September 20, 2011

The Death of a Bookstore...Any Lessons for Us?

For 40 years Borders was a major force in Americans' reading habits. Its big box style stores anchored shopping malls and power centers. Readers, or simply browsers, found comfort in the aisles crowded with books on any subject. Music CDs and DVDs satisfied those looking for music or movies. Often a coffee shop and comfortable chairs offered a none-to-subtle enticement to sit and read a book or scan a magazine while sipping a latte. Buying the reading material became almost secondary to the experience. In fact, picture a library with better lighting, a wider selection, and a coffee shop, and you have a Borders bookstore.

Earlier this year Borders gave up the fight and closed down the final 400 stores while laying off its last 11,000 employees. For book lovers the death of Borders was a sad moment. It seemed to be the clearest signal yet that brick-and-mortar bookstores were not going to be part of our future. After this 1,250 store business disappeared, could Barnes and Noble be far behind?

I am not going to detail the future of book selling in America (and the rest of the world, for that matter).  I'll leave that to others. Rather, I have been wondering if there are larger lessons to be learned from this business failure. Are there a few elemental truths that we can uncover?  Obviously, the answer must be yes, since I am writing this post. Consider the following:

Change is a powerful force.  There is little disputing the fact that Borders was unable to keep up with the transition from printed to electronic distribution for many readers. Figures released by Amazon from earlier this year show that e-book sales are now besting printed versions by 2 to 1. Unable to compete on price and selection with Amazon, Borders steadily lost printed sales. Since 1999 they have suffered a 44% drop in sales, while Amazon has seen Internet sales explode by over 800%.

The company was also quite late in deciding to produce an e-book reader. By the time they did, Kindle and Nook owned that category in the consumer's mind. Barnes & Noble was bigger and had more clout in the industry. I have always thought having two major bookstores with similar names was not a recipe for success for one of them. Time has proven which one.

The quip that change is the only constant in life was proven again in this case. To protest against it, deny it, or dig in your heels and be the last man standing is a losing strategy, whether you run a chain of book stores or your life. The old days and old ways are not coming back. You must adapt to changes in technology,  financial planning and expectations,  health care costs and availability, and what your retirement lifestyle will look like. The plans you made may not be viable anymore. You can whine about it, fight it, or change.

Serving Others Serves You.  The Borders store near my house never equaled the close-by Barnes & Nobles in friendliness and having a constant presence of employees to help. That may have not been true in other situations, but I was more comfortable to be in a B&N. With the coffee shops, the huge selection of magazines, and the book, music, and movie sections being almost identical, I usually choose the store with  better service.

Another personal example involves Home Depot and Lowe's. For the longest time I would never go into a Lowe's Home Improvement Center because they had invisible employees. I never could find anyone to help me. On the other hand, Home Depot had folks in virtually every aisle eager to find that sprinkler part or perfect shade of blue for the home project.

A few years ago, Home Depot decided to save money by cutting back on employees, at the same time Lowe's started hiring more. Within a very short time period, my loyalties shifted. Realizing the error of its ways, Home Depot's experiment in poor service ended quickly and once again, service was given a top priority. I'm back to the folks with the orange aprons.

The point is obvious. People respond to other people being helpful. It doesn't matter if you are in the business world, trying to build a happy family, or  volunteering for the local food bank, serving the needs of others provides direct benefits to you. 

The perception of value becomes the value. In most cases the price of a paperback or hardcover book was virtually identical at Borders and Barnes & Noble. Amazon was almost always cheaper, as was Walmart on occasion. But, if you were the type of reader who wanted to hold the book and sample some of it before buying, you were likely to choose one of the "B" stores. As noted earlier, customers may have established a greater value to Barnes & Nobles than they did to Borders on something other than price. Customer service may be one reason. Certainly the number of stores and location had some bearing on the outcome. B&N had a better web site with easier navigation.

But, something else in our collective mind said B&N was better. I contend that "something else" was the wholehearted acceptance of changes in reading habits. Barnes & Noble's rapid deployment of the Nook reader left its direct competitor in the dust. It also helped validate the entire concept of e-readers. If B&N and Borders had both been slow to develop such a device, I wonder if Kindle would have become the force it is today. With two devices on the market, each supported the other to grow the market for downloadable books. That perception of the value of e-books became a self-fulfilling prophesy when they became mainstream.

