̽��ֱ�� of Cambridge - retail

First COVID-19 lockdown cost UK hospitality and high street £45 billion in turnover, researchers estimate

fpjl2 — Thu, 18 Feb 2021 09:00:37 +0000

̽��ֱ��UK’s first national lockdown from March 2020 and its immediate aftermath saw a massive shift in consumer habits that was initially mandated but then lingered as shops and restaurants opened but risks from the virus remained.

A new study from the universities of Cambridge and Newcastle used data from the Office for National Statistics (ONS) to compare retail, hospitality and online sales in the UK between March and August 2020 with average figures for the same months for the years 2010-2019.

Researchers took an approach normally used to estimate cumulative excess deaths to try and measure the impact of the COVID-19 shock on sales of UK retailers and restaurants.

They say their economic models suggest that shops predominantly selling food, such as supermarkets, saw a 5-10% bump in sales in lockdown, adding up to an additional £4 billion in earnings over 'business-as-usual' expectations.

This is 'consistent with large-scale stockpiling', they say, as people prepared for an indefinite future of home-cooked meals.

With many shops shut and people stuck indoors, online sales experienced a major boost, peaking at around a third higher than business-as-usual estimates during the first lockdown – an increase that amounts to an additional £4 billion.

Non-food high street shops, those selling everything from books to clothes, saw sales evaporate during the first lockdown when they had to shut, costing around £20 billion in turnover. Sales returned to normal once national lockdown lifted.

̽��ֱ��shortfall for bars, pubs and restaurants was 'dramatic', say researchers, with the first UK lockdown causing sales to fall as much as 90% below the business-as-usual level, equating to around a £25 billion revenue loss.

Hospitality sales saw some recovery post-lockdown, as government schemes such as ‘Eat Out to Help Out’ kicked in, but were still 25% below estimated business-as-usual revenues by the end of summer.

Writing in the journal Global Food Security, researchers say they found no evidence of a post-lockdown fall in food-shop sales as people used up their stockpiles, or an 'overshoot' on the high street due to 'pent-up demand' during lockdown.

“Lockdown restrictions led to behaviour changes in consumers and retailers that caused huge fluctuations in sales,” said Dr Shaun Larcom from the ̽��ֱ�� of Cambridge, who co-authored the study with his Cambridge colleague Dr Po-Wen She and Dr Luca Panzone from the Newcastle ̽��ֱ��.

“Shopping frequency dramatically reduced, and footfall vanished from many commercial areas, with people going online or using local outlets within residential areas when they had to shop.”

“Consequences of lockdown, such as long queues outside supermarkets, led to ‘forced experimentation’. Consumers had to explore new purchasing methods,” said Larcom, from Cambridge’s Department of Land Economy.

“Many people shopped online for the first time. They also bought directly from wholesalers or even farms, and trialled different types of home cooking. When people are forced to experiment, it can lead to behavioural changes that last well beyond the life of a crisis.”

̽��ֱ��researcher say that, while online sales peaked during lockdown, they remained above pre-lockdown levels in August 2020, which they suggest may be early signs of a more permanent 'structural change' in shopping habits.

Recent media reports suggest that the UK Treasury is considering a one-off tax for online retailers who saw profits boosted by the lockdowns.

In February 2020, stores primarily selling food had sales figures almost identical to business-as-usual (BAU) estimates produced by the researchers’ econometric models: £12.6 billion. Sales for March ran at £17.5 billion – around 10% higher than the £16 billion BAU estimates – but had returned to BAU levels by July.

For online retail, sales sharply diverged from BAU estimates by May – £5.3 billion against a predicted value of £4.1 billion (+29%) – and peaked in June at £6.8 billion compared to £5 billion BAU estimate (+36%). While online sales then started to fall, they were still above BAU estimates by the end of summer.

Non-food shops had February sales figures almost equal to their BAU estimates: £11.6 and £11.9 billion respectively. Actual sales tumbled as the pandemic took hold, with an April nadir of £5.9 billion compared to BAU estimates of £13 billion (-54.6%). Sales then started to recover, and by August only just lagged BAU estimates.

