The fall of Borders Books: A follow-up observation.


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I just had the pleasure, or maybe experienced the sheer pain and agony of visiting one of the Borders Books locations slated to close as part of their bankruptcy process. The store’s specific location doesn’t much matter, but for simplicity sake, let’s say it’s a high traffic mall location. I’ve been at the store before on prior mall excursions and the store was surprisingly empty each time I went. The specific location is a large, single floor floorplan with approximately 15,000 square feet, if not more. Typically on prior visits there were no more than 20 or 30 other shoppers there each time I went. Somewhat surprising considering the busy mall foot traffic just outside the door.

Today’s visit was very different. There were hundreds of people in the store, literally arguing with one another about who’d be able to take the last $1 2011 swimsuit wall calendar or generic James Dean poster. The walls and windows, you see, were plastered with huge signs saying the store is closing and everything was on sale. The shopper experience there was neither caring nore innovative, but rather every man for himself and a sort of “You’re on your own, buddy” which was somewhat disconcerting.

People packed the store looking for bargains. People were willing to accept a poor customer experience at the store in favor of bargain hunting, it seemed. The ironic twist, however is there was not a single bargin to be found in the store. Just the simple act of placing store signage indicating the sale price and “all sales final” was enough to create the perception and drive the traffic. What shoppers fought over and tolerated substandard customer experiences were, however no great deals. The pricing, even after the discount was relatively non-competitive and indeed, higher than other booksellers who also provide a superior customer experience for their shoppers. Books that were sticker priced at $39 were discounted to $32, or so and people literally scrambled to grab the last ones, hording merchandise for themselves when in fact the same product could be bought elsewhere for less than $30 and if you’re an astute shopper, far less.

One of the interesting takeaways for me was that people are still bargain crazed and lose sight of substitute pricing realitites in some situations, but never are thees situations sustainable. Borders can only have a “going out of business sale” for so long, and then will need to close. Companies on the other hand looking for a sustainable strategy need to position and build a strategy around value and customer experience and not just fire sale pricing.

People are funny. Shoppers are fickle. Sellers are growing in their own desparation. Yet, firesale strategies are really only suitable for companies on fire. Driving revenues alone is almost never a suitable substiute for driving PROFITABLE revenue. Firesales are not the answer for profit maximization nor sustainability.

Oh, and that $39 book? I passed it by, along with the $3.29 magazines and the $22 DVDs and left empty handed because the value of the merchandise was insufficient to me to tolerate the substandard experience I received.

Republished with author's permission from original post.

Marc Mandel
Marc Mandel is a Regional Sales Director at Allegiance, Inc.


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