WHAT PEOPLE BUY: BOOKS, MAGAZINES, AND NEWSLETTERS


In 2003, the category of books, magazines, and newsletters took over the number one position from prerecorded media as the most purchased entertainment and recreation product. About three-fourths of adult consumers purchased books, magazines, or newsletters in the past year, dropping from 78 percent in 2001.

Industry Snapshot

Personal consumption of books and maps totaled $35.8 billion in 2002, up 6.3 percent over sales of $33.7 billion in 2000, according to the Bureau of Economic Analysis (see Figure 7.4). Consumer sales of magazines, newspapers, and sheet music declined in the same period, down from $35 billion in 2000 to $34.2 billion in 2002. While the rising educational level among the population provides a favorable environment for reading material, the sales of magazines and newspapers, in particular, are seeing an erosion of their subscriber base as more consumers turn to the convenience of the Internet for research, current events, and other personal information.

 

2000

2002

% CHG '00–'02

Total Personal Consumption in millions

$68,702

$69,932

1.8

Books and maps

33,654

35,772

6.3

Magazines, newspapers, sheet music

35,048

34,160

-2.5

Source: Bureau of Economic Analysis


Figure 7.4: Books, Magazines, and Newsletters Industry Snapshot

New trends in book retailing support sales growth in the category. The big bookstore chains, Barnes & Noble and Borders, have taken the concept of the small, private bookseller and completely overhauled it. They have introduced category-killer bookstores on a nationwide scale. They offer coffee, tea, and treats in a cafe setting, provide comfortable chairs so you can read as well as shop, and have expanded into music and DVDs in a more adult-friendly environment than the typical youth-oriented "record" store.

The Internet, too, is a powerful retailer of books, with Amazon.com leading innovation in the category, and barnesandnoble.com following behind. The online merchants offer access to both in-print and out-of-print titles, including a growing list of used and secondhand titles. Amazon.com reported total corporate sales of $3.9 billion in 2002, with books making up the largest share of sales. Barnesandnoble.com is a far distant second in the online book market, with 2002 sales of $422.8 million.

Retail Overview

Not surprising, the most frequent source for books, magazines, and newsletters is the category of stores that includes book stores (sporting goods, hobby, book, and music stores). Some 46 percent of consumers visited these stores in the past year to buy books.

The next most popular destination is discount department stores, visited by 40 percent for book purchases. The third most popular source for books is nonstore retailers, including the Internet and Web sites such as Amazon.com. Some 32 percent of consumers made a purchase of reading materials through a nonstore retailer, which also includes catalogs and TV retailing.

No other retail source comes close to the top three shopping sources, although 18 percent pick up reading material in food and beverage stores.

At retail, national bookstore chains are the market share leaders (see Figure 7.5), with many independent bookstores being forced to close as they can't effectively compete with the national book chains and the Internet. Mass merchants and discounters, such as Wal-Mart, also sell books with an emphasis on best-sellers and specialty titles that target their shoppers' tastes. While traditional mail-order book clubs have been on the decline for years, the Christian specialty retail market is growing by offering a careful selection of spiritual and religious titles. The Christian Booksellers Association estimates that Christian booksellers have a total market of $2.5 billion in book sales.

 

EST. 2002 SALES

Barnes & Noble (1,321 stores)

$5.3 billion

Borders Group (1,246 stores)

3.5 billion

Follett Higher Education Group (680 stores)

1.5 billion

Books-a-Million (203 stores)

443 million

Nebraska Book Company (110 stores)

339 million

Family Christian Stores (350 stores)

323 million

LifeWay Christian Stores (115 stores)

205 million

Source: 2002 Directory of General Merchandise Stores by Chain Store Guide


Figure 7.5: Book Store Market Share Leaders

Purchase Drivers

Consumers are motivated to buy books by many of the same reasons they purchase movie videos and DVDs. These include convenience, saving time by not having to return books to the library, and for personal and kids' entertainment. One consumer explains: "For me I always have to have something to read. I read a lot and buy books everywhere. My friends ask me about using the library, but the library doesn't fit my schedule. I get a sense of desperation if I don't have a book to read."

A unique emotional equation is at work in the motivation to purchase books. Consumers are more personally and emotionally involved with their books than they are with videos and music. Part of a book's appeal may be that it is "low-tech"—one reason why so many industry pundits see little threat to the book publishing industry from e-books. Another factor may be simple nostalgia because we all grew up reading books, holding books, and striving to understand what was in books. For some consumers, this early exposure to reading never took off, but for others, books have become a very real and essential part of their lives. This emotional attachment to books is what makes them so collectible. In describing her library, a focus group respondent said: "My husband and I love books and buy lots of books. Our house is full of bookshelves. I have a friend who thinks this is a luxury. She says 'that is what libraries are for.' We go to the library, but I still buy books. They are my books. It's about the pleasure of re-reading old 'friends.'" Another respondent wishes for a library to store all of her books. "I would love to have a library to keep all my books. Having a house with as many books as I have without a library is a challenge. I love books. I don't read every one, but I think in maybe a year or two I will get to them. I wish I had time to read all of them."

For most households, books and magazines are a personal indulgence, representing a small luxury that they can buy without guilt. For those with an inclination to buy books, the library is not a viable alternative. Consumers with a passion for books want to have a personal relationship with them and that requires ownership.

Demographic Variables

Three-fourths of American households bought books, magazines, and newsletters in the past year. Demographically, women are slightly more likely to buy in this category, as are Caucasian consumers. From young to old, households between the ages of 18 to 64 have a high purchase incidence for books, magazines, and newsletters. Purchase incidence of these items also correlates with higher incomes. Households with incomes of $35,000 or more are the most active book buyers, as are those with higher educational levels. As educational attainment rises, so too does the household's purchase incidence for books. Larger households of three or more individuals also buy books more actively.

Key Demographics of Buyers of Books, Magazines, and Newsletters.

  • Females buy more.

  • Highest incidence among ages 18 to 54.

  • Middle-to-upper-income households buy more.

  • Those with higher education buy more.




Why People Buy Things They Don't Need. Understanding and Predicting Consumer Behavior
Why People Buy Things They Dont Need: Understanding and Predicting Consumer Behavior
ISBN: 0793186021
EAN: 2147483647
Year: 2003
Pages: 137

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