Unless you’ve been living under a rock or deep within a cave the last week or so, you’ve heard over and over again about the final demise of Borders Books. Everyone seems to have their own opinion on what caused the once powerful bookseller to go under. Fingers are pointed at the downturn in the economy, the e-book revolution, Amazon, and publishers. Some even point at the real heart of the matter, in my opinion — Borders’ upper management. So, what is the truth and is the demise of Borders an omen of things to come?
The simple answer to what went wrong with Borders is “all of the above and more”. Borders and Barnes & Noble came to prominence at a time when superstores of all flavors were the rage. Readers were dazzled by the huge selections offered under one roof. If they didn’t have what you wanted, you were sure to find something else that intrigued you. Plus, they were more than happy to special order any title they didn’t carry.
Borders did a lot of things right — in the beginning. But, for the last ten years, they have done more things wrong than they’ve done right. One of their first major missteps was when they contracted with Amazon as their online presence. I remember the first time I went online to check availability of a title at Borders. The local store didn’t have the title but there was this new button that let me order it online and have it delivered to the store or to my house. Cool. But when I clicked on the button, I was redirected to Amazon. What?!? I hit previous page and tried again. Yep, I was taken to the Amazon site. Barnes & Noble didn’t do that. They had their own online store. So did the local indie bookseller still in business. So why is one of the largest bookstore chains in the country using their competitor, the online presence so often cursed and denigrated by booksellers everyone as being the epitome of evil? How much money did Borders lose this way? More importantly, how many customers became Amazon customers because Borders was sending them there?
Then came the increased popularity of e-books. Amazon brought out the Kindle. Sony brought out their own line of e-readers. Kobo had dedicated e-readers and Barnes & Noble brought out the Nook. Where was Borders in all of this? For a long time, nowhere. Then they started selling the Sony readers and Kobo readers in their stores. Then they partnered with Kobo, much like they did Amazon (although, to be fair, Borders did own a share of Kobo). Would having their own dedicated e-reader have saved Borders? Probably not, not without a lot of other changes, but it might have bought them some time.
Did Amazon put the final nail in Borders’ coffin? No. Did it help bring down the bookseller? Most definitely. The lower prices and the ability to find any book you want lured customers away from the bookseller. But, let’s be real here, folks. The responsibility for a number of customers going to Amazon instead of Borders lies with Borders. They quit stocking as many books as they once did. Worse, they quit stocking as many mid-list writers as before. Sure, you could find that best seller and that newest “hot” author. But the work horses of publishing — the mid-list authors — were quickly disappearing from their shelves. Add to the fact that you could place your special order with your local Borders and it might or might not ever arrive there and, well, you have dissatisfied customers who will look elsewhere for their books.
Fast-forward to the announcement that Borders was filing for bankruptcy. Publishers weren’t being paid for books delivered to the stores. Landlords were being blamed for not renegotiating leases. Borders was going to be forced to close a number of stores. Guess what? A number of stores that were shut down were stores that were posting profits while stores that weren’t were kept open. Does anyone else see the flaw in that? So, was anyone surprised when Borders asked publishers to keep sending them books and deferring payment for them? What I never understood was that there were publishers who did. Now those publishers are out even more money than ever.
Borders is now in liquidation. Soon, it will cease to exist and there are cries going up about how this signals the end of bookstores. But does it? Or is this a very good lesson in how not to run a company? Borders failed to adapt to the changes in the economy and in market demands by their customers. Borders often failed in customer service areas. (A caveat. I know there were some Borders stores where the employees were knowledgeable and more than happy to help you. But that seemed to be the exception and not the rule.) Instead of adapting or even reinventing their market plan as customer demands changed, Borders took away space from books to add stationary products — and, sorry, but who writes letters these days — and educational games and expensive DVDs (which could be bought at much lower prices at the local Walmart or Target).
So, back to my initial question. Are we entering a new age in bookselling now that Borders is gone? I don’t think so. I think we are seeing the natural evolution of the market. Bookstores need to take advantage of being able to sell not only hard copies of books but electronic versions as well. This can be done by becoming part of the google e-book market. It can be done by letting small e-presses and authors sell gift cards for their books. Bookstores need to be inviting. In other words, not only do they need to be well stocked but they need to have knowledgeable and personable employees. They need not look like a generic store. Have nice lighting, comfortable seating. Be willing to take special orders — and make sure those orders are fulfilled.
More than that, I think we will see the return of specialty bookstores, smaller stores that stock only mysteries or romance, etc. These were the stores that managed to survive in the face of the big box stores because of customer loyalty. But the key for this to happen is tht the stores that open do so with sufficient operating capital to function for several years without profit.
But there is another player in this that has to understand that the market is different now than it was five years ago, much less ten or twenty years ago. Who am I talking about? The publishers. Those houses that have been around forever and have become dinosaurs. They have dragged their corporate feet when it comes to e-books. They continue to hang their survival on overpriced hard cover books — something most readers can’t afford any longer unless they order from Amazon. They are sacrificing mid-list writers, their bread and butter, for big names that aren’t selling like they used to. Worse, they use accounting systems that aren’t accurate and one day authors will finally have enough and will band together to demand an accounting and houses will fall.
What does this mean, it means that we have already entered a new phase of publishing. Borders was a victim of this new phase but not because of any one factor. Mismanagement on a huge scale teamed with the change in customer demands and often foolish decisions by publishers all combined to bring down the bookseller. Other factors were present as well. Does it mean there will soon be no bookstores? Not at all. As long as there’s a demand for physical books, there will be bookstores. They just won’t be on every corner and there won’t be two or three around every mall. We might have to actually drive a few minutes to get to one. But you know what? That’s how it used to be. So you could say we are taking a step back in time.
No, the real question we should be asking is how many publishers will be unable to recover from the loss of Borders. Not so much because of the loss of shelf space. That won’t help the industry, but it’s not a killer. There are other options out there for publishers, if they will pull their heads out of the sand long enough to see them. No, what may bring down at least a few publishers is the amount of money owed by Borders to them. In some instances we are talking debts in the millions. For an industry that is already suffering, that is going to be hard to absorb.
What will be the result? Short term it’s hard to tell. Authors are going to see smaller royalties and even smaller advances than now. More mid-listers will find themselves not being picked up by their publishers even though their numbers have remained solid or even increased. For readers, we’re going to find it even harder to find some of our favorite authors and we will see yet another increase in the price of books. E-books from the main publishers will continue to be priced higher than many are willing to pay.
It’s the long term implications that are harder to predict. My gut feeling is that we’ll see some of the major houses either selling off huge chunks of themselves or doing major reorganizations, closing down lines once thought to be sacrosanct — in an attempt to stay alive. But publishing will survive. People want to read, despite what we’re told. The question becomes not, are we entering a new age but can the upper managers of the large publishers learn from past mistakes and move their houses back into profitability or will they go the way of Borders? I’m hoping for the former but expecting the latter. The only thing for sure when it comes to publishing is that the ride is going to be a bumpy one.
