The Borders Question

By | August 3, 2011

Contributed by: Joseph Baker

Borders filed Chapter 11 Bankruptcy in February, and they recently announced that they are closing down their remaining 399 store locations. With the death of Borders book stores, many book lovers are wondering about the future of the medium. When Borders closes their stores, what will move in to fill that vacuum—other big box book stores like Barnes and Noble? Small independently-owned book stores? Nothing? Does Borders’ death represent a move away from book reading in general, or just a move away from stores like Borders?

The face of book sales in the US has been changing. Of course, with the economic troubles, book sales, like all luxury products, have been low in general. But how people are buying books has also changed significantly. For one thing, ereader sales have been increasing—an estimated 6.7 million ereaders were sold last year. Yet the ebook market is still just a fraction of the market for paper books. The more-profound change is how people have been buying paper books. Increasingly consumers are getting their books online rather than in brick-and-mortar stores.

Meanwhile Amazon has been doing fantastically well, watching their net sales grow by 51% since last year, despite the lagging economy. This is indicative of a general shift away from big box retail and towards online retail. Borders’ closing is not an isolated incident. Best Buy is also in dire straits, losing much of their business to Amazon as well. All across the board it seems that online retail is replacing the large brick-and-mortar stores.

While Barnes and Noble has not succumbed to this trend yet, if they do not reduce store sizes and increase their web presence, it seems like only a matter of time before they may have to.

Though death seems immanent for the largest book stores, there is no indication that the smaller book stores are on their way out yet. Small independent stores seem to be doing just fine. Though the profit margins for such businesses are small, savvy bookstore owners are keeping afloat.

What all this means is that people still want books (mostly physical), and people still want places to hang out. Borders’ closure doesn’t indicate that people have stopped buying books entirely; it just reflects a shift in the way people are getting their books.

Book stores need to compete with online retailers, which means having their own good online stores and/or having locations that are small and cherished enough that they can afford to keep the lights on. One way businesses are doing the former is using order fulfillment to help manage their online stores, while a way that business are doing the latter is by using social media to reach out to the community and put themselves on the map as a cultural haven.

With the coming changes in the way book stores do business, authors and publishers should take note as to how this will shift sales in the literary world. As online sales increase, sales of books that people usually look for directly via a search will likely increase, while sales of books that people usually pick up incidentally at a book store will likely decrease.

Accordingly, authors need to focus on writing books that people will seek out rather than expecting books to be able to promote themselves off of a shelf. Expect to see more in-depth specialty books pick up sales, while the lowest-common denominator, impulse buy books drop in sales. As consumers take an increasingly active role in their acquisition of media, producers of media should stop trying to reach such broad audiences and instead compete more ferociously for the attention of people in smaller sub-markets.

Leave a Reply

Your email address will not be published. Required fields are marked *