Monday, August 8, 2011

Borders on Depression

As we mentioned a couple of weeks ago, Borders Books has officially decided to liquidate the entirety of their stock and go out of business. This, obviously, means that they will be closing all of their retail stores.

When this happens, the retail stores sell off their stock at "steep" discounted prices. Only, in this case, they don't really.

Sure, prices are currently slashed to 25% off pretty much everything in the store--with lesser-selling genres and titles cut back further--but these new, discounted prices are actually higher than what I paid at Borders on any given day over the past three or four years.

And yet, the store was packed with people looking for "a bargain."

As a Borders Rewards member, I received discounts on every purchase and once a week, I would get emails from Borders loaded with coupons. Typically, these coupons started at 30% off one item, but often included even further discounts.

Over the years, I don't think I've ever paid anywhere near retail on a book, DVD, or CD at Borders.

Their discounts couldn't quite match those offered by Amazon, but then again, I can't walk into Amazon, stroll its aisles, and spend a leisurely afternoon combing the racks.

Of course, Amazon does just about everything else better than Borders or Barnes & Noble, for that matter, could ever dream of.

Still, Borders was offering excellent prices on their product. Their customers just weren't aware of that. Or, if they were, they just weren't compelled to join the program.

How many times were you on line at Borders and the person in front of you refused the cashier's offer for a free Rewards card? How many times did you refuse that offer?

If you did, I don't think anyone could blame you.

Signing people up at registers is annoying. It just is. It's annoying for the person handing over money and it's annoying for the person standing behind that person, waiting to hand over money.

If the customer is interested, he or she will never just say, "sure!" He or she will ask several questions, which then need to be answered and, inevitably, countered. Information needs to be gathered and things need to be signed.

This takes time and it makes the people standing in line angry.

Borders had a wonderful Rewards program working for them and for their customers. They just did an incredibly bad job of promoting the upside of the program to their customers.

Never has this been more evident than now, when Borders stores--like the one I was in late Saturday--are packed with people picking through the shelves and buying armfuls of books.

Again, for a discount less than what Borders usually offers to its Rewards customers. insane to me.

But you don't have to step back too far to get an idea of why Borders failed in the end. Yes, they were fighting Amazon and iBooks and Barnes & Noble.

But they were also fighting themselves.

In failing to promote the Rewards program, and in failing to get more customers on board with the Rewards program, Borders had no chance in the current market.

It's quite obvious that people still want books. They just don't want to pay full price for them.

To wrap this up, one last point.

When I walked around that Borders on Saturday, my stomach turned and my heart sank. There was the shell of this place that I'd visited countless times over the past 10 or 15 years.

The staff is comprised of familiar faces, but there was a completely different look on those faces. They were tired and overworked and stressed out.

The store itself was dark and dreary because of all the BIG SALE! signs hanging from the ceiling and blocking the light fixtures (well, blocking the ones that hadn't already been sold), the bathrooms were locked up, and the air conditioning had been turned off. Or, at least, turned down too far for a store that large, and with that many people inside.

I talked to one employee and she told me that they think the store will close sometime in September, but their warehouse continues to send more product.

They're dumping everything they have in every warehouse they have, and they're sending that product to many fewer stores than there were just a year ago. Retailers will work frantically for the next couple of months, ostensibly speeding up their own termination.

That's horrible.

And that's why my trip to one of my favorite places was just...depressing.

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