Early in my radio career I was taught that perception is reality. If the radio station I worked for said it was the #1 choice for the latest hits often enough, then eventually that perception became true, even if another station across town actually played more.

In life you are perceived a certain way. A post from a few weeks ago on your legacy made the point that we want to believe our time on earth means something to someone else. The value you have in your relationship with others is directly affected by the perceived value you bring to that relationship.

Related Posts
Speaking of electronic e-books, I'd appreciate your consideration of the purchase of my e-book, Building a Satisfying Retirement. It is available by clicking here. 


  1. Bob, as I read today's blog post I had a couple of thoughts. One was how quickly (or seemingly so) change or demise can come. I was thinking of when we visit museums or read historical accounts of other human institutions or devices and see how few years some of them actually were "in", it should come as no surprise that the big box bookstore/coffee shop lasted for only a relatively short time. In fact, I've come to think of how everything has a lifetime and as soon as it is "born", the dying process has actually begun. Of course some organizations morph into other entities and extend their "life" but sooner or later nothing remains quite the same. Our personal opinions decide whether the new version or thing is better or worse but I suspect that younger people like the change better and we older people tend to look fondly backwards. Actually, when I really think about it objectively, some things need to "end" and the newer thing is often better. Hard to admit for some of us.

  2. Don,

    You have summarized the dilemma of change quite nicely. As as soon as we are born we are on the path to death. Any business or organization also has a lifespan. Some are shorter than they should be through miscalculations or bad decisions. Others just outlive their purpose in their present form...think US Postal Service.

    I love using steno pads for lists. I thrive on high-tech stuff but I hold onto that little bit of my past. In this case I'm certainly looking backwards.

  3. Without doing a word search or a lot of re-reading, I’ll guess that “competition” does not appear in this post. Without exception, the bolded points are true and the reflection supports the valuable lessons in each point. It’s just that there’s more. One big make or break force in the capitalistic market place -- competition.

    A current change simmering in the stew of competitive capitalism: Netflix vs. Blockbuster vs. every website streaming entertainment content online. What moves will Hollywood (content owners) make as change is accomplished during the current competition?

    One more thought about print on paper publications lining shelves in brick and mortar bookstores; maybe smallish high service mom & pop bookstores will get their shot at competing on Main Street again soon


  4. Hi Bob,

    What your post brought to my mind was that like Borders, many people aren't keeping up with the times either. I just used that example to my sister the other day.

    For over 20 years, she has sold infomercials to TV stations. Since about the time of 9-11, she could see that in time, her job will cease to exist. You may not know this, but if an ad agency books an infomercial, in order to make a commission, people must buy at that moment, using that phone number. If they see a product and go to the internet to order it, the ad agency makes no money from that so revenue is way down.

    Although TV abounds with infomercials, the industry as a whole is tanking due to the economy and the fact that old ways of advertising are becoming antiquated. Up until last summer, my sister ignored the changes in the wind because she had a job. Suddenly revenue is down and she is laid off.

    Now what? No one else in that industry is hiring either. All her contacts report being laid off or hours or pay being cut and they fear they will be laid off too at any moment.

    My sister has worked with computers in her job but she knows relatively nothing about social media (the new form of advertising), blogs, websites, etc that have to do with today's Internet marketing.

    I told her she should have taken a leaf from Borders' book (pun intended) as they also didn't keep up with the times.

    I think those of us still working should see from Borders demise that you can't bury your head in the sand. You have to keep up with the current trends and become educated in changes in your industry.

  5. QwkDrw,

    You are right, the word "competition" wasn't used. But, all of the bullet points are a reflection of a part of competition that Borders was beaten by B&N.

    Netflix is becoming a classic case of a company that keeps kicking over its own water dish. They owned the streaming position in the consumer's mind but have done everything possible to get people to consider alternatives. Hubris or stupidity?

    Two of the great independent bookstores in the country are located in the Phoenix area: Changing Hands and The Poisoned Pen. Both are doing much better since Borders has left the market. Mom and pop bookstores have a new lease on life.

