Borders - in the Washington Post 1/21/1011

[fjtorres]

Originally Posted by jbcohen

The one such shift that comes to mind is AT&T.

Minor point of fact: today's AT&T only shares the name with Classic Ma Bell.
(Just as the Modern Atari bears no great linkage to Nolan Bushnell's Atari)
The current AT&T is actually Cingular; they rebranded themselves with the AT&T name after they bought the last remnants of AT&T. But the other important chunks of Ma Bell (Bell Labs, their computer division, their manufacturing division) those are all gone.

Today's AT&T is barely more related to Ma Bell than the makers of RCA TVs to the Radio Corporation of America.

I'm not sure there is any industry-leading company outside the technology arena that *has* successfully adapted to and prospered after a paradigm-shifting technology disruption. (In the Tech arena, Apple, HP, Adobe, and Microsoft stand as examples of companies that that successfully navigated multiple tech disruptions and continued growing through it all by reinventing themselves; most recently, Apple.)

Borders, as the article points out, didn't really *try* to adapt; they just tried to "ride it out" as if they thought that online sales was just a fad. To be honest, that they've lasted this long is actually a bit surprising considering all the mistakes they've made in the last 16 years.
Much as I'd like to see them survive (they are the only book superstore anywhere near me these days) I'm not sure that even a bailout by the publishers can bring them back to relevance.

[fjtorres]

Originally Posted by ProfCrash

So Borders is a partial investor in the Kobo, as I understand it not a majority owner and possibly somewhere between 10-20%.

Correct.
Borders' approach to eBooks is, effectively, the same as it was to online sales; to outsource it. (Like, say the eyeglass stores or clinics at some WalMarts). This is what retailers do when faced with niches they have no desire to address directly; it's a form of spec-sheet marketing, really

The main difference between their deal with Kobo and their infamous deal with Amazon is that Kobo needed cash so they got to buy a chunk of equity in the outsourcing partner.

And the current Kobo reader sale?
I find it noticeable that the 4-day sale is running towards its 8th day and wouldn't be shocked to see it run 12 or 16 or whatever it takes to clear out their stock.

In other words: its a liquidation sale. Obviously they miscalculated how many Kobos they'd sell for the holiday season and are now desprerately trying to get rid of the excess inventory. Because, unlike their publishing partners, Kobo has a way to force payment for that inventory.

Edit: BTW, Books-A-Million is also outsourcing their ebook customers. To B&N. BAM seems to be a better-run operation than Borders but the move doesn't exactly inspire much confidence for their future growth.

[taming]

Originally Posted by SensualPoet

figuring out how to repackage books to a declining, but loyal, audience of consumers who will actually prefer to buy paper over electrons, and books where books are sold next books and not cough remedies.

Before Christmas, I shopped at our local Chapter's store, buying some books for various young nieces and nephews. I appreciated being able to buy toys that matched up with the books (Winnie the Pooh bear and Thomas the Train shtuff), nice wrapping paper, and cards to make a complete package. I think that is an example of the kind of buying need/desire that is not well met at other kinds of stores. I browsed the books while I was there, and while I did not buy any of them at the time, I would have had I been able to buy electronically through a WiFi connection or some sort of kiosk. If the store was able to offer that service and monetize it for themselves, I think this would be a fairly common experience.

From my POV, the issue is that I do this sort of thing only a few times of year. Most of the time I have no need or desire to go to the store for my reading needs. The last time I had been there was when an author did a reading--something else that is not likely to happen at WalMart.

[Anthem]

Originally Posted by boswd

Overall whenever a major storefront closes it's never good for your local economy.

boswd, what you say is true and explains my twinge of regret for awaiting the dissolution. On the other hand, Borders managing to pull out a squeaker and set the agenda for the future would be nice as well. I just want to see the future!

Your comments remind me of the fact that I am a displaced modern. A permanent alien in my society.

I don't know why you made me think of that.

[fjtorres]

Originally Posted by Anthem

boswd, what you say is true and explains my twinge of regret for awaiting the dissolution. On the other hand, Borders managing to pull out a squeaker and set the agenda for the future would be nice as well. I just want to see the future!

Your comments remind me of the fact that I am a displaced modern. A permanent alien in my society.

I don't know why you made me think of that.

You're hardly alone at feeling alienated at the current state of the world especially among the science/tech/future-focused crowd.
This isn't the world we signed up for.
And things will get worse before they get better but they *will* get better, probably 'round mid-decade; that's how long it took for things to turn around last time things got this gloomy in the 70's.

As for what made you think of it, I'd suggest that Borders' travails are actually a metaphor for the greater problems around us; too many people are still following a non-functional (business) model, thinking that sticking their head in the sand, and hoping things would get better on their own without them having to actually *do* anything. (A quip I saw a while back: "Hope is sitting around doing nothing, waiting for someone else to solve your problems for you." Geoff Johns, in BLACKEST NIGHT.)

As Borders is now proving, doing nothing about a problem just because you don't know what to do about it doesn't make the problem goes away. It only gets worse.

Ignoring online book sales for a decade was no smarter than outsourcing them to their main competitor. And outsourcing the main growth area in book retailing to a third party, even if they own a sliver of that third party, isn't going to do much to address the fact that their overhead is just killing them. The simple harsh reality is their facilities simply need a higher sales volume than most, if any, of their stores can possibly generate under any realistic conditions. As the article clearly documents Borders' (and B&N's) problems have long been obvious yet they have done nothing significant to address them. It has all been doodling on the margins, squeezing the workforce, toying with triffles.

