Ebook Buyers Are Loyal to Specific Retailers, Especially Kindle, iBooks and Nook, New Data Show

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

The walls are indeed high and hard to climb for readers living in the ebook retail walled gardens of Kindle, Nook and iBooks, according to new data from Codex Group, a New York-based book industry research firm.

According to a November survey of 2,042 ebook buyers, 86% buy ebooks from only one retailer, most likely Kindle, iBooks and Nook, Codex Group president Peter Hildick-Smith told me.

What this data point implies is that the vast majority of ebook retail activity in the U.S. is happening in so-called “walled gardens” — digital content ecosystems run by companies like Amazon and Apple that keep consumers searching, discovering, buying and consuming all or most of their ebooks, songs and movies in one place. If a reader has an Amazon account and has bought Kindle ebooks, they are very likely to continue doing just that.

For the big retailers with significant market share in the U.S., this is good news: Their current customers are mostly loyal.

The news isn’t so good for the smaller ebook retail operations run by Sony, Google, Kobo, Samsung and others. The majority of these retailers’ sales happened within the 14% of ebook buyers who bought from more than one retailer — and, even worse news for that group, 32% of unit sales among that group were Kindle ebooks.

Translation: Customers of those smaller retailers were much more likely to go elsewhere to buy more ebooks and the most likely place for them to go was Amazon.

The implications of this data are fairly clear:

1. The big ebook retailers that have created fairly seamless reading, buying and storing experiences have loyal customers who will continue to buy ebooks from them. So, these retailers probably don’t have to do all that much to keep these customers save for continue to do what they’ve been doing.

2. The smaller ebook retailers have an uphill battle to fight when it comes to not only attracting new readers but keeping old ones. And their biggest foe in that fight is Amazon, which is the most successful ebook retailer when it comes to luring rivals’ customers — likely through price promotions, exclusive content and ubiquity.

For the big retailers, I think the recommendation is very clear — and perhaps counter to trends we’ve recently witnessed: It pays to offer price promotions in select efforts to attract new customers but perhaps not to cater to old ones; that the price wars we’ve witnessed in the ebook world likely haven’t done very much for the retailers engaging in them aside from help them lose a lot of money. Due to high customer loyalty, a returning reader is very likely to buy an ebook offered by Kindle, say, almost no matter the price — so why sell to them below cost?

The trick for these retailers over the next year or two will be to balance income-generating sales to loyal customers and money-losing efforts to attract new customers.

For the small retailers, the picture is fairly bleak. It’s clear, though, that they need to think of ways to keep their small customer bases more loyal, perhaps through better sales and marketing of dedicated e-reading devices or promotions that reward loyalty.

Related: Peter Hildick-Smith of Codex Group presented cutting edge consumer data at Digital Book World 2014. Make sure to be there next year when more of the latest data and insights are presented at DBW 2015. Register now for the lowest possible prices!

16 thoughts on “Ebook Buyers Are Loyal to Specific Retailers, Especially Kindle, iBooks and Nook, New Data Show

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  3. Joe Wikert

    The results probably aren’t surprising to anyone in the book publishing industry but I think it’s also worth considering what this means longer-term. The more someone buys from one retailer, the larger their library becomes on that platform. The larger their library becomes the less likely they are to shift to another retailer. I know…I’ve done it. I started with Kindle, switched to Nook and then returned to Kindle. I’m pretty sure I’ll never do it again as I hate having my library spread across two different services. It’s like having some of your music only on vinyl and other music only on cassette tapes, with no (legal) way of bringing the two together.

    The more someone’s library grows with Amazon, for example, the less likely they’ll be to ever want to buy from someone else. So the question retailers not named Amazon have to answer is this: Why would consumers want to buy from me and not Amazon? Every year that question becomes more difficult for all the other retailers to answer, and the walls are indeed getting higher as consumer digital libraries grow.

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  7. BananaTricky

    I think the biggest issue is that for an unsophisticated user it is difficult to find books in the right format elsewhere. I have bought books in various formats from various sites and converted them to AZW/MOBI format using Calibre to read on my kindle. However, my 75 year old mother has a Nook (in the UK) and finds it difficult to find retailers selling e-books in the requisite format. Obviously I can McGuyver books from other formats for her but it is time-consuming and confuses her.

    What we really need is an e-book format that can be read on any reader then retailers would only need to sell one format, or in the case of Amazon et al, their own format and a “one-size-fits-all” format.

    I don’t buy books from i-tunes, despite having an iphone and ipad because I can’t read them on my kindle – wand that is my preferred reader.

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  9. John F. Harnish

    A year prior to my premature retirement late in 2011 from a mid-size publishing company, I purchased an iPad because the device could display ebooks in various formats. Displaying different ebook formats was important because my former employer was finally launching a very belated ebook conversion and publishing program for our authors. Unfortunately their ill-fated ebook launch was still floundering when I left the company so I never used the iPad to display our authors’ ebooks.

    I have used my iPad to download a couple hundred ebooks—96% were purchased from Amazon, the rest were PDFs sent to me as advance reading copies from authors, and two Nook ebooks sent to me as gifts. Amazon has made it sooo damn easy to select and buy an ebook and the Kindle format always displays perfectly on my iPad.

    As the author of two dozen ebooks I don’t like the fact that the lesser ebook vendors pay royalties quarterly and require an ISBN blessed by R.R. Bowker. Quarterly royalties are a carryover from publishers waiting for pbook returns to settle out from bookstores—Amazon and B&N pay royalties monthly. I fail to see the benefit in purchasing an ISBN for an ebook to be identified in the ebook vending systems of perhaps half-a-dozen smaller ebook sellers—Amazon and B&N assign unique identifiers to ebooks at no cost to the authors and those free numbers work just fine. iBooks only accept uploads of ebook files from Apple computers—that’s a turnoff for lots of authors.

    Enjoy often… John

  10. Steve McIlree

    Although I am currently using a rooted NOOK as my reader, I purchase most of my ebooks from the Kindle store. That is because I like Amazon’s rather open storage facility, which allows me to purchase MOBI and PDF formatted ebooks directly from publishers and upload them to my Kindle library. I do have a fair number of titles in my NOOK library as well, but since Amazon started accepting uploads, I only purchase from B&N when their price is much better. The reason I have several NOOKs is they are good hardware at a great price which can very easily be turned into un-walled Android tablets.

  11. Theresa M. Moore

    You won’t find my ebooks on Amazon, Barnes & Noble, Kobo, or the rest; precisely because they maintain “walled gardens” of ebooks priced so low that the vendor supplier cannot make any profit on the deal. I sell a variety of formats direct from my own site. I don’t care that Amazon makes it “easy” to read any book. Amazon has many other things wrong with it that I won’t go into it here. The same with Nook and other ereaders. I sell my ebooks for reasonable prices, often less than half the price of my print format books. Yet, over the years I have learned that Amazon used to offer my books free without my permission, pigeonholed them deliberately and gave favor to the very publishers it abuses, and in other ways denied me the opportunity to earn from my work. Nook Press’s contract reads like something Darth Vader wrote, and more of these ereader sellers are doing the same thing. One-sided contracts are death to the average small publisher. I will continue to offer my ebooks on my own and stay independent, thank you very much.

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  13. jd

    86% buy ebooks from only one retailer

    Yes, they are stuck with the DRM their ereader supports OR they don´t want to bother with more than one tool to remove DRM.

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