  6. As every one here I see that as a change in the marketplace and is a necessary part of capitalism. Why keep cutting down all those trees when a few electrons will do just as good.

    But I am a little troubled by the possibility that the overall market for book length reading is decreasing. It seems we all, and I am including myself in this, want our information condensed as much as possible. That is why I always try to keep my blog posts to less than 500 words. Yes, I continue to read 4 - 6 books a month, mostly the electronic version, but I also skim Internet info more than I used to.

  7. I get all my books from the library. I can't remember the last time I bought a book. Maybe there are a lot more people going to the library-my local library is packed all the time-the economy is part of the reason for the drop in sales.
    When the customers stopped coming, the business has to adapt to what the custmers want or die.
    Service is a major issue-I will pay more for good service. I have been in stores where I could not find anyone to take my money-noone at the cash register! Two stores closed because of this.

  8. Joan,

    I didn't realize how the infomercial business works. If there had been a huge decline i would assumed people just TiVo'd past the commercials. But, what you say makes sense. See something on TV, then do a little research on-line before ordering.

    I did the same head-in-the-sand trick when my radio consulting business started to slide in the late 1990s. A Federal rule change was the big, bold, writing on the wall that I ignored. By 2001 I was toast.

  9. RJ,

    Personally, I read physical books more than I used to. I think it is a break from the hours of reading and writing in front of a computer.

    Holding the book and turning the page is a process I enjoy and it relaxes me. I have 20 or so electronic books (19 copies of my, just kidding) but find reading a novel or non-fiction in that way not as enjoyable.

  10. Donna,

    Our local library is packed, also. It closes 1 day a week which puts more pressure on the times it is open. I see lots of folks using the computers. I assume they are saving money by using the library's system instead of paying for Internet at home.

    Libraries have also changed their attitude and become much more of a social place. The librarian who tells you to be quiet is rare today. Sometimes I am disturbed by the noise but realize being more tolerant is how they attract teens and younger folks.

    The last book I bought was mine.

  11. My next door neighbor owns a small, local, independent bookstore. Even though it costs more, I try to buy all my books from her. Her store is such a wonderful part of our area, and I would hate for it to close. And what service--when I want a book, she just brings it home with her and delivers it right to me! She also just today brought a gift for my new grandson--some favorite children's books, each one a treasure. I can't imagine ever living without books I can hold in my hand, but I imagine that day is coming, if not in my lifetime, probably in my grandson's.

  12. Galen, the new grandmother,

    Being the friend of an owner of a small bookstore would be my idea of heaven. I can't walk into any bookstore and not want to leave with a stack of new material. I resist the impulse, but am looking for a Book buyers Anonymous organization I can join!

  13. My library just got a slew of eNooks, which we can rent out at 28 days per time. For free. It's pre-loaded with all the best sellers. I don't have to wait weeks before I can read what I requested. It's been a great experience.

    The pages are easier to read, and since they are smaller than the actual book, I read through them faster.

    My library also just got in several iPads. All from donations. Not tax money. The iPads however, can not be rented out. You get to sit in lovely, comfy chairs, in the new wing the library built in 2005 and read to your hearts content. The Wall St Journal, the NY Times, Newsweek....whatever.The library here has become the hub of the social gatherings here in town. With scrabble games and art auctions and lectures and meetings.

    It's delightful.

    All we are missing is an espresso machine and the place would be near perfect.

    If I do buy a book, I usually get a used book from Amazon. Generally cookbooks and travel at 75% less than cost. B&N and Borders wouldn't like me very much.

  14. Your response made me laugh. I need that organization, too, except that I really don't want help with my book addiction!

  15. I love neighborhood bookstores and always buy from them when I have the chance. Ditto for neighborhood yarn stores. The Internet and big box stores like Michaels have really hurt the neighborhood yarn store and many have closed. Still, there the small yarn stores carry specialty items and buying on the Interent doesn't give the opportunity to actually FEEL the beautiful yarn and see the colors. Michaels and Joann only carry generic type yarns.

  16. Galen,

    Ah, the first sign of a true addition...denial.

  17. Joan,

    My wife spends a fair amount of time (and more than a fair amount of money) at Michaels and Joanne. But, she does not buy yarn, so you can still like her!

