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Borders’ In-Store-Only Coupons Sign Of A Much Bigger Problem
Still, if a chain truly believes that it might not survive the storm, sheer survival might trump all. But will it really?
The irony here is that Borders’ customers are a community of information-lovers. They are likely to be more open to mobile and social media forums, let alone Web communications. Is it not indeed ironic that two of the chains whose customers are most inclined to embrace the Web—Borders and Starbucks—are the ones most inclined to ignore it?
Borders officially says the program is indeed temporary and the chain is trying anything it can to try and survive now, so that it will have options later.
“As our CEO, Ron Marshall, said on our most recent investor conference call, we are focused on improving gross margins through being smarter in controlling promotional offers and in-store discounts,” E-mailed Anne Roman, Borders’ VP for corporate communications. “We are researching and experimenting with a variety of offer types and combinations of offers to be more effective and hit the right sales/margin balance.”
One has to ask the question whether this in-store focus is based on customer and prospect feedback or whether it’s internal logic, calculating that if stores today deliver more of the revenue and profit, that’s where investments must go. It might sound rational and logical in a memo from the new CEO, but I think Borders may be about to discover that many of its customers are probably not going to have received that memo.
They’re going to expect the chain to anticipate their needs and work with them in their preferred channels. It wouldn’t be the first chain to not properly hear what its customers are saying, but it seems an odd way of reversing sales declines.
-Marc
April 30th, 2009 at 8:33 am
I’m not sure that I agree with your premise. I think most Borders’ customers enjoy the in-store experience and just view the emails as an (informational) annoyance. The coupons serve as an reminder/incentive to go get ‘that book’ you were needing anyway. Borders’ problems, I believe, stem from a shrinking base of readers plus the obvious economic reality that eating comes before reading. Like many retailers they are trying to get more from less.
April 30th, 2009 at 9:52 am
I am a typical geek with over 25 years sitting behind the computer screen. I buy online all the time. Even have special bank accounts setup just for online buying.
I hate buying books online.
Books are a tactile experience, shopping is half the fun. Even techie books require a good looking through before I decide between the 5 or 10 possible choices.
If I want to save money and know exactly what I want, I go to Amazon. Good discounts and lots of used vendors. When I get an in-store only coupon it encourages me to go and shop. How often do I walk out with only one to use the coupon on? Never. On the web site it’s so sterile that I buy the item, log the coupon and I’m gone.
The strategy pushing people towards brick and morter has a good foundation in this business. Very tactile, very shopping oriented.
Bravo Borders for going against the grain!
May 1st, 2009 at 10:03 am
Book people go to book stores and shop online only when they know exactly what they want. Coupons online result in lower average sales. Coupons in-store lead to impulse buying and much higher average sales. If Borders wants to grow sales driving traffic into the store is key. People who read and shop for books are the ultimate multi-channel consumers, they’ll make a store trip with a good offer.
May 20th, 2009 at 1:36 pm
It seems that Borders has set itself up for failure in its Web strategy. It sells a majority of items at borders.com at list price. To make coupons only valid in a B&M store further alienates those who would prefer to shop online. So, yes, while, as Kelly says, book people go to book stores, there is a huge market of those who will pass right on by borders.com and go to amazon or bn.com. Borders is leaving money on the table.