In my previous post I mentioned some factors that have led Borders Books to the brink of bankruptcy. The Borders executives have been in NY and talking with publishers for weeks. I am not privy to any of those conversations but the general buzz in the industry is that this one is much more serious than previous years.
Who knows? Borders death has been reported for the past five years. They always seem to come out with enough financial backing to survive another year. I hope that happens. But if it does, Borders will need to change to survive.
Some suggestions:
The book retailing world has changed dramatically and all bookstores must adapt to survive.
1) Selection is not what it once was — Borders prided themselves on having a great selection. At one time that was an advantage. But physical bookstores can not compete with the selection on the Internet. Borders needs to cut back on selection and focus more on promotion. I am not saying cut out all the backlist, but it does need to be weeded out. What is the inventory turn? How much money is tied up in wallpaper? I was in a Borders last week and they had at least one copy of every Sue Grafton mystery (A is for Alibi…). She is on U. Do they really need all of these titles?
2) Get into the eBook game in a real way — Sure they are way behind in this space. But this is the growth area in bookselling. All they need is 2-3% and it will translate into millions of dollars. Their current play is confusing. They own 20% of Kobo and have contracted with them to run the eBook store on Borders.com. That is fine, but I don’t see anything that makes me want to shop at Borders.com. They need to specialize. Also, I hope they are not making the same mistake as they did with Amazon and give away their best customers.
3) Specialize in Children’s items — I like the entries into Children’s books. The Build-A-Bear and American Girl relationships makes sense. Borders can create the “go-to” place to bring children. Parents are always looking for places to take their kids and if Borders can get front of mind for them, they will get repeat visits. Sell books, videos, games etc. Many criticized Borders for the Build-A-Bear relationship, but I think it brilliant. Borders MUST break out of the “bookstore business as usual” to survive. Building up Children’s is a key driver. Make it a destination.
4) Eliminate 400 stores — This may be impossible given long term contracts and agreements. Over-expansion has hurt many retailers. But supplying all these stores with new merchandise doesn’t make sense. I wonder if the 80/20 rule can be applied? 80% of the revenue coming from 20% of the stores. If they can not get out of the additional leases, maybe Borders strips them down and sells remainders? There are warehouses of dead stock that could be cleaned out.
These are just a few thoughts. I realize the Borders situation is much more dire than this but somethings to ponder.
If Borders survives, they will need to do things differently. There is no more business as usual because the world has changed and it will never be the same — ever again.
