Thursday, July 21, 2011

Death of a Retailer

The bankrupt bookstore, Borders, announced a couple of days ago that it will liquidate its remaining assets, after a deal with the Najafi Companies fell through. Borders was the second-largest bookstore chain in the U.S., after Barnes & Noble, with a presence in most of our larger cities and urban areas. (The third largest, Books-A-Million, is a long way behind, with locations primarily in the Southeast and a brand that lacks, um, gravitas.)

A lot of people, me included, grew up browsing the local library, Borders, and Barnes & Noble, picking something off the shelf that looked interesting, and learning about topics as disparate as high literature, philosophy, and cosmology. More so than any other bookstore, Borders was a place where you could just plop down and read and sometimes even doze. While that might have been a problem, in terms of business-model sustainability, it certainly made Borders feel like the center of a community--a private but publicly available information repository.

I grew up with Borders. My mom worked next to one, so whenever I had to wait for her I waited there. Whenever I found myself having to wait in Center City, I waited at the Borders at Broad and Chestnut. Most of the books I bought, I bought from Borders. They were always my favorite bookstore--the first one opening up in my area had been a revelation. I've never really felt at home in Barnes & Noble's stacks; I'll miss Borders.

So what's next? A big push by Books-A-Million? The company is far too small to compete with B&N--and even then B&N hasn't been having a good year? What about Amazon deciding to maintain a physical presence alongside a Web presence? (Its market is the descendant of mail-order, after all, and it would be following in the footsteps of brands such as Sears and Montgomery Ward.) American expansion by the Canadian chains Indigo and Chapters? (Kobo, because of Borders, certainly has some American presence.) Or of European and Oceanic firms, such as Waterstone's, W.H. Smith, fnac, Weltbild, Angus & Robertson, or some other established chain? Or a contraction of the publication industry in general? (I hope it's not that, I want people to read.) But there's the rub--despite the doom-and-gloom claims that Borders went bankrupt because its core business model wasn't sustainable (especially in wake of Amazon), the fact that so many other companies are successful in their fields, coupled with bad business decisions Borders made (most especially its early-2000s partnership with Amazon, which really served to poach Borders' customers), and the destabilizing effect of the recession, was more what brought the store down. The need to browse is human, and these big chain bookstores are consequently always stuffed with browsers. Browsing leads to impulse purchases: this creates a market bricks-and-mortar retailers can capitalize on that mail-order catalogs Internet retailers can't. This is why firms such as Sears and Ward's made the leap from the catalog to the showroom and physical store--and why the physical store will never die: because the psychology of the shopper changes subtly from the catalog (or website) to the physical store: the site feels more like a wish list ("what if?") while the store feels more concrete, more there, and easier to think about getting. Impulse purchases on Amazon are unlikely; at Barnes & Noble, they're a certainty.

1 comment:

  1. More possibilities:

    1. There could also be a push by Asian stores to open more bookstores - for example, Kinokuniya, whose main Singapore store is immense.

    2. A horde of small stores could grow at the expense of Borders - perhaps regional stores (and this includes some global brands with stores only in the largest and most globalized cities).

    3. Department stores or other retail could branch into books - this includes Fnac, which is not primarily in the bookselling business.