Sales in 'food and beverage serving services' suffered most in terms of lost revenue. In February, turnover was £5.7 billion, just shy of the £6 billion BAU estimate. By March this had slumped to £4.3 billion against a prediction of £6.7 billion.

April sales for bars, pubs and restaurants were just £0.7 billion compared to a BAU estimate of £6.7 billion: an approximate shortfall of 90%. While this gap shrank it remained startling. Even with the ‘Eat Out to Help Out’ scheme, August sales were £5.2 billion compared to a BAU estimate of £7 billon (-25%).

“Understanding the monetary impact of the pandemic is important to gauge the magnitude of the damage, and can help government design policies to assist these sectors,” said Panzone from the ̽��ֱ�� of Newcastle.

“Food services and non-food retailers lost a huge share of their yearly business, compared to food stores and online retailers that actually gained from lockdown. One-size-fits-all policy approaches across retail won’t work,” he said.

However, UK supermarkets and online retailers made an additional £4 billion each thanks to the coronavirus lockdown that began in March last year, according to econometric models.

When people are forced to experiment, it can lead to behaviour changes that last well beyond the life of a crisis

Shaun Larcom

Gary Butterfield

Central Leeds during the first UK lockdown

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. Images, including our videos, are Copyright © ̽��ֱ�� of Cambridge and licensors/contributors as identified. All rights reserved. We make our image and video content available in a number of ways – as here, on our main website under its Terms and conditions, and on a range of channels including social media that permit your use and sharing of our content under their respective Terms.

Yes

Licence type:

Attribution

Location, location, location: researchers develop model to predict retail failure

sc604 — Mon, 08 Oct 2018 23:01:44 +0000

Using information from ten different cities around the world, the researchers, led by the ̽��ֱ�� of Cambridge, have developed a model that can predict with 80% accuracy whether a new business will fail within six months. ̽��ֱ��results will be presented at the ACM Conference on Pervasive and Ubiquitous Computing (Ubicomp), taking place this week in Singapore.

While the retail sector has always been risky, the past several years have seen a transformation of high streets as more and more retailers fail. ̽��ֱ��model built by the researchers could be useful for both entrepreneurs and urban planners when determining where to locate their business or which areas to invest in.

“One of the most important questions for any new business is the amount of demand it will receive. This directly relates to how likely that business is to succeed,” said lead author Krittika D’Silva, a Gates Scholar and PhD student at Cambridge's Department of Computer Science and Technology. “What sort of metrics can we use to make those predictions?”

D’Silva and her colleagues used more than 74 million check-ins from the location technology platform Foursquare from Chicago, Helsinki, Jakarta, London, Los Angeles, New York, Paris, San Francisco, Singapore and Tokyo; and data from 181 million taxi trips from New York and Singapore.

Using this data, the researchers classified venues according to the properties of the neighbourhoods in which they were located, the visit patterns at different times of day, and whether a neighbourhood attracted visitors from other neighbourhoods.

“We wanted to better understand the predictive power that metrics about a place at a certain point in time have,” said D’Silva.

Whether a business succeeds or fails is normally based on a number of controllable and uncontrollable factors. Controllable factors might include the quality or price of the store’s product, its opening hours and its customer satisfaction. Uncontrollable factors might include unemployment rates of a city, overall economic conditions and urban policies.

“We found that even without information about any of these uncontrollable factors, we could still use venue-specific, location-related and mobility-based features in predicting the likely demise of a business,” said D’Silva.

̽��ֱ��data showed that across all ten cities, venues that are popular around the clock, rather than just at certain points of day, are more likely to succeed. Additionally, venues that are in demand outside of the typical popular hours of other venues in the neighbourhood tend to survive longer. ̽��ֱ��data also suggested that venues in diverse neighbourhoods, with multiple types of businesses, tend to survive longer.

While the ten cities had certain similarities, the researchers also had to account for their differences.

“ ̽��ֱ��metrics that were useful predictors vary from city to city, which suggests that factors affect cities in different ways,” said D’Silva. “As one example, that the speed of travel to a venue is a significant metric only in New York and Tokyo. This could relate to the speed of transit in those cities or perhaps to the rates of traffic.”

