The college store market is reflective of higher education and publishing, the two mature industries which we intersect. As Stacy noted, “Resistance, denial, fear, withdrawal - we have it all. Our channel includes a high frequency of hostility to the reality of the shifting market, and to anyone who points out just how radical a shift is required by us to survive -- IF we can.” It reminds me of one of my current favorite quotes from Clay Shirky:
And so it is today. When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution. [...] They are demanding to be lied to. There are fwer and fewer people who can convincingly tell such a lie.We could just as easily replace "newspapers" with "bookstores" in the above quote and have it be just as relevent. Stacy remembered observing the deer-in-headlights looks in the room at a recent meeting of college stores when he said "it may be too late" for stores to make the changes required to survive. I had a similar reaction at another recent presentation where I thought some people in the room looked like they might need a stretcher by the time I finished. Particularly when I commented that in a NACS survey from earlier this year 3% of stores believed that digital would not impact their stores... EVER. I, of course, followed this by a remark that if one of those stores were in the room they should leave immediately because they cannot be saved. In that same survey nearly 31% of responding stores believed digital would not impact their sales for at least 4 years or more. I worry about that group's survival as well. Better perhaps to focus on the remaining two-thirds of the industry that is at least aware that their world is changing.
A topic that came up in our conversation about this point is the concept of asymmetrical competition. Asymmetrical competition is when your competitor refuses to compete in the traditional way, causing traditional organizations or industries to react to disruptive change. Frank Hecker has a nice paraphrasing of this concept which comes from the innovation theory literature (see also Clay Christensen’s Seeing What’s Next). He writes:
[A] classic disruptive scenario is when a market entrant introduces a disruptive innovation of some sort and incumbents are motivated to ignore the innovation, for whatever reason: For example, the innovation does not meet the needs of incumbents’ existing customers, or the incumbents’ cost structures or business models are such that they would be unlikely to make money in the initial market for the innovation. [In] this scenario the market entrant is protected by the shield of asymmetric motivation and has time to develop the sword of asymmetric skills that enables it to threaten and (in some cases) displace the incumbent.Wow, do we sound like those incumbents at all? In the case of the textbook market, the example might be where competitors start by making some of our fundamental products free. I agree with Stacy’s observation that stores “need to consider the primary shift they are driving toward being less about preventing channel collapse, and more about abandoning the channel By which I mean, it is more about management needing to abandon their existing thinking and business model, and adopt a new approach in a market that may not even exist in total yet, and in fact may not gel for the next few years.” Wayne Gretsky might have described this as “skating to where the puck will be, not where it is.” In innovation theory we would describe this as “pursuing future profit pools.” We need to focus on where the future business will be, not where today’s business is. That may require abandoning some of our traditional practices and foci in order to survive the change to our industry.
About a year or so ago, when asked if publishing would move from print to computer, Bill Gates replied that it will leapfrog the computer and go directly to mobile. Cloud computing facilitates this. It is important to see digital course materials within the context that all of higher ed (indeed all education) is transforming. Look at Wiley Plus Wiley Plus, and the new Houghton announcement of their Learning Village deal with the Detroit public schools. Houghton will be providing a computer-based teaching system it developed with Microsoft Corp. that will connect teachers, students, and administrators. It's a radical shift away from the classic textbook publishing model and represents an industry transformation, as technology supplants books. "The textbook is no longer the center of the educational universe,'' said Wendy Colby, a senior vice president at Houghton, which is based in Boston. Wait until we hit reverse site licensing, where a university press gives all of its content away for free because the new revenue stream is a partnership with a learning system that will incorporate their content into a delivery and custom commons with a percentage going to the up. Or who knows what else?
For stores today, we must take on as part of our education and marketing the issue of "Why Free?", which allows us, as Stacy puts it so eloquently, to raise the idea that "our free has to be better than their free." We are challenged to design new business models that abandon our traditional legacy infrastructure, even while that infrastructure continues to support the existing channel. The textbook manager of the future will be as much reference librarian, helping faculty and students find the right content for the course, as a course materials expert who knows what products are available in what formats and with which associated rights. In making this shift, along with others, the college store can continue to add value, stake a claim and build market share in the new or emerging digital course materials channel.
I know -- heavy thoughts for the middle of the week. These are questions and ideas we must think about and address as an industry if we do not want to end up like record stores (and perhaps newspapers) before us.