On Change, 5: Thing One and Thing Two (Three, Four and Five)

In this series of posts I've been looking at how the Book Industry Supply Chain is changing, whilst giving that change a wider frame of reference. Now it's time to narrow the focus back down to our industry, and to mention an uncomfortable truth - which is the adversarial undercurrent in relationships between many publishers and their distribution partners (and in "partners" I include outsourced distribution services and resellers further down the chain). Publishers regularly put their distributors through competitive tenders, book wholesalers and retailers routinely press publishers for margin. All of this is sound cost-management. But if supply chain costs aren't looked at in the round (that is within a strategic context) we risk putting short-term savings ahead of a collaboration that could benefit all of us.

Over the past decade many publishers (but not all - and I have the great privilege to work with many in the latter category) have been prone to regard distributors as a necessary evil rather than as key partners in the crucial endeavour of servicing customers. The supply chain is seen as a place to shave cost, not gain a competitive or strategic advantage. Meanwhile customers are frustrated that outside of Amazon and a few other on line retailers, their expectations for information and supply of books, particularly specialist and back-list books are rarely well met.

Last Wednesday I mentioned that Peter Kilborn of BIC had been surprised when he read the first draft of my New Trends keynote, having anticipated a narrower and possibly more pessimistic view of the future. To redress the balance I rounded off with five “distributor-type” implications of the observations I had made. Except they aren't just for distributors or publishers. They're for all of us interested in the supply chain for physical books - and the new suite of products and services that are related to them. Change can be an opportunity, and it's time for us to look through the other end of the telescope and see it that way. And this is how:

1. Those of us in the supply chain for physical books have reached a point where to remain competitive we have to put our arms’ length and mistrusting relationships behind us. The economic forces at play in our technological environment, economic environment and social environment are creating empowered, demanding customers. To make a paradigm shift into the service economy, we must collaborate to deliver services across multiple product and service ranges – which will include books – and to interface with customers in many new and different ways.
2. Our industry needs to hire in new customer service and transactional expertise. This could be a hard one to swallow because traditionally we like to think in term of volume sales in big round numbers. But very soon we are going to have to get to grips with micro-payments. A less scary way to think of it might be: much larger volume sales involving fractions, not rounding.
3. The supply chain requires investment in systems, expertise and human and electronic interfaces. Big investment. We need to think about how we can afford great customer-facing staff and excellent transactional I.T. systems before we cost-cut in the supply chain.
4. 1-3 above suggest to me that we are approaching a time when publishers and third-party distributors might have to consider putting their financial relationship on a different footing. In a changing world, commission on print book sales may not be fit-for-purpose much longer.
5. Collaboration starts with open, honest and trusting conversations. And those conversations need to start now.

Reviewing this five-point call to action, I find myself thinking: gosh, that's not actually all that difficult then, is it? And then I remember, as Dr Seuss said, "Sometimes the questions are complicated and the answers are simple".