Borders’ Way Out: Ultra-Local Digital Content

Written by Evan Schuman
February 24th, 2011

Ever since Borders’ bankruptcy became official, commentators have been falling over themselves offering the chain advice. At least one column was encouraging employees of the chain’s closed stores to buy the stores themselves and to reopen them with an all-local focus, selling books and whatnot about local residents. That idea is both wonderful and awful.

The problem with most of these suggestions is that they are trying to figure out ways to breathe more life into dead-tree book versions. This is akin to suggesting to Blockbuster, a fellow retail resident of the critical care unit, that its revival key is to get more people to buy DVDs and to reinvest in VHS and Betamax marketing.

But the idea of converting a bookstore into a place for events and ideas with an exclusively local twist has strong potential. And the reason why is deep in new technology: E-books and even more simple electronic documents are so cheap to make and distribute that it has vast potential.

One of the problems with Borders—and other remaining book chains, especially Barnes & Noble, aren’t any better—is that it is trying to be a national chain. That makes little sense. Amazon is a national book chain. The best approach for Borders would have been to function as a huge number of very local stores. These stores, though, need to have only a very small area in the back for dead-tree books.

What if the content was exclusive (differentiated) and entirely local? Have a citywide baking contest. The winner gets to write his/her own cookbook and it’s only sold (downloadable) from that shop, either in-person or on the site. Local musicians cut albums, and the agreement is that it be only available through that store. All revenue to be split.

The store could videotape local events (high school graduations, parades filled with locals, school shows, community theater, etc.). The downloads could be sold for low prices and yet still leave enough for splitting. Business execs doing business books, filled with local examples.

This is a way for book stores to offer differentiated products profitably. Want to compete with Amazon? Offer things it can’t.

The irony here is that this is actually how Borders began. In its early days, Borders was obsessed with local. But the local was locally made choices about which nationally published books, audio and videos to offer, as opposed to true local content. This was long before Amazon, when a book only available at the store on Elm Street was about as exclusive as it needed to be.

Today, there was insufficient differentiation. And it’s at a time when daily newspapers are dying, which means that the best sources for local content are also dying. Win-win. It’s a little late for Borders, but it might be just in time for smaller retailers across the country. And if a large national chain wanted to create a network of tens of thousands of ultra-local shops, all the better. Hear this, Barnes & Noble?


4 Comments | Read Borders’ Way Out: Ultra-Local Digital Content

  1. Mark Says:

    This side of the pond it’s the nationals that basically have the stranglehold and life isn’t easy for independants in reality.

  2. Richard Nedwich Says:

    This is a tough one. Reminds me of “You’ve Got Mail” except now the national chain is struggling.

    On a recent family trip to NYC, we brought our kids to a local book store on the Upper West Side – the staff was wonderful, helpful, knowledgable – interacting with our kids and then zeroing in on just the right books for their reading level and their interests. Perfect. You just can’t do that with e-commerce. Were the books more expensive than Amazon? Yes. Will this book store be around next year? I hope so….

  3. Fred Says:

    The death of the book store and the death of books are not necessarily the same thing. Even Vinyl records live on long after high street retailers stopped selling them.

    eBooks and Books are simply alternatives for the consumer.

  4. Evan Schuman Says:

    That’s certainly true, but I might suggest that vinyl is a wonderful example supporting the death of dead-tree books. I never suggested the death of books, but merely the paper version, in the same way that the death of betacam and VHS didn’t mean the death of videos. Nor will the death of DVDs. Videos will survive but they’ll keep changing form. So will it be for books.
    Vinyl records (of which I have more than a few, he sheepishly added) are hard to find and they’re typically lumped into the dreaded “collectors” category. Some music producers have done a handful of records in recent years, but if you link dead-tree books with vinyl records, you’re onto something. Books will still be around, but they will ultimately occupy a similar space to today’s vinyl. And that’s far too small a space to support a major retail effort. You see many large music shops around that still make most of their money from vinyl?


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