To test the predictive power of their model, the researchers first had to determine whether a particular venue had closed within the time window of their data set. They then ‘trained’ the model on a subset of venues, telling the model what the features of those venues were in the first time window and whether the venue was open or closed in a second time window. They then tested the trained model on another subset of the data to see how accurate it was.

According to the researchers, their model shows that when deciding when and where to open a business, it is important to look beyond the static features of a given neighbourhood and to consider the ways that people move to and through that neighbourhood at different times of day. They now want to consider how these features vary across different neighbourhoods in order to improve the accuracy of their model.

Reference:
Krittika D’Silva et al. ‘ ̽��ֱ��Role of Urban Mobility in Retail Business Survival.’ Paper presented to the Ubicomp 2018, Singapore, 8-12 October 2018. https://ubicomp.org/ubicomp2018/program/program.html

Researchers have used a combination of location and transport data to predict the likelihood that a given retail business will succeed or fail.

One of the most important questions for any new business is the amount of demand it will receive.

Krittika D’Silva

toastbrot81

Regent Street

Yes

Licence type:

Attribution-Noncommerical

Newly-developed image guidelines will improve mobile shopping experience worldwide

sc604 — Wed, 07 Feb 2018 02:53:29 +0000

̽��ֱ��concept, known as ‘mobile ready hero images’, was designed to make shopping for grocery products faster, by making it easier to quickly spot key information about a product, such as size, type or flavour.

For example, searching for ‘soap’ on Amazon or other retail websites will bring up hundreds of images, and most customers will scroll quickly through the list on their phone in order to find the particular item they want. However, based on product images alone, it can be difficult to quickly spot the differences between items: whether an item contains one, three or ten individual bars of soap, for instance.

“While traditional pack photographs can be effective on desktop screens, different flavours and sizes of products can look identical when these photographs are displayed on mobiles, reduced to the size of a postage stamp,” said Dr Sam Waller from Cambridge’s Engineering Design Centre, who led the project. “This is especially problematic for older consumers with age-related long-sightedness.”

To date, mobile ready hero images have been adopted by over 80 retailers in more than 40 countries. India – where 65% of all online shopping transactions take place on mobiles – has been one of the fastest countries to adopt these images.

In addition to making the mobile shopping experience easier for customers, mobile ready hero images have also been shown to have a positive impact on sales. “Magnum ice cream is one of our billion dollar global brands that has adopted hero images,” said Oliver Bradley, e-commerce director at Unilever. “During an eight-week A/B split test with a retailer, Magnum’s hero images led to a sales increase of 24%.”

In order to meet retailers’ demands for consistent product images across all brands, Unilever commissioned Cambridge to develop a website for hero image guidelines, with freely available templates to help brands create improved product images.

To date, some brands have created mobile ready hero images using the Cambridge templates, while others have developed hero images in a different way. Some retailers have chosen to accept all kinds of hero images, while others will only accept some kinds of hero images, resulting in an inconsistent experience for consumers.

GS1, a global non-profit organisation which sets standards for consumer goods, has recently established a working group to focus on mobile ready hero images.

“We spotted the opportunity to improve the current situation using our Global Standards Management Process,” said Paul Reid, head of standards at GS1 in the UK. “ ̽��ֱ��aim of the working group is to get agreement between competing brands and retailers, leading to a single, globally applicable set of guidelines for mobile ready hero images. These guidelines will help brands and retailers make the shopping experience better and more consistent.”

“Inclusive design can help improve the visual clarity of hero images, making them more accessible to a wider range of consumers,” said Waller. “In particular, our SEE-IT method can estimate the proportion of the population who would be unable to discern the important information from e-commerce images. We have joined the GS1 working group in an advisory capacity, and we are looking forward to contributing our expertise to help inform the critical decisions.

“Grocery products are just the start: we want to improve the e-commerce images used for every product, at every retailer, in every country in the world.”

Inset image: Examples of mobile-ready hero images. Walkers is a trademark owned and designed by PepsiCo and used with permission.

A new type of online product image, developed by researchers at the ̽��ֱ�� of Cambridge in collaboration with global consumer goods company Unilever, could improve the mobile shopping experience for the world’s 2.5 billion smartphone users.

We want to improve the e-commerce images used for every product, at every retailer, in every country in the world.

