The last days of Borders had a measurable impact on a number of industry trends in the third quarter of 2011. Driven by its going-out-of business sales, Borders’s market share held even in the period at 8% (while units rose to 9% compared to 8% the second quarter), according to the latest market research from Bowker. While Borders held steady, Barnes & Noble lost share, and the two chains combined to account for 23% of sales in the period, down from 25% in the second quarter, but one percentage point higher than the third quarter of 2010.
Borders’s liquidation sales (the last stores closed in mid-September) could also help explain Bowker’s most startling finding of the quarter—no growth in the market share of e-books. Sales of e-books accounted for 14% of all sales in the quarter, up significantly from 4% in the third quarter of 2010, but even with the second quarter of 2011. According to Bowker, this was the first period since it has been tracking sales by format that e-books’ share of the market failed to grow on a quarterly basis. Trade paperbacks, a popular format at Borders, increased its share of the market in the third period, rising to 35% from 33% in the second quarter, its highest percentage since it took a 36% share in the 2010 third quarter. Mass market paperback sales continued their downward trajectory in the quarter, falling to 14% of units sold from 15% in the earlier quarter and down from 18% in the third quarter of 2010. The hardcover category’s market share slipped to 28% from 29% in the previous quarter and was down from 32% in the 2010 third period.
One factor leading to the flat performance of the e-book segment was the lack of growth in the number of people who purchased an e-book in the quarter. According to Bowker, while 16% of book buyers bought an e-book in July, that percentage slipped to 15% in both August and September; in June 14% of book buyers bought an e-book and 15% bought an e-book in May.
Despite the lack of market share growth of e-books, online retailers, which are the main beneficiaries of e-book sales, still increased their share of overall book spending, taking a 39% share in the third quarter, up from 37% in the second quarter and 33% in the third quarter of 2010. Amazon has by far the largest share of the online book market, and Bowker’s data show that the online giant was responsible for over 25% of all book sales in the quarter. Independent bookstores gained a percentage point in the quarter, while nontraditional stores, which includes college stores, had a big gain compared to one year ago. The book club segment continued to decline in the quarter, with a 2% market share compared to 3% in the second quarter and 5% in last year’s third quarter. As Bowker points out, the third quarter, marked by the final days of Borders, is likely to be a bit of an aberration. The shape of the post-Borders bookselling environment will come into better focus when data from the fourth quarter can be analyzed.