Discounts And Used Books Continue To Drive Consumer Demand

Sluggish 2003 Dollar Expenditures Results, According To Ipsos BookTrendsSM

New York, NY - Consumer demand for general trade books held steady during 2003 compared to 2002, however spending on a per-book basis slipped, resulting in lower 2003 consumer expenditures, according to recent findings from Ipsos BookTrendsSM, an ongoing tracking service from Ipsos-Insight, the global marketing research firm and member of the Ipsos Group. BookTrends found that while Americans bought nearly the same number of books in 2003 as they did in 2002--1.176 billion books in 2003 versus 1.177 billion books in 2002--overall spending on books decreased 2%, falling from $11.3 billion in 2002 to $11.0 billion in 2003. The disparity between unit and dollar trend performance during 2003 is partially explained by continuous increases in used book buying, and supported by increased traffic at used bookstores and online retailers. In total, the number of used books bought by consumers between April and December 2003 increased 5% over the same period the year before, while demand for new books fell by 2%. Overall, the used book market accounted for 14% of general trade book sales, gaining one share point since 2002. "Sales from the ever-widening used book distribution channels, including online options, are beginning to impinge on new book sales. The challenge for publishers and traditional book retailers will be to devise effective strategies to leverage and preserve their backlist sales, which have, up until now, largely been exempt from heavy discounts and provided better gross margins," said Barrie Rappaport, chief analyst of Ipsos BookTrends. Continued discounting on hardcover books further contributed to the decline in per-book spending. The list prices1 for both mass market paperbacks and trade paper titles have increased since 1998 (by 9.6% and 1.9%, respectively) and the total per-book spending after discount has increased (by 13.3% for mass market paperbacks and by 4.8% for trade paper titles). However, the ongoing Ipsos study of more than 16,000 nationally representative households found that the average amount spent per new hardcover book purchase in 1998 was $23.73; in 2003 that amount dropped to $22.75. (Whereas the average list price of a hardcover title in 1998 was $24.20, the average list price for a book in 2003 was $23.87.) "Hardcover books are actually less expensive now than five years ago--both the list price and the average amount paid by consumers. Whereas once the hardcover was a prestige item and contributed significantly to publishers' and book stores' gross margins, competition between price clubs and chain superstores has put the squeeze on publishers and independent and small chain bookstores," said Rappaport. "At the same time, lower prices have made hardcovers more accessible to consumers, so we're seeing more non-traditional titles in hardcover, such as crossover juvenile fiction novels - those that appeal to kids of all ages," added Rappaport. "The latest Harry Potter The Order of the Phoenix was published in hardcover to much consumer consternation about inflated book prices, but at least one leading online retailer is currently offering the bestseller at 70% off the list price." "Publishers and retailers need to take a close look at their pricing and discounting structures to ensure that they can compete with the growing used book segment and the shrinking margins on hardcover titles," said Rappaport. "If per-book spending is decreasing and discounts are increasing, publishers and retailers will need to find new ways to increase their overall sales volume and share-of-wallet." [+] click to enlarge 1Ingram's titles@ingram, based on an ISBN match of Ipsos BookTrends' data To learn more about Ipsos BookTrendsSM, please visit our homepage. For more information on this press release, please contact: Barrie Rappaport Chief Analyst, BookTrends Ipsos-Insight 312.665.0541 About Ipsos-Insight Ipsos-Insight, the flagship marketing research division of Ipsos in the U.S., specializes in research for companies in the following industries: agrifood; cable, media and entertainment; consumer packaged goods; energy and utilities; financial services; health; lottery and gaming; retail; and technology and communications. Ipsos-Insight provides custom and tracking research services to domestic clients, as well as U.S.-based multinationals. It offers concept and product testing, package testing, attitude and usage studies, omnibuses, tracking systems, brand equity, volume forecasting, marketing models, advanced analytics, and global research. Ipsos-Insight is an Ipsos company, a leading global survey-based market research group. To learn more, visit: About Ipsos Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and reactions of consumers, customers, and citizens around the world. Member companies assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media. They measure public opinion around the globe. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting and modeling and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2003, Ipsos generated global revenues of $644.2 million U.S. To learn more, visit: Ipsos is listed on the Euronext Paris Premier Marchй, and is part of the SBF 120 and Next Prime Indices as well as eligible to the Deferred Settlement System (SRD). Euroclear code 7329, Reuters ISOS.LN, Bloomberg IPS FP

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