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Reading the Future: 2010; Pt II
02.06.10 | Tom Tivnan and William Higham
Readers want age guidance on children's books. Internet retailers rule the roost, but customers are warming more to the independent bookseller experience. Word of mouth from friends and family is the main driver of new book sales, but bricks and mortar shops have a role to play with appropriate displays and merchandising.
Those are some of the top line findings in this week's preview of our Reading the Future 2010 report, which we will explore below. We embarked on our first Reading the Future in 2008 to commemorate our 150th anniversary, not knowing whether it would be a one-off or an annual survey. As the recession deepened last year, and uncertainty grew as to how digitsation would affect the trade, we felt we had to continue. Now more than ever retailers and publishers need rock solid consumer research to help their businesses survive, and thrive, in a period of tumultuous change.
The following, and last week's feature, are but a sample of Reading the Future 2010. The full report, available for £89 from 01604 251040 (£44.50 for Bookseller subscribers), includes in-depth analysis that cross-references each question in the survey against a range of demographic data: age, sex, genre and retail buying behaviour.
True, there is some sober reading in these results. For example, the public's thirst for discounting—and by extension for booksellers, the shrinking of margins—continues unabated. For traditional bricks and mortar booksellers will not be cheered that online retailing is becoming an even more desirable place to shop. Yet a close examination of the data reveals consumers also hungry for a good retail experience, in addition to, or even over, discounting. For publishers, there is business critical data on the rising (and falling) popularity of genres, what marketing initiatives can drive sales and which electronic devices will win the e-reader wars. Sober, yes, but ultimately hopeful, and essential.
Online, yes, but cheer for indies
For the second year running, the internet is the place to browse for our respondents (see Table 1). It is firmly in first place, although it fell back slightly from our 2009 survey by almost two percentage points to 38%, it increased its lead over the second most favourite place, chain bookshops, from 9% to almost 13%.
An important note is that we did change our methodology from the first year to year two, going from a face to face questionnaire to a 3,000-strong online panel, which may account somewhat for the chains and internet shops swapping positions from 2008 to 2009. Yet it is probably safe to say that the past two years have been the more accurate reflection of consumer behaviour. A recent survey by web analyst UK Online Measurement reckoned that the average Briton spends 22 hours and 15 minutes surfing the web a month, by far the most in Europe. Rising popularity of the internet chimes in with the continuing growth of e-commerce, especially for book purchasing. According to a study by consultant Verdict Research in December last year, e-commerce will account for one fifth of all spending by 2020: and for books and electrical goods, it will account for the majority of purchases. We did have a new option this year, social networking, to help assess the impact of sites such as Lovereading or Shelfari. This has not yet established itself among our respondents: fewer than one in 17 claim this is their favourite place to browse. And, of course, the inclusion of this new option may have slightly altered the percentages from past years. Although it is interesting to note that those who said they favour social networking aren't the kids: 31–35-year-olds were by far the most likely to use them.
So bad news for bricks and mortar bookshops? Actually, there is certainly some good cheer for indies. Although they remain in third place, the percentage claiming it as their favourite browsing venue rose this year, moving them ahead of supermarkets, reflecting wider trends of a growing interest among consumers generally in independent retailing and the importance of "locality". Figures are still not up to 2008's high of 26%, but it is encouraging. As in the last two surveys, indies are favoured most by older consumers. In fact since last year, the age of those favouring them most rose from the 40 pluses to the 46 pluses.
Chains remain in second place, but have been on a downward trajectory since 2008, perhaps not a surprise given the state of the high street. Still, there may be hope with the younger generation. Of those who said they preferred chains, they scored their highest approval rating in the 16–20 age bracket (33%).
The popularity of supermarkets fell slightly this year. This could be because those who previously enjoyed browsing in supermarkets now prefer doing so on another channel (most probably online). But there is another possibility: as with 2009, we only polled those who had read at least one book in the past year. It is possible that some of those who enjoy browsing in supermarkets (typically lower income groups) did not buy a book last year in an effort to save money.
Finding out about new books
Word of mouth
For the past few years, overall consumer trends have shown that recommendations are becoming increasingly popular (see Table 2). According to a recent Guardian poll, 78% of Britons trust friends and family as a news source. A Nielsen survey in 2009 also showed that 78% of people consider consumer recommendations the most credible form of advertising. And in a study by Econsultancy last year, 90% of online consumers claim to trust recommendations from people they know, and 70% trust the opinions of unknown users.
