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A survey of 2,000 UK consumers finds that the majority of consumers head to the internet for their book purchases, and shows the extent of Amazon's dominance of this market in the UK.
According to the Toluna survey, almost 80% of respondents have bought books from the online retail giant, compared with just 8% for Waterstones.
Where do people buy books?
Almost 56% of respondents head online to buy books, while 23% use Waterstone's, 23% buy books from supermarkets, and 21% use WHSmith. A higher proportion (58%) of the 16-34 age group are buying books online.
There are some positives for offline booksellers from the survey results, with 43% claiming that they aren't planning to buy books online in future.
Which websites do they use?
Amazon is the clear winner here, with almost 80% of respondents buying their books there, compared with just 8% for Waterstones and 4.5% for WHSmith.
Why do people choose to buy books online?
Unsurprisingly, price is the key factor for 71% of consumers, and there is a perception that books can be bought more cheaply online.
50% cite the convenience of online shopping, while 35% appreciate the improved choice on offer, and 27% find reviews and recommendations helpful.
What can traditional booksellers like Waterstone's do better online?
With the decline of some booksellers like Borders, in the US and UK, the growing influence of the internet, e-books, and the dominance of Amazon, brands like Waterstone's face a challenge.
The decline of Borders wasn't necessarily all about the internet, but the fact that the retailer outsourced its e-commerce activities to Amazon until 2008 tells its own story.
Many offline booksellers have so far failed to establish an online presence as strong as that of Amazon, though Barnes & Noble in the US is one example of how this can be done.
Amazon is difficult to beat when it comes to user reviews. Almost any book you enter into Amazon already has at least a few reviews, but the same cannot be said for Waterstone's.
Waterstone's and others should be more pro-active in attempting to gather more user reviews from customers, such as emailing post-purchase to ask for customers' opinions, offering incentives to do so, or even using third party reviews providers.
One thing Waterstone's does well offline is to provide written recommendations from its staff of certain books, and this is something which could work well online.
In the absence of reviews from other customers, this is one alternative that provides customers with help and ideas when searching for a book to read. This online review from Tom at the Brentford store is a great example:
Use the multichannel advantage
One advantage that offline booksellers have over pure plays like Amazon is that they can offer a more varied range of services to customers.
For example, they can offer collect in store services to web users, or else offer in-store ordering kiosks for customers who are unable to find what they are looking for in store.
Waterstone's has a useful iPhone app, but it does have its limitations, such as a clunky checkout process. By contrast, Amazon account holders can use 1 click ordering on the app to make smooth mobile purchases.
The Barnes & Noble app is a great example, as it contains many useful features for offline shoppers, such as the ability to search for books using the phone's camera. Great for price comparison.
When asked how online booksellers could improve, 43% of respondents cited lower delivery costs.
In a price sensitive market like this, delivery costs can be a deal breaker, so free delivery offers can be an effective sales tactic.
Waterstone's now offers a clear free delivery offer on its homepage:
The Book Depository has been a UK success story, and part of the reason for this is the simplicity of its offering. It offers free delivery anywhere in the world, and this has helped to establish it in foreign markets, and to compete with Amazon on price.