Sam Waller

Photo by Gilles Lambert on Unsplash

Man on a smartphone

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. For image use please see separate credits above.

Yes

When is a book not a book?

amb206 — Mon, 10 Oct 2016 14:00:46 +0000

In his book Merchants of Culture, Professor John Thompson recounts a conversation with the head of media asset development at a large US publishing house. ̽��ֱ��topic is the impact and future of digital publishing.

His interviewee, anonymised as Steve, has come from the music industry, where he has seen the digital revolution disrupting traditional models. Tasked with shaping the future of a leading publishing house, Steve is struggling to convince his colleagues to think differently about books and to embrace the digital revolution. He says: “A book is not a book. Books are categories. Books are types. Books are different styles of things.”

Thompson is interested in the changing structure of the book publishing industry as the digital revolution transforms the processes and products of the publishing business in ways that are both visible and invisible to the consumer. ̽��ֱ��outcome of his present research will be a book that is due to be published in 2017, in which he will describe the volatile, contested environment responsible for delivering texts to millions of readers in an ever-increasing range of formats.

At the heart of Thompson’s conversation with Steve is a discussion about the thousands of files that are the publisher’s most valuable assets – literally its lifeblood. Having digitised its backlist of top sellers, the company holds an archive of 40,000 titles, a figure that is constantly expanding. How these files are archived, managed and protected so they can be delivered to readers in the most suitable formats is vital to the continuing health of the publishing house. ̽��ֱ��archiving process has been far from simple, requiring the retrieval of files from printers and opening up heated debates about copyright. And the sheer flexibility offered by digitisation introduces new challenges.

Steve explains that, while paper books are relatively simple to deliver (“you’re delivering tree”), the delivery of digital goods is much more complicated. “ ̽��ֱ��thing that people always hoped was the digital world would get simpler and it’s actually a whole lot more complicated because your end result isn’t the same. ̽��ֱ��end result is a database, the end result is a PDF, it’s an image-based PDF, it’s an XML file, it’s an ad-based, Google-search-engine toolset – we’re going to have many more properties digitally than we possibly could have physically. We have seven physical properties [for our books]… and online we have hundreds of formats and types and styles.”

Few of these challenges were foreseen in the feverish hype of the 1990s that the days of the book were numbered. Paper texts were clunky and old fashioned; digital versions were smart and sleek.

Many new start-ups were launched, seeking to create new forms of the book that exploited the multimedia potential of new technologies. But, despite the hype, sales of e-books remained sluggish and many start-ups failed.

E-books finally began to take off in autumn 2007 when Amazon launched the Kindle, which allowed readers to download books and other content directly onto their devices. Sales of e-books soared: in 2010 one large publisher saw its e-book sales rise from 12% to 26% of its revenue over Christmas week.

Industry pundits had predicted that e-book sales would be driven by business books and by businessmen, but it didn’t work out like that – far from it. “ ̽��ֱ��real areas of growth were commercial fiction and genre fiction – categories like sci-fi, mysteries and crime, romances and thrillers,” says Thompson. “This was a revolution being driven largely by women reading commercial and genre fiction on their Kindles.”

Much has happened since Thompson’s interview with Steve took place in New York, but Thompson has maintained the many publishing contacts who give him first-hand access to the latest industry developments. He is now mid-way through an ambitious project to revisit publishers on both sides of the Atlantic in order to discover “what is happening while it’s happening” in an industry that suddenly finds itself at the centre of a major disruptive transformation.

From 2008 to 2012, e-books grew from less than 1% of total US trade sales to over 20%; this was phenomenal growth in an industry where overall sales remain largely static. Many people working in the industry worried that publishing would go the same way as the music industry. But then something dramatic happened: the growth slowed and levelled off at around 22%, forming a classic S-curve. “When you dig beneath the surface, however, you see that the simple S-curve is misleading because it conceals a great deal of variation between different kinds of books. In the case of romance fiction, the growth begins to level off at around 60%, whereas many categories of nonfiction plateau at between 15% and 25%,” says Thompson.

“By looking at what is happening inside the industry, we can see that some of the fears about the future of the publishing industry were misplaced. Many observers thought that developments in book publishing would follow those in the music sector but that hasn’t happened. There isn’t a single model that describes the impact of the digital revolution on the creative industries – there are multiple models, and the impact varies from industry to industry and sector to sector.”

