9 Perspectives and Limits of New Technologies

We have seen the extent to which new technologies have provided new opportunities for diffuser/distributors, especially in terms of communications throughout the chain of supply, specifically communications between the diffuser/distributor and the retailer. The introduction of Needa, for example, has made it possible to accelerate communications between partners, achieve greater accuracy and minimize error, thereby reducing the operating costs of distribution companies and bookstores. Even within distribution companies, order management and inventory management systems make it possible to accurately trace all copy movement, thus minimizing losses and improving speed and efficiency even further. Book distribution can no longer be managed effectively and efficiently without these remarkable technological systems. Distribution technology is also essential for access to diversity, because it makes distributing books with very low sales potential cost-effective.

The Sales Information System, to be introduced in February 2009, is also likely to revolutionize the book trade by allowing the principal stakeholders to follow day-by-day progress in sales of a title, and monitor sales activity by title, collection, publisher, region, etc. These increasingly targeted and sophisticated analyses will permit better planning of print runs and reprints, as well as placements and restocking. While it is currently still difficult to obtain accurate, reliable and complete data on book sales, the Sales Information System should overcome this deficiency in the system.

There is no longer any doubt that the development of new technologies in the book trade has created rising expectations of more efficient practices among commercial partners, and even between retailer and client. However, the fact remains that many independent booksellers make little use of computers and are even hesitant to adopt new practices that would allow them to increase efficiency and save time and money. Booksellers' associations and governments must continue their efforts in this respect. Tools such as Needa and the Sales Information System will be most beneficial only if they encourage all the commercial partners to join in. Otherwise, gains will only be partial and the information gathered incomplete and therefore of little use. Updating computer systems in all French-language bookstores in Quebec and Canada remains a major challenge for the sector.

The development of new technologies influences the sales medium as well. Clients have changed a lot and continue to change their purchasing practices, even for traditional books in printed form. Since the very beginning, books have been one of the products most sold online, perhaps thanks to Amazon's massive promotions early on.

In every survey by Statistics Canada on purchasers' Internet behaviour, books have been among the most popular products among online consumers. The Indice du commerce électronique au Québec [index of e-commerce in Quebec]¹ very recently showed that from May 2007 to February 2008, an average of 15.95% of Quebecers made one or more online purchases each month. Of these, on average, 12.3% bought a book, magazine or newspaper online each month for the period from October 2007 to February 2008.² Books thus rank second among online purchases in Quebec, after travel products. Data on the amounts spent on book purchases by Quebec Internet users is expected to be released shortly.

What is the impact of online sales for Canada's French-language distributors? According to the distributors consulted, this impact is still not being felt to a significant degree, but it could become significant in the medium term. It must first be recognized that online sales by Quebec and French-Canadian booksellers (including Amazon.ca) do not generally bypass the distributors, since booksellers still obtain their stock from the distributor, regardless of how the sale is made. In Quebec, under Bill 51, all institutions must obtain their books through a local bookstore, whether electronically or directly at the sales location. Institutional purchasers usually wish to examine the book and thumb through it before buying, and this can only be done in the bookstore, at least at present, although the possibility of "thumbing" through online books is now under development.

Quebec and French-Canadian publishers were slower than their English–Canadian counterparts at allowing customers to buy directly from their own Web sites. Even today, a substantial number of Canadian French-language publisher sites redirect purchasers to an already identified bookstore or a list of bookstores. In this respect as well, Bill 51 prohibits institutions from directly purchasing books from publishers, which limits purchases outside of bookstores.

However, there is perhaps some concern given that distributors' final sales decreased 21.3% from 2001 to 2007 (Ref. Table 10), unlike publishers (61.1% increase) and booksellers (37.3% increase). Publishers are thus becoming increasingly active in direct sales to clients, and it is not difficult to believe that the development of online sales has had something to do with it. This report suggests that certain sectors of the supply chain could be in increasing competition with their traditional partners, which may very well upset the fragile balance between the sectors and endanger the profitability of certain links in the chain. In the medium term, the rapid growth in final sales by publishers could have a significant impact on booksellers and distributors. New technologies may thus alter certain sales channels.

New technologies have also altered a number of cultural products. We only have to look at the music industry to see how quickly CDs replaced audio tapes, and then how CDs themselves are gradually disappearing in favour of direct downloading into a digital audio player. Of course, the book as an object is also part of the pleasure of reading; however, the fact remains that in certain sectors, the electronic book in all its forms is a harbinger of significant changes in the product as such.

Will distributors still have a role to play in the marketing of books in electronic format (such as e-books and .pdf)? It appears that the major online bookstores (particularly Amazon) and the main portals (such as Yahoo, Google, Microsoft) have already entered the race, not to the electronic product as such, but to the contents in electronic form, which could pave the way for them to become suppliers of books and content in electronic form, to the detriment of book distributors and traditional bookstores. In this connection, even our major Canadian bookstore chains are not in the race.

Publishers could also be swayed by the direct sale of books in electronic format. Through their professional association, they are currently working on introducing an electronic product integrator that would allow them to sell these products directly to individuals and institutions without going through the traditional middlemen, the booksellers and distributors. At least for the time being, electronic products are not covered by Bill 51 (they did not exist at the time the Bill was passed). The direction this strategy will take in the coming years will have a significant impact on distributors and may jeopardize the fragile balance within the book trade.

The distributors interviewed said they were worried, less for the short term than the medium term, and would like to know how to best prepare for this technological shift. Just as it is important for Canadian publishers to confer in order to learn more about the current changes and develop common solutions, there is a similar need among distributors. Perhaps the associations and governments should begin examining this issue immediately.

Lastly, the new roles that distributors could play include offering print on demand. Print on demand makes it possible, using compact reprographic printing equipment, to print short runs, or even one copy of an out-of-print work, or a title that has never even had an initial print run.³ Distribution companies are the only businesses (along with the big bookstore chains) to have the critical mass (and contractual agreements with publishers) needed to offer print-on-demand services and, most importantly, make it profitable. In light of this, however, it is still difficult to know what platform will be adopted for producing or saving electronic documents, which increases the risk associated with investing in this technology. Furthermore, a book printed on demand still does not have the quality of the classic printed book, and is still expensive. However, in the medium term, print on demand could become a service offered by distributors, which would make it possible to considerably increase supply by making out-of-print titles available, and considerably reduce warehousing needs.

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