Borders Is Dead
Well, Borders is finally gone!
This evening, Borders closes its doors at all 45 stores. Over 1000 people will be made redundant on Christmas Eve, after efforts by the Joint Administrators, MCR, to sell some – any – of the company’s stores as going concerns failed.
Many are commenting on the demise of the high street, and it is easy to blame e-tailers such as Amazon for Borders’ failure to trade profitably. However, competitors have existed since the Snake competed with God to provide advice to Adam and Eve, and will always be with us. Competition is healthy in any market. So why have high street retailers such as Woolworths, Zavvi and Borders been dropping like flies?
Consumers!
Consumers?!
Yes, consumers.
The problem is that as consumers (and I include myself in that category), we’re very shortsighted.
We love the experience of shopping for books, picking up books, feeling their� weight and texture, maybe sitting and� reading for a while… We forget, though, that someone has to pay for our shopping experience. But we forget that someone has to pay for that experience – by buying books. As we complete the shopping experience by buying a book -� from Amazon -� we’re trying to have our cake and eat it, hoping that someone else will pay for our browsing.
Unfortunately, as the Borders escapade has shown, someone else won’t.
I remember I first visited the new Borders store in the Bullring in Birmingham in 2003. Despite Birmingham having two large branches of Waterstones, the offerings found in these stores were being gradually diluted by the need to cater to the masses. I was finding it increasingly hard to find affection for Waterstones – whereas 2 years earlier I could easily spend an afternoon and an obscene sum of money in Waterstones, branches were becoming samey and generic. I wanted to find books with depth, on new and specialist subjects, yet I was increasingly confronted with volumes such as Windows XP For Seniors – for which I felt as much enthusiasm as fishes feel for raincoats.
Borders offered something different. Whilst their Computing section was similar in size to that of Waterstones, it seemed to delve deeper into the subject, with more books of specialist interest. I was hooked. But I rarely bought books, and when I did there was a sense of guilt, that I could have made better use of my money buying online.
Recently, I restarted buying books in stores. Partly because I wanted the immediacy of getting my book there and then, partly because Amazon’s Super Saver delivery irritated me by delaying postage on free delivery – it seems almost miserly. And partly because my daughter (aged 4) was developing an appreciation for book shopping, and I couldn’t think of a way of getting her equally enthused about internet shopping from Amazon. She reawakened me to “the experience”.
The constant race to be the lowest priced retailer is not sustainable – it’s a game of Russian Roulette between stores. Who will be the first to commit commercial suicide by offering the most loss-making, consumer-pleasing range?
I fully expect that Borders’ closing sale will have a significant impact on other retailers such as WH Smith, Waterstone’s and smaller retailers. I’ve spent my entire year’s book budget in the past 2 weeks, leaving no money in the pot to spend elsewhere. The hordes that have cleared the shelves of Borders stores across the country won’t now be rushing to other shops to buy more books – the book market is saturated. The� leaders of other retailers will need to display nerves of steel and sound management to bring their businesses safely into 2010.
The biggest lesson, though, is to us as consumers.� We need to be very clear about what we want and what we value, and we need to support those values� in� how we� spend our hard earned cash.
The cost� difference between an online purchase and a high-street purchase may be as much as 40%, but we need to be very clear about what that 40% means. That 40% pays for our browsing experience, for something to do on a rainy day, for helping to get children interested in reading, for broadening our interests through browsing. Is it worth paying 40% more? I can’t answer for everyone, but it’s certainly worth it for me.
If you think I’m being sentimental and nostalgic, consider the business case. Waterstones’ main competitor on the high street has just fallen. There’s a few independents left (Foyle’s in London and� Blackwell’s are prominent examples) but the main race is between Waterstones and Amazon. What will happen if Amazon wins? I find it hard to believe prices will remain low when there’s no competition to provoke price wars. So Amazon will sell at RRP, in which case, what have we gained through e-business?