Last week the retail bookseller Borders filed for bankruptcy and announced the closing of nearly one-third of its stores nationwide. My favorite Borders location was spared but unless things change and change quickly the second largest bookseller in the United States will soon go under for good. How did this happen? Many experts have weighed in but simply put, Borders was reactive instead of proactive. You don’t need a large panel of analysts to figure it out. Borders was behind the curve on:
1) Online sales
2) Music downloads
Those four things conspired to kill them. First, they sourced out online sales to Amazon with no incentives. Why? I have no clue. It wasn’t until the last few years that you could order online through Borders direct. By that time, Amazon had established itself as a book seller and Barnes and Noble (The other major player here) had done so for years.
Second was music downloads. Again, Borders failed to see the risk and did nothing. they had a great CD section at one time. Most of my music purchases were made at Borders when I was buying CD’s but I haven’t bought one in a long time. Now if you go into a Borders, their CD selection is a limited amount of stuff and a bunch of special priced mass produced sellers. Not much selection.
Next is eReaders. I purchased my Sony Reader from Borders a few years ago and love mine but Borders was not aggressive at all in marketing it. Accessories were limited and soon, I had to go to Target to buy extra items for my Reader when they started carrying them. Borders had a tie in with Sony and my software for my reader still has the Borders logo attached to it but Borders is now officially connected with KOBO and while it’s a great product, many folks had already jumped on the Nook bandwagon from Barnes and Noble if they hadn’t already purchased a Kindle from Amazon. Which leads to the last reason….
eBooks. The growing eBook market is taking off and Borders being late to the party not only cost them in physical book sales which have dropped off everywhere because of digital alternatives, but it also cost them a nice chunk of the ebook market because people had purchased other brands of readers and were buying books from eBook stores that had already been set up. Borders didn’t offer this alternative until just recently. The readers they were selling were tied to outside ebook stores and Borders received none of the money. Meanwhile, Barnes and Noble had a HUGE Nook setup in the front of their stores pushing their readers, leather covers, and the ability to purchase from the entire Barnes and Noble catalog the minute they powered their readers. See the difference?
In the end, doom came. No money coming in means not paying the publishers and losing ground on getting more best sellers into your store. Borders had to file for bankruptcy protection and in today’s economy, they will be lucky to survive as K-Mart did just a few years ago. The percentages are higher that they will go the way of Linens & Things and Circuit City who tried to reorganize but ultimately cashed out because of the cost to do so. I hope for competition’s sake that Borders gets their act together but they will have to institute some MAJOR changes for that to happen. The bibliophiles are watching….