Abstract: Reinvention and Renewal in American Bookselling: Some Dynamics of Distribution Institutions

Daniel Raff

Abstract

In 1900, the manufacturing sector of the American economy employed more than twice as many people as the distribution sector. By the year 2000, distribution employed half again as many and accounted for the larger share of GDP. The sector is of great importance to economic welfare in subtler ways as well. Tastes are heterogeneous across the population and variety on offer matters to most consumers along with low prices. Although it is easy to imagine that the efficiencies of the present were always with us, the present distribution system is a relatively recent development; and the emergence of its present standard of performance is a matter of changing institutions as much as it is of incremental increases in the efficiency of already existing institutions. All this is worthy of much more attention from business historians than it has received to date. The book trade is an excellent grain of sand in which to observe this world. Most retail venues have physical constraints both on how many volumes they can keep in stock and on how many they can display. There are arguably well in excess of a million distinct stock-keeping units among which the retailers must choose (with something like fifty thousand new possibilities appearing each year from a wide variety of sources). These include both steady sellers and fashion-sensitive goods. Books are published in sizeable batches, so there is also a question of who will hold inventory. A wholesale segment of the trade participates in this and otherwise assists in the overall flow of goods.The institutions organizing this flow and facilitating the variety outcomes potential customers observe have evolved over the course of the twentieth century and have changed quite radically since c. 1970. The paper studies the emergence of the (chained) superstore format, analyzing the early histories of the principal firms in terms of the capabilities they developed and the competitive dynamics—among the chains and between the chains and independent bookstores—that these engendered. The complex impact on this course of events of the onset of online retailing and of a not well appreciated series but profoundly influential series of changes in the organization and capabilities of the wholesale sector are explored. Both reinvention and renewal are illustrated and, in this setting at least, unpacked.