Can Borders Be The Next Amazon.com?
from the doubtful dept
In an interview with the Wall Street Journal, George Jones, the CEO of Borders, discusses his company's plans to remain relevant as more and more commerce is done online. Borders' story is an interesting one, in that its struggles are being felt by a wide variety of traditional retailers right now. Jones' insights into the changing nature of e-commerce is interesting. He notes that when Borders first decided to sell online, it pretty much had to partner with Amazon, because of the infrastructure that it had built up. Now, however, options for third-party fulfillment (also an area that Amazon is interested in) will allow Borders to launch its own site (whether it's able to gain any traction remains to be seen). That being said, parts of his vision seems a little off. He imagines that one day customers will come into the store to buy digital goods, like music and e-books, an idea reminiscent of Starbucks' ill-conceived fill up stations, where customers could get music for their MP3 players. The idea of tying a digital good to a physical location is not a model that customers are likely to embrace. Ultimately, there's no easy answer for a company like Borders. It can embrace the internet all it wants, but it's hard to see its fortunes being tied to much else than the continued success of selling physical books in actual stores.
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I agree with the author of the article - people are unlikely to go to a store to get their digital media - duh. What would probably work though, is putting kiosks into a store so that people can order a book to a store for a hold. For years, bookstores have had "staff only" computers - it's time to have smaller, more accessible kiosks - perhaps even end-capped "jukeboxes" geared towards the subject area they are located in. Better yet - they should also deliver a few "you might also be interested in" selections at the same time and them to you for review when you come to get the book you ordered. That's the key to profit -someone comes into your store looking for one item and walks out with two or three.
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Of course, the just building the infrastructure guarantees success to neither party. Trends in this and other industries make the web presence appear to be more valuable, even though it costs much less to establish. The point here is that the barrier for Borders compete on Amazon's turf is much lower than it is for Amazon to compete on Borders'.
If Borders can build an e-commerce engine to match Amazon that at the same time leverages their physical outlets in a way that Amazon will have a hard time matching, then Borders could be a good bet in the long run. I can immediately think of several ways to do that:
1) They could use their physical locations to provide a kind of distributed warehousing system that could yield faster shipping times for less money.
2) Items on the Borders site could be marked "Get it Today", with the idea that the customer can buy it online and go pick it up at a store the same day with it already paid for, wrapped up, and ready to go.
3) Borders can leverage their existing distribution network for getting books to stores to provide free or very low cost shipping for items if the customer can pick it up in the store. Many "big-box" stores already do this.
4) Tie in-store purchases to online discounts and vice/versa.
To defend against this, Amazon has done a few things that won't work well with the above strategy:
1) Used books- Borders will have a hard time keeping a good used book stock in physical locations.
2) Other products. Amazon has a lot more than just books, some of them things that would look very odd sitting in a bookstore.
But I don't see why Borders.com couldn't also have these products, just list them as web-only. It again comes down to the idea that Borders can build an Amazon much more easily than Amazon can build a Borders.
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Eh.
I've only purchased a couple things from their site - because they were the only source.
It's going to be hard for a lot of people to switch from Amazon. Most people, myself included, are comfortable with Amazon. And the prices. And the shipping costs. And the vast selection.
As for offline integration.... Sweet Jesus, get over it. If I wanted to waddle my ass down to a physical store, I would.
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Borders and B&N
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Beware the TRU way
Borders is obviously a stronger player in the field, so I think if anyone can pull it off, they can. I really think if they can integrate their physical presence, with their virtual presence, they can maintain themselves successfully, and retain a portion of the market. The biggest thing to me, is in-store pickup. With books, this is key. I think the practice in general is picking up steam, and to offer it in the book world, is huge. They have enough stores to make it an attractive option. Nobody would rather wait and pay for the shipping instead of stopping off and picking it up on the way home, as long as the prices are comparable.
Bottom line, this is something that Borders must do in order to grow. Partnering with Amazon was a fantastic way to gain online presence, but eventually, they need to go it alone in order to be successful. The sooner the better, as the market keeps growing.
I wish them good luck.
Also, someone mentioned they need to tie in online promos with physical locations. I believe they already do that. If you are a Rewards member with Borders, you get weekly email promos that can be printed and used in-store. So they are on the right track at least.
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Blockbuster won me from Netflix with in-store pick
By the way, I'm a fan of Booksamillion.com rather than Amazon.com.
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