How Will eBookstores Earn Your Loyalty?

Where I buy a print book often comes down to convenience (which store is closest), pricing, availability (is the book in stock?) and loyalty programs (e.g., member discounts).  The choice of a brick-and-mortar vs. an online store adds in the component of urgency; do you need the book today or can it wait till tomorrow?

I'm buying ebooks almost exclusively now.  In fact, I can't even recall the last print book I bought for myself.  Although I ditched my Kindle on day one with my iPad, I do most of my book reading in the Kindle app on the iPad.  Although Amazon has a major selection advantage of the iBookstore, Apple will catch up at some point.  Then there's B&N and Borders.  Both of them have iPad apps and ebook stores.  And don't forget about Google and their upcoming Editions program as well a host of other up-and-coming e-tailers.

So here's the question: With all these ebook retailers just a click away from each other, what must they do to earn your business on a repeat basis?  This is a critical question for all the e-tailers looking for loyal customers.  I've come up with a list of some of the items that affect my buying habits:

Reader Features -- I'm referring to the bells and whistles the vendor builds into their ereader apps.  Today they're all about the same but I believe this will be a critical point of distinction in the years ahead.  Integration of social networks (easily sending excerpts to your friends, tweeting them, etc.) is just a simple example.  I'm willing to bet the features we'll see in ereader apps in a year or two will make today's apps look pretty basic.

Sharable Content -- B&N took the first steps of this for the Nook but that's not going to cut it long term.  Customers need to be able to share their purchases with all their friends, one by one, of course, just like they can with a print book.  Which leads to...

Eliminating DRM -- Which major ebook retailer will be the first to feature nothing but DRM-free books?  We sell a lot of ebook bundles on oreilly.com and I believe one of the reasons why is because we've totally eliminated DRM from the transaction.  We trust our customers to do the right thing and they reward us by coming back and buying more.  This is a tough one though as it's the publishers who need to be convinced DRM is bad, not so much the retailers.  I was pleased to see that one of the larger, old-school publishers who was a huge advocate of DRM at our 2009 TOC conference became a convert by the time they attended our 2010 TOC show.  I figure if they can make the change, anyone can!

Price -- It's the obvious way of winning customers, but is it a legitimate, significant long-term advantage?  Probably not.  I compare the top e-tailers before I buy books for my iPad and I rarely find a price difference.  On top of that, I'd be willing to pay more for each book if the more expensive option offers me some of the other advantages I've listed in this post.

Loyalty Programs -- Here's one we really haven't seen tapped into yet.  When will I be able to take advantage of a "buy-2-get-1-free" ebook campaign?  We've done some experimentation like this on oreilly.com and it works.  What's nice about this model is that the e-tailer has easy access to your account, so you could accumulate buyer points, buy 1 book now and come back a week or two later to buy the 2nd book that gets you the 3rd one free.  Good luck trying that at your local brick-and-mortar store.  If I know that I'm one book away from getting a free one I'm much more likely to go back to that same store for my next purchase.

Non-book Content -- Up to now all I've been talking about is books.  What about magazines and newspapers though?  When I bought my Kindle v1 I thought it would be a way to always have my newspapers and magazines on the road.  Unfortunately for Amazon, the user experience for newspapers and magazines was awful, so I quickly dropped my subscriptions.  Although most of these publishers are trying to go direct to customers (e.g., iPad apps), there will also be subscriptions through larger e-tailers.  Part of this has to do with discovery, which is why print magazines/newspapers are still at your local convenience store.  How could e-tailers leverage these products to make their site/reader the most compelling one available?

Those are just a few ideas off the top of my head.  What have I missed?  What products and services can an e-tailer offer to earn your repeat business?  Or, with all these stores just a click away, are we less likely to remain loyal to only one or two of them?

Comments

[Robin Mills]

I believe that for most people, price will be the final decision maker on purchases. On my iPad, I have iBooks, the Kindle app and the B&N eReader. Functionality-wise, they are all basically the same - text appears and you read it. Yes, there are different fonts and color selections, etc, but I've been able to set each one up almost the same and I'm quite happy to read my books on all of them. I do admit that I tend to use the Kindle app more often than not - simply because that is where the bulk of my library is located. I've had a Kindle since initial launch, so I have quite a store of books built up by now. So, everything comes down to price for me. I, too, compare prices - mainly at www.ebookprice.info, a nice site, but sometimes a bit glitchy. Does anyone know of another site, or better yet, an app?

