Is this the natural outcome of having larger retailers?
In the era of small local book stores, the store owner had large discretion on what to stock. Different book stores would naturally stock different books and cater to different preferences. The customer would have options to discover new books, but would also have popular books sometimes "hidden" by the book sellers preference.
If every book reader is hooked into the same recommendations/search feed will they naturally move to reading the same books?
Yes, but more specifically, large retailers track the way books sell and order authors based on prior success. So if an author has a down book it can trigger a spiral where the big stores order less and less. Amazon isn't impacted by this in the same way because technically everything is on their shelves, but the B&Ns and the like of the world it does (and before they went under Borders as well).
On the other hand B&N had a lot more books. The small bookshop was typically filled with the same trash that I'd never read. (that is the definition of trash book: one the person making that claim would never read - those retailers stocked them because that is what most people read)
Small bookstores can be more driven by personal taste of someone, be it a book buyer if they have one or the staff. Like the way a lot of indie bookstores will have tagged books recommended by the staff in each section, sometimes the normal big names (Game of Thrones) but sometimes by far less big name authors they are passionate about.
It's the natural outcome of publishing being cheap and supply of aspiring authors being much higher than the demand for novels. The money which used to be concentrated in the hands of the few who could convince publishers to do business with them is now spread thin among many niche authors.
Further, every modern author is competing with every author who ever lived. I could read the science fiction you wrote last year or I could read Asimov, Herbert, Card, etc. and they're often cheaper and more socially relevant.
In the era of small local book stores, the store owner had large discretion on what to stock. Different book stores would naturally stock different books and cater to different preferences. The customer would have options to discover new books, but would also have popular books sometimes "hidden" by the book sellers preference.
If every book reader is hooked into the same recommendations/search feed will they naturally move to reading the same books?