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What Went Wrong at Borders (theatlantic.com)
69 points by mikecane on Jan 13, 2011 | hide | past | web | favorite | 83 comments

I have a serious book habit, and Borders used to be my go-to bookstore in the US. Or was it the Barnes and Noble. Well, you know, one with a B in it at any rate.

In over a decade of patronage, I cannot recall ever having a single successful conversation with a staff member (other than "These books, please.")

The bookstore receiving 50% of retail price for providing fungible copies of books, bitwise identical to those offered by all other bookstores, without even a scintilla of value-add, has struck me as something in urgent need of radical corrective capitalism.

By comparison, Amazon recommendations are routinely as good as my sister's, their customer service has been top-notch, their prices are cheaper, and the Kindle has transformed my experience with the medium and quintupled my consumption. I am in no danger of confusing Amazon with another shop that starts with A.

In over a decade of patronage, I cannot recall ever having a single successful conversation with a staff member (other than "These books, please.")

The problem with big box booksellers is that they can't possibly win on customer service, because their customer base is too diverse, and no single employee can begin to satisfy the customer service needs of such a broad range of tastes and needs until they've spent years both learning the store's inventory and building a mental model of customer types and their preferences. But it's a retail job and the rewards are meager, so there's little incentive to become this ideal bookstore employee, though they do exist; the employee you do end up with is either a thwarted English major who despises you (this was once me, I'm sorry to say) or the avid reader of bestsellers -- and if that's not a good fit for you, too bad.

The achievement of Amazon is that they've actually done a decent job of automating what an ideal generalist bookseller does.

(Specialty bookstores are another story. In those cases, you can more readily assume that the preoccupations of the bookseller and the customer will align.)

" ... without even a scintilla of value-add"

I get tremendous value from being able to flip through a book, check out the index, get a feel for the quality of writing. I love being able to wander around and randomly bump into things I might otherwise never know about.

I like browsing the magazines, seeing what's out there.

Whether that justifies the increase in cost is another matter, but there is tangible benefit to the physical B&N.

"Without even a scintilla of value-add" ?

Brick and mortar bookstores add value. They just add it to the process rather than the final product. They shelve the book for an indeterminate amount of time, just on the chance little old you happens to come along and buy it. (Instant gratification has value: for the next three days you will have your book instead of waiting for shipping.) A retail store also provides a different and arguably superior browsing experience through multiple books: you get pre-sale access to 100% of the content.

There's also the magazine section. Try finding a website that lets you browse through all of Forbes, Cigar Aficionado, and National Geographic. The bookstores have created a profitable model that doesn't work online, making magazines free-to-read in order to sell coffee.

Sure, if you are laser targeted on what you want, and either don't mind the shipping wait or consume only e-book content, Amazon is far superior. But there is a real place for the brick and mortar store. They're not just anachronistic dinosaurs, they fill a still-extant niche of the capitalist market.

In some ways, going to a bookstore for me is like going to a museum. I'll wander through the sections, stop to look at things that look interesting on my way around. Mostly I'll walk back out when I'm bored, but knowing a little bit more about what kind of books I might like to buy. Occasionally I'll buy something from the gift shop on the way out.

I wonder if you could operate a bookstore more along the lines of a museum? Or maybe that would be called a library.

I find that Borders employees are generally not that helpful. True story: I bought the "Inception" soundtrack on CD from Borders, and the bookseller checking me out saw it and said, "Wow, I didn't know we had this movie!"

Barnes & Noble employees are a little better on average, in my experience. I've actually gotten some good recommendations there.

"corrective capitalism" - awesome term.

This saddens me. Borders have always had nicer stores for a book lover than B&N... I can immediately tell if I'm going to like a bookstore by whether they display books cover-out, or on a shelf with the spine out. This immediately indicates whether they emphasize a large, diverse inventory, or focus only on mass market material. Borders did it right, unlike most other stores including B&N. They have an especially large technical inventory.

Their books were overpriced, of course, but they actually sent out 30%-50% off coupons weekly, bringing them basically to Amazon's levels - so while I did the bulk of my book-buying on Amazon, I really enjoyed dropping into the store every week or two and browsing for something fun to buy.

