The traditional bookstore is doomed by e-readers and online sales of hard copy books. I use the word “doomed” in the same sense that online digital sales of movies and music have doomed movie rental stores, movie theatres, and stores that sell albums of music. Doomed does not mean that these stores will quickly, or ever fully, disappear, but that they have received deadly blows from Internet competition.
Joseph Schumpeter, an outstanding economist in the first half of the 20th century, originated the term “creative destruction” to describe new technologies and other forms of new competition that wreak havoc on older and established industries. The process is creative because it provides consumers and producers with more effective ways of satisfying their wants. The process is at the same time destructive because it greatly reduces the value of services and products provided by older industries.
Extreme examples of creative destruction from the 20th century include the complete substitution of cars for horses and buggies, movies with speaking for silent movies, and computers for typewriters. Less extreme are the large reduction in clerical and secretarial staffs caused by the development of computers and the Web, and the sizable reduction in demand for milk and eggs induced by better information on the health value of low cholesterol diets.
A similar creative destruction process began for bookstores with Amazon’s development of online book sales that offered huge inventories of books, convenience of purchase, speedy deliveries, online reviews of books, and various other services that made it more efficient and often cheaper to buy books online rather than in bookstores. Sales of books online started slowly, but they have accelerated as consumers became more familiar with the process of buying books (and other goods) online. I first started using Amazon at my summer home since it is not near any bookstore. Discovering the convenience of buying books online, I now buy online all year, although I still enjoy visiting bookstores.
Effective online readers, like Amazon’s Kindle, and Apple’s iPad, are only a few years old, but they have become big hits since they can be used both to purchase books online, and to read books in digital form. Hundreds of books can be stored digitally in a single Reader that weighs less than a couple of pounds. They are especially valuable when traveling, but are useful when reading in bed or eating, and also with traditional reading when seated on a comfortable chair. They are particularly useful for individuals with weak eyesight since print size can be easily adjusted. This is why digital readers will appeal eventually even more to older persons than to others, although mainly younger persons are the ones who so far have bought digital readers because old persons are less familiar with digitalization.
I do not expect bookstores to rapidly disappear the way the production of silent movies virtually ceased once talking movies were created. However, I do expect an accelerating decline in the number of bookstores as many close down due to bankruptcy and excessive losses. Some bookstores will continue to exist to cater to men and women who like to browse among physical copies of books, and because some owners of bookstores get great pleasure out of selling and being surrounded by books. Many bookstores that survive are likely to combine selling hard copy books with that of other products. For example, university bookstores usually also sell clothing that have the university logo, computers, greeting cards, snacks and coffee, and other goods that cater to students and faculty. Other surviving bookstores might combine selling of hard copy books in physical facilities with online sales of hard copy books, and online sales of digital books.
The decline of bookstores, theatres, laundries, and other retail industries with physical facilities illustrates a trend that runs counter to older ideas about the effects of economic development. The process of development has been presumed to cause a substitution of market activities for home production. For example, households in poor rural societies have not only grown their own food, but also made much of their clothing, washed their clothes, baked their bread, and cooked from scratch their other food. As countries underwent economic growth, many of these productive activities left the home and migrated to the marketplace. Factory-made clothing was substituted for clothing made at home, and bakeries and laundries developed to make bread and sweets, and to wash, clean, and dry clothes.
Further technological developments,however, such as small motors used in home washing and drying machines, and small machines that cooked bread easily at home, shifted many activities back into the home, and thereby saved on time and energy spent in the shopping process. The online digital revolution is a further major step in this trend of returning activities to the home. Time and effort are saved, for example, when instead of going to movie theatres, consumers both order and download films online to be viewed at “home”, either on television sets, or increasingly on computers.
From this perspective, what is happening to bookstores is not unusual. “Books” are still read at “home”, but increasingly they are also purchased at home, and not only in hard copy form. Digital books are a true revolution, but their effects on bookstores are only a small part of a broader technological development that has brought important activities into the home.