This certainly is reflected in RTF 2010. The most popular way to find out about a new author or book today is via recommendations from friends or family, which has risen steadily from 12% (fourth place) in 2008 to just under 20% this year. There was a rise in recommendations (from shop assistants, librarians and local reading groups) and those things that enable consumers to choose more easily for themselves (the blurb on the book jacket). In fact the blurb rose above "mentions on TV or Radio" as a driver for the first time. A tie-in with television is not necessarily a guarantee of success these days; neither mentions on TV/Radio nor recommendations from celebrities were among the top five purchase drivers this year.
The percentage trusting internet reviews fell slightly; perhaps we can call this the Orlando Figes Effect, after the noted historian who was recently unmasked posting positive reviews of his own books and scathing reviews of rival historians' under a pseudonym on Amazon. This, and several other similar fracas, have perhaps led consumers to doubt the veracity or worth of internet reviews somewhat. Yet it still is a significant driver at 13%.
Good news for physical shops in that displays are once again an integral part of introducing shoppers to books, taking second place at 16.6%. True, this is an almost 10% drop since RTF 2008, but that is to be expected if a lot of shopping traffic is going online. Respondents who favour shopping in the chains most were more likely to gain their knowledge from displays and blurbs on jackets, suggesting chain shoppers are looking for more impulse purchases. In fact, blurbs have gained in popularity year on year—take note marketing departments.
A tough time for old media as mentions on TV and radio fell for the third year running and newspaper and magazine reviews slid 3% since last year. Still, newspaper and magazine reviews are the third biggest influence at 14.5%, but are declining with younger respondents. Over 18% of the over 40-year-olds said they trusted newspaper/magazine reviews, compared to just 11% of the under 40s.
Spending more money in shops
Discounts, plus a little bit more
There is no way to sugarcoat this, booksellers: customers want you to give up even more of your carefully negotiated margins (see Table 3). Discounting is by a country mile the most important purchase driver at 56%. Though we have added a number of new options this year (which obviously may alter percentages), it continues the trend of previous surveys of consumers who are increasingly price savvy.
And yet, delving deeper, there does seem to be a bit more going on. As we have seen elsewhere in this poll, recommendations saw a strong rise in importance, and have risen steadily over the past two years: from just one in nine in 2008 to one in six today. Of the new options, by far the most popular was loyalty schemes (a third of respondents claim this would make them buy more books); one in six respondents claimed online ordering and in-store pick up schemes would drive them to purchase more; and more than one in nine claimed more in-store events or book tokens would.
Following on from that, "wider range of quality books" (20.7%), "bookshops stay open later" (13.8%) and "other products and services" (13%) all proved popular. The suggestion is clear: customers are looking for money off, sure, but they are also looking for a good overall experience with greater range, better service and longer opening hours. You don't have to deep discount to bring punters in as long as the bookselling environment is attractive, and a loyalty card scheme at the end may just add the perfect sweetener to the deal.
On the downside, of course, people who claim that they never buy from bookshops has increased from last year to almost 9%, consistent with other findings in our survey. Yet there is hope even among people who favour e-tailers as their bookseller of choice. Apart from discounting and loyalty cards, an "order online pick up in store" option is the most appealing, at nearly 20%. A chance for bricks and mortar shops to grab share from e-tailers.
Respondents who favoured indie shops said they would be more influenced than normal by more in-store recommendations and better service—qualities often associated with independent book stores—plus opening later and a wider range of books, qualities perhaps less associated with them. The growing importance of including more products and services in store suggests that "time poverty" is on the increase—customers cannot spend hours browsing any more. Plus the sorts of products these might be (stationery, coffee shops, etc) are typical of the "small indulgences" that consumers are using as "luxuries" in the current economic climate.
Counting the cost
Economic woes still cut
Following two recession-battered years, 2010 has not started all that well, with Nielsen BookScan figures down 3.1% year on year since January. Still, there is some good news on the consumer confidence front. When asked how their book buying would change if the economic downturn continues (see Table 4), there was an increase in the number of respondents who said they will "buy the same amount of books". Plus, there was a slight decrease in the number saying they will buy fewer books.
The findings also reflect a general increase in consumer confidence in the wider economy. For instance, the Nationwide Building Society's consumer confidence index surged to 80 last month: its highest level since January 2008, and double last April's figure.