If one has multiple copies of a book, say 5 or more, they can take up less shelf space cover-out than side by side, depending on thickness... which allows you stock a larger, diverse inventory while still having copies in stock for the popular titles. Also, if a book is a very popular book, it's worthwhile to have it cover-out so that folks can quickly locate it. That doesn't mean the store focuses only on mass market, but instead focuses on customers: some want the popular item, so make it easy for them and not be out of stock on these, and some want more depth, so try to stock as deep as you can on the shelves.

For many stores across many industries, having enough stock of popular items subsidizes the ability of the store to stock rarer and less-often selling stock.

I feel the same, B&N sucks royally for anything but best sellers. The borders next to the school where I went always had an pretty good computer, math and science selection. Their weekly coupons were awesome. 30% on any books. But I just went back (I moved about a year ago) and they don't seem to be receiving a large amount of new stuff. The shelf were all screwed up ( I feel odd saying this but I help keep that computer section in order ;p Python stuff next to oracle crap is a mistake ;p).

I probably spent 30% of my student loans on books at borders because I'd have a hard time waiting to get home and buying from amazon. Plus like you said the 30% coupons made buying from amazon a waste of time. They changed that for borders bucks which I think was a major mistake. Bring back the coupons.

The cover/spine out is a marketing thing by the publisher.

Cover out sells a lot more books, so the publisher will insist on certain books being displayed like this, or prominently on 'new book' stands.

Sometimes the publishers pay for this service, but more often it's blackmail - "put our new diet book cover out or you will get the next Harry Potter book a week later than Amazon"

Cover-out can also be the sign of a bookstore lacking inventory to fill the shelves. I've seen it happen to a bunch, some of them which had ambitions & were anything but mass-market.

Borders was a revelation when it opened. I'll miss it if it disappears.

I didn't know that, are they still sending out these coupons?

The last coupon I got by e-mail was around the end of December. Ordinarily they came out once or even twice a week, so it feels as if they've finished doing this.

However, this site lists some current coupons: http://www.dealigg.com/story-Borders-Coupon-Code-Discount

Yes, I received a 33% off one item coupon yesterday. They sent 50% off one item coupons around the first of the year.

I never buy anything at Borders without a coupon.

Me either. And they come out all the time on their twitter feed: http://twitter.com/#!/borders

The Barnes and Noble in Clear Lake, TX (near NASA) had a 30'x8' wall of programming and sysadmin books, and 3x that when you take in general computing, math, and science. I loved it. "Corporate" had them rearrange the store a bit, and the selection is (or looks) a bit smaller now.

Borders in San Antonio has a large selection of said topics, and I'm impressed. The only thing about Borders that bugs me is the lack of sitting areas.

I wonder if their demise would actually be good for a lot of independent booksellers whose customers would avoid B&N.

I live in Austin and if I want a tech book from borders, there is usually 0 inventory here. There is something about those San Antonio Borders, though. They seem to have all of the books in stock. Are they that much larger than the stores in Austin? Or is SA a growing tech hub?

There's only one SA borders that I know of; one got closed down within the past year. Huebner/I-10 is the open one.

I know several datacenters are in San Antonio. MSFT, Rackspace, etc. Also, the NW side has a medical center, a university, and several banks (USAA's HQ is a mile away from it).

In short, the NW side is an affluent area.

Borders (noun) Bor'-ders - a coffee shop where one previews books they'll buy online for 40% less.

I'm embarrassed to admit that I was standing in line at a Borders (Or was it a Barne's and Nobles, anyways, one of them) in Emmeryville after catching a movie, waiting to purchase a book that had caught my eye - the line was moving somewhat slowly, so, while waiting, I popped up my iPhone, brought up the amazon web page, found the book (for about 20% less) - bought it, and started reading it in the Kindel App before I got to the front of the line.

I felt somewhat bad about just handing the Cashier the book and leaving the store, but it was a really long line.

Very true. And with the Amazon iPhone app, you don't even have to leave to finish your purchase. Just scan the barcode, purchase, and continue enjoying your coffee.

Wait you can barcode books into an Amazon cart!?

The Amazon UK iPhone app does this. Or there's RedLaser, which gives you Google Shopping results + local libraries and bookshops.

It's brilliant. Though I usually try to buy some things in the shop too, if it's a place I want to survive.

