The retail industry is very competitive these days, especially here in the Triad. Back then, it was big-box retailers competing with small locally-owned businesses, and now it's basically online retailers competing with the big-box stores. Small businesses here in the Piedmont are still flourishing as of now, but what about the big boys in retail? They're trying the best they can to adapt the changing times, and the book industry is one example. I'm going to focus on two specialty booksellers in this post, and I will talk about how one flourished, while the other is currenty facing liquidation.
As many of you know by now, Borders Group announced that they were going out of business, closing all of their 399 stores (including the Winston-Salem location) and eliminating 10,700 jobs. Many people are wondering what caused Borders to fail while its larger rival Barnes & Noble (NYSE:BKS) is still thriving. The answer? Barnes & Noble developed its own eReader, something Borders failed to do. Barnes & Noble itself was falling behind Amazon.com (NASDAQ:AMZN) during the time the Amazon Kindle was launched, but was finally able to catch up in 2009 when they introduced the Nook, which proved to be very popular with consumers. Books-A-Million (NASDAQ:BAMM), which recently took Borders' throne as the second-biggest bookseller in the United States, even has a deal with B&N to sell the Nook. But, the question we keep asking is why did Borders fail? Sure, they had eReaders available at their stores, but they couldn't come up with an eReader of their own like Barnes & Noble did with the Nook. Instead, they sold an imported eReader from Canada called the Kobo (manufactured by the Canadian company of the same name), which has not been very popular in the US so far.
Not only was failure to shift themselves into our modern digital world the case for Borders, but while a B&N employee was helping me find a book I wanted called "The Adventures of Tintin: The Secret of the Unicorn", he said to me that their (B&N's) rival's poor management (which dates back to the chain's ownership by Kmart back in the 90's) and poor customer service was a factor as well. Even though Barnes & Noble has been rumored to have a buyer (Liberty Media) earlier this summer, there's no question that they're doing just fine, despite the liquidation of their biggest competitor. One lesson learned in retail (and from the liquidation of Borders) is, if a business sticks to an old fashioned business model for a long time during a changing world, it can be dangerous. And, when you finally decide that you want to change that business model, you realize it's too late to do anything about it.
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