The Book Industry Turned Topsy-Turvy (Again)
Customer segmentation strategy in the book industry hasn’t changed for decades, even while the rest of the industry has been up-ended. The US print book market grew 8% as measured by units in 2020, with approximately 751 million books sold. That’s approximately 2.3 print books per US person. Ebook revenues also grew in 2020, at 17% for the first 10 months of 2020.
Age-Based Customer Segmentation Strategy in Print Book Industry
Growth and size vary considerably according to age-based customer segmentation used in the industry: adult, young adult and juvenile.
For instance, year-over-year, the small young adult nonfiction segment (1% of market) grew faster than all other major segments at 38%. For both juveniles and young adults, nonfiction grew faster than fiction, in part driven by school closings. Among adults, nonfiction grew 5%, with strength in political books and books tied to social justice offsetting declines in travel books.
Book Shopping and Discovery are Changing
The age-based customer segmentation categories provide a broad starting point, along with the specific sub category, e.g., adult nonfiction (major category), travel (sub category). This approach has seemingly served the industry well for many years. Physical bookstores and libraries are typically organized in these sections.
With the impact of COVID-19 and store closures, consumer shopping behavior changed abruptly for books. According to Wired, “leisurely in-person browsing is on hiatus indefinitely.”
As one independent bookseller put it,
“We’ve switched from an events-and-browsing bookstore to a miniature mail order warehouse.”
New Approaches to Customer Segmentation Strategy are Needed for Books
Industry expert and Running Wild Press Editor Lisa Kastner notes how deeper understanding of customer segmentation strategies are needed as traditional approaches are no longer as effective.
“The old school profile of the optimal book purchaser or fan based on age range won’t cut it. This profile completely missed customer segments for categories such as fiction or memoir who may have been interested because the book was based in their hometown, or they had a similar background to the lead character. Some authors and publishers tend to think, ‘I like it, so the audience must be the same as me.’ That’s a mistake.
“What’s needed today is to spend time on a customer segmentation strategy that is tailored to the specific book. Questions like, where is the story based? What are the themes? What are the types of characters? For instance, are there LBGTQ characters? Are there people from lesser means? Are there characters suffering from PTSD? Then, marketing to organizations that would find the story engaging or beneficial, such as Veteran’s organizations, LGBTQ+ advocacy groups, and so on.
“How people are finding out about stories and what interests them versus the past is so dramatically different. It used to be that if your book was mentioned in USA Today or on Good Morning America, that was it, the book was a success. Today, this is not the case. We still perform the standard approach, including getting reviews and blurbs and sending out press releases to those who signed up and to libraries and independent booksellers, but we need to do more. We need to demonstrate an understanding of our audience, otherwise they will ignore us.
“New customer segmentation approaches that go deeper than mass market are needed. We’re investing in a team that’s focused on operationalizing the deeper audience segmentation outreach to ensure our fans know that they are heard.”
Customer Segmentation Strategy for Books can also Consider the Heavy Purchaser
From years of work across categories at Insight to Action and The Cambridge Group, I expect that books have a strong super heavy user or purchaser segment of consumers. That is, some 10-30% of consumers account for 60-80% of the spending in the category. And, if books are like other categories, there will be heavy users who buy both print and eBooks for different need states and occasions. Focusing on these heavy readers who value books sufficiently to buy the print and online editions will likely yield additional profitable growth.
Some consumers are purchasing books out of perceived necessity, e.g., parents of school-age children purchasing nonfiction for their children. Others are choosing books as their preferred form of entertainment ahead of electronic options like online gaming or movie, TV, or other program viewing.
The book industry provides a good example of how deeper segmentation approaches are needed to identify and reach the relevant customer audiences. Traditional historical practices are no longer sufficient.