Today we looked at the potential bad aftermath of the Borders bankruptcy. What will happen now??, we all wondered. Though one commenter chose to turn around and take a look at what already happened. It's an interesting bit of inside businessy analysis.
I worked for a large technology company about 15 years ago that had Borders as one of its clients. I was working with an Internet group that was selling adoption of e-commerce to large brick-and-mortar customers by explaining the potential impact of the Internet on their business. We went through the scenarios — of being undercut by potential 'disrupters' like Amazon, of the difficulty of managing physical inventories vs 'virtual' inventories, of the ability of online vendors to undercut price, the need for providing better service as a differentiator and the increasing costs of providing that service, etc. etc. etc.
The folks at Borders were in a bind then — as difficult a position as they are in today. Invest in these new technologies and undercut your core business? Or try to reposition your core business and establish a market position that would be less tenuous than brick-and-mortar holdout in an increasingly online world.
They chose to reposition - incorporating cafes, expanding inventory, expanding service. It was a bold move and they got 15 good years out of it. Funny thing was that Barnes & Noble was doing the same thing ... at the same time. If one had bought the other there might have been room in the market for a repositioned bookstore chain as a community gathering place for people who value the written word. As it was, both firms fought on, and ended up with storefronts at the opposite ends of towns or in competing malls both positioned similarly, offering similar value and features. It was like two Roman wrestlers, chained to the same log, pummeling each other until they both collapsed, bloodied and exhausted, and died.
Though, at least for right now, B&N manages to hobble along. Attaboy, Nook!
[Photo via Getty]