While no one can be sure how the pattern of e-book sales will develop in the future, the digital revolution has already had an enormous impact on the way the publishing industry works. In what Thompson calls “the hidden revolution”, the processes involved in taking a text through the supply chain, from author to reader, have been thoroughly transformed. Print-on-demand means that a book never goes out of print, and with the advent of self-publishing anyone can publish.

“This means that the numbers of books being published, and the number available, have risen dramatically. But how do readers get to know about what’s out there? New platforms have emerged to supplement the traditional model of the newspaper review,” he says.

̽��ֱ��rise of Amazon has played a major part in these developments. “Amazon is part and parcel of the digital revolution. ̽��ֱ��company started in a garage as a classic internet start-up and its ascendancy took everyone by surprise,” says Thompson. Publishers have benefited from Amazon’s growth but they now find themselves locked in a power struggle with the retail giant, who controls around 67% of all e-book sales in the USA and over 40% of all new book unit sales, print and digital.

Relations have become increasingly fraught, he says. Publishers have tried to retain control of pricing by selling e-books on an ‘agency model’, which allows them to fix the price, while Amazon has used its growing market share to try to extract better terms of trade from publishers. ̽��ֱ��struggle ebbs and flows and at times becomes vicious, as it did during the 2014 standoff between Amazon and Hachette (one of the Big Five US trade publishers).

Thompson is determined to get to grips with the fine detail of what goes on behind the scenes in the day-to-day publishing processes. “Fifteen years ago I knew little about trade publishing, but we can only understand how this industry works and how it’s changing by immersing ourselves in it and looking carefully at what happens when new technologies collide with the old world of the book.”

̽��ֱ��e-book has made continued inroads into the publishing world but the printed book has defied predictions of its death. Research by Professor John Thompson focuses on the challenges facing the publishing industry as it embraces the opportunities afforded by the digital revolution.

By looking at what is happening inside the industry, we can see that some of the fears about the future of the publishing industry were misplaced.

Professor John Thompson

̽��ֱ��District

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. For image use please see separate credits above.

Yes

̽��ֱ��rise and fall of Kodak's moment

bjb42 — Wed, 14 Mar 2012 21:00:19 +0000

Earlier this year, Kodak filed for Chapter 11 bankruptcy protection. But when Kamal's camera was made, the company bestrode the world of amateur photography – a world Kodak itself had created.

Established by George Eastman in the 1880s, by the 1950s Kodak had the lion's share of the US amateur film market. “Kodak was a company at the top of its game,” says Kamal, who has studied the Rochester-based business for more than a decade.

“Kodak controlled almost 70% of the highly lucrative US film market. Gross margins on film ran close to 70%, and its success was further underpinned by a massive distribution network and one of the strongest brands in the world. ̽��ֱ��company completely dominated its industry,” he says. “And then, in 1981, along came digital.”

Thousands of words have been written recently seeking to explain Kodak's failure. ̽��ֱ��company, all agree, was slow to adapt to digital, its executives suffered from a mentality of “perfect products”, its venture-capital arm never made big enough bets to create breakthroughs, and its leadership lacked vision and consistency.

None of this analysis, however, fully explains why digital – a technology Kodak pioneered – did for the company. Understanding that, Kamal argues, requires a deeper historical and social approach.

“Photography is very much a social activity. You can't really understand how people relate to their pictures – why people take pictures – unless you do a social analysis which is more anthropological or sociological,” he explains.

“Whenever I ask why a certain company that has fallen on hard times is doing badly, I always start by asking why it was successful in the first place. That is where the answer lies.”

For three-quarters of the twentieth century, Kodak's supreme success was not only developing a new technology – the film camera – but creating a completely new mass market.

During the nineteenth century, photography had been the exclusive preserve of a small number of professionals, with their large-format cameras and glass plates. So when Kodak invented the film camera, it needed to teach people how and what to photograph, as well as persuading them why they needed to do so.

“Kodak is the company that made photography a popular pastime around the world. It made a tremendous contribution to how we see things,” Kamal says.

