Tech, Autos, & Gear in Layman's Terms Since 2006

313

July 7, 2010 • eBooks, Editorials

Is Borders Destined For Failure?

Oh Borders. I don’t want to wish failure on any entity, especially a company that taught me a great deal, but sadly, the Borders eBook strategy is going to fail. Spectacularly. I just don’t see how they’ll overcome the Amazon/B&N/Apple juggernauts with such scattered, messy, and honestly lackluster set of offerings.

Head over to Borders’ site, and check out their ebook readers page. Be sure to look at their ebook comparison chart. In case Borders caught on to how bad it is and has removed it, here’s a screenshot:

Hint to Borders-If your “comparison chart” illustrates how much better spec’d your competitors devices are to yours, you might want to tweak it a bit — or not show it at all! I honestly think whoever is responsible for that chart needs to be smacked for the inclusion of the WiFi nook alone…why even list the WiFi nook price as $149, really highlighting how unimpressive the Kobo Reader is on paper for the same price? Why not list the $199 3G nook price at least? It’s part of the eternal mystery that is Borders…just look at a few of their issues throughout the years:

Borders can’t decide…do they want to be Barnes and Noble or beat Barnes and Noble?

Borders used to pride themselves on being non-corporate. Employees had dyed hair, piercings, band t-shirts, and could set their own displays of favorite books. Back then, it was about being a bookstore.

Meanwhile, Barnes and Noble is many things, but generally “laid back and counterculture” isn’t one of them. B&N is the epitome of a corporate bookstore. This isn’t a bad thing at all, it’s just a fact. They sell books, and they sell them well (if you’re shopping in a brick and mortar bookstore). And while the strategy may not last forever, B&N successfully convinced quite a few consumers to pay $25 for a 10% discount!

Borders has tried to compete with B&N, but they just seem to miss the boat repeatedly. Look at “Borders Rewards” as a good starting point. The original iteration of Borders Rewards was so complicated customers were turning it down left and right. Trust me, I was one of the ones trying to offer it! People were trained by B&N to expect an ongoing discount, not “Well, no discount today, but sometimes we have coupons, but only if you have the card, and by the way we’ll give you ‘Holiday bucks’ back between November 1 and December 31, plus you can have 10% off bestsellers sometimes on alternate Tuesdays. Would you like a coupon for a bag of coffee from the café?”

To buy or to outsource…that is the question.

Borders also has an uncanny knack for never knowing when it’s better to license and when it’s better to keep something in-house. For years, Borders operated their own personal brand of cafés, taking on both the risk and the costs. However, Borders is a bookstore, not a restaurant. The cafés were a mess that bled money, and finally, Borders wised up and struck a licensing deal where Seattle’s Best Coffee rebranded the cafés. Yes, the day-to-day operations are still on Borders, but it meant that like B&N Borders wasn’t as responsible for planning menus, recipes, etc. And it means we’ll never again be subjected to the horror of someone in Ann Arbor pushing all stores to market espresso and Coke as a summer drink.

Then there’s the borders.com/bordersstores.com/borders.com issues. For many years Borders.com was run by Amazon.com. Talk about letting the wolf into the henhouse…This caused a great deal of confusion, since Borders.com was essentially a separate company entirely from Borders (which had its own brick and mortar store presence as bordersstores.com). Ironically, at one point during my Borders tenure, IT actually removed our ability to access Borders.com. We couldn’t even look up our “own” website at work. They have since brought the website back in-house, but 10+ years under Amazon can’t have been beneficial.

Finally, there’s Paperchase. Oh dear lord, Paperchase. Possibly the worst decision in the history of forever. Borders redid every store they could with a “Paperchase” section, apparently believing if customers loved greeting cards, they’d REALLY love greeting cards and $25 cardboard boxes! Also, colored staples and paper clips. If you’re wondering why Borders felt that not only was Paperchase important, it was important enough that Borders should own them outright. Because when you’re a struggling bookstore, there’s nothing better than taking money and floor space from your main attraction (books) to sell overpriced crap.

