Borders, established 40 years ago in Michigan, just shut its doors. To be honest, I’ll miss it. Despite the “big box” feel, I often found myself lost wandering the aisles wishing I could buy everything. In the wake of Borders’ demise, let’s take a moment and reflect on what happened. Some of the reasons that I’ve read include:

  • Huge inventory in each store and large lease spaces
  • Bet on CDs and DVDs (when everyone else was going digital)
  • Did not develop an eReader
  • Dirty bathrooms
  • High prices
  • Handed over the website to Amazon
  • We are supplier (and therefore brand) agnostic

I’m going to touch on the last two specifically.

Borders outsourced its website to Amazon

What a dumb thing to do. The market was clearly going online, a space where Amazon is the gorilla competitor. And rather than putting up a fight, Borders simply handed its online operations over to Amazon. Simultaneously, Borders put more money into its physical locations. Management held onto a dying dead dream – digital is secondary.

We consume media via many platforms and from many suppliers

Peter Wahlstrom, an analyst at Morningstar who tracks Barnes & Noble, said, “Just as I’m probably device agnostic, I am supplier agnostic. I can go online, I can go to Barnes & Noble, I can go to Apple, or I can go to Google. Or I can borrow it from a friend or I can go to a library.”

Borders did not create a brand or experience for which consumers were willing to consistently pay a premium (compare it to Apple). Media is a highly saturated market and they lacked brand differentiation.

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Opportunity for small bookstores

I think Borders closing is a great opportunity for mom and pop bookstores to make a resurgence. First, mass bookstores are probably only viable in major cities and will therefore not service your “local” area. Second, a small store can create an in-store experience that justifies premium prices and a limited inventory. The key will be to never focus on selling a book. But rather, to focus on creating a community of book readers. Borders did a hack job of community building (should have secured the Starbucks deal).

For more perspective, read the comment by Mark Evans, former Borders executive, in the comments section of this post.