To give a quick review of recent events, Borders Group (which controls Borders Books & Music and Waldenbooks stores) recently imported a new CEO who's making a big load of changes to the way they run things, in hopes of distinguishing Borders as it continues to slump behind its major competitor, Barnes & Noble. The changes include closing a bunch of Waldenbooks and focusing on Borders superstores, closing down international stores, revamping their customer rewards program, developing their own website (instead of having one through Amazon.com), and launching their own proprietary publishing line.
After careful observation, I've come to the conclusion that they've blown it.
For one thing, these changes aren't going to distinguish them from Barnes & Noble at all; in fact, it's just about going to eliminate the only ways in which they were different from Barnes & Noble, which concentrates on superstores, has its own website and publishing line, and a very similar rewards program. This alone may be enough to doom Borders to further descent into obscurity, but I'm convinced that even if Barnes & Noble weren't already doing this stuff, it would still be a bad idea.
The biggest problem is that publishing line. According the the Shelf Awareness article covering the changes,
Borders has already begun negotiating to publish titles by "celebrities, undiscovered talents and others" that would be exclusive to Borders. The company imagines that it can make many of the titles bestsellers.
The article further reveals that Borders plans to take unproduced screenplays from Hollywood writers and develop them into novels. This is a terrible idea. There's not much money in trade (i.e. non-academic) book publishing in the first place; fiction, which they appear to be aiming to publish, is the least profitable segment of trade publishing, and first fiction (books by first-time authors, which they also appear to be aiming to publish) is the least profitable segment of trade fiction. Barnes & Noble has been driving its (very similar) imprint like crazy for years, and have had very poor success with it.
If Borders want to use publishing to, as they say, distinguish their brand and drive high-margin sales, they could publish textbooks and sell them for much less than any college bookstore, and it would be much more profitable than what they're doing now.
Incidentally, this is something that's true of the job market as well: there aren't many jobs in trade publishing, and as I've stressed before, connections are all important. Academic publishing presents more opportunities, but that's probably not what most of us are here for. Bookselling and freelancing present many, many more opportunities in this department.
Moving on, Borders's new rewards program is another problem.
Under the old program, 5% of every purchase you made at Borders would go into your "holiday savings" account. Once the holiday season rolled around, you could put whatever was in that account toward your purchases--provided you had at least $10 saved up, which meant you had to spend at least $200.
Under the new program, whenever you spend $150 they send you a $5 gift card. It sounds simpler, but what they're really effectively doing is decreasing their discount ($5 for every $150 you spend reflects about a 3% discount, as compared to the previous 5%). And despite the fact that it's simpler, I don't think it's going to increase sales any. If you look at the number of people who spend $200 a year at Borders, I doubt the number of people who spend $150 is going to be much higher. People either spend a lot or they don't, and making it so that those savings aren't tied to the holidays (which got the few big-spenders into Borders for their holiday shopping) isn't going to help things.
There's really not much to say in regards to the website. It's too late to start up their own; no matter what they do, they're never going to get ahead of Barnes & Noble or Amazon in that department.
The problem that I really have with all this is how it reflects the trend that's been happening in entertainment for years. Right now, we're at a point where there are basically only 3 outlets for people to buy entertainment products: (1) The giant bookstore that sells music and movies and magazines and has a coffee shop attached, (2) the new/used CD/DVD/Videogame and related accessories store, and (3) Wal Mart, Target, and Costco.
Within these categories, the individual stores aren't much different. It doesn't matter if you go to Borders, Barnes & Noble, or Books-a-Million; if you go to Strawberries, Gamestop, or Newberry Comics; even Wal Mart, Target, or Costco. In any category, they're all pretty much the same thing, and increasingly so.
I like small and independent, so you probably all know what I'm going to say here, but this is an area where smaller businesses, smaller entertainment outlets, can start to take back people's attention. I think people are getting tired of the staunch homogenization; I know I am. I'm tired of having to bounce back and forth between every Borders and Barnes & Noble in town whenever I'm looking for a specific book, because which of them will have it is ultimately a shot in the dark. I'm tired of the fact that I'll always have to travel for half an hour or more to get to a bookstore because I live in a neighborhood that is not, and will never be zoned right for big superstores.
The question is, why are independent retailers going under at such an obscene rate these days? I honestly think it's because they're too much like the big chain stores. Most of them do basically the same thing, except they have smaller selection and flimsier incentives to buy there. But they don't have to be like this.
I'm reminded of a case earlier this year where Pandemonium Books & Games, an independent bookstore in Cambridge, MA was in danger of shutting down. But unlike other indies, their customers--and even some people who weren't their customers--rallied around them, poured thousands collectively into a fundraiser, and saved the store.
Now Pandemonium isn't just an indie bookstore: it's a specialty bookstore, for science fiction. I've been to Pandemonium (they carry my magazine, in fact); they know their customers, they carry a much larger selection than big chain stores within their specialty, and they hold lots of nifty events that suit their audience. They're doing something the chains can't, and they're succeeding. In my mind, operations like this are where the future of retail (hopefully) lies for us in the industry.
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