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"walls of the city" logo conceptualized by Oleg Volk and executed by Linoge. Logo is © "walls of the city".

why did borders fail?

Anecdotally, when I hit up the Borders sale in our area, it took a 30% markdown to get their prices anywhere near what I could procure online (except on certain things like Feed and Deadline, but those were only 10% off), and even then, I very carefully checked every book I purchased through my Google Shopper app to ensure that the prices I remembered were accurate.

Turns out, that was a very good idea:

Before liquidation began, we visited the Borders store in the Time Warner Center in New York and noted the price of several books and select movies. Then, we returned on Saturday to note the post-"everything must go" prices — and discovered that 19 out of 25 items were cheaper last week, while five were merely consistent. And, not surprisingly, almost none were actually price lows once we compared online.

If that is how you are going to treat your customers on your way out, then I wish you good riddance and hope you let the door slam you on your ass.

Fortunately or unfortunately, the demise of brick-and-mortar new-book stores has been inevitable since the first launch of Amazon.com, and definitely since the advent of Kindles and the rest of their e-book brethren. To be certain, used book stores (like the massive McKay here in Knoxville and elsewhere) will chug merrily along for the foreseeable future, simply because books last a while, and Amazon will be more than happy to ship you whatever you want, but price-conscious, non-instant-gratification-requiring shoppers have long since realized that bookstores (like video game stores, and movies at physical stores, and…) are far from the best places to shop.

And if this is how Borders is going to handle its business when they are closing, I dare say it is high time for them to do so.

12 comments to why did borders fail?

  • Back in high school the borders in town here was a real store–and we’d get coupons for 30-50% off on a regular basis. When I came home from college the store had cut its music section by probably 60% and replaced it with a Twilight section, and had cut the book section by 20% to make way for more bistro, even though I never saw anyone buying coffee.

    So why did they fail? You can’t support a facility the size of a big bookstore when half of your space is devoted to a coffee shop and a quarter is devoted to angsty teenage girls. The market just isn’t there.

  • It’s not Borders that did it. When companies liquidate, they sell all of the stores off to someone that buys it all in bulk. That company starts selling the stuff off, regardless of how Borders did it. Circuit City did the same. The name was the same, but essentially under new management. That management says “We’re going to squeeze as much blood from this rotting turnip as we can.” and they do that with fake sales. “Marked down 66% off! This pocket dictionary WAS $30! Now you only have to pay $10! What a BARGAIN!”

  • Its actually a pretty common practice when a store is closing. I guess the laws on the matter state that the “closing discounted price” only has to be less than the MSRP, not less than it was actually selling for before.

    Borders never seemed to quite get it when it came to modern book reading, my local B&N might just make it though, every time I drive by, much less want to come in, their lot is at least half full, and although yes alot of folks are there to buy coffee, I see alot of them with books in their hands. I hope they make it anyway, or there won’t be a bookstore anywhere close except for a couple very small used book stores!

  • Vis-a-vis brick & mortar stores: I’ll admit I still like Barnes & Noble, Linoge, but your points are still well-taken. My wife and I went to one of the Borders stores here in San Antonio, and to put it bluntly, it sucked. Subpar restrooms, disorganized book selection, and inferior music and magazine selection. Seriously, Best Buy had a better music selection, and they fricking sell cds as loss leaders! I know music was only a part of Borders’ business, but if they were going to let themselves be beaten by a chain like Best Buy, I have to ask: what was the point of having music in the first place? More expensive music, on top of that!

  • The thing that I always hated about Borders was their awful “reward” program. You got a card, but instead of giving you a discount right then, after you scanned it when you made a purchase, you’d get a coupon on your receipt. If you brought that in the next time you bought something, you could save money.

    Who the hell carries their bookstore receipts around with them on the off chance they’ll go into Borders and get a paperback?

  • Kresh

    Well, there’s a reason they failed in the first place; I stopped shopping there years ago (once the Gee-Whiz! What a cool store! wore off) merely because their non-book prices were substantially higher than anywhere else in the city. Albums (fine, fine, CDs) were 20 to 40% higher, DVDs saw the same price increase, and you could expect that other items saw the same over-market mark-up.

    This, of course, was in the days before Amazon and such.

    To be honest, I would still wander in there from time to time as they did have, occasionally, an album that couldn’t be found anywhere else, but biting the bullet and buying a single album (on average) annually does not a loyal customer make.

    I was surprised they took this long to fold.