̽��ֱ��Kodak moment

Kodak's high-profile advertising campaigns established the need to preserve 'significant' occasions such as family events and holidays. These were labelled 'Kodak moments', a concept that became part of everyday life.

And it was women Kodak cast in the leading role. In its advertisements, women held the cameras, busy preserving moments of domestic bliss for posterity: “Kodak knew how to market to women. If you wanted to be seen as a caring mother and responsible housewife, then you needed to record your family's evolution and growth,” he says.

But women were only part of the story. It was they who took the photographs, but the other half of the Kodak moment required a subject – birthday parties, sporting success and, crucially, family holidays.

“Kodak also played a big role in converting travel to tourism. ̽��ֱ��idea was that if you hadn't brought back pictures from your vacation you might as well not have gone,” says Kamal. “For them, photography was all about preserving memories for posterity, photography was all about sentiment, and it was women who were doing this.”

By the 1970s, more than 60% of pictures in the US – the world's largest photography market – were being taken by women. And it was partly how men – rather than women – responded to the digital revolution that Kodak couldn't cope with.

Digital disrupted the company's equilibrium in two crucial respects. Firstly, it shifted meaning associated with cameras and secondly, digital devices allowed newcomers such as Sony to bypass one of Kodak's huge strengths – its distribution network.

Gadget man

̽��ֱ��knock-on effects of this shift were enormous. Digital cameras came to be viewed as electronic gadgets, rather than pieces of purely photographic equipment. As a result, he explains: “ ̽��ֱ��identification of cameras as gadgets brought about another significant change: women were no longer the main customers, men were.”

̽��ֱ��gender shift led to the third source of disruption for the photographic industry in general, and for Kodak in particular. With digital cameras, images could be viewed on cameras, mobile phones or computers without the need for hard prints. And with women giving way to men as primary users of cameras, printing plummeted.

According to Kamal: “ ̽��ֱ��people taking pictures suddenly changed, from 60% women to 70% men. Kodak didn't know how to market to men. But even if they could get them to buy, they didn't want to, because men don't print. Unlike women, they hadn't been socialised in the role of family archivist.”

Faced with such an enormous threat to its business, Kodak did what many companies do in similar circumstances – ignore the problem in the hope it goes away, and when it doesn't, deride the new-comer.

“Some things do go away – not all technology gets diffused,” he says. “When that fails, the second reaction is usually derision – it'll never take off, it's too expensive, it's too difficult, the print quality is too bad, people will never part with hard prints. When I talked to Kodak executives they would always cite the same example – if someone's house catches fire, the first thing they rescue is their photographs.”

From preserving memories to sharing experiences

Having played such a central role in creating meaning for photography, the company failed to believe that meaning had changed, from memories printed on paper to transient images shared by email or on Facebook.

“ ̽��ֱ��change from preserving memories to sharing experiences, and from women to men – these were things Kodak simply couldn't handle,” says Kamal, who saw the writing on the wall when he visited the company's senior management in Rochester a decade ago. “By the end of the day I was convinced the company was not going to be around much longer.”

In 2006, Kamal sent a letter to the Financial Times, pointing out that Kodak's strategy was fundamentally flawed. “Kodak is better off taking a leaf out of Lou Gerstner’s strategy for re-inventing IBM – from a manufacturer to a service-provider,” he wrote.

“Kodak needs to disassociate itself from its traditional strengths and come to terms with the fact that this technology will be commoditised sooner or later. What they need is a new business model for an environment in which people do not ‘preserve memories’ but ‘share experiences’ ... I am afraid Mr Perez's [Kodak CEO] strategy of engulfing the consumer in the Kodak universe has a low likelihood of success."

But rather than a new business model, what Kamal had seen in Rochester was a digital imaging division under pressure from its consumer imaging counterpart, and a company unable to shake-off a corporate mindset that had developed over more than a century.

“Its focus on retail printing, investing in inkjet printing research and development, and selling sensors to mobile manufacturers – altogether, these never added up to a coherent, sustainable business model. And the digital guys were always under pressure because they were seen to be cannibalising sales of much more lucrative products,” says Kamal, who thinks Kodak should have cut the digital business loose and freed it from the Rochester mindset.

