Ryan Raffaelli, associate professor at Harvard Business School, gave the keynote speech at Winter Institute 15 in Baltimore on Wednesday morning. Raffaelli studies innovation and transformation in legacy businesses and released a preliminary academic paper on his eight-year-long study of independent bookselling.

Raffaelli initially focused on the transformation of companies like German pencil maker Faber Castell, which benefitted from the 2015 coloring book boom; the Italian notebook company Moleskine which has partnered with app developer Evernote; and the Swiss mechanical watch industry which went on to compete with digital watches by creating the Swatch.

"What happens when radical technology comes into a new industry, you have an area of technological fermentation," said Raffaelli, who described this as an era in which different ideas compete for dominance, before choosing a winner and moving onto an era of incremental change.The question then becomes, how does the established dominant design compete and even thrive when facing competition from new designs or ideas.

Moving on to bookselling, he outlined a "catalog of competitors" to indie bookselling. This list is familiar and began with mall chain stores, the rise of the big box store, the birth of Amazon.com, the emergence of e-books. "The year 2009 saw the lowest number of ABA bookstores two years after the introduction of the e-book," noted Raffaelli. The industry then bounced back.

His report identified several factors that signalled the sea change that brought about the resurgence of numbers. First was "community," which bookstores identified has a movement. This was amplified by a massive boom in social media. Around 2010, people stopped talking about bookstore activism and getting bookstores fair pricing from publishers and others, and shifting to talk of 'localism' — or buying local," said Raffaelli.

He next identified the emergence of the concept of curation in stores and identified handselling as something the corporate retailers cannot replicate, calling it "pure gold" and the means by which "humans can beat algorithms."

Rafaelli's third concept was "convening" — the notion that booksellers have an ability to bring people into their stores for a conversation. He finally landed on the notion of "collective identity," which is the value system that identifies independent bookstores.

He underscored that the digital disruption that destroyed music retailers didn't happen in books, as e-books never took off in popularity the way that music downloads and pay-to-stream services have dominated music sales.

So, in summary: his three main factors contributing to the bookstore revival were "community," "curation" and what he called "convening."

The keys to the future are how booksellers will communicate the value of community, continue to compete on experience and quality, not price and inventory, and maintain the bookstore as a gathering place.

Two major challenges are how stores will contribute to data collection projects — Rafaelli implored booksellers to complete their ABACUS surveys — and then how bookstores will be able to exchange best practices with other small businesses and learn.

The growth in stores, said Rafaelli, is not necessarily a measure of health. "Margins, profitability, and turnover are indicators — not the number of stores," he said.

"Indie bookstores symbolize the power of community as a source of competitive advantage," said Rafaelli in conclusion.