Digital Investment

So Blackwell are restructuring and in order to preserve cash are scaling back their digital ambitions. This does surprise me but I imagine it is a result of the credit crunch. If you’ve a cash shortage and can not raise credit for investment in the current climate then things may well have to be cut.

The reason that it surprises me is that I know that Blackwell have experience of good returns on digital investment. Three or four years ago I went to a Publishers Association seminar at the rather grand Stationers’ Hall. At the seminar a Blackwell’s representative explained that since they had moved to exclusively electronic ordering for their shops they had reduced their transaction cost from something like 27p to 4p per transaction. It had required quite a lot of investment but the return had been worthwhile. Of course further returns on digital investment are going to be harder to achieve – 4p to 1p per transaction would be very tough.

Given this experience you would think they might see digital investment as a sensible strategy. It isn’t difficult to see other areas where digital investment might create a return. The most obvious is the Blackwell online shop. Functional as it may be, it looks a little dated in comparison with the revamped Amazon and Waterstone’s sites and doesn’t really take advantage of Blackwell’s more academic focus. Where for instance is the ability for a student to check whether or not their campus bookshop has the book they want? This functionality is available on the Waterstone’s site but would probably be even more useful to Blackwell’s customers.

Still it appears for the moment that any changes are likely to be more fundamental in what is a worrying time for Blackwell in particular and the book retail trade in general. Let’s hope they got through this. Waterstone’s needs the competition. The UK book trade needs a strong Blackwell too.