Learning from history

In his view, Kodak needed to let a new generation of users and entrepreneurs take charge – people who could embrace uncertainty and were prepared to be driven in unforeseen directions – a far cry from how the company had spent its life.

“It's important for companies to reinvent themselves. Kodak had tremendous market power – one of the things that allowed it to survive thus far. But for this kind of reinvention, where you're faced with a technological discontinuity which has little in common with what you've been doing, you need to radically alter your mindset or world-view and emerge as a completely different company. IBM is a good example of this kind of reinvention, which was a huge cultural shift and took several years. But Kodak wasn't willing to part with their legacy.”

̽��ֱ��challenges Kodak faced are not unique, so what can other businesses learn from its failure? Clearly companies that derive a large proportion of their profit from a single product – in Kodak's case film – are more vulnerable. But having a corporate mindset open to new ideas and able to embrace uncertainty is essential.

According to Kamal: “ ̽��ֱ��important things are not to tie the weight of legacy assets onto new ventures; to refrain from prolonging the life of existing product lines, while trying to create false synergies between the old and the new; and, most of all, to base strategy around users, rather than the existing business model.”

As the company approaches its 130^th birthday, what will be its legacy? Those precious family albums, perhaps, and our enduring passion for photography. But its impact could have been even greater, and longer-lasting.

“There was a time when photography was known as 'kodaking',” he concludes. “I don't think Kodak will survive. Someone might buy the brand and its assets, but Kodak is never going to be Kodak again.”

On a shelf in his office in Cambridge Judge Business School, Dr Kamal Munir keeps a Kodak Brownie 127. Manufactured in the 1950s, the small Bakelite camera is a powerful reminder of the rise and fall of a global brand – and of lessons other businesses would do well to learn.

Whenever I ask why a certain company that has fallen on hard times is doing badly, I always start by asking why it was successful in the first place. That is where the answer lies.

Kamal Munir.

Dok 1 from Flickr.

Kodak Color Film.

This work is licensed under a Creative Commons Licence. If you use this content on your site please link back to this page.

Yes

̽��ֱ��future of books

bjb42 — Fri, 01 Jan 2010 00:00:00 +0000

For centuries, books have played a central role in education, the spread of knowledge and the cultivation of literary and scholarly debate. With its origins dating back to the 15th century, the publishing of books is the oldest of the media industries and one which has continued to flourish despite the profusion of other media forms. However, over the last 30–40 years, the industry has gone through a process of turbulent change stemming from forces that are partly commercial, partly technological. Thanks to these developments, it bears little resemblance today to the industry that existed in the 1960s and before.

Despite these changes and despite the continuing importance of books in contemporary culture, there has been very little systematic research on the modern book publishing industry. Historians have studied the book trade and the impact of books in earlier centuries, but the modern publishing business has been largely neglected by researchers.

It was partly to fill this gap in our knowledge that I began in 1999 to study the changing structure of the industry in Britain and the United States. ̽��ֱ��research, spanning a decade, was funded by two grants from the Economic and Social Research Council (ESRC). While the first phase of the research focused on academic publishing, the second phase, begun in 2005, was concerned with mainstream trade publishing – the world of general interest books, aimed at the wider public and sold through high-street bookstores, supermarkets and the internet. This is the sector of publishing that produces bestsellers like Dan Brown’s ̽��ֱ��Da Vinci Code– books that are widely reviewed in the press, prominently displayed in bookstores and, in some cases, turned into films.

What makes a bestseller? Why do some books take off and become runaway successes while thousands of others vanish without a trace? What are the changes that have swept through the industry and how have they affected the nature of what gets published and what succeeds? What impact have these changes had on the character of our literary culture, and what impact are they likely to have in the years to come?

Three key developments

To address these and other questions I immersed myself in the world of trade publishing in Britain and the USA. I interviewed senior managers, editors and other staff at all of the large trade publishing groups in London and New York, as well as many staff working in small and medium-sized publishing houses; I also interviewed agents, authors, scouts and booksellers – altogether, I did more than 250 interviews with key players in the industry. This enabled me to build up a detailed picture of how the industry works, how it has changed over the past few decades and how it is changing today.

