The UK’s leading high street bookseller, Waterstones, has just pulled the plug on the world’s most popular e-reader, the Kindle. Is this a sign that the tide has turned on the e-book market?
When Amazon released its first Kindle in November 2007, the product page on its website included a prominent quote from non-fiction author and financial journalist Michael Lewis which read: “This is the future of book reading. It will be everywhere”. However, this prophecy has failed to come true – at Waterstones at least. Just four years after introducing the devices into stores, the UK’s leading book retailer is withdrawing Kindles due to “pitiful” sales. So, after all the fanfare, just how well have e-books fared compared to traditional printed books?
Now in its seventh generation, Amazon’s Kindle is the most successful dedicated e-reader, dominating the e-reader market with a greater than 50% share. When it was first released in 2007, it was met with enthusiasm and sold out in just five and a half hours. Although Amazon has never publically confirmed how many were sold in this initial frenzy, business news organisation Forbes estimates that 30 million Kindles have been sold to date. That’s just Kindles, not to mention other popular e-readers such as the Nook and Kobo. Moreover, when it comes to e-books themselves, market research organisation Nielsen BookScan reports British consumers spent £300m in 2013 alone. Waterstones founder Tim Waterstone is the first to admit “e-books have developed a share of the market, of course they have”. However, when put into the context of the entire bookselling market, e-book sales account for just 30%, with physical book sales dominating the other 70%. However, sales of printed books are on the rise.
In 2015, sales of print books demonstrated growth for the first time in eight years. In a report published in September 2015, Nielsen BookScan calculated sales were up 4.6% year-to-date compared to 2014. In contrast, the Association of American Publishers reported a 10% drop in e-book sales during the first half of 2015 against the same period a year prior. This continues a trend reported by Forbes, which indicates Kindle sales peaked in 2011 and were flat by 2013. Meanwhile, Barnes & Noble’s Nook e-reader business is estimated to be losing $70m a year. In this context, Waterstones’ decision to withdraw the Kindle from stores can be seen as a symptom of a wider change in the market.
So, after disrupting a traditional market and successfully achieving 30% market share, why are e-books now running out of steam? Tina Jordan, Vice President of the Association of American Publishers, provides one explanation: “In the early years of e-books, the percentage growth from physical books to digital books was rapid. Now that e-reading is fully integrated into a consumer’s choice of options, the market has begun to stabilize”. In other words, perhaps the novelty is wearing off. However, there is another dimension: the initial rise of the e-book may have shocked bricks-and-mortar booksellers into rethinking their businesses for the better.
Skipping back to 2012, RetailWeek announced the bookselling market “has been hit hard” by e-readers and ‘etail’. To survive in this climate, former UK Borders Chief Executive Philip Downer predicted: “The bookshop of the future will promote itself as a place to spend time that also sells books and lifestyle products”. Step into any Waterstones store today and Downer’s prediction could be seen as the blueprint. Having refurbished some of its 290 shops, the customer experience is today characterised by bright lighting, attractive displays, espresso machines and a selection of wider products such as stationery, games and greetings cards. The importance of this transformation is not underestimated by Waterstones’ Chief Executive James Daunt, who correlates it directly with the company’s 5% increase in book sales in 2015.
In addition to changing the store environment, the books sold on the high street have changed. At the advent of e-books, Downer anticipated avid users of e-readers may still “keep physical copies of their favourites, and books will always have an edge when it comes to gift buying”. The idea of consumers purchasing books as cherished items is supported by the bestselling author Joanna Trollope who believes publishers need to work harder to make books more “precious”. She explains, “Publishers may have to produce fewer books, and more beautiful books”. Again, this trend can be observed on today’s high-street – a case study being the appearance of The Folio Society’s publications in Waterstones’ stores.
In its own words, The Folio Society publishes “beautifully illustrated editions of the world’s greatest books.” These luxurious editions often feature leather-bound exteriors, ornate cover designs and full-page illustrations; all designed to elicit “the unique joy to be derived from owning, holding and reading a beautiful printed edition.”  This ethos defies the eReading experience, differentiating these items by offering a luxurious reading experience available only in print format. In the past, these premium items were available exclusively from The Folio Society’s own website and London bookshop, as well as prestigious venues including the British Library and British Museum. However, in 2013 they began to appear in Waterstones’ London branches. Since then, this retail partnership has expanded to Waterstones stores throughout the UK. So, not only has Waterstones reinvented itself as a lifestyle destination, it has reconfigured its merchandising to match.
Philip Jones of The Bookseller remarks on the turning of the tide for e-books: “There is a belief (and relief) now among some booksellers that the e-book ’threat’ is over. I have heard similar talk from senior buyers at supermarkets, who tell me that they have seen e-reader buyers switching to print books.” So, far from making printed books extinct, e-books may have helped today’s publishers and booksellers breathe new life into printed books after all.