Seemingly shielded from the most rampant severity of the global economic downturn, is Australia a territory ripe for the opportunistic?

As a British ex-Borders SSO employee, imagine my sadness to find having moved half way around the world to one of the remaining territories in which Borders was still operating - albeit crossing the fence to a publishing role - that the bookselling behemoth was to collapse here too. Was it me? Was I cursed? No, of course not. The model was flawed and destined for failure. It’s been said hundreds of times: huge stores, huge overheads, slow stock churn, competitive online bookselling, blah blah blah... Let’s move on and look at the fallout or more positively the opportunity here in Australia.

Since the demise of Red Group (owners of Borders and Angus & Robertson), Australian book-buyers have been left with a few really good independents, the big international online retailers, a selection of local online retailers, Dymocks and not a lot else. Research shows that 53% of books bought online in 2010 came from overseas retailers. Between 2001 and 2010 the value of books sold in Australia increased by 1.1% outperforming many other international territories. Again in 2010 the total value of books sold in Australia was approximately $2.3 billion dollars. Anecdotally, it is speculated that if you include overseas, eBook and other digital product sales in 2011 figures, the market could be flat, again outperforming many other territories. So what does this all mean? It means there is an opportunity.

Australia is a receptive, literary country that from a digital perspective continues to surprise me. Although e-reading is not nearly as prevalent here as in the UK or US, it is growing fast and people’s adoption of other digital content types and devices is as strong here as anywhere, in the major urban centres and rurally. Let’s look at some stats:

• 77% of Australian homes are connected to the internet –  virtually on par with the USA.
• Australians spend 43hrs, 54 minutes online, on average each month.
• 49% of Australians own a smartphone, up from 35% at the start of 2011
• 10% of metropolitan  households own a tablet device, up from 2% at the end of 2010.
•  PricewaterhouseCoopers estimated 740,000 iPads were sold between release and the end of March 2011.

This is a nation of increasingly willing consumers. What can we do to sell them more books?

First some of the obstacles…

Distribution is the key. Because of the terms of the Universal Postage Union and high domestic prices the local delivery leg in Australia is cheaper for a UK bookseller than it would be for an Australian business to post the same product. This is crazy and requires intervention at a government level.

Tiring retail models. The High Street is not dead down under. With the arrival of Topshop, Zara, Gap and the success of local brands, the High Street, although under pressure, is surviving. There’s growth in service outlets and an amazing amount of socialising which brings consumers to these important commercial centres. But, as much as we are nostalgic about the traditional bookstore experience, the model needs to evolve and develop.

Device penetration. Having lost some big shopfronts both on the High Street and online, positioning the new technology that is booming in other territories in front of local consumers is hard. Amazon and Kobo both offer limited Australia-centric shopfronts and indies are never going to create the level of awareness and penetration that is needed for the e-reading cultural shift to occur on a big scale. We’re seeing e-readers pop up in electronics retailers and some supermarkets but should these be the primary retail outlets for these products? Apple stores exist and iPads are selling but reading ebooks is a secondary iPad function for now however sales are encouraging and growing.

Shameless marketing? Unless solely digital, many publishers treat the majority of ebooks as secondary offshoot products. Until that mentality shifts, even if sales don’t yet justify it, how can we expect consumers to be convinced? How many self-published successes come when the author shamelessly self-promotes themselves and their ebook?

Online bookselling. Refer to the previous stats. 53% of online book sales went overseas and that should frighten the local market. As the stats show, Australian retailers aren’t doing enough online or being aggressive enough to buck this trend and keep those all important dollars on home turf.

Overpriced and underselling. I remember going into Borders, South Yarra and picking up a paperback I was planning to buy. We all know Borders was the only company on earth that priced above RRP, but this book had an insane $28.99 pricetag (₤19.65 at today’s rate) compared to a USD $12.99 and to top it off, was over-stickered at a whopping $54.99. Your average consumer is not stupid. They will not buy that book. They can also work out exchange rates and know that all is not equal in the international pricing stakes. The reality is that discount is lower in Australian bookstores than other territories and even with a 20-30% discount the same book can often be found cheaper - even at full price - on US and UK websites. Australian consumers have been burnt by local pricing policies and are prepared to head overseas for better value, benefitting from a strong currency. It's up to the local market to tempt them back with compelling pricing and quality and to respond to the fact Australia is competing in a truly international consumer marketplace.

The great news is that these problems can be fixed and each represents a real opportunity. Publishers and retailers can negotiate more compelling price offers. Retailers can invest in online bookselling and create better web and mobile experiences. Retail opportunities do exist and the opportunities to better market the digital products so critical to our industry are only limited by imagination. But referring back to the title, what could some of the key opportunities look like?

Rebuild marketing strategies. The unexplainable love of cataloguing in Australia is an outdated and expensive marketing medium which I believe has a limited future with my generation and the next. A mix of on and offline marketing is still vital, but creating new and reusable direct-to-consumer strategies that cope with the growth of digital and online bookselling are of paramount importance. Every day that passes it becomes easier to self publish, more books are released and it gets harder for the consumer to distinguish between the good, the bad and the ugly. Publishers should have the muscle, resources and relationships to get their books in front of consumers but new methods, strategies and skills are needed to succeed. This also applies to retail. To keep justifying the high contributions publishers make to funded marketing, retail needs to offer new and more interesting routes to consumers. We still want to place books in stores and on websites, but together we can do so much more to help make that sale.

Reclaim the High Street. Bar frontlist, do stores need to hold stock? Can a shopping experience based on access to range in print and digital, informed face to face recommendation (think Apple-store style), POD, some print bestsellers or event-stock and the all-important café space work? Would the overheads be lower without the stock investment? I think yes. People and publishers will be receptive to a new shopping experience. We have to believe that people will still make time to buy books, socialise and meet their favourite authors.

Reinvent online retail. Australia is ripe for a price-competitive, cutting edge online retailer that offers a great user-experience, competitive delivery costs, a good recommendation engine integrated with social media. Australians love to buy Australian; it’s of huge cultural significance. They also are savvy enough to know when a book is cheaper overseas and in most cases are happy to wait the extra delivery time to save money. It's time to respond to this locally before one of the big internationals gets an even bigger foot in the door.

Publishers as retailers. We’re in a competitive market. Now more than ever it feels like publishers have to convince the world of their significance in the food chain. Is there an opportunity, although controversial, to take some of the power back and form a publishing alliance to co-invest in either of the above options in order to best serve consumers? We're seeing this embryonically with Pearson's acquisition of the Borders and A&R websites in Australia but the fact they have retained the original company names is bizarre for the trade and for the consumer. Everyone knows those businesses have ceased trading, it's time to move on.

Expand on digital. Yes be better at producing and selling eBooks but digital isn't just apps and eBooks and the argument that the app world will be short-lived is gathering pace. There are a raft of commercial web-based opportunites out there which require alternative strategies, new business models and different staffing and skills, but most boil back to content that people are now willing to pay for online. Winecompanion.com.au is one Australian example of transitioning a non-fiction print reference product successfully into a commercial website with a variety of revenue streams a print project can only dream of.

This post only represents my personal experience and opinion but it is hard to ignore the possibilities that exist on this side of the world and beyond…

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