Ingram Sees Big Changes Ahead for the Retail Book Market

This week's issue of Publishers Weekly includes an article by Phil Ollila, Chief Content Officer of Ingram Content Group, that, based on a mass of data they've collected, offers a number of changes Ingram expects to see in the book retail market.

First, a little background on Ingram Content Group: they are a U.S. based service provider to the book publishing industry formed in 2009 as Ingram Lightning Group (if you've published a book independently, you may be familiar with Lightning Source, which is one of the Content Group's operating units). Ingram Content Group has the industry's largest active book inventory with access to 7.5 million titles, according to Wikipedia, and is a major distributor for independent book stores. In addition to print distribution, they provide digital content services and distribution.

Some findings from Ingram's data (which is all from their own sales and distribution, and largely focused on independent book stores):

• Unit sales have declined in independent bookstores, but the number of unique titles have gone up. In other words, independents are buying more 'unique' books, but selling less units overall. Ingram sees this as a problem for independents.
• Independents are still focused on fiction (68% of what they buy from Ingram is fiction, 32% is nonfiction). However, the opportunities for independents, based on the data, are to "develop category strengths outside of fiction." In other words, independents would be well advised to carry more nonfiction titles.
• Fiction is shifting to e-book formats, and aggressive discounting in fiction in internet and mass merchant channels makes competitive pricing difficult for independent bookstores.
• Fiction sales are largely concentrated in a low number of titles and few publishers, primarily the big six.
• "Going Vertical' is a good option, meaning "communities will be built around enthusiastic categories." He doesn't mention it, but think Mystery Bookstores or SciFi Bookstores.
• If you are a nonfiction writer, here are the categories Ollila thinks will do best at independents: travel, cooking, art, and other visual or reference.
• The industry has changed toward easier developing, editing, acquiring and distributing books (by people who are not traditional publishers), so publishers, Olilla thinks, will have to acquire better content, market to both retail accounts and consumers more specifically, and be prepared to contend with a huge number of competitive titles.
• Prediction: a massive change in distribution strategies for publishers. Many will trade their infrastructure and distribution costs for content development money. "The most nimble publishers will have great content, marketing, and distribution reach—and no back office or warehouse."

There's more, but this is enough to chew on . . . and chew and chew. Of course it's important to keep in mind who this information is coming from--a non-traditional and fast growing book distributor and producer with a focus on independent bookstores and e-books. Ollila does make his points somewhat difficult to understand with a lot of insider language, but nonetheless, this does appear to be solid information worth considering.