Supply chain consolidation "inevitable", LBF told

Supply chain consolidation "inevitable", LBF told

Supply chain consolidation is "inevitable", as the increase in sales of digital books will mean fewer physical books sold and more trade going online, London Book Fair delegates were told.

Speaking at "The Changing Shape of the Supply Chain: How Digital Publishing is Transforming the Industry" seminar on Day Three of the fair, former Waterstone's head of e-commerce David Kohn said the growth of e-books would lead to a "steady decline" in the number of physical books being sold. He predicted range would diminish with spoken word among the genres he expected to disappear.

He said: "I think it is inescapable that for a retailer, centralised distribution has got to be the solution. But once again, if the number of sales go down once you've set it up, it's going to lead to trouble".

Kohn added: "I think the gist of my thesis is that there is too much supply in the UK, and there are a lot of big sheds out there designed to supply in big volumes." He said consolidation was "inevitable, it will occur . . . Unless there are new volumes that go through that supply chain or unless the model changes significantly".

Kohn predicted stores would not be able to keep as much stock on display as sales continued to decline. He said switching to a firm sale model could be a solution, but only "on much better terms than I've seen offered by publishers . . . Risk and reward has got to be spread evenly".

Elsewhere in the seminar, Theresa Horner, Barnes & Noble vice-president of digital content, and Neil Broomfield, John Wiley higher education sales and marketing director, stressed how the rise of digital enforced the need to stay connected to the customer. Broomfield said the development of John Wiley's digital offer had led to "broader engagement with universities" and "a deeper understanding of what students go through".

He added: "I think that the goods and services model is absolutely crucial to the future health and survival of the academic publishing industry".

In discussing Barnes & Noble's digital programmes, including the promotion of its e-reader the Nook in stores, Horner stressed the need to continue to include digital customers in the chain's physical offer. She said the company had found that on average a B&N member with a Nook bought 60 more books and spend 120% more with B&N than a non-Nook owning member. She said: "Digital appeals to our original customers but attracts new customers too".

Talking about whether the Barnes & Noble model could be replicated in the UK, Kohn praised B&N's digital programme. He said: "The main competition is Amazon and iBooks; they don't have stores, and if you do have stores then you would be foolish not to leverage them."

He estimated the cost of setting up a fully integrated digital offer would cost "millions of dollars" and UK or foreign booksellers would be better trying to partner with the likes of Barnes & Noble or Kobo.

When asked if Barnes & Noble had plans to expand their programme outside of the US, Horner said: "We are looking at this market very seriously. You need to be very strategic with your partners. There is a lot of planning and thinking going on. I'm [at LBF] meeting lots of publishers, and we are starting to think in that direction but we are still thinking about it".