Not just barcodes, it can recognize DVD/book/CD covers too. You can even take pictures of items (iPods, laptops, toys, etc) and it will do its best to identify the item and find it on Amazon. It's pretty slick.

darn it, the ipod version of that app won't do barcodes.

Google Shopper for Android does this.

Newest (US) Amazon app has bar code scanning for a product... Then add to cart.

True for > few months ago, when their 33% off coupon* only comes every other weekends or so. Since few months ago, their 33% off comes almost as soon as previous one expired. Every month or so, they would have a 40% too, and two 50% offs during the xmas holidays. So if you're in need of a printed book the same day or Amazon's prices aren't lower than discounted price + tax + your time, Borders is still a good place to buy books.

* (just show it to them if you have a smart phone).

Ethically problematic, but yes.

Unless their margins on coffee are high enough to subsidize a book inventory. At which point, they could basically be a library without the lending.

Not ethically problematic at all, economically problematic for Borders, certainly. As another poster pointed out, Borders offers the same products as online bookstores except with a substantial markup. Markups need to be justified with some sort of value-add, what's the value-add for Borders? Quick access to books? That's a dubious advantage in the age of Amazon Prime and e-books, especially when weighed against the disadvantages of physical bookstores such as time wasted waiting in line, time wasted making a trip to the store to pick up a specific book that it turns out they don't have in stock, etc.

Borders is a retail store heavy company, and they haven't made any significant changes in their store in response to competition from online stores. That's a huge red-flag and is nobody's fault but theirs.

Why is it ethically problematic? There is no implied assumption that I will buy something when I walk into a store. People comparison shop all the time.

And as long as you aren't damaging the books, and as long as the store isn't so crowded that you're discouraging other potential customers, the store looses absolutely nothing by having you there. In fact, they always gain something - there's always the off chance you'll see something and decide you don't want to wait for it to ship.

For me it's a grey area. For a small specialist shop where I receive useful advice? I'd almost definitely pay the higher price in return for the service offered by the shop. For a bookstore where all I did was wander around on my own occasionally looking at product? I don't know. I'd like for book stores to continue existing, but I don't know if they're worth the premium.

What went wrong at Borders? Easy. They have a ubiquitous competitor who offers customers 1,000x the selection at lower prices. The only benefit Borders offers is immediate gratification for those who can't wait a few days, or a week, for their books. Borders has had the stench of death for a long time now. I'm wondering whether Barnes & Noble is next.

The only benefit Borders offers is immediate gratification for those who can't wait a few days

Or for those who want a meaningful preview of a book before buying.

Over the years, I've saved much more money by avoiding purchases of books I imagined I would like, than I've saved by buying from discount warehouses.

Libraries are one way of doing this, but for new technical books, my local Borders was a go-to place.

One thing to consider here is that Amazon accepts returns. You have to pay a bit for shipping, but you could easily buy a copy of each book you might want, keep the ones you do, and still end up ahead.

Thanks. That's at least an option, especially once/if the local places close.

I will still feel bad about it. With the Borders coupons, I usually ended up spending no more than I would at Amazon, anyway. And I really like the experience of browsing. I often end up with three or four books spread out in front of me, dipping into each one, comparing their style, presentation, TOCs and indices, etc...

About previews, I find amazon's free sample on kindle to be really useful most of the time.

I suspect local used book stores are next. As a greater proportion of book purchases become e-books fewer physical books will be available for resale to used book stores. Yes, there are people who would never touch an e-book, but even a slight decrease in their available inventory is going to have an impact.

Local bookstores seem to be booming. Amazon is taking out their competitors (B+N, Borders, Waterstones) while offering them a global marketplace to sell used books online.

The ones that have put any effort into a pleasant environment, local books, reading events etc are doing better than they have in years. Remember HN are not typical of the general population when it comes to book buying or ebook reading.

IMO the problem won't be incoming inventory, it'll be outgoing sales. Inventory won't be a problem because fewer people will be buying new physical books, plus a certain amount of people will replace their physical books with the digital counterpart.

Barnes & Noble have put a lot more thought into their revenue model than Borders and are more interested in trying new things (e.g. they have a credible entry in the e-reader market). They are feeling the pressure from Amazon, but not circling the drain like Borders has been for a long time now.

Not true. I shop at Borders, Amazon, used bookstores and small local stores in about equal proportions.

