Data is power

Kindles, Kobos, OYOs, iPads, Nooks . . . the arms race is 
now well underway. The logic is that consumers are more likely to buy e-books from a retailer which has also provided them with an e-reader.

Kind of obvious really, which makes you wonder why it has taken the major players in the UK so long to get their acts together.

These laggards have always consoled themselves with the fact that e-books still account for a very small part of the overall book market. With sales of around 8%, e-books have a bark that is far worse than their bite.

To the casual observer this may make sense. However, the real value of e-readers is not the sales numbers per se, but the fact that they are a springboard for selling books online. By selling the Kobo, www.whsmith.co.uk is suddenly a more viable place to buy books than it was six months ago.

And this is where things get interesting. Because the prize for online booksellers is data capture. This is what enables them to ring-fence their consumers and then analyse their purchasing patterns to target them ever more effectively.

Right now, W H Smith doesn't really have a clue who buys their books. But within a year, through the Kobo, they will know who is buying what, how frequently, at what time of year, and for how much money.

Think of the power.

Of course this is nothing new. We have all watched Amazon clean up because of its ability to communicate with customers on a regular basis and give them just what they want.

The difference with W H Smith is that they have a strong bricks-and-mortar presence too. It will not be long before they start using their consumer data to hone their offline offering, as well as their dealings with publishers.

It is not too extreme to expect that within a year or so, retailers like W H Smith will be using their consumer data to pitch for ever-larger chunks of publishers' marketing budgets. In fact, why let the publishers do any marketing at all? Wouldn't it make more sense for them to hand over their funds to the retailer's marketing departments instead? After all, they know more about who is reading the books than the publisher ever will.
And here is the rub.

The new battleground in the book industry over the next decade will be the fight for reader data.

Those who know most about who is reading their books will win. Everything else is guesswork. The industry may have got away with fudging things until now, but that is all about to change and retailer e-readers may leave publishers out in the cold.