06/15/2011 02:34 pm ET Updated Aug 15, 2011

Technology and the Independent Bookstore

Why (and how) the ABA needs to rethink its approach

No, I am not talking about the American Bar Association. I'm talking about a lesser-known organization that shares the same acronym ABA -- the American Booksellers Association. Since many HuffPo readers probably wouldn't know who the ABA is and why they should care, let me put them in context of the significant disruptions whipping through the book industry right now.

Who is the ABA and why should you care?

The ABA is a trade association with roughly 1,500 member bookstores in the U.S. As a trade association it does what other trade associations do i.e. advocacy, organizes member gatherings, etc. But it also plays a unique role unrelated to being a trade association. It runs a fee-for-service company called IndieCommerce that provides e-commerce solutions to bookstores. IndieCommerce develops and hosts the e-commerce solution that powers more than 200 bookstores including Tattered Cover (Denver), Politics & Prose (Washington D.C.), Kepler's in the heart of Silicon Valley (Palo Alto) and Elliott Bay Books in Amazon's back yard (Seattle).

Back in the 1990s this software development function ended up at the ABA because the thinking was that most bookstores would not have the resources to develop e-commerce capabilities on their own and they would be better off pooling their resources together. Since then the ABA and IndieCommerce has acted like a software and marketing company providing a service to member bookstores that many of us rely on to run our websites. With the transition to e-books this function has become even more important and now the ABA is also developing and managing new partnerships with emerging e-book players and technology providers including Google on behalf of its member bookstores. So, if you care about your favorite bookstore's future survival, you are going to care about how well the ABA is doing at this unusual but increasingly critical role its member bookstores are expecting it to play.

Why does the ABA needs to reinvent itself and rethink its approach to technology

It is no news to anyone that most independent booksellers have failed to take advantage of the internet. In the fifteen years since Jeff Bezos started Amazon, independent booksellers as a group have lost market share and influence, and thousands of bookstores have closed all around the country. In 1993, the ABA had approx. 4,700 member stores, more than 3x than today.

A very small number of independent bookstores, Powell's being the best known, have succeeded in taking advantage of the internet to grow their businesses. Powell's didn't rely on the ABA offered e-commerce solution and instead chose to develop it's own. Most bookstores actually lose money on their websites -- in other words, they pay more to host and maintain their website than they actually bring in from online sales.

And now, we are well into the second phase of internet enabled disruption with the rise of e-books. Personally, I have a love-hate relationship with e-books. On the one hand, they provide easy and convenient on-demand access to the written word on my iPad or iPhone. But on the other, they also offer create an existential crisis for independent bookstores who continue to depend on selling books to support their activities (note: many bookstores have added cafés, non-book merchandise and other revenue streams to make up for the slow but steady decline in their book revenue).

If things continue on the current path, you will see many more independent bookstores close in the next five years. This would be a real shame. As previously detailed in "Why All the Fuss About "Independent" Bookstores?" Independent bookstores matter:
1. They provide a cultural experience for readers.
2. They provide a nurturing environment for emerging writers.
3. They enable positive changes in local communities.
And, many publishers would say, that 4. they are still the best place for new discovery.

Bookstores help connect readers to books through interesting displays as well as with the recommendations they offer one-on-one.

While the ABA's staff and board consist of many well intentioned, well meaning, very nice people, the ABA has unfortunately failed to provide effective support and leadership in realizing a sustainable model for the future of independent bookselling. It's been over 10 years since ABA launched eCommerce; three years since the launch of Indiebound, and six months since the launch of the Google eBook partnership. All of these efforts took considerable resources of the ABA. And, unfortunately, none can be considered a real success.

The title of this article has a teaser, that I will offer my ideas on how the ABA needs to change. Stay tuned. In the meantime, I welcome your comments on how successful you think independent bookstores are online.