  • @ bluesun: I guess we should be thankful the market is not there, but one would think Borders would have eventually noticed and made the appropriate modifications to their busines model.

    @ Tango: Sure, but do companies have to use liquidators? Did they have to use that liquidator? And, as you said, their name is still very much attached to the store and product, so regardless of who is turning the gears behind the curtain, it still very much comes across as misleading advertising.

    @ Ruth: The only bookstores around here that are booming are McKay and their competitors… but primarily because $25 for a hardback is goddamned ludicrous.

    @ the pistolero: Oh, I love brick-and-mortar stores… I just got some new shades, and I went to Sunglass Hut first to try them on and make sure they fit. And then I purchased them off Amazon, for nearly 50% the price Sunglass Hut wanted.

    If I can get them for that price, why can they not? And do they really think the number of people who are more interested in instant gratification will make up for the number of people who are looking to save money… especially in this market?

    @ wfgodbold: Huh. Glad I never signed on to that reward program!

    @ Kresh: Pretty much got it in one. Unless your physical store adds some kind of value to the process of buying something, people just are not going to pay more to use it. It sucks for the employees, but one would think they would have eventually spoken up… or, worse, maybe they did?

  • I just got some new shades, and I went to Sunglass Hut first to try them on and make sure they fit. And then I purchased them off Amazon, for nearly 50% the price Sunglass Hut wanted.

    That’s a pretty effective way to drive Sunglass Hut (et. al.) out of business if widely practiced.

    Amazon doesn’t have to pay rent on lots of storefronts scattered across the country, doesn’t have to pay for carrying unsold inventory at all those locations, doesn’t have to pay wages and overhead for all the people working at all those locations…

    The premium you pay at Sunglass Hut (et. al.) goes in large part to pay for having the product there for you to actually interact with. If you’re going to go to a brick-and-mortar to try stuff on, and if you find something you want that fits you, you should buy it there. They aren’t providing a “come in and see if it fits” public charity service.

    However, I don’t stretch this to products where you don’t need to try for fit – I’d never buy electronics at a B&M unless I needed it right now or their price including tax was better than the price including shipping for the same model number online.

  • John Hardin wrote:

    That’s a pretty effective way to drive Sunglass Hut (et. al.) out of business if widely practiced.

    …And? If they are not competitive, they are not competitive, and they are going to go out of business eventually regardless, as Borders has shown quite well. Unless, of course, they are “too big to fail”.

    They aren’t providing a “come in and see if it fits” public charity service.

    By the same token, I am not providing a “I will support you even if you are charging twice as much as your competitors” public charity service. Yeah, it was nice to be able to try it on and see if it fits… except I could have just purchased them from Amazon, and had a 30-day trial period wherein not only could I return them to Amazon for a full refund, they would pay for postage (new deal for clothing, apparently). At that point, “trying it on” becomes moot, and this was just a product of me being in the area and being bored.

    It is even more moot when they did not have the specific model I wanted (polarized).

  • Well, the Borders reward program was free. But I have to wonder how many people actually availed themselves of the coupons on their receipts; I can think of maybe two times I did, and that was after a few years of shopping there. Infrequently. B&N was across the street, and 10% off everything beat the hell out of 25% if you remembered your receipt, even at $25 per year.

  • craig

    @ Linoge:

    “Yeah, it was nice to be able to try it on and see if it fits… except I could have just purchased them from Amazon, and had a 30-day trial period wherein not only could I return them to Amazon for a full refund, they would pay for postage (new deal for clothing, apparently).”

    Yeah, you could have and yet you didn’t. So, clearly, you found some measure of value in Sunglass Hut’s storefront, and in return you stiffed them. Since you say you’re an engineer, this situation is no different than a company holding phony job interviews for experienced professionals and hitting up the prospective hires for free design advice, with the express intent of giving that advice to inexperienced new hires to implement.

  • @ wfgodbold: Yeah, but just about every other major rewards/tracking program out there is free as well, and they either give you the discount at your purchase, or they put your rewards “on your card”, so to speak.

    *shrug* Guess it does not matter now :).

    @ craig: You get bonus points for your creative analogy, however loose it might be, but it simply does not matter – Sunglass Hut chooses to operate an open, public business, and to allow people to come and go freely, and do as they choose. The “value” you arbitrarily assign (and really does not exist, since it arguably took me more time to do that, than go through Amazon) is given away by them for free, and I will be darned if I am going to turn down someone giving something away.

    Again, I do not run a “keep overpriced coporations afloat” charity, and I am under no compunctions to pay someone for something they did not bill me for.