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The End of Borders

The Borders book and music chain is closing down for good, with its last operations sputtering out at the end of this month.  Annie Lowrey at Slate has a concise post-mortem, which digs deeper than the conventional wisdom that Borders died from an overdose of web surfing:

In the end, you could blame the Internet for Borders’ downfall. Retail has become a challenging, if not outright terrible, business, regardless of what you are selling. But, again, other companies adapted. Borders just didn’t.

Barnes & Noble may well not be around in five years. But at least it has built a business that recognizes the trends in bookselling—toward the Internet, toward e-readers, toward a more boutique retail experience, away from big-box stores. It is remarkably similar to the strategy Borders laid out in its bankruptcy filing. The company’s management said it wants to “aggressively [grow] borders.com and eBook market share” and “[expand] the company’s overall retail mix … to improve profitability and offset the digital effect.” Alas, that strategy came too late.

Follow the link to read Lowrey’s entire piece, and you will learn, among other things, that Borders had its own e-reader, the Kobo.  I had no idea, and I used to shop at Borders all the time.

The changing marketplace for books and music illustrates the need for businesses to adapt quickly, which Borders didn’t do.  They spent a lot of money opening enormous brick-and-mortar stores with vast back catalogues, but retail book purchasers are most likely to be interested in a smaller venue selling hot new items and impulse buys.  Online retailers are a much more logical choice for locating and purchasing obscure catalogue titles.  When Borders realized its mistake, it was already locked into long leases on those oversized book stores.

Books are data, and e-readers give swift and convenient access to that data.  If you’ve got a Kindle or a Nook, you’re only a few moments away from having any book you want.  The more advanced models even have cellular modem access to the Internet.  Furthermore, e-reader versions are generally a good deal cheaper than even discounted online purchases of physical books, and they’re about half the price you would have paid at a Borders retail outlet.

Consumer resistance to e-readers is crumbling fast.  They’re so inexpensive that the money saved on the purchase of less than a dozen books pays for a top model.  Personally, I was a paper-loving old-fashioned reader who thought I’d never be willing to embrace an e-reader… until I spent thirty seconds with a Kindle.

None of these developments should have come as a big surprise to Borders, because it’s exactly the same glide path music purchases have taken.  When CDs first came out, everyone was fascinated with the sci-fi technology of those rainbow-kissed little discs and their incredible audio quality.  Now they look like stone tablets, and music stores feel increasingly like museums – although that doesn’t mean they’re pointless.  People like going to museums. 

The ambience of small music and book stores is still wonderful, but they have a hard time selling enough product to keep the doors open.  The mega-stores are keeling over from profit coronaries first.  It’s sad in some ways.  Nostalgia is beautiful because it’s sad.

One of the Internet’s most remarkable features is that it has increased the need for adaptability among retailers.  Customers have huge amounts of information at their disposal, and a vast array of competitive options they can access with a few mouse clicks.  Borders died because it couldn’t adapt fast enough.

And there you have today’s dreadful economy in a nutshell.  Nobody can adapt fast enough.  From the purchase of brick-and-mortar property, to the hiring and reduction of staff, capital improvements, advertising, and purchasing and shipping merchandise, every stage of business creation and growth is clogged with regulations and overhead costs.

Consumers appreciate the power of Information Age technology.  They expect companies to have a Web presence, smartphone apps, and other online features.  They have certain expectations of the 21st-century electronic marketplace… but every corporation in America is shackled to a government that works with chisels and stone.  Unions and federal bureaucracies still posture as the last line of defense against sweat shops and robber barons.

For business visionaries, and the consumers they would serve, an incredible future lies ahead.  For those who have the power to strangle their dreams, it’s still nineteen-twenty-something, and it always will be.  Borders made deadly mistakes, in a business quagmire that leaves no room for error.  That’s how the most astounding innovations in publishing and distribution to come along in centuries helped to destroy a company that sold books.

Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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