The recent demise of book giant Borders is, while tragic on many fronts, also a seismic shift in the marketplace, and demands that businesses everywhere take a lesson, lest we forget, in the words of Spanish American novelist George Santayana that, “Those who cannot remember the past are condemned to repeat it.” 

According to the July 21^st entrepreneur.com blog, “What Entrepreneurs Can Learn from Borders’ Demise”, there are several factors that contributed to the failure of the chain. 

Size matters. Because Borders stores are so large, they carry large overhead expenses, including rent and utilities. That’s all well and good, given there’s also a large volume of foot traffic – and thus customers – buying books and music. But with the overwhelming trend toward virtual shopping, the volume of customers needed to support said expenses began to disappear. Independent retailers have smaller store fronts, which translates into lower overhead, which translates to more security. 

Lesson learned? Bigger isn’t always better. Even if you’re not a bookseller, the logic still applies. If you’re a business owner with a physical location, think long and hard before you build or rent a bigger office. Do you really need it? Or can you make do with what you’ve got? Could certain employees telecommute? Could you offer more products online? Think outside the ‘big box’ concept. Remember, often less is more. Maybe Borders would have survived, albeit a bit longer, had it adopted a plan to close stores gradually, proactively, instead of being forced into it. 

Work it. Borders had hundreds of square feet of store space, but rarely used it for anything other than book displays. What could they have done with the space? What about hiring bands? Putting on cooking demonstrations? Debates? A coffee klatch? Poetry or book readings? Perhaps this is a case of Borders resting on its laurels – just because it’s Borders doesn’t mean it’s all that. Advertising, reaching out to the community in order to increase foot traffic – and thus customers – didn’t happen, or didn’t happen enough. 

Lesson learned? Plan to invest dollars and resources in advertising on a regular basis. It’s the old adage of, ‘you have to spend money to make money.’ 

That’s so last season. Borders somehow lost touch with the fact that the internet provides a major platform for e-books and virtual shopping. The big box bookseller never managed to develop a dominant online presence. Opinions vary when it comes to the electronic versus paper preference, but one thing is for sure – digital media is here to stay. 

Lesson learned? Stay in touch with trends. It’s not wise to jump on the bandwagon for every trend that comes down the pike, but this one was screaming, jumping up and down, and waving a red flag for at least a decade. Don’t get set in your ways. Invite discussion, and schedule ideation sessions with your employees on a regular basis. Follow the market. Read industry literature. Attend continuing education classes. Network with your peers, and your competition. Be proactive, and keep an open mind.

As for the electronic versus paper debate, that’s a topic for another blog.