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PREAMBLE: THINKING DIGITAL
THE DIGITAL REVOLUTION is here, and no industry is immune from its impact. The good news: all companies – big or small – can benefit. German booksellers have grasped their opportunity against a seemingly unassailable opponent.
For 550 years, everything was fine: Ever since Johannes Gutenberg founded printing with movable letters in 1450, the retail book industry largely remained unchanged. The print shop produced the books and delivered them to the store; customers visited the store, browsed through the selection, and bought their reading material. With the dawn of the new millennium, however, a new upstart turned all the rules upside down. It wasn’t enough that the online retailer Amazon grew to become the largest bookseller around the world; with its Kindle device, it introduced a reader for electronic books that quickly became popular.
Pure fear gripped booksellers and the management of big bookstore chains throughout the world. They were faced with a disruptive technology and revolutionary change that was upending the old business model. Digitization had reached their industry, and if they weren’t to be ejected from the market like photography specialist Kodak years earlier, or like mail-order catalog retailers, as well as several travel agencies and newspapers, then something had to be done. Large bookstore chains like Borders in the United States and Waterstones in England had already fallen victim to the Amazon infiltration: they ignored the threat for too long, and then reacted too slowly and halfheartedly.
But it was a crisis with a happy ending for German booksellers. Faced with the pressure of rapid change, the bookstore chains Thalia with Michael Busch, Hugendubel with Maximilian Hugendubel, and Weltbild with Carel Halff, as well as the book clubs of media giant Bertelsmann with Niklas Darijtschuk, had a meeting. According to coinitiator Michael Busch, CEO of Thalia: “We needed to establish strong marketing power in the German-speaking area.” And since Thalia as well as Hugendubel and Weltbild had been unable to successfully market their own electronic readers in previous attempts, the book retailers now sought the services of Deutsche Telekom as a technology partner. “We wanted to build a value chain in which all partners were playing at Champions League level,” according to Busch. Together, they developed the Tolino e-reader as a rival to Amazon’s Kindle, created a Tolino app for mobile devices, and invested in an Internet campaign to market the electronic offering.