    My dream neighborhood has front porches that people actually use, areas of small, specialty stores and restaurants within easy walking distance, and a park.

    The closest I have found is downtown Flagstaff. You just have to get by the big box gauntlet on the stret into town.

  18. That is such an excellent, insightful, and tempting-to-comment-about point; your 'dream neighborhood' (downtown, city centre, or core) compared to the 'big box gauntlet' just on the margin of the dream core area.

    Perhaps some if not most would benefit if the neighborhood sense of place (to borrow a phase) would migrate in the built environment out into the site planning of the big box stores -- might be latent potential, actually.

    For your readers that may be generally interested in this topic, and with your permission, I'll thank you and give the web address directly to an on topic post over at my blog:
    This and related topics are interesting enough (at least to me) to consider for more articles in future months


  19. QwkDrw,

    In Flagstaff, AZ, the built up area is there because 1) the University is there and students spend lots of money and 2) it is the road tourists first encounter on their way from the Interstate to the Grand Canyon.

    Just a few blocks behind the built up area are small homes in distinct neighborhoods. But, the traffic and concentration of shopping on Milton Ave. pretty much overwhelms anything else.

    The idea you express in your post is a good one and actually solves a few problems, as long as the smaller stores aren't trying to compete with the big boxes. They would have to fill other needs.

    Interestingly, in Flagstaff there is the huge Barnes & Nobles a few blocks away from an equally large used book and video store. It does well because it is selling something B&N isn't: cheaper used books.

    I have been an amateur urban planning geek for most of my life after a fascinating few courses in college. I love seeing in-fill working well. Phoenix is doing an excellent job of transforming the downtown area into so much more than just office building. ASU now has almost 10,000 students downtown and all sorts of loft condos have been built. Two grocery stores are now open, along with a 6 day a week farmer's market. Very encouraging.

  20. I only recently found your blog and am enjoying it very much. I purchased your book last evening and am already learning a lot.

    My wife and I have also lived below our means and have saved all our lives. We both contributed to our company 401K plans early on, paid off our mortgage years ago (bought a much nicer home 6 years ago and will be paying off our current mortgage next month), and never carry a monthly credit card debt. We both still work … my wife has her own business consulting for non-profits while I “work” from my home office as a programmer. I love programming so I really view my job as just another hobby. Next year I’ll be eligible for Medicare so maybe I’ll retire then. Or maybe I already am.

    I’ll be checking in from time to time. Thanks for the writing your blog.

  21. Nick,

    Thank you for visiting and a double thank you for buying the book. I hope you find the $5 investment worth it.

    Stop back here and comment as often as you can. Your move towards retirement appears will thought out and on the road to being satisfying.

  22. Bob,
    Much as I like the idea of bookstores, I have always resisted actually buying books - unless it seems likely that I might want to read them again. For this reason I have always been an enthusiastic user of public libraries. In my SoCal life, I had an excellent local library and even in the sticks, my NoCal library is pretty good. Even so, I can't see myself ever going with a kindle. I like the feel of a real book.

  23. Ralph,

    I have 20 books I downloaded to this laptop from Amazon...all for free (except my book which I bought!). I have read none of them.

    Like you, I like a physical book. In fact, Betty and I just returned from a used book store where we bought 5 or 6 paperbacks for our trip to Maui next week.

    Generally speaking, I don't buy many books anymore. They are too expensive. I'll wait for the library to get them.

  24. Thank You for letting us know about the Kindle reader download.

  25. Dr. Keith,

    You are quite welcome. Look for all the free books Amazon offers through their Kindle store. You may never have to buy another book again!

  26. Bob,
    I think you're right about Customer Service. Also Borders always seemed "old-fashioned" and not cozy. I always preferred B&N, with their comfortable armchairs, coffee shop and they are packed on weekends with people reading "free" books and magazines. I did not get a Kindle or Nook but a Verizon tablet and can download from Amazon, where your new e-book is.

  27. Sonia,

    The Borders near me added a coffee shop a few years after B&N, but is was rarely busy. There were also fewer places to sit and browse. They just didn't understand what their business had become.

    Another example unfolding before our eyes: Netflix. It is doing everything it can to lose it's positive position in the mind of the customer.