I was able to show that three key developments have shaped the evolution of trade publishing in the English-speaking world since the 1960s. ̽��ֱ��first was the growth of the retail chains, like Waterstones in the UK and Barnes & Noble in the USA. These nationwide chains of book superstores transformed the landscape of bookselling in the 1980s and 1990s; they made books much more widely available, but at the same time they drove many smaller independent booksellers out of business.

̽��ֱ��second development was the rise of the literary agent. Although not new – the first agents appeared in London at the end of the 19th century – literary agents have, since the 1970s, become much more powerful brokers in the field of trade publishing. They control access to new content and, through auctions, are able to raise the stakes for books that are perceived to have high sales potential.

̽��ֱ��final development was the consolidation of publishing houses under the umbrella of large multimedia corporations. Many of the great publishing houses whose names are well known to us all – Penguin, Jonathan Cape, Macmillan, Knopf – are today owned by large corporations and survive as imprints rather than as independent publishing houses.

Making bestsellers

Together, these developments have created a field of cultural activity that has a distinctive structure and dynamic – a ‘logic of the field’. They have led, for instance, to the polarisation of the industry, with four or five large corporate groups dominating the field and a plurality of small independent publishers on the margins. Very few medium-sized independent publishers remain active: in this new world of trade publishing, it is very difficult to be medium-sized.

These developments have also led to a preoccupation with what in the industry are commonly known as ‘big books’. These are not yet bestsellers but rather ‘hoped-for bestsellers’. Given the unavoidable role played by serendipity in trade publishing, it is simply unclear how well many new books will do in the marketplace – no-one really knows.

So how do publishers decide how much they’re willing to pay for them? Various factors come into play here, but a crucial role is played by ‘the web of collective belief’ which is built up through the numerous conversations that take place between agents, editors and other players in the field. In the absence of anything solid, the expressed enthusiasm (or lack of it) of trusted others is decisive.

̽��ֱ��focus on big books is exacerbated by the financial pressures on the publishing houses owned by large corporations and by the practices of the retail chains, which order large quantities of some new books, charge publishers a premium for front-of-store displays and expect them to turn over quickly. Many new books fail to take off and are sent back to publishers in large numbers, resulting in historically high levels of returns. But in those cases where they do take off, publishers and booksellers mobilise quickly behind them, with additional resources and promotion, pouring more fuel on the flames – this in part is how bestsellers are made.

̽��ֱ��end of the book?

Today trade publishers are faced with unprecedented challenges. ̽��ֱ��economic climate is tough, overall sales (especially in North America) are down and the arrival of a new generation of ebook readers has raised fresh questions about the future of printed books. Do these developments mean that the world of the book as we’ve known it is about to undergo a further transformation, even more radical than that which has characterised the industry in recent decades, perhaps even leading to the eclipse of the printed book as such?

Despite widespread speculation about the ‘end of the book’, we are still a long way from a world in which trade books are routinely read on screens rather than on the printed page. Although ebook sales have increased significantly in recent years, especially in the USA, they still account for only around 1% of the revenues of trade publishers – a tiny fraction. This is bound to increase as reading devices become more widely available but no-one knows exactly how significant it will eventually become.

Whatever happens, it seems likely that books will continue to play an important role in our cultural and public life for the foreseeable future. Books have been, and remain for many, a privileged form of communication, one in which the genius of the written word can be inscribed in an object that is at once a medium of expression, a means of communication and a form of art. For the telling of extended stories or the sustained interrogation of our ways of thinking and acting, the book has proven to be a most satisfying and resilient cultural form, and it is not likely to disappear soon. But how books will be produced and delivered, and where they will fit in the new symbolic and information environments that are emerging today, are questions to which there are, at present, no clear answers.

For more information, please contact the author Professor John Thompson (jbt1000@cam.ac.uk) at the Department of Sociology.

̽��ֱ��book publishing industry has gone through more change during the past few decades than in any comparable period in its 500-year history. Professor John Thompson examines this change and asks what impact it will have on the future of books.

Despite widespread speculation about the ‘end of the book’, we are still a long way from a world in which trade books are routinely read on screens rather than on the printed page.

SpecialKRB from Flickr

Browsing for books at ̽��ֱ��Strand

This work is licensed under a Creative Commons Licence. If you use this content on your site please link back to this page.

Yes