By Porter Anderson, Editor-in-Chief |
McLean: ‘The Market Is Definitely in a Restart’In an interview with Publishing Perspectives, NPD books industry analyst Kristen McLean says with a wide-eyed laugh that being a data analyst during a worldwide viral pandemic turns out to be “like watching an IMAX movie from the front row.”
But if she pushes back in that seat as far as possible and gets the longest view she can, what McLean sees is the American publishing industry so far weathering the storm well.
Cautious optimism has been showing up in the weekly dispatches that she and the NPD Group are supplying to news outlets during the course of the contagion’s presence in the market. And the top-line observation she stresses is that nothing structural is wrong with the book market’s consumer base: nothing has qualitatively shifted in how the trade’s audience thinks of books and reading.
“Demand has stayed up there,” she says. “As far as actual units-out-the-door, people figured out how to get what they needed. And so I don’t really think that demand is a factor.” And this should sound good to most players in the book business.
“The book market historically is very resilient,” McLean says. In the financial crisis that was triggered in 2008, “The book industry’s worst year was 2009, and it was down four points.”
But McLean’s message is far from an all-clear, and it’s important to point out, she says, that “how this looks depends on where you sit in the market.”
Contrary to what street revelers in Daytona seem to think, COVID-19 is in no way done with us. And what McLean is saying is that the last two months have given the American market a chance to “look for the points of pain we’ve experienced. For certain sectors like Christian books, like comic books”–both of which had major distribution problems causing shipping disruptions from which their business hasn’t recovered.
“How can we engineer ourselves to be better prepared in the future? The indie bookstores fought tooth and nail, taking orders online, doing curbside, shipping, delivering, to keep their businesses going.”Kristen McLean, NPD Group
Nevertheless, McLean’s newest report that followed Monday’s (May 25) Memorial Day holiday, she reports on the week ending May 16, saying, “While sales were down from the last week, they were up 8 percent against the same week last year, and the market shaved another 0.4 percent” off its negative year-to-date trend. Several points:
That year-to-date negative is 1.1 percent, as McLean and NPD see it
Forty-nine of the top 99 DMAs (designated market areas) in which NPD operates its tracking “are in flat to positive territory this week, up from 26 last week” ending May 9, “and 58 DMAs are beating that total market year-to-date figure
Many DMAs hardest hit by the contagion’s disruptions in the States “have been gaining a bit every week,” she says, “including New York, which added 0.4 percent to its year-to-date performance, after adding 0.3 percent” in the previous week.
The San Francisco metro area “was up 3.8 percent this week, shaving 0.7 percent off its negative year-to-date figure.”
All caveats flying, McLean’s message is something publishers and all their associated businesses want to hear: “The market is definitely in a restart.”
Kayyem: ‘Never Go Back to the Office’
Sharp executives, McLean agrees, are likely at this point to be studying real estate costs and the capabilities of a workforce dispatched to home offices and kitchen tables because it’s unsafe to bring the staff into the center. Here at Publishing Perspectives, we’ve called this the Coronavirus Worklife in our series of commentary from an international workforce displaced.
In the American publishing industry’s New York City hub, so ferociously slammed by the virus, publishing is hardly the only industry with leadership talking about overhead and what chance there may be to formalize a work-from-home telecommuting strategy for segments of the staff that management once thought needed to inhabit those pricey square feet of Manhattan cubicles.
Juliette Kayyem—the former assistant secretary of Homeland Security and author of Security Mom: An Unclassified Guide to Protecting Our Homeland and Your Home (Simon & Schuster, 2017)—on May 19 published “Never Go Back to the Office” at The Atlantic.
“The coronavirus has accelerated trends that were already under way,” Kayyem writes.
“Companies were looking for ways to cut their spending on office space; many workers were eager to telecommute more often. Even assuming that remote work does put a dent in productivity or employee unity, bringing employees back is a high price to pay for corporate culture.”
And in a follow-up to our conversation, McLean lists several areas in which publishing players may want to focus attention, based on what became evident during the worst of the pandemic’s impact this spring. They include:
- How does publishing look in a future without in-person events?—something many trade shows and book fairs are working on, including this week’s digital programming from BookExpo
- Where, if anywhere, did your own spot in the supply chain either work well or go soft?
- Is it possible that local bookstores could benefit first, if commercial real estate costs come down—partly because companies cut back on office space?
- Will growth in ebook sales and reading related to COVID-19 concerns be sustained as a fundamental shift in consumer behavior?
McLean: ‘The Acute COVID Period’ and What’s Ahead
One of the most compelling factors in the US recovery has to do, of course, with a dazzling but maddening interplay of consumer sentiment and political will. As McLean points out, no president or governor is going to tell Americans, “You can come out now” and turn out the workforce on demand. As Andrew Restuccia is writing at the Wall Street Journal, Donald Trump’s administration is considering a back-to-work bonus, “cash incentives to encourage unemployed Americans to return to work, according to a top economic adviser,” Larry Kudlow, “as the White House looks to revive the economy.”