[Prestondubose]

I'm still searching for the golden retailer. I've been burned by poorly implemented DRM, by "Digital Editions" books that are really PDFs (and look terrible on my Sony reader), and high prices. Of the three, only the latter finally seems to be correcting itself. I really like the idea of sticking with epub, but Kindle is looking more and more tempting.

[Aaron Pressman]

Choice of platform is probably the most important factor you left out. iBooks are limited to iPad/iPhone/iPod touch right now. B&N and Amazon have many more platforms. Sony, I think, has almost none -- do they even have an iPhone reader?

I find your discussion of price shallow. Price is very important. Under the big five "agency" price fixing model now in vogue, it's harder for retailers to differentiate themselves. But price cuts to the quick for many, many consumers. How many books can I buy this month? I agree that in some theoretical future, the addition of other valuable features could obviously mitigate a price advantage but that's still pretty theoretical at this point.

The absolute biggest possible win would be if the major publishers stopped insisting on DRM. But I think that would only happen, as it did in music, if one retailer got a lock over the publishers with a dominant market share. Apple's entry into ebooks thwarted Amazon's leverage over publisher so I don't think we see the end of DRM for a long, long time.

[Springbrookaud]

Interesting post. As an up and coming ebook and audiobook distributor, it's quite a challenge getting people to come to my site as opposed to Amazon, or even Smashwords. We find that people come to our site when they want a specific book, not when they want to browse. Hopefully implementing some of these ideas will help. Thanks!

[Justin]

I've used the site http://www.diesel-ebooks.com/ to buy eboks, and they have a point system which you can put towards new ebooks at a reduced cost.

[Jindo Fox]

I'm with Aaron, and if this were a poll, I would choose "none of the above." I don't think this is as complicated as Joe makes it sound. Integration with social media is not going to make or break this technology -- a far larger, more relevant hurdle is converting the "paper or death" people who don't see the value in ebooks.

I already have a favorite ebook seller, and it's Amazon without a runner up in sight. Their selection is far and away the largest, and anything I buy from them is readable on Kindle, iPhone, iPad, Macintosh, Windows, Android, Blackberry, with likely more to come. I don't mind their DRM, but if I did, it's easily ripped away using Calibre. Amazon's Whispernet feature synchronizes my bookmarks so I never lose my place. I have no motive whatsoever to switch to a different bookstore, and the more I spend on Kindle content, the deeper entrenched I get.

Once the Kindle hardware price drops under $100, it will be all over for the other publishers.

[Erica]

Fictionwise had a substantial non-DRM selection, a buy-2-get-1-free (ish) system, a book club with regular discounts, subscriptions to magazines, and for their non-DRM books, several formats. Because of these, they were a longtime favorite bookstore for many ebook readers.

They've gutted most of those features in the last few months, and many people have declared Fictionwise has seen their last dollar. (http://www.mobileread.com/forums/showthread.php?t=78899)

Bells and whistles in apps won't be as strong a selling point as good customer service, metadata that displays correctly on the ebook reader, and a good search engine on the site. And price will matter--if the bookstores can't negotiate price with the Big 5 publishers, they'll need to carry content from other publishers, so they can offer sales & discounts.

[Peter]

The problem with most of your suggested means of differentiation is that they're not under the control of the retailer - sharing? Publishers won't allow it (take a look at B&N's store sometime, and note the very small number of books that you can share, even with the crippled Nook sharing scheme). DRM removal? Publishers won't allow it. Price competition and loyalty programs? Not if you want to carry Agency 5 titles (see the demise of Fictionwise's Buywise Club).

[Digitalaisbizness.wordpress.com]

I think you make some good points. Re price, very few businesses survive a low cost strategy. I think publishes need to be trying to create an engaging experience for their written content that would be appealing for consumers and that consumers perceive to be more valuable than just the textual content.

The sooner publishers accept that copy protection is not viable, the better for them.