Ah, but everything's not all that rosy. Slightly more this year claimed they would "buy a lot fewer books". And the percentage who say they will buy fewer books is hovering around the 50% mark, after being just 29% in the first year of our survey. The over-45 age bracket is once again the group that says it will continue to buy the same amount of books. However, they were closely followed by the 16–20s. Those in the 31–35 age range were most likely to say they would buy a lot fewer books.
On a genre basis, fans of romance and celebrity biographies (the two genre groups that say they buy most of their books in supermarkets), are most likely to say they will buy fewer books. The more "serious" end of the market are the safer bet in a recession; fans of literary fiction and serious non-fiction are the two groups who say they will continue to buy books regardless of the economy.
Hardbacks: cheap as chips
When it comes to hardbacks, the news on consumers' view on pricing is not so good (see Table 5). We asked respondents what they typically do when they hear about "a great new hardback". The number claiming they would "buy it as soon as you can regardless of price" has fallen dramatically over the past two years: from over a third to less than one in nine.
There still seems to be a place for hardbacks, however. Close to half of respondents said they would buy a hardback in some form, but this has fallen almost 10% since the 2008 survey. Price is clearly an issue. Less than 12% said they would buy a hardback regardless of price, a dramatic fall from 34% two years ago. The number who said they would search for the cheapest hardback fell (from 38% to 36%), at the expense of those who are happy to wait for a paperback or borrow it from the library. It appears it is no longer about finding the cheapest version of the hardback, but about finding something cheaper than a hardback altogether.
Concerns over the price of hardbacks clearly tie in with broader consumer concerns about spending in the current economic situation. We did not ask a question about the possible size/weight-related inconvenience of hardbacks, but current consumer trends for convenience and downsizing suggest this might be a factor in their falling popularity.
Fans of serious non-fiction appear to be the savviest shoppers, not surprising given that some of the weightier history, politics and economic tomes can hit the £30–£35 range. They are more likely than average now to find out where a book is on sale cheapest. Perhaps unsurprisingly, those who favour internet browsing are more likely than normal to find out where a book is on sale cheapest. Those who favour chain bookstores and supermarkets are more likely than normal to wait for a cheaper edition. Good news/bad news for indies: those who favour those shops are most likely to buy the hardback as soon as possible, but also most likely to borrow it from a library.
Children's book sales: age guidance wanted
Perhaps the most contentious issue in the children's market (see Table 6) over the past few years has been the use of age guidance on books, with a huge swathe of leading authors firmly against them, but publishers in favour. The row has subsided this past year, mostly because publishers have largely won the day, but if the authors and the trade want to listen to the buying public, age guidance gets a big thumbs up. In a question that we have run for two years (with new options this year which, again, may alter percentages), it is now the most important purchase driver for consumers at nearly 20%, rising from third place last year. This perhaps underscores that the majority of children's book purchases are not bought by the reader of the book, but by a parent or someone buying it as a gift. The older the respondents, the more important age appropriate guidance was, with 46% of 51–55- year-olds favouring it.
Children's may be the part of the book trade with the greatest reliance on the big name authors, from Stephenie Meyer to Jacqueline Wilson to venerable brands such as Enid Blyton. For the second year in a row, "you know and like other books by the author" has finished in second place, this year at 18.6%. Consumers who like to shop most in bricks and mortar shops show the most author loyalty; it is the purchase driver for 42% of chain shoppers, and 39% of indie shoppers.
Again we see the power of word of mouth. Of the four new options we added, teachers' recommendation was the most compelling driver (nearly 10%), while librarians' recommendation was higher for children's books than for all books. As with general books purchase drivers, TV or film tie-ins are here not necessarily a silver bullet for children's purchases. Interestingly it is the over 45s who are most influenced by TV or film tie-ins —and it is by far the most popular for our oldest age bracket, 61 and older (16.9%)—perhaps because it is an "easy indicator" of appropriateness for those who feel they are not in touch with the very young. Literary prizes are the lowest scorer, clocking in at a measly 2.2%.
William Higham is the founder of research and trends consultancy Next Big Thing. He studies consumer change across a range of industries, working with clients including BBC, BSkyB, Budweiser and Barclays. He is the author of The Next Big Thing: Spotting and Forecasting Consumer Trends for Profit (Kogan Page).
This year's Reading the Future was conducted by Next Big Thing in March/April 2010 via an online poll of 3,000 people with respondents from all regions of the UK and a representative spread of adult age (16–61+), gender and socio-economic groups. All respondents had to have read at least one book in the previous 12 months.
The full 60-page report is available for £89 from 01604 251040 (£44.50 for Bookseller subscribers).