The imminent collapse of Borders Books in the US, following its local demise of a few months back, brings back memories of when Borders was the biggest thing in all of literature and how really nothing ever changes.
In the early 1990s I was living and studying for an MBA at Northwestern University at Evanston, Illinois, the first suburb north of the Chicago city boundaries, a town with a village feel inhabited by wealthy people in their massive homes adjoining the lake and the University, its staff and 18,000 students.
In the comely shopping Main Street area was a general book store, the family owned Kroch’s and Bretano’s. Kroch’s was your then typical book store – interior walls lined with high shelves filled with books under various topics and big tables in the middle filled with paperbacks, sale items and remainders. They offered what they wanted to offer you and the quicker you made your purchase decision and got out of there the better. The newspaper and magazine area was sadly little better than the supermarket’s and variety all round beyond the best sellers was a negotiable commodity.
Word then spread that Borders was going to open up just 50m away down the road. Borders by then had its flag ship store on Michigan Avenue (along with HQ in New York) and they had a new model for selling books – don’t foist on people what you want them to buy, rather let them buy the way they want to.
This meant many more shelves and an almost library like approach to stock. On top, you could take a book from a shelf and start reading it in the store, on a comfy chair or with a coffee from the shop, all without feeling like a cheapskate and forever under disapproving eyes of the floor manager and security.
Despite ample warning of its arrival, Kroch’s response to Borders’ arrival was either half hearted or hapless. At first they plonked down a couple of reading chairs and decked their store out with sale items. Then within a few months the closing down sale commenced and soon after the northern Chicago book chain and its 100 year history was gone.
One needs to remember this all preceded the internet and the birth of companies like Amazon. But even then and before also the arrival of the Borders franchise into Australia, a highlight of international travel was (for me at least) a pilgrimage to a Borders book store.
Given my studies, perusing management books was my interest and in Borders there would be shelves upon shelves of them, to be inspected and chosen from at my leisure. And every few weeks, it seemed the stock would change and there would be yet newer additions to the offerings. Coupled with the coffee and the magazine and newspaper stands that carried seemingly every title for every interest from everywhere around the world, this was as good as it got – what shopping for shoes can be for women and hanging out at game parks for photographers, Borders was for me.
That love affair continued even when Borders set up shop in town – a visit was an adventure, how to make valuable time on a rainy day.
Did the business model, wrapped up in the service proposal work? Well, hell yes, it did with me as too often I would walk out with $300 worth of books under my arm when buying zilch had been the original intent upon entering.
This week it seems certain that Borders will enter its end game. In Australia, as noted before, the end has already been and gone. While debt is the main cause in these days of highwire leveraging that has little contingency built in for adverse trading conditions (as it was here too where Borders was part of a private equity gamble), nonetheless the same lessons that swept away Kroch’s and Bretano’s twenty years also apply to Borders today.
The company’s love of its stores and the printed book shrouded their view of what book buyers now wanted (as they always have) – to buy reading material their way. As Kroch’s didn’t understand they were in the literature sales business, with terms dictated by the market, terms they didn’t adapt to when their old model out lived its welcome for consumers, so Borders lost that sight too – the literature business that consumers wanted to engage with no longer was just about words printed on paper.
Particularly, Borders didn’t see the electronic book coming and the rate of take up it would enjoy. When Amazon jumped into the market last year with its Kindle, Borders, like Kroch’s confronted with library like shelves and coffee shop leisure stood frozen to the floor. Then came the i-pad and like Kroch’s again, just a few months later the book store of choice for a generation has gone.
Boom to bust in just 20 years. Boom to bust from not understanding the business they were in and adapting when they should have and could have. It’s nothing new, plenty of businesses have gone that way – Blockbuster Videos is another they got side swiped this year out of business by Netflix, selling the same consumer experience in a way they didn’t see because their model was built around the premises as Borders saw theirs being about the printed book.
So what is next to go? An article out of the US earlier this year stated that Apple was looking to drive so much of its demand for its products onto the internet and directly from its own web site that it would look to bail out of the retail market altogether, meaning it would no longer need to supply stores like Harvey Norman.
That concept was quickly rubbished by the major retailers but after the howl they engendered over internet sales (that avoided the GST) one wonders whether the bright flashing lights of the electronic sales stores are also soon to be a thing of the past, gone like Borders and Blockbuster and record stores before that, for not seeing the writing on the wall and moving more quickly before it was too late.
Recent Comments