Some problems need major surgery instead of bandaids and one can simultaneously feel for the people at risk within the organization who are bound to suffer for the stupity of their leaders and at the same time despise the idiots who ensured an unhappy ending to the story.

Some stories can only end badly.
Past a certain point, there is nothing anybody can do to make it otherwise.
All we can do is watch the slow-motion trainwreck and be ready to pick up the pieces.

[Fbone]

Originally Posted by fjtorres

Some stories can only end badly.
Past a certain point, there is nothing anybody can do to make it otherwise.
All we can do is watch the slow-motion trainwreck and be ready to pick up the pieces.

This is so true for many retailers these days. Even the successful ones are closing due to circumstances beyond their control. Shop owners tell me it's usually rent increases. Commercial real estate, property taxes, insurance, utilities and maintenance costs are hard to predict and sudden increases will force closures.

Also, retailer's online sales directly compete with their B&M stores. I'm sure your local Border's would rather you come in to make your purchases than shop at their company's website.

[jessicalynn]

Originally Posted by jbcohen

Does anyone remember Crown Books? They were a victim of the last Game Change in book selling.

I do! I've always been an avid reader and when I was younger my parents used to take me to our local crown books every few weeks (I also used the library a lot). I remember being so sad when it closed! However, within a few years a Border's opened up nearby and I loved that store too!

The article was very interesting. I had no idea borders was so instrumental in getting so many books made into movies.

[fjtorres]

Originally Posted by Fbone

Also, retailer's online sales directly compete with their B&M stores. I'm sure your local Border's would rather you come in to make your purchases than shop at their company's website.

True.
But companies need to respond to the evolving marketplace.

Unlike Borders, who practically ignored the threat of online sales, Wal-Mart for one, have publicly sworn they intend to become the number one online retailer and outsell Amazon. Their position is that if their B&M sales are going to be cannibalized *they* will do the cannibalization, not somebody else.

That is where B&N differs from Borders. They understand that the people who want to buy ebooks are going to buy ebooks whether *they* offer them or not. The only question is *who* is going to sell them the reader and the books.

[Andrew H.]

Originally Posted by fjtorres

True.
But companies need to respond to the evolving marketplace.

Unlike Borders, who practically ignored the threat of online sales, Wal-Mart for one, have publicly sworn they intend to become the number one online retailer and outsell Amazon. Their position is that if their B&M sales are going to be cannibalized *they* will do the cannibalization, not somebody else.

That is where B&N differs from Borders. They understand that the people who want to buy ebooks are going to buy ebooks whether *they* offer them or not. The only question is *who* is going to sell them the reader and the books.

True enough about e-books. But what are they going to do about their B&M stores. E-books aren't killing Borders and causing B&N to suffer year after year of losses - it's competition in the paper book business - from Amazon, but also from Target and Wal-Mart and Kroger and Albertson. If B&N doesn't figure out how to become successful in this space, their 20% of the 9% US e-book market won't amount to very much.

[Fbone]

If evolving means closing B&M stores and going online only, then leave me out of it.

[wvcherrybomb]

This is really sad.

I have to admit that, as much as I love book stores, I have contributed to their downfall. I haven't bought a book in a book store in 15 years or so. As soon as I found out about Amazon, I bought all my books from them. It was just a no-brainer since I could always get exactly what I wanted easily and cheap.

The only b&m store where I've consistantly bought books over the years isn't even a book store. If anyone is familiar with Ollie's they will know what I mean when I say it's book heaven. In a sense, books go there to die, but as a result they are giveaway prices.

I've never shopped much at Borders since I never lived near one. Crown Books was who I betrayed and they are long since gone. The times they are a changing...

[jbcohen]

Speed look at my original post. The way Amazon and Borders are connected is that Amazon initiated the shift in the book retail business and Borders was not quick enough on its feet to adapt to the change. In a sense Amazon is killing Borders.

I'm with you cherrybomb except for one thing, I really could care less who sells me the electronic books, what I am looking for is someone to sell me the books I want for less, preferably a company that is willing to sell to me for less then they paid for it, in other words the lowest bidder for the electronic book. Could care less if that was ebooks or kobo or amazon.

[SCION]

I guess you could say the root of the problem is high speed internet access. Where would things be if all one had access to is dial-up internet. Perhaps we'd rather make a trip to a brick and mortar store instead of going through the painful process of waiting for web pages to load.

[wvcherrybomb]

Originally Posted by SCION

I guess you could say the root of the problem is high speed internet access. Where would things be if all one had access to is dial-up internet. Perhaps we'd rather make a trip to a brick and mortar store instead of going through the painful process of waiting for web pages to load.

I was shopping on Amazon for many years on dial-up. It was slow but it's all we knew then. It was exciting with 56k modems came out. I suppose web sites were made accordingly then so it would be much worse trying to use dial-up now.

[luv2knit]

i think some of their low eBook sales is just due to lack of effort on their part. i just got my reader after Christmas and have attempted to buy a LOT of stuff at borders - prefer them over B&N due to the whole proprietary DMR issue. Here's two basic problems I encountered:

1. doesn't recognize a .me email address. i got one of these YEARS ago. their IT dept is so out of the loop they won't accept it so i can't create an account. any other company i have encountered this with over the last few years, once i send a c/s email the issue is solved within 2 days - they kick their little IT butt to get them in the act. Borders - 3 weeks later still no change.

2. lack of basic book info for eBooks. Can't believe the amount of books that don't have descriptions, no reviews, etc... so i found myself toggling between amazon and borders just to get sufficient info for a book.

talk about not trying to sell eBooks....