Amazon is more dangerous than ever—and publishers need a plan

Amazon is more dangerous than ever—and publishers need a plan

Amazon’s dubious ethical employment standards are nothing new. You know the ecommerce giant is unrivalled when it comes to logistics and infrastructure. And their unscrupulous pricing strategy has long ceased to astonish - retailers simply cannot compete. But as Amazon continues to expand far beyond its current terrifying $1tn etail presence, grabbing an even bigger piece of the bookselling pie, what are the implications for publishers and retailers?

Can it really be business as usual as old-fashioned publishing houses continually fail to innovate and high street retailers miss the mark when it comes to what today’s customer really wants? Whatever metrics you’re using to measure your business against Amazon - be it sales, customer engagement, pricing, innovation or anything else - they’re beating you.

Amazon in the UK

Here in the UK, recent buzz around Amazon has focused on smart, at-home devices, and aspirations to gain a presence in the digital fashion space. This side of the pond, we’re 6-18 months behind the US, where Amazon’s strategic moves to dominate the bookselling industry continue…

But first, some numbers. And they make for sobering reading.

2017 saw the company publish more than 1,500 books across its 15 imprints. And its AmazonCrossing imprint translates more fiction than any other US publisher. Outside of its own imprints, Amazon controls almost 50% of all book sales across the US and 83% of all e-book sales. 36 of Amazon Publishing’s authors have reached more than one million readers in the US. Just a few weeks back, six out of the 20 bestsellers were from Amazon Publishing. These are real numbers. If you’re not worried, you should be.

‘Only a fool would underestimate Amazon, arguably the most innovative and commercially successful company on the planet,’ explains Lounge Marketing’s Sam Missingham. ‘Yet, I see no evidence that big publishers are either diversifying their revenue streams or innovating at scale. Publishers' business model has been propped up by print sales remaining strong, which is great news, but this is heavily reliant on bookshops.’

With 15 stores opened in major cities across the US since 2015 and more on the way, Amazon is yet to bring it bricks-and-mortar experience to the UK. Acting as physical extensions of its website, the data-driven stores curate titles based on real-time sales and ratings. Book covers rather than spines are displayed, with recommendation-style ‘If you like, you’ll love’ bookshelves helping shoppers find their next read, and online user-generated reviews placed alongside products. The online pricing policy applies in-store too - Amazon Prime members can access discounts not available to regular customers.

So what should independent bookshops be considering - when their chances of beating Amazon on price or choice are slim? Sam Fisher of London bookshop Burley Fisher Books points to strategic selling as key:  ‘The two most crucial things to beating Amazon are diversity and community - turning bookshops into assets for the local area through events and outreach, for example. Like all monopolies, Amazon relies on homogeneity: driving customers to a select number of discounted titles to take advantage of economies of scale. By advocating for books that would otherwise be ignored, smaller bookshops can sidestep their monopolistic advantage.’

And it’s the same for publishers. Sure, the big names push sales and the expensive hardbacks make more cash - but don’t forget that you’re competing against Amazon there. Dialogue Books, And Other Stories and 404 Ink champion more diverse voices - what is your publishing house doing? What percentage of your books are written by white, middle class men? How can you ensure those ‘other’ stories are heard and that you react to current shifts in society?

Amazon and ethics

Tech giants’ political clout has come into question in the wake of Cambridge Analytica, but you’d be forgiven for imagining that Amazon’s geopolitical influence might be less potent. October 2018 saw Amazon-owned AbeBooks announce that it would cease selling books from 27 countries across the world including Russia, South Korea, Poland and the Czech Republic - prompting an outcry from booksellers across the globe at what they termed ‘Banned Booksellers Week'.

As people rise up against Amazon and what it stands for as a company, now’s your time to step in. Black Friday saw union members at Amazon factories across the UK and Europe stage protests against the company’s’ ‘inhumane working conditions’. Their outcry was echoed by Amazon workers in Germany, France, Italy and Spain. And that’s before we even get to questions of negligible tax payments.

What's next for Amazon?

Amazon’s latest foray into your territory? Building on the popularity of online book clubs such as Reese Witherspoon’s Hello Sunshine and Emma Watson’s Our Shared Shelf,  Amazon has partnered with Buzzfeed to launch the Buzzfeed Book Club. With online ad spend and native content on rocky ground, media outlets are seeking new ways of monetising their audience and diversifying revenue streams. With Buzzfeed Books 1.2 million followers-strong on Facebook, it makes sense to connect with book lovers directly.

‘Companies that are connecting with their customers on the basis of their values and company mission are much better placed to compete against Amazon, especially as concern over their working practices, ethics, tax paying history and environmental impact are growing,’ explains retail expert Catherine Erdly.

So how can you beat Amazon? You can’t. Not at their own game. You can, however, do things differently - and think about how you can provide an alternative to Amazon. As ethical and political concerns around the company abound, how can you step in and offer the same product, service or experience free from those issues?

Whether you’re an indie bookseller or a large publishing group, how can you think like a startup and create something compelling and meaningful that really resonates? How can you publish, market and sell books in an innovative way that makes sense for today’s time-poor, screen-addicted customers? In many ways, Amazon might be winning, but this is an exciting time to be the company choosing to do something different. Will you stick with the same old tired Instagram takeovers and the same old book displays and the same old expensive hardbacks?

Now is the time to ask yourself uncomfortable questions as a business. Look at other industries that ARE succeeding. Take risks. Be bold.

05/12/18 - This article has been edited for accuracy following factual errors pointed out by Amazon.