And now, when everyone else is focused on owning their content, Borders is importing theirs from a third-party. From everything I’ve seen of the ebook market, that doesn’t seem like a good idea, but we’ll have to see…

This isn’t the company they used to be.
I feel sort of terrible for slamming Borders over all the changes they’ve been through. In fact, when I was a manager, my biggest peeve was hearing repeatedly about how “Well, when I started at Borders we did ____ …” At the same time, there are huge issues going on at this company that aren’t going to be solved through a partnership with Kobo.

Their ebook strategy so far is awful. Content is king, and while they have some content, none of their devices make it easy to get to new books without a computer. Set aside the fact that it’s relatively easy to load books. Consumers are being trained to expect wireless downloads of books and newspapers. The Kindle started the trend, and the nook runs with it further, with daily updates from B&N sent to your nook. Meanwhile, your Borders Kobo Reader…has Bluetooth? For a potential future sync option, maybe, if you’re lucky. But you still won’t be able to buy books on it, and it’s lacking in many bells and whistles the competition has for the same price. It’s not enough to sell ebooks these days, they need to sell an ecosystem. Selling a handful of unimpressive devices, with vague promises for more in the future, aren’t going to cut it anymore.

Then again, I shouldn’t be surprised anymore. This is the company that wanted to fire good booksellers, who knew books cold, over low Borders Rewards cards signups. This is the company that has churned through four CEOs in four years. And this is the company that suggested “just put a display over it” when the local building inspector threatened to shut my store down over a major structural issue. Borders stopped being a laid-back, local bookstore years ago. The problem is that they can’t seem to figure out what they are instead, and that’s both sad and potentially deadly.

For more references on many things I mentioned here, the Borders entry on Wikipedia is a good start. Please remember that much of this post is my own personal opinion, based on my own experiences and views on the bookstore and ebook markets.

14 Responses to " Is Borders Destined For Failure? "

  1. awesome post by carly @questionfear! RT @GearDiarySite: Is Borders Destined For Failure? http://goo.gl/fb/whdPW

  2. RT @geardiary: awesome post by carly @questionfear! RT @GearDiarySite: Is Borders Destined For Failure? http://goo.gl/fb/whdPW

  3. Is Borders Destined For Failure? #gadgets http://bit.ly/bkskXo

  4. Wong Shi Guo says:

    RT @gadgetsearch: Is Borders Destined For Failure? http://goo.gl/fb/eDtC8 http://j.mp/findmore

  5. Dan says:

    RT @gadgetfreaks: Is Borders Destined For Failure? #gadgets http://bit.ly/bkskXo

  6. Heatwave316 says:

    Great article!!! I am a fan of Borders. The one where I live is in a college town, so it still has that laid back attitude that I enjoy over the cold corperate feel of B&N. I agree their strategy is just garbage. They waited forever to get into ebooks, and when they do, its sort of halfway. They should steal some exec from B&N or Amazon, make them CEO, and hopefully they can fix things.

    • Heatwave316 says:

      Also, I refuse to pay the $25 to B&N for their discounts. Everyone in the world has free rewards…that’s why I don’t shop there. Its the principle of the thing.

      • Carly Z says:

        Thanks! And I agree…I forgot to point out that two of their 4 CEOs were a grocer and a clothing guy. Books are different, and no one there seems to remember how to sell them. The worst part is the home office once was staffed by booksellers who worked their way up the ladder, but I think many of those people have left.

        And you summed up exactly why I can’t pay for a B&N membership either. The math doesn’t hold up. You need to spend $250 to break even on a B&N membership! (Why Borders didn’t spackle every inch of their stores with that point when Borders Rewards was rolled out, we’ll never know…)

        Hope your college town Borders stays laid back! My first two Borders that I worked in were both more chill…of course, they’ve since both been closed by the company. 🙁

  7. […] BlackBerry, iPhone Discussion For anyone who's interested, I did a pre-postmortem on Borders: Is Borders Destined for Failure? __________________ "Give them nothing! But take from them everything!" Gear […]

  8. questionfear says:

    RT @GearDiarySite: Is Borders Destined For Failure? http://goo.gl/fb/whdPW

Leave a Reply