Reluctant Capitalists: Bookselling and the Culture of Consumption

Book summary: Reluctant Capitalists: Bookselling and the Culture of Consumption, by Laura J. Miller

This book deals with the transformation of the retail bookselling industry and its supply chains (authors, publishers, distributors) from a retail culture rooted in scholarship, love of books, and idiosyncrasy to a mass-commercial culture where every aspect of book sales from authoring to retail is optimized to serve the needs of the masses—hugely popular, homogenized books, appealing to a “middle America” reading audience, at the lowest possible price. The conflict is that as a society we like to believe that because of what their content represents, books are not just another saleable commodity artifact like, say, toothpaste. Does such commoditization strip books of their cultural dignity, or demean the acts of writing and reading them?

(Book Wars picks up where this book leaves off, examining the effect of digital publishing starting in the late 1980s.)

Briefly, the major transformation of book retailing was foreshadowed by major department stores (e.g. Macy’s) not only stocking some books, but carefully selecting which ones to stock as popular loss leaders in cheap formats (mass market paperback, vs. trade paperback or hardcopy). Other retailers and publishers fought against discounting, but legally there wasn’t much they could do, both for antitrust reasons and because Macy’s could simply buy books at retail and resell them at a loss under the First Purchase rule.

With the rise of suburban shopping malls, which concentrated lots of buyers in places where space was cheap, arose the chain discount stores. These were aligned with the “consumer is king” philosophy (and overwhelmingly targeted women, by then the well-educated main shoppers and often financial decision-makers of households). American retailing was increasingly coalescing around the idea of “value for money”, and chain stores’ centralized buying allowed new economies of scale and discounts. But this same focus on scale also led to homogeneity in offerings and store layouts, with standardized promotion of a few big sellers chain-wide, often heavily discounted and subsidized by “co-marketing” in which publishers pay for display/shelf space. This strategy means profit must be made at the margins by scrutinizing consumer analytics to determine not only what to stock but what to push publishers to publish. And unlike neighborhood/independent bookstores in which the proprietor might have personal relationships with customers, know their tastes, and so on, chain store transactions were anonymous and conducted by staff who usually were paid little and weren’t particularly literary. Independent bookstores, publishers, and distributors tried to resist this formula (as they had tried to resist Macy’s discounting, and would try to resist Amazon later), but so much volume came through these channels that publishers could not afford to alienate them. (Similar “massification” was happening in franchise fast-food restaurants, “urban renewal” megaprojects, and processed foods.)

The chain stores aimed to provide a comforting, uniform atmosphere in which “middle American” consumers wouldn’t feel intimidated by the elitism of being among books. They borrowed display and marketing strategies from successful superstores in other segments (food, electronics, etc.), with a level of data-driven marketing never before used in book retailing. At the same time, the stores wanted to retain some credibility with “serious” readers, so they kept indie and backlist books on their shelves that they never expected to sell, but needed to create an ambience and retain some credibility with “serious” readers. An ironic result of trying to play both sides of this is that chains attract fewer low-income readers than independent bookstores, despite offering lower prices.

The Internet sealed the deal: online bookstores can both leverage huge economies of scale for discounting and stock the backlist/indie titles for “serious” readers far more comprehensively than brick-and-mortar stores can. But while the Internet promised personalized/crowdsourced book recommendations based on collaborative filtering, these have marginal value for serious readers since they just amplify the trends of “average” readers. Similarly, widely-cited/widely-read user reviews are effectively Pareto-distributed—the typical widely-cited review points to a high-volume book, but the typical book isn’t likely to have a widely-cited review. Whereas independent bookstores had prided themselves on “knowing their customer” and bringing passion and idiosyncrasy to book sales, the massification of retailing has led to selection dominated by “the dispassionate vote of the like-minded”. A retail culture once rooted in scholarship and literature had become just another commodity like toothpaste. (The book From Betamax to Blockbuster makes a similar case for the demise of independent video stores in the onslaught of the megachains like Blockbuster and later Netflix.)

In the 70s and 80s, independents began to fight back. They switched from complaining that book retailing shouldn’t follow free market rules (ie, that consumers should value the “intangible extras” of independents and put up with higher prices) to going on the offensive with both PR and legal actions, leading to battles inside the American Booksellers Association, which didn’t want to alienate the chains either. A group of independents first sued publishers for giving chains better terms (the publishers settled), then later sued the chains for strong-arming publishers into illegal discounts in defiance of the settlement. They stopped the merger of B&N and Ingram, which would have given B&N Ingram’s competitive intelligence on the finances and practices of a huge number of retailers. The chains protested that they were just helping more consumers get books; publishers protested that interfering with the free market was hurting them, and at any rate they’d become dependent on chain sales. In the world of books, publishers don’t have “brands”, but chains do; independents tried to “brand” their idiosyncrasies, which ironically was opposed to their original position of being “noncommercial” and the last bastion of the “folklore of small retailers”. But that position itself was tenuous: independent booksellers don’t want books to be free, as with libraries; they want to make money. Like the chains, they also found they’d have to appeal to consumer preferences, just not those focused only on price. To that end, they got neighborhoods to deploy all kinds of legal obstacles to chain-store establishment, including appealing to customers’ distaste for chain bookstore employees being mistreated (underpaid, fast turnover) and underinformed (though computerized inventory has mitigated that). (Consumers at some level know that employees at non-book chain stores are mistreated as well, but books are “different” so bookstores mistreating employees is seen as hypocritical or culturally more dissonant than for other commodities.) In essence, independents appealed to consumer sensibility that “their choices about consumption aren’t private but have knock-on social (effects).”

The title of the book makes the most sense at the end. Independents had to migrate from a position of books being somehow separate from the free market that otherwise governs commercial endeavors to a position of playing in that very market by trying to appeal to other values and (where it can) bend some of the rules. Economies of scale have profoundly disrupted almost every kind of small business ever since the invention of department stores, and books were not going to be immune, despite the privileged cultural standing of the book as artifact.

The next epoch in the story is taken up in The Book Wars.