transactions, such as welcoming spaces to sit and read, and specialised knowledge targeted to the local audience.

In addition to this differentiation, local booksellers can also leverage the advantages of online selling by developing a (potentially) worldwide market. While small retailers might be isolated on the internet, cooperative sites can overcome this challenge (Ahlert, Blut and Evanschitzky 307). This can be seen, for example, with Abebooks. Small secondhand retailers can list their stock on this centralised site and, while they are also competing against other sellers, can make their stock list available to a vastly larger number of people than would visit their physical stores.

Retail sellers have always had to adapt to changing circumstances. The technological pressures of the internet, while occurring rapidly, represent both challenges as well as opportunities, especially for smaller, more specialised, retailers. Those who succeed in this environment will be those who actively embrace the technology, and those who are in the forefront of these changes.

Works cited
Ahlert, Dieter, Blut, Markus, and Evanschiztky, Heiner. “Current Status and Future Evolution of Retail Formats.” Ed. Manfred Krafft and Murali K Mantrala. Retailing in the 21st Century. Berlin: Springer, 2006. 289-308 Print.
Canadian Heritage. Appendices: The Book Retail Sectors in Australia, France and Scotland. Candian Heritage. 22 Sep. 2009. Web. 12 Aug. 2013.
Crikey. Last Page for Book Buying? Carr, Cunningham, Rosenbloom on REDgroup. Crikey. 18 Feb. 2011. Web. 12 Aug. 2013.
Hillesund, Terje. “Will E-books Change the World?” First Monday 6.10 (October 2001). Web. 13 Aug. 2013.
Holtzer, Michael. “Australia’s Retail Challenge.” Inside Retailing Magazine (Feb/Mar 2011). Web. 13 Aug. 2013.
Keane, Bernard. The Threat of the Internet to Retail. Crikey. 27 Jul. 2011. Web. 12 Aug. 2013.
Li, Jen. “Choosing the Right Battles: How Independent Bookshops in Sydney, Australia Compete with Chains and Online Retailers.” Australian Geographer 41:2 (2010): 247-262. Taylor & Francis Journals Complete. Web. 14 Aug. 2013.
Page, Jon. The Challenges of Book Retail. Collaboration. n.d. Web. 12 Aug. 2013.
Productivity Commission. Economic Structure and Performance of the Australian Retail Industry. Australian Government Productivity Commission. 9 Dec. 2011. Web. 14 Aug. 2013.
Ramli, David. Gerry Harvey: Retailers Will Perish Unless Online Sales are Equally Taxed. ARN. 4 Jan. 2011. Web. 12 Aug. 2013.

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