Why did Amazon change the strategy for books in the UK

In 2011, the Levi’s Law went into effect in Italy, limiting the maximum discount on the cover price of books for physical and online libraries to 15 percent. At the time it was referred to as the “Anti-Amazon Act” because its main purpose was to reduce overwhelming competition from e-commerce, which was able to sell books at much lower prices than bookstores. In 2020, the law got even stricter, mandating a discount of no more than 5 percent (excluding some upgrades).

So, since 2011 there has never been real price competition in Italy between Amazon and physical bookstores, but the same cannot be said for the UK. There the prices of books were never regulated and that is why the way things have developed is particularly interesting: Kathryn Swindells told her in new country stateanalyzing how Amazon changed its book strategy from 2010 to today, inadvertently ending up returning some space to independent bookstores.

To give the idea, in 2010 in the United Kingdom’s physical libraries the novel street By Cormac McCarthy it usually costs 8 pounds, while on Amazon it was 4, half. Now, twelve years later, the cost at the library has gone up from £8 to £9, while the cost at Amazon is £7.35: still a handy price, but since 2010 it has almost doubled.

In those early years, when Amazon was an online store that only sold books, competition for bookstores was unsustainable just about everywhere. Amazon did not have all the costs of physical stores, and by buying books in bulk, it was able to get from the publisher more advantageous terms of sale than those of bookstores. Added to this was the introduction of e-books which in the early days were considered ‘the books of the future’: it was feared that, in the UK as in Italy, no one would go to bookshops, especially independent ones, which would disappear.

Mike Shatzkin, publishing expert and book author The Business Book: What Everyone Needs to KnowHe explained that books played a key role in Amazon’s initial strategy: “It did not enter the book market to make money, but to gain customers.” Books were in fact an ideal product to bring people closer to online purchases because they did not have to be touched, smelled, or worn: they could be easily purchased remotely.

Now Amazon has achieved the initial goal of becoming the e-commerce par excellence in the shared imagination, and its Prime fast delivery program has more than 200 million subscribers worldwide and no longer has the same interest in selling as before. Books at bargain prices or to prove itself in the publishing market.

This does not mean that Amazon has stepped aside in the competition for selling books, because also with the push of the closure of 2020 to contain the Corona virus, the proportion of books bought online in the total books sold rose somewhat. Worldwide (in the UK, for example, it was 50 percent while in Italy, in the first four months of 2022, it was 43 percent). However, its new, less aggressive strategy of cuts appears to have left new space for libraries.

– Read also: We buy more books than before the pandemic

Swindells says many independent bookstores in the UK in the late 1990s began closing, from 1894 in 1995 to 867 in 2016; Now it is reopening: in 2021 there were more than a thousand.

Roland Bates, bookseller at the independent Kirkdale Library in London, explained, “Technology, which used to be a threat to independent publishers, has become a huge help. The increase in the efficiency of wholesalers means that many libraries can now order books to customers that are already available the next day”, Hence the ability to compete with the speed of Amazon. Furthermore, physical libraries respond to a need that is hard to satisfy online: to offer an “immersive” search experience, based on the sensations that books give off as nice-looking and pleasant things to browse and based on personal advice from booksellers, as well as on a good degree of randomness. In this sense, Bates commented, libraries will always be “one step ahead of the algorithm”.

– Read also: Because e-books didn’t convince us much

Meanwhile, e-books never replaced books, and Kindle Unlimited (Amazon’s e-book subscription program) fell short of expectations. Now the new threat to libraries is being seen, by many, in audiobooks. In 2021, 13 million adult audiobooks were sold in the UK (half of it thanks to subscription): less than 10 per cent of the total, but it’s still a large and growing proportion. Once again, however, the parallel increase in sales of hardcover books, particularly of adult fiction, shows that perhaps, as Swindells wrote, “the growing market of readers does not necessarily need to pit the various forms against one another.”

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