On The Border

14 02 2011

One of the harshest realities of a free market is that, in addition to there being winners, there are losers. We suffer from a chronic “over-storing” of America. There is little chance we could ever begin to consume all the goods and services available to us. Customer preferences and tastes change. Fads come and go. New products are introduced, while others are phased out.

So given these market realities, it is incumbent upon all who wish to play that they strive to be leaders, not followers. Providers of differential advantage. Purveyors of value.

So it has been no surprise to me that Borders is filing for bankruptcy. Saddened, yes, but not surprised, for here is a company that has “successfully” avoided the reality that is this for booksellers: You had better have a significant digital component to your business, because this is where the market is heading.

Yes, I realize that just a few days ago I waxed poetic about the independent bookseller, and how they will likely exist in the years to come, especially if they continue to do the things that large chains don’t, won’t or can’t. But Borders is not in the same league as my favorite little shop in Estes Park. No, with over 600 stores, they are in the major leagues, doing battle with Barnes & Noble, Amazon, and Books-A-Million.

Critics have been quick to point out that Borders was an early failure in the e-commerce business, so about a decade ago, hired Amazon to run their online business division. But I don’t think this was a shortcoming. In fact, I think, for the time, it was actually rather shrewd of Borders to acknowledge their own inadequacies. Instead of continuing to founder, they joined forces with a proven entity.

It was only in recent times that Borders launched their own new e-commerce portal, but it was this move I think proved to be their fatal distraction. It was in trying to once more operate their own e-commerce operation that they lost track of the changes afoot in books, that being the introduction of Kindle, Nook iPad and others. Yes, the Borders website now proudly displays the various eReaders they stock, but much water has flowed beneath the bridge of technology.

While bankruptcy does not necessarily mean the end is imminent, it is still perilously close. In so filing, Borders may be able to buy a little time in which they can regroup, repurpose and relaunch their business. But time’s a wasting. By closing one-third of their storefronts immediately, they can hope to trim operating expenses.

Still, this may not be enough. It is going to take a future-forward outlook that focuses on digital and value to get customers to spend money. It is no small task shedding an out-of-touch image, for perception becomes reality in the minds of consumers.

And that’s a book no one wants to find themselves featured in.

Dr “Turn The Page” Gerlich




2 responses

14 02 2011

It was just a matter of time before this happened. Blockbuster was holding on by a thread for years and then came the dreaded Netflix and The Redbox. I have finally started using iBook app for my iPad and am enjoying it. Jill is slow to move to technology so she continues to buy paper books.

15 02 2011

I, too, have made the leap to digital books, and love it. My shelves of books, DVDs and CDs have stagnated.

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