COMMENTS
Strikes me that the industry changed not only because of a change in the distribution model but also due to a change in where the product got used. With the advent of lower cost platforms being able to absorb "books" electronically became mainstream not niche. What else is the move to electronic doing...how about killing the fax machine, long a staple of electronic communication. Scanning and e-mail is replacing this technology just like the fax replaced the telex.
How about courier and mail services...where do we see them going?
Sorry to see them bankrupt. Book stores created a good feeling for readers everywhere. That being said, it is also a good feeling to get ebooks for 1/2 price or less vs printed books, even new releases. They should have seen this revolution coming. All the best to their employees and their reader community.
Faxing is the most god-awful-out-dated piece of technology still used today. It needs to be replaced. Some things, like microwaves and blenders, do a good job. They do exactly what you expect them to do at a reasonable cost. No need to replace. This is not so with fax machines.
I'd add that Borders was not very good at involving authors in the marketing promotion of their books on sale at Borders. What we can take away from this is that every organization has constituents that can push business your way. In the case of booksellers, that's the authors of the books they sell. Partnering with authors to do, say, a webinar or special content offer would have been good. Amazon has done this kind of thing to great success.
I think Borders made one other big mistake in parallel with the emergence of electronic books: they continued to maintain their policy of low-price products. The problem is that the people who are attracted to the low prices are exactly the ones who are adopting the electronic format.
I'm old-school enough to be impressed by a library of books, and I like having them. BUT -- I want durable hardbacks, not paper-bound volumes that will disintegrate after three readings (yes, I do read my books, too). In recent years, I haven't found many books at Borders that met my (physical) quality standards.
porter said in his paper Strategy and the Internet back in 2001,"The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to deploy it." but Borders seems to ignore that in the hope that it is just another additional medium which they may ignore without any losses. well closing eyes from environment changes can cost fortune.. learnt through hard experience
It just really shows that the race is never won and that no business can rest on their laurels. Who knows what's next in this industry if its online bookstores organizing reading circles to promote book sales or whatever. Especially in this new age of inbound marketing, the victors will continue to be the ones who have the humility to constantly self-criticize, asking, "What can we do better for our consumers?", "What's next?", and "How do we get their first?"
As a customer of Borders, it wasn't just technology moving on that killed them in the UK.
You couldn't find what you were looking for, the staff were hard to spot, their locations were either too small and over stocked or too large and cold. Not to mention the horrible music they pumped out all day long.
I ended up only going into the store to go to Starbucks.
It was not a nice shopping experience, so they were failing before technology started to be a problem for them.
Oh yes, they were also over priced.
Other bookstores still remain busy, whereas Borders was empty.
Good article. I'm surprised to see Borders go bankrupt. It's another consequence of the changes the industry goes trough. The reasons you refer to are very important, but still bankruptcy happens when a set of internal mistakes and external changes come together. <a>http://twitter.com/swiftminds
I wasn't surprised at all by Borders liquidation. Their original declaration of bankruptcy was a "when", not "if" matter, and the underlying question was "Who might buy them, and why?" The answer to the latter question was "Nobody who would keep them alive."
Publishing has been struggling for decades with the problem of "too many books chasing too few readers", and there have been wrenching waves of consolidation as houses trimmed lines, and publishers merged into larger entities in attempts to get economies of scale and reduce costs.
Book retailing (and retailing in general) has been struggling with "too many outlets chasing too few customers". Borders was trying to compete with B&N, matching them superstore for superstore, as the underlying economy moved away from brick-and-mortar retailing to Internet based commerce.
Borders was hobbled by long-term leases on real estate, which reduced flexibility. They were further hobbled by a revolving door on the executive suite, and lack of any consistent long term plan to fix their problems. Technology was only one factor in failure. Their underlying problem was an inability to execute as a brick-and-mortar retailer. They should have recognized the underlying structural changes in the econmy and begun to retrench years ago, closing underperforing outlets and reducing overhead.
They should also have paid far more attention to the demands of ecommerce, and their entry into ebooks should not have been a "me too" effort performed through a third party.
B&N is still standing, but I wouldn't call them healthy. They face the same challenges as Borders, but have been more aware of them. Their push ontp web based retailing has been far better executes, and their internally developed reader, the Nook, has bought them time. They will be closing retail outlets as leases expire, and rethinking the nature and product mix of those that remain.
I'm sorry for the 10,000+ plus Borders employees whose jobs will go away, but I won't miss the chain at all.
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Dennis
I think, too, Borders' failure was a failure to build relationships with both buyers and sellers. Connecting readers and writers has the potential for incredible tribe building (as Seth Godin would put it). Technology is a vehicle for deepening these relationships. I wrote about this as well a few weeks back, http://www.billzipp.com/blog/why-borders-is-bankrupt-and-what-we-can-learn-from-it
This is a sad development, and this move towards a reliance on e-publishing is going to cripple the publishing industry. Why? Even now I can find any - any!!!- recent title posted online by pirates and not pay a dime for it. It will be as bad for publishing as the mp3 has been for the music industry. Also, with my local Borders closing, there will be no place within 10 miles of my house where I can walk around and just browse. Many titles I later eventually bought, I discovered in this way. Sadly, sometimes from Amazon...