Reflections on the Demise of Borders—Is there a lesson to be learned?
I was saddened to hear of the long-awaited bankruptcy filing by Borders, the book seller, last week. They will be closing the Mt. Prospect (Illinois) store where I have spent many evenings slowly exploring their many shelves for book, periodical and music titles of interest. I usually found what I wanted, and Borders probably has me on a list somewhere as a good customer—or at least oft-present.
I found their stores pleasant places to visit with an unhurried atmosphere, helpful staff and thousands of on-hand and colorful titles. I liked them much better than their competitor although they looked a whole lot alike.
Pure and simple, Borders was book store before anything else. And what made it a pleasant place may have ultimately been their Achilles’ heel. I understand they grew from the Walden chain that populated mall spaces for many years and at one time they had over a thousand stores. They started as book stores, but as often happens in such situations; they likely found that they had evolved into a pretty large book merchant that also had a bunch of stores. As they grew, they would have started to exercise significant power over publishers and large distributors, and newly-hired company marketing experts surely began to use such foreign terms as “sales channels,” “virtual,” “branding” and “brick and mortar.” Pretty heady stuff.
At some point in time it is likely that Borders had to make a business-changing decision—what are we: a book merchant or a chain of book stores? Based upon their decision, the next actions and the future would be quite different. For example:
- If I am a book merchant, I recognize that the book stores are merely a single sales channel for the core-merchandising business. That channel must perform to set standards, or be modified, shunned or closed. In this case, marketing is a more important function than chain operations.
- If I am a chain of book stores, I must operate my chain in an effective & profitable manner, get books from the best outlets and sources available (including the Borders’ book buyers, or not), survive with lower margins and broaden the product line to appeal to (and leverage upon) my walk-in customer. [Their coffee was pretty good.] In this case, chain operations rein as the top company function.
Now I have never studied Borders and know nothing of their internal operations (other than as a customer), but I sense is that they came to that fork in the road and “took it,” as Yogi Berra used to say. And since being a bookstore was in their DNA, they became a chain of book stores by default. This is somewhat supported by the fact that a decade ago Borders gave up control of its “virtual” (internet) sales channel to Amazon for a couple of years before they realized its error. (Borders who?)
Those of you who interface with Wilkening & Company or regularly read these pages know that I am a strong believer that every company should develop a brief one-page statement of strategy (intent) that unambiguously states four truths about the direction of that company:
- Products or services to be offered;
- Customers to be served;
- What the company would like to be known as now, and 3-5 years from now; and
- How will we know we have won?
While I was not there, I sense that if someone on the Borders’ Board of Directors had asked the CEO to rigorously decide (and defend) whether Borders was a book merchant or a bookstore, there would not have been a bankruptcy filing last week. And, I could still go to my favorite book store in Mt. Prospect and rummage through the titles. If such a Board meeting happened, I wish I had been there!
I hope Borders survives in the long run, but my interest is academic for they closed my bookstore.