Canada’s book industry has changed forever

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Technology has substantially affected Canada’s bricks-and-mortar book retailing industry. Yesterday it was announced that the flagship Chapters bookstore at Toronto’s Festival Hall will close, and over the weekend Toronto’s ‘World’s Biggest Bookstore’ closed for good. The following is a discussion of how technology has affected bricks-and-mortar book retailing in Canada. 

Canadian retail, overall, has changed more over the past few years than it has in generations. National institutions, including some of our largest grocers and drug stores, have been taken over by larger competitors. Canadian consumers are purchasing more online than ever before. It’s no secret that the way we purchase goods and services isn’t just changing; it has changed. And one of the first sectors to experience this change was brick-and-mortar book stores. 

Sony is credited as being the first major tech company to release an electronic reader, with its 2006 release of the Sony Reader. Not long after, Amazon revolutionized such devices and brought them into the mainstream with its Kindle reader. Consumers quickly picked up on this trend. By 2010 and for the first time in history, more books were purchased online through devices such as Kindle than paper books. Since then, virtual book sales have continued to grow. Sales have grown so much, in fact, that the sustainability of the world’s largest brick-and-mortar book stores is in jeopardy. 

Chapters in Downtown Toronto. Yesterday it was announced that this store will close on May 30th, 2014.

In Canada, there are two major players in the brick-and-mortar book retailing: 1) Indigo and 2) everyone else. The former is the nation’s largest book seller with hundreds of locations from coast to coast under the Indigo, Chapters and Coles banners. Coles represents the company’s collection of smaller, independent book stores while Chapters and Indigo stores are typically much larger. The Indigo retail group boasts a loyal and passionate fan base. Despite this, the number of shoppers at the company’s brick-and-mortar stores has decreased as online book sales eat into its revenue and reduce its customer base. 

In the last few years, the book industry has been rocked by a force that is now becoming commonplace: the boom of online sales. Across the country, some of the most beloved independent book stores have shuttered their operations or have announced their intentions to do so. The Cookbook Store in Toronto, arguably Canada’s best-known place to learn the latest in culinary trends, announced in February that e-book sales were a major factor in its decision to close. A few days ago, Indigo-owned ‘World’s Biggest Bookstore’ in Toronto closed its 64,000 square foot store to make way for a new restaurant development

In 2010, Indigo introduced a tablet called Kobo to counteract online competition. The tablet, originally sold exclusively at Chapters/Indigo/Coles stores, has become the Canadian industry leader. Research conducted by pollster Ipsos Reid determined that more than 35% of electronic books read in Canada are done so on a Kobo.

Image: KOBO

Indigo has also taken a page out of the book of other national retailers, by diversifying its product offerings. Gone are the days when the book giant was solely the place for the latest autobiographies, short stories and children’s literature. Today, a Chapters/Indigo store typically devotes thousands of square feet to items such as toys, household items, gifts and even clothing. This summer, popular doll retailer American Girl will open shops-in-stores within Chapters/Indigo’s flagships in Downtown Vancouver and at Toronto’s Yorkdale Shopping Centre. Diversification may be the key to keeping these stores alive. 

Brick-and-mortar book retailers may be relieved that the pace of online sales is slowing. Nevertheless it’s still growing, while sales at physical bookstores decline. Slower growth may be due to market saturation, or possibly because the past year hasn’t seen blockbuster book releases such as The Hunger Games or Fifty Shades of Grey. There is still a possibility that the industry, after years of tumultuous activity, has finally started to stabilize. Those bricks-and-mortar book retailers that have weathered the storm may now be able to succeed, possibly with the help of product diversification. The the next chapter of Canada’s bricks-and-mortar book industry will no doubt be a very interesting read.

Article Author

Craig Patterson
Craig Patterson
Located in Toronto, Craig is the Publisher & CEO of Retail Insider Media Ltd. He is also a retail analyst and consultant, Advisor at the University of Alberta School Centre for Cities and Communities in Edmonton, former lawyer and a public speaker. He has studied the Canadian retail landscape for over 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees.

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