As McLean stresses, “People are going to establish their own level of comfort” with what may be a long wait for a vaccine. “And they’re not 100-percent there yet. And, ironically, the efforts our ‘fearless leaders’ are making are actually making it worse.” The American population, McLean agrees with polling data and policy analysts, “don’t trust what they’re being told. And this is actually going to make it take longer” to regain traction for an economy in search of its consumer base.
McLean now identifies the week ending March 28 as the bottom, the nadir of the “acute COVID period,” as she puts it, when “we were at 10.2 million units, down from an average of about 12.5 million units. So we were off a couple of million units.” The seasonally common drop right after Easter in April played, through, “and the week ending April 18, we were also down to 10 million, but that was the [usual] Easter drop-off.
“Our average up until March 1 was 12.4 million units per week. Our lowest point was 10 million units. So let’s call it 2.5 million units” in terms of the weekly average’s deepest drop.
The economy could tumble into a W-shaped recovery, she says, and this seems especially critical considering the stark concerns that public health officials are displaying after reports of reckless partying in some parts of the country during the Memorial Day weekend. As states reopen without hitting their marks for caseload and death-toll reductions, many parts of the US market could see serious viral outbreaks after the period of usually asymptomatic incubation.
What’s more, there are real supply-chain questions ahead, not least among them serious concerns about how independent bookstores and comic book retailers will fare, companies for which the Book Industry Charitable Foundation (Binc) is working diligently to raise funds in its #SaveIndieBookstores campaign.
What’s more, there’s a profound question awaiting in regards to discretionary spending. The staggering unemployment picture in the States, only partly masked by the provision of a stimulus check from earlier congressional action, may mean that the “second valley” of that W-shaped recovery could be remarkably tough.
And now is that time, McLean emphasizes, for publishing’s leadership to look “at the health of different parts of the book market chain” and assess where work is needed.
For example, she says, “Printers struggled. What happens to shipping between China and the United States” when so much printing of American books is typically done in Asia? “Where else can we print? Those structural issues can possibly drag us down a bit,” she says.
“That ‘acute COVID period’ showed us things about our business. How can we engineer ourselves to be better prepared in the future? The indie bookstores fought tooth and nail, taking orders online, doing curbside, shipping, delivering, to keep their businesses going. Bookshop.org came along at the right time” to help support stores through its focus on patronage of local bookshops.
“What were the points of pain? How could we improve? How can we fix the problems we’ve just experienced, and how can we look for the problems that might be in front of us? How can we think innovatively to come up with alternatives” in a crisis?
McLean: ‘Looking Ahead’
While “I’m not expecting the 100-foot drop,” McLean says, “Looking ahead,” McLean says, to “one of the challenges in front of us, it’s going to be so hard to bring a new author out in the market” in the latter part of this year.
If anything, what the American publishing industry now will be doing is akin to the work of Cayce Pollard in William Gibson’s Pattern Recognition (Penguin Random House, 2004), a book peculiarly widely read and enjoyed by book-industry folks.
“It’s going to be so hard to get a new book or a new author into the marketplace in the latter half of the year because of the amount of content that’s been pushed back.”Kristen McLean, NPD Group
In a newly fluid social and policy construct, the industry needs to sharpen its ability to cast an eye forward a few months, both for predictable problems and for where the boggled heads of a disoriented consumer base will be.
An example of the kind of challenges it’s good to have your marketing thing of now? “It’s going to be so hard to get a new book or a new author into the marketplace,” McLean says, “in the latter half of the year because of the amount of content that’s been pushed back, and the fact that you can’t do traditional author-appearance work.”
The kind of online author-meetup that Madrid’s Javier Castillo and Penguin Random House Grupo Editorial initiated just as Spain was locking down will mean even more, and trying to get something like Castillo’s 60,000-person turnout for such a moment will be the stuff of marketing teams’ dreams.
And an example of “pattern recognition” to get ahead of what’s on the American consumer’s mind? Travel books.
Having declined 40 percent so far this year, McLean and the NPD Group says, travel books now have seen four weeks of growth through May 16, apparently indicating that “many readers are looking ahead to summer vacations and travel plans.”
Domestic travel looks strongest, the report says, up 77 percent in the most recent four-week period over the prior 28 days, with books on the western United States leading, at 108-percent growth.
McLean does point out that she sees indicators here that domestic travel is being favored over international trips not least because the coronavirus COVID-19 pandemic is keeping people from flying. “Data from other practice areas at NPD,” McLean says, “also shows a rise in sales for outdoor toys and equipment, grills and outdoor cooking gear. It certainly seems to be shaping up to be a summer of road trips and time spent in the great outdoors.”
And along with travel books, titles about other outdoor subjects have seen growth in the same four-week period, including hiking books at 131 percent, running and jogging books at 113 percent, and unit sales of outdoor skills books growing 12 percent.
Sensing the vibes, catching the clues, may be the key for publishers working to prioritize releases into that difficult, crowded market of the autumn.
What hasn’t changed? “The need for discovery. I do believe there are opportunities to innovate,” Kristen McLean. In the digital space, “There are whole new ways of engaging with artists.” And now is the time to develop them.
More from Publishing Perspectives on the United States market is here, more from us on Kristen McLean and NPD is here, and more from us on the coronavirus COVID-19 pandemic and its impact on international book publishing is here and at the CORONAVIRUS tab at the top of each page of our site.