The evolving state of the publishing supply chain, questions about the use and potential of blockchain technology, and a renewed debate over the practice of returns, were among the topics highlighted at the annual meeting of the Book Industry Study Group, held April 27 at the Harvard Club in New York City.

This year’s meeting featured panels focused on three specific areas of the book publishing supply chain (publishers, distribution, and retailing). The meeting also offered a fourth panel celebrating innovative book professionals featuring, among others, Noëlle Santos, founder of the Lit. Bar, a new bookstore set to open in the South Bronx this summer, and who is also the moderator of PW’s retailers Facebook group.

In remarks opening the meeting, Maureen McMahon, president and publisher of Kaplan Publishing, and BISG chair; laid out the challenges facing BISG as the book industry continues to be transformed by technology.

McMahon cited the growing interest around blockchain technology and a corresponding sense of industry confusion over its application to publishing. (“I’m not ready to think about it,”she quipped). Blockchain is a secure and transparent network technology generally associated with cryptocurrencies such as bitcoin, that is now being touted as a platform for distributing content in the future.

BISG executive director Brian O’Leary presented preliminary results of a 25-question survey on the State of the Supply Chain conducted in March/April (a formal detailed report is slated to be released in May). Among the findings in the survey: responders said retailers face the biggest challenges in today’s book marketplace followed by publishers and distributors. Responders also said one of the biggest areas of concern was maintaining high quality metadata; and that the biggest challenge facing their specific organizations is the ability to adapt quickly to a changing marketplace.

The first panel of the day focused on publishers, and echoed some of the BISG surveys findings: “we’re in a metadata arms race,” said Kent Watson PubWest executive director. The publisher panel also sparked a renewed debate over the issue of returns (the book trade’s consignment business model) and the ability of retailers to return unsold stock.

Acknowledging that he’s a new comer in the book industry, Stephen Day, senior v-p, supply chain, global operations at Pearson, nevertheless expressed surprise at the practice, calling returns, “old fashioned,” and an “unimaginable,” business practice, though he stopped short of offering what would replace it. Indeed Day’s copanelist, Watson responded that “returns are part of this business. I don’t see them going away, though I wish they would.”

Day also brought up concerns over the issue of piracy, though not only electronic piracy, but the need for better warehouse and supply channel security for physical books. Pearson, Day said, has instituted a unique ID system that places a digital marker (not the ISBN) on each physical book.

Wiley Publishing v-p, strategy, planning and development Peter Balis provided one of the better summations of the issues surrounding the supply chain, explaining that “books are not the only game. The term is out of place. It’s not a consistent thing anymore. The supply chain [represents] a lot of pieces that we use to build products that aren’t a traditional book.”

The issue of returns reappeared, so to speak, at the distribution panel, which featured IPG CEO Joe Matthews, and OverDrive CEO Steve Potash, among others. Dane Neller, CEO of the Shakespeare & Co indie bookstores, and founder of the in-store POD publishing platform, On Demand Books, set the tone for the panel, declaring that the “supply chain is broken.”

Neller explained that while “it works for big, large quantity frontlist books,” the supply chain doesn’t work so well for backlist or smaller books. Returns, he said, are “great but it’s a false economy,” explaining that his stores are always out of stock of 20-30% of the titles he feels he needs

Not surprisingly, he cited the potential of POD technology to solve the problem, calling for the increased use of in-store digital printing to provide customers with books that may not be immediately available on the bookstore shelves. Neller complained that most publishers were still reluctant to freely allow the use of POD technology for their books.

“The technology is there to print books in the store. The industry must rethink how books are delivered,” Neller said. While Matthews said that IPG uses POD printing in many of its distribution centers, he also said that publishers were deterred because of the higher unit cost to produce POD books. But Neller was quick to challenge that conventional notion, explaining that returns also include hidden costs—among them the costs of additional shipping and handling, and the loss of a sale when a retailer can’t deliver a title—that can far exceed that of the POD manufacturing unit price.

Nevertheless, Neller was “bullish on retail,” citing a renaissance in independent retailing. He urged publishers to focus on “how consumers consume,” and called for “the bundling of content in any way consumers want, e-book, paper, or audiobook.”

The retailers panel featured ABA CEO Oren Teicher, who cheerfully chided publishing consultant Mike Shatzkin (who was in attendance) over a prediction he made eight years ago that projected the inevitable decline of indie booktores. “Eight years later stores are growing—thanks to the enthusiasm of people like Noëlle Santos—and older stores are selling to younger, tech savvy owners,” Teicher said.

And he said the percentage of sales of books via physical bookstores is growing. “We’re still here, but challenges remain, including the rise of online shopping and new minimum wage laws,” Teicher said.

The retailing panel also turned its attention to millennial consumers (generally those born in the 1980s and 1990s), a perplexing (and overgeneralized) demographic that seems to confound retailers. David Barker, senior v-p of ReaderLink Distribution Service, which distributes books to mass market retailers, said the millennial customer wants, “genuine and honest experiences, they don’t like ads, and they respond to social media.”

In many way, millennials represent an opportunity for indie bookstores. Noah Genner, president and CEO of BookNet Canada, said millennials rely on “word of mouth recommendations, they plan their purchase and they want value and they discover books online more than any other demographic group.”

“They want experiences, events, a place to hangout,” Teicher said. “And as much as they use technology, some millennials want an alternative to digital culture, and that includes print books.”

The annual meeting also honored three book industry innovators, who all received the BISG innovator Award. in addition to the Bronx bookseller Noelle Santos, awards were presented to Margret Aldrich, media programming manager at Little Free Library, and to Susan Robbins, cofounder and chair of Project Cicero.

In addition, the BISG lifetime achievement award was renamed to honor the late Sally Dedecker, and it was presented this year to Michael Bamberger, general counsel for Media Coalition, the First Amendment rights organization, and the BISG Industry Champion Award was presented to Diane Degener of LSC Communications.