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JEFFREY BROWN (Newshour): For Borders, it is, yes, the end of the story. In February, the book chain filed for bankruptcy, hoping to reorganize and stay in business. But, today, its representatives were in court with a plan to liquidate its remaining 399 stores beginning as early as tomorrow. More than 10,000 employees will lose their jobs as a result.
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JEFFREY BROWN: From humble beginnings -- the first Borders, a used bookstore, opened in Ann Arbor, Mich., in 1971 -- the company became a pioneer of the big-box bookseller concept.
At its peak in 2003, Borders had more than 1,200 stores around the country, each with thousands of new titles. The company says a host of factors led to its demise, including the turbulent economy, the move away from brick-and-mortar stores to online retailers, and the rise of e-readers, like Amazon's Kindle, Apple's iPad, and the Nook of rival Barnes & Noble.
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JEFFREY BROWN: Now, part of this is, of course, about larger trends of the Internet's impact on the book business. But Borders also made its own mistakes, I guess, along the way, right?
ANNIE LOWREY, Slate.com: Absolutely.
JEFFREY BROWN: What happened?
ANNIE LOWREY: It's not an easy climate for any retail business. It's not an easy climate for anybody who is selling books, obviously.
But Borders made some strategic mistakes. First and foremost, they had a very, very tenuous relationship with the Internet. They actually outsourced the sale of a lot of their books online from 2001 to 2008 to Amazon. And on top of that, they were very slow to come around to e-readers.
That, combined with some other strategic mistakes, having too many stores, having those stores be too expensive, ended up really hurting their business.
JEFFREY BROWN: All right, so take that apart a little bit, first the online sales.
ANNIE LOWREY: Yes.
JEFFREY BROWN: Now, that's clearly where a lot of the business has gone, right, in the book business?
ANNIE LOWREY: Yes, absolutely. It's increasingly migrated on to the Web.
And so what you had was these big-box stores which they always sold themselves as a place that you could come and find any book. All of a sudden, when you could go to Amazon or any of a dozen sites and get a much bigger selection of books, you didn't need those big-box stores as much, and so they became places where you could go, you could sit, you could sip and -- sit and have a cup of coffee.
But Borders also made some strategic mistakes there. They lost a Starbucks contract to Barnes & Noble, for instance, and the company just ended up being mismanaged.
JEFFREY BROWN: But people do go to those -- to the real stores to look at the real books, but increasingly then they leave and order online.
ANNIE LOWREY: Exactly. Exactly. It's very, very hard to compete unless you are offering a very boutique experience.
And Barnes & Noble has done pretty well to take advantage of e-readers and e-books and also to make sure that its stores are places that people want to go and congregate.
JEFFREY BROWN: Now, talk a little bit more about the e-readers. You mentioned Barnes & Noble with the Nook, of course, Amazon with the Kindle. This was an area where Borders fell way behind.
ANNIE LOWREY: Absolutely.
So the Nook is not as big as the Kindle, but it sells really quite well. And more so, every time that somebody buys a Nook, Barnes & Noble not only benefits from selling the Nook, but also then gets to sell e-books to that reader, so they develop a relationship over time. That reader comes back to them. And so it generates a lot of repeat business for Barnes & Noble. And that really helps them.
JEFFREY BROWN: Where are we in the e-reader and physical book situation? Now, the e-readers have grown and grown and grown. But is there any sense of reaching an equilibrium as to the number of books that will still be sold?
ANNIE LOWREY: Well, I don't think that you will ever see the physical book die out as a form. I think that 50 years from now, physical books will still exist and I think people will still be buying them in bookstores.
But you're going to see this migration towards e-readers and e-books, especially since there is a lot of competition in the market. Prices are going to come down. And so for consumers, it is going to make more and more sense. If you have an e-reader and you can get a book within -- any book, almost, in seconds, basically, you know, in your lap, yes, that's pretty powerful. And that's a good thing for consumers.
I was a Borders shopper in the past. Go in to buy books, Movie DVDs, Music CDs, and have a Cappuccino. So I'm sad that Borders did not survive.
Also, just recently (since I installed WiFi at home) got Amazon's Kindle. The experience is just like reading a paperback book, including the soft-white screen (even when it's off), but advantages like adjusting text size. I use my Kindle for mostly non-fiction books like "A Hole at the Bottom of the Sea" (my first purchase) an excellent book about the Gulf Oil Disaster, BUT I still buy fiction books (hardcover), mostly Science Fiction, Horror, and Fantasy, I've been a member of the Science Fiction Book Club since the '60s.
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