Thursday, February 17, 2011

Think Borders Is Going Down the Tubes Because of e-Books? Not So Fast

Philip White

Today’s guest post comes from Philip White, a writer based in Kansas City. A Lion in the Heartland, his forthcoming book about Winston Churchill’s unlikely journey to Fulton, Missouri to deliver the “Iron Curtain” speech will be released by PublicAffairs in 2012.

So it’s now official–Borders, the real-life Fox Books (come on, admit that you’ve seen Tom Hanks hamming it up as a nationwide bookstore mogul in AOL vehicle You’ve Got Mail) has filed for bankruptcy.

Many a web-based postmortem is fingering electronic books, or e-books as the kids call ‘em, as the perpetrator. After all, supposed industry bellwether Amazon recently announced that e-books in its proprietary Kindle format are outselling paperbacks, though, as is the company’s wont, they conveniently neglect to mention how many of these e-books are free, and avoiding giving precise sales figures.

So are e-books to blame for the fall of this once-mighty purveyor of the printed word? Not to the extent that many are claiming.

Certainly, the sales of e-books are continuing to rise. Cheaper and better devices, the shameless self-promotion of the Kindle by Amazon on its homepage and atop many of its book listings and cross-platform, multi-device support in the booming smartphone and tablet markets are just some of the reasons. Not to mention that a new e-book costs significantly less than its paper-based counterpart, and is, in many cases, available at the same time or before the hardcopy release.

But, for all the hype surrounding the rise of the e-book, many other factors contributed to the downfall of Borders, and most of its brick-and-mortar rivals. For the record, I will not be analyzing the viability of the online Borders offering, which may yet survive the follies of its physical location.

First to consider is one of the primary drivers of any consumer purchase: price. The reason that I get a coupon from Borders via e-mail each week–anywhere from 25 to 40 percent off a single item–is that the store often sells its wares at full list price. This can be above $30 for a new history hardback, and pushing $20 for a softback. Yikes! Meanwhile, Amazon, much to publishers’ chagrin, deeply discounts most of its titles from the get go. No need to waste money on e-mail marketing and website customizations that promote special offers when your upfront prices are already the lowest (with some exceptions, like during the run up to Christmas). I have also, in my forgetful way, gone to my local Borders to make use of a coupon and, as Sod’s Law would have it, left the offending item on the kitchen counter. Many retail employees at other chains would help a poor, forgetful bibliophile out in such a situation by simply scanning a coupon from behind their particle-board checkout counter. A fine fellow at Half Price Books recently handed me back a 20 percent off coupon “In case you want to use it again later in the weekend.” Not so at Borders, at least in my experience. No, they’d rather belittle you and huff and puff for a few minutes before eventually yielding. Yay, customer service.

Then there’s the convenience factor, or, in the case of Borders and its ilk, the lack thereof. Option one: Drive 20 minutes across town to a big box store strip mall, and, once there, weave in and out of the parent-with-screaming-kids coming out of Old Navy and the scary looking, 2-by-4 wielding fellow who looks like he wants to hurt this puny bibliophile for slowing his exit from Home Depot. Then spend 15 to 20 minutes, if I’m lucky, looking for a book that may or may not be in stock. Calling ahead doesn’t help, and even if it did, it’s just one more step. If, praise the Lord, the book is on a promotional stand there is a brief moment of joy–3 for the price of 2!– followed by the horrendous realization that every other book on that neatly-stacked table, is, bar none, utter tripe. So, even if I reluctantly, begrudgingly make the decision to buy the book anyway, I have to wait in line for who knows how long. The reward? Dealing with the not-so-friendly, can’t-wait-to-get-home-after-another-crappy-shift “sales associate” who hosed me on the coupon the previous week. Repeat the parking lot debacle. Waste yet more time (and gas) on the drive home.

Option two: From my tablet or desktop, log onto any online bookseller’s site. Time elapsed: 1 second. Yep, the higher speed home broadband’s worth every cent. Search for the book. Buy with one click. E-mail confirmation received. E-mail with reading recommendations customized to my purchase history to follow. True, there is the wait for shipping, but that’s not the point–it takes far less time and is far less a hassle to buy online. And if I, the Luddite, ever bury my suspicions and embrace the e-book revolution, my text will be delivered in a minute or two. I could, of course, select as my online bookseller of choice. But that will (or should I say, would, for we speak of the deceased) do nothing to support a bloated, unsustainable network of characterless warehouses that happen to house books. (Note to corporate execs everywhere–adding in-store “cafés” that sell mediocre coffee at inflated prices does not a comfy shopper experience make.

“But what of the tactile, in-store browsing experience?” I here you ask. True, I do enjoy it. At local, independent stores (selling used or new books) or chains such as Half Price Books, where the proprietors and staff members know their Stephanie Meyer from their Ernest Hemingway. At Borders, there was always the same experience I get at every big box store. Employees who like the company health plan but despise every other aspect of their job, and have no idea who John Lukacs is, let alone where to find his latest book. Does that apply to each and every staffer? No, of course not, but when it’s the case with even 30 percent, that’s a problem, and the percentage is far greater than that. Indie bookstores also find ways to set themselves apart–the exemplary Rainy Day Books here in Kansas City has many author events each month, and bundles tickets with a hardback to add value. Borders? Not so much.

Finally, Borders, Barnes and Noble and their kind annoy the daylight out of publishers and authors because of their pay-for-play positioning model. Publishers have to cough up outrageous sums to get their latest titles on the most prominent, front-of-store displays and they’re rarely going to fork over that money for anyone other than their cash cow authors–Meyer, Rowling, Grisham et al. Something similar may be true in Amazon's New and Notable section, but not to the same mercenary degree, I’ll wager.

So, do I sympathize with the thousands of Borders employees who will likely be seeking new employment? Yes, of course. Do I have the same sympathy for their soon to be former employer? Not a smidge. Like Blockbuster vs. Netflix, Borders has been outfoxed by a nimble, visionary competitor, baffled by new technology and, fatally, unwilling to change because of the misplaced belief that its overestimated brand loyalty would save it. Does the fall of this behemoth mean printed books are dead, or that e-books are the only viable medium? That is, for now, overstatement on both counts.


hcr said...

Probably worth mentioning that not all Borders stores are the same. The one at the Maine Mall in South Portland is a model bookstore: extensive and smart selections, great staff, tons of parking, on-site coffee, and so on. I love my local bookstores, but the selection at that Borders is so terrific I always stop there when I'm in the area.

Eager to see the Iron Curtain book. My mother always talked about that speech, and I could never quite figure out what Churchill was doing in Missouri.

Unknown said...

Borders did a lot of acquiring in the 90s. The Borders in Minneapolis was originally Odegard Books, and stayed substantially the same for a long time. At least from the customer's POV -- I have no idea what it was like to work there, but the people seemed to know and like books.

Anonymous said...

I worked for Borders for some time while I was getting my M.A. in Ohio in 2004-2006. Even at that time Borders was in serious financial crisis due to under-performing stores and over-whelming corporate debt. This has been a long time coming and while Amazon has certainly contributed to the decline of major book retail chains, the real problem with Borders was perennial mismanagement at all levels of the company. Some stores have managed to survive this round of closures, but the company is to blame for its own demise--not e-books or Amazon.

PW said...

Thanks for the comments. Certainly, there are bound to be (pardon the bad book pun) exceptions to the "my bad time at Borders" angle, which was intended as an example of how some Borders stores - and 'Big Box' retailers in general - are failing we, the humble consumers. With over 2,000 stores, and some, as Dan mentioned, being acquisitions, I am sure there were and are Borders stores that offer a far better experience.

Mismanagement, the rise of Amazon, an unsustainable business model that remained brittle to the last - there are, as Mcconeghy pointed out, myriad factors that contributed to the fall of Borders.

HCR - thanks for the encouragement. The book is as much the story of the people who facilitated WSC's unlikely appearance in Fulton, Mo. as it is about the man himself.

I've enjoyed reading your recent posts, particularly the exploration of plagiarism.