I had no idea that Borders was in financial trouble. I have always preferred them over Barnes and Noble because they always have a wide selection of technical books. Unlike B&N which has aisle after aisle of VB, * for Dummies books, and their ilk, Borders is a place where I have discovered great books on niche technical topics. It will be sad to see them go -- buying a book physically provides a far greater visceral stultification than buying online.

As a book lover, I'm happy in either store, but Borders has always been my preference. They always seemed to carry more titles and somehow feel to me like less of a big corporate store. (I'm a little biased, having spent quite a bit of time around Ann Arbor and the original store even before it moved.)

"... wide selection of technical books" - my experience is opposite, sorry. I've seen the number of technical books dwindle in the years I've patronized my local Borders store. Lots more emphasis these days on M'soft applications and Xyzzy for Dummies. Where there was once an entire corner of the store dedicated to computing titles, there is barely 15' of wall space now.

Over time the store has ditched its foreign newspapers. Used to be able to buy Russian language titles in there, but not anymore. Few tech books on music/theater. Biographies heavily loaded toward current celebs.

But they've got holiday calendars by the gobs.

I liked doing business there 'cause I got instant gratification and it was a comfortable place to browse. But they've gotten rid of the chairs and tables too, and now the only place to sit is in the cafe. Many's the time I'd read a chapter in an easy chair, get up and purchase the book so I could take it home with me. But now all your browsing has to be on your feet - I get the feeling that management thinks bookstore shelves are like supermarket shelves. "Hello Dear? Would you stop by on the way home and pick up something from the Ender series?"

There was once a wonderful independent bookstore here in St. Louis whose sales floor was 2x the size of the average B&N or Borders. They were run by people who knew books. I especially appreciated how they had a really good selection of technical books, way better than any of the chains.

They had big community book fairs, they ran the only coffee shop that was open late for a mile in any direction, they brought in local music acts.

In '97 the owners decided to retire and sold the whole operation to Borders. Borders ran the store for about a year or two and then shut the whole place down when a huge strip mall development containing a Borders store opened a mile away.

In hindsight I guess they planned that new store all along, and bought out the little guys because they didn't want the competition from someone who actually knew how to run a better bookstore.

Library Ltd was a spectacular store with a national reputation from a single outlet back in the pre-WWW days.

A 1996 article: http://findarticles.com/p/articles/mi_m1154/is_n4_v84/ai_181...

I stopped buying books when they closed. B&N and Borders were useless substitutes for me.

I never understood how Borders became so big and powerful. They charge list price for everything! Walmart's destruction of local stores is easy to see. Grocery chains too. But Borders? They offer little advantage over an independent bookstore, and plenty of disadvantage.

I always assumed I just missed something along the way. Or I'm just too young to have really compared them.

Sheer size counts for a lot as far as bookstores go, at least in the pre-Amazon era. Your typical local bookstore of the pre-Borders era was generally pretty small and/or poorly laid out.

Personally I still do most of my book shopping at Borders and B&N, because once I decide I want to read something I'd rather pay the extra few dollars to read it now rather than wait for it to arrive in the mail. Though they both aggravate me with the unskippable script which their checkout chicks are forced to go through... no, I don't have one of your loyalty cards.... no, I don't want one of your loyalty cards... no, I don't care what great benefits it may give me.

Borders regularly emails out coupons for 33% off of a single item. That brings their price closer to Amazon.


Any one item, which I find to be an insult. Rather than worry about which book on my list I'm going to use the coupon for, I can buy 2 on Amazon and have them here in 2 days.

I find it interesting that the OP mentions Jeff Bezos as someone who has "a deep attachment to books and the people who read them".

My understanding was that Bezos chose books for Amazon after writing a list of things people could carry in one hand, and decided Books was the biggest market on the list.

In trying to find my source for that on Google, I came across plenty of other explanations for why he chose Books as the topic to sell - they may discount my previous belief, but none of them make the case that he loves books or that books led to the business. All seem to claim that the need to create an internet business came first, books were a means to an end.

I shouldn't even attempt to recap the story, but it's really interesting to look at how Bezos selected books. He wanted something with a lot of unique products/SKUs that was cheap enough for people to try buying online for the first time. Books and CDs were two of his front-runners.

I wonder if back then he realistically considered the possibility that either or both could someday be delