In the past I've received emails announcing the death of a friend or colleague, and I've received emails containing heartbreaking literary rejection, but the one that lobbed into my laptop last week truly knocked me sideways. First there was shock, then disbelief, then emptiness, before anger set in. I guess that echoes the stages of grief, doesn't it.

What did the email say? It said that one of my favourite bookshops, one of my favourite shops of all time, was closing its doors after nearly 30 years of trading.

For many Canberra people, the Electric Shadows Bookshop or "ESB" or "Lecky Shads", has been a bona fide institution.

For a couple of decades in the city it co-existed with the infamous but now defunct Electric Shadows Cinema. If you enjoyed the film, you could go next door and buy the book or screenplay or soundtrack, even late into the evening you could do this. ESB ran a highly regarded video rental library, and it was the only place in town that stocked genuinely obscure (and sometimes risque) titles.

ESB was also well-known for supporting community events, such as SpringLit, a popular annual gay and lesbian afternoon that celebrated literary luminaries such as Dorothy Porter, Andy Quan, Judy Horacek, and Christos Tsiolkas. Speaking of Tsiolkas, astute readers will remember that in the late 1990s the future author of The Slap could be found behind the Electric Shadows Bookshop counter closing a sale with that warm and generous smile of his.

When the cinema closed in 2006, ESB moved to a new location in Mort Street, Braddon, which at the time was full of car yards, Summernat types and people wobbling ecstatically out of Civic in the early hours of Sunday morning. The new version of ESB was smaller but funkier and it hung out next to the Cornucopia Bakery, another Canberra institution that's bitten the dust.

Despite the somewhat cramped conditions, the bookshop continued to support the ACT region with all manner of literary events. The staff members were always knowledgeable and eager to please, with more than a dash of quirky humour.

In short, to me, Electric Shadows Bookshop has been a constant reminder that the world is more interesting than I sometimes think it is. It has given my little life depth and context and meaning. It has given me hope.

But within days the shop will be gone.

Sadly this is a tale that's being played out across Australia, indeed throughout most of the developed world. Industry insiders will tell you that during the past 10 years the book trade has been hit by three body blows: the Global Financial Crisis, the advent of the e-reader, and the behemoth that is Amazon.

But other issues are involved.

The internet as a whole has become an accessible source of information. Want to know more about Vanuatu? Just type a word into Google and, hey presto, you have more information than you could possibly digest in a lifetime.

Then there are the issues of urban change, gentrification and ever-increasing rents, which is very relevant to the Electric Shadows Bookshop situation. In this economic and social climate, bookshops which at best operate on the slimmest of profit margins, simply cannot afford the rents that can be charged once an industrial area is turned into a playground for young men who look like Ned Kelly and young women with cane baskets on their pushbikes.

It's pointless to say that cities shouldn't evolve and it'd be foolish to argue that market forces shouldn't be allowed to play a role in how cities develop. If there's a demand for apartments that look like oversized microwave ovens and cafes that serve cappuccinos in glass jars then, quite frankly, that's commerce.

If you can read on your iPad an interview with your favourite novelist, click on a link to buy the book, and have the book appear electronically within seconds or turn up physically on your doorstep within days, then that's just the way it is. And it's probably a good thing too, in terms of building a global literary community.

It's not all doom and gloom for bookshops.

Publishers will tell you that e-book sales have reached a plateau and print book sales are on the rise. Reports are coming in that young folk born since 2000 prefer to read on paper. And it seems that in cities like Sydney and Melbourne, wherever a bookshop closes, another opens.

However, could it be that in the ACT bookshops will only end up existing in cultural institutions and universities? This despite the fact that our region is one of the most educated, literate, and cultural engaged in the nation?

It would be a sad state of affairs if one day there isn't a bookshop in the Belconnen Mall or there isn't a single book to be found in Braddon except for a dog-eared Penguin Classic edition of Brave New World that's been strategically placed by an interior designer.

In all of this there are three things that could be lost.

First is the importance of real places that are filled with life and provide opportunities for surprise and exploration – go out for brunch, come home with a Cadwallader, a Musa, and Geoff Page's latest poetry collection.

Second is human interaction: convenient as it is to order online and let's face it, internet shopping isn't going away, there is something about stepping out the front door, walking down a street, checking out the people, talking to shop-keepers, and having a meaningful person-to-person exchange.

The third is diversity – of commercial enterprise, of cultural experience, of information. Do we want to live in a world where there's only one media source, one supermarket chain and books are only available through a single online store based in the US (with all the data-mining that goes along with that)?

No doubt we don't.

More than ever booksellers will need to be innovative, imaginative and take a few gambles in their bid to come up with sustainable business models if they are going to survive this ongoing turbulence. But we also need to be consumers who are activists – energetically supporting inherently worthwhile enterprises such as bookshops. And we also need nuanced and sophisticated planning regulations that enable a wide variety of commercial expression, and we need developers who are committed to creating places that pulse with deep and wondrous life.

In the meantime, vale Electric Shadows Bookshop. Thanks for the hope.

Nigel Featherstone is the author of The Beach Volcano, opentopublic.com.au