' cachet lies in its cavernous City of Books.

The nearly 40-year-old retailer, a tourist destination that requires a map for many to navigate, is defined by its 68,000 square feet of new, used and rare books. Indeed, Powell's and other independent bookstores have flourished for years thanks to their deep collections, comfy chairs, hot coffee and clerks who can almost read book hunters' minds and lead them to sought-after works.

That may not be enough anymore.

These days, bricks-and-mortar stores have become a bookseller's biggest liability.

It's simply easier and cheaper to buy books online. Shoppers often can track down titles, especially bestsellers by big-name authors, for as much as half off through electronic readers such as a Kindle, or at Amazon.com or Walmart.com. They can be shipped to your front door or downloaded almost instantly on to an e-reader.

Perhaps, mused one industry expert, bookstores of the future will be showrooms, allowing shopper to thumb through pages and then download a selection.

By the numbers

2,700:

Independent bookstore companies listed as members of the American Booksellers Association a decade ago

3,200:

Stores those companies operated

1,400:

Independent bookstore companies listed as members of the trade group today

1,700:

Stores those companies operate

200:

Stores that Borders,which filed for Chapt. 11 protection this week, plans to close starting Saturday

136:

Additional stores Borders may have to close.

— American Booksellers Assoc. and Borders Group, Inc.

"The Powell's model that has been so successful is really being challenged by new competitors, new technology and new shopping habits," said

, a retail marketing professor at Portland State University.

"They need to go back and rethink that business model," he said, "otherwise it'll just be ratcheting down and down -- unless there's some huge wave of nostalgia."

Last week, in

of 31 employees, Powell's Books pointed to a drop in fiscal 2010 sales alongside its largest decline in new-book sales. And though most downturns in its business typically last no more than two years, the company said, the current "unprecedented, rapidly changing nature of the book industry" is expected to challenge Powell's for years to come and further chip at its revenues.

Smaller, local chains aren't the only ones being dragged down.

Barnes & Noble, the nation's leading chain bookstore, shuttered its B. Dalton subsidiary and is expected to trim its store count as it swims deeper into the digital world this year. Borders, the second-largest national chain with about 640 locations, filed for Chapter 11 bankruptcy protection Wednesday and could lay off as many as 6,000 employees nationwide and

close more than 200 of its stores -- a move that industry analysts predict could help e-books even more.

Lost shelves, they say, won't come back. That gives consumers even more incentive to turn to computers, smartphones or e-readers for books -- abandoning the serendipity once enjoyed wandering a bookstore's aisles.

Digital readers are rewriting the future bookstores had imagined for themselves. Along with cheaper prices for new titles, handheld readers offer convenience, more room on home bookshelves and an experience that some readers prefer over actual pages.

At a recent conference of the nation's top book publishing houses, consensus was that within the next five years e-book sales will make up 50 percent of all books sales --

.

The International Digital Publishing Forum points to

in the United States from e-books was $119.7 million -- not counting trade, technical or textbooks -- in last year's third quarter, a figure that likely would double when retail sales are included. That compares with $46.5 million in wholesale e-book revenue during the same period of 2009, the trade group reports.

E-readers aren't just snarfing up the new-book pie; they're also nibbling away at technical book and textbook sales

According to the

, 95 percent of textbooks from The McGraw-Hill Co. are available digitally. Abilene Christian University in Texas has touted its goal to distribute readers to its students and last spring, its student newspaper, The Optimist, was published on an iPad.

E-books often are cheaper for students, but not always. An academic trade journal recently compared costs for a chemistry course, in which required reading ran $101 in the digital format and $175 for the hardback. "For $100," according to the report in Converge, students "would rather have something in their hands that was tangible."

But the independent bookstores' battle doesn't end on the technology front. They also face a more fundamental retail issue. Price.

Powell's, for instance, offered the hardcover edition of The New York Times' best-seller, "The Girl Who Kicked the Hornet's Nest" for $19.57 last week. The same book went for $11.88 at Walmart, $11.89 at Amazon.com -- or $9.99 for the Kindle version.

"Every industry experiences that race to the bottom, and the healthiest thing is to stay out of the way," said Emily Powell, president of Powell's Books Inc.,

adding that she understands some customers will continue to make decisions based on price.

"I'm not going to argue with them -- I have to be dollar-oriented too as a business person. But we can't sustain those losses, so we're not going to go there."

Along with the layoffs last week, she also instituted a pay freeze for managers and suspended the company's 401(k) match -- both measures could be temporary she said, but will last at least a year. Powell, who took over her father Michael Powell's company last summer, said she'll look to make up revenues by selling more used books and gifts.

"We can also get customers by offering service -- being the editor and curator and finding them the books they wouldn't have been able to find on Amazon and Google," she said. "It's not an easy job by any means, but we can play a role there."

Although Powell recoils at the idea of stores as showrooms, she agrees Powell's must do more to weave the "digital experience" into stores. She envisions more technology to link readers with the books they want or to suggest others.

"For years, we were used to dealing with ourselves -- other book stores as competitors -- adding stores or finding new ways of vending the same product," Powell said. "Now our market is being controlled by Google, Amazon -- businesses with very different models."

Will Peters, manager and buyer for

in Southwest Portland, said he's also had to acknowledge at times that he just can't compete in certain areas, such as New York Times bestsellers.

"We have seen an increasing decline (in sales) over the years there. It started with competition from chains, then continued on to every different evolution, from big boxes to e-books," he said. "The biggest challenge now -- whether you're an independent or a chain -- is getting people into the physical stores."

Peters aims to mold his store into a "cultural institution," where customers will exchange ideas and information, enjoy book groups or attend readings and talks. He says they try to listen more for what customers want and respond with great service.

The New York-based booksellers group points to the technological revolution that shifted music purchases away from full albums and physical music stores to single songs and Apple's iTunes. That could be the future for booksellers,

.

And it's not just the evil Web producing the competition for bookstores. Just this week, the Multnomah County Library

to members and has been growing its

. The number of e-books checked out at the library grew by 47 percent between fiscal year 2010 and 2009.

"While there is no guarantee that digital content will have the impact that some are predicting, and while we should not let the issue derail us from other important work we must do," Vlahos wrote, "it is clear that this is something that requires serious study and attention now."

"And remember, the reason 'The Hitchhiker's Guide to the Galaxy' was so successful were the two words in giant letters printed on the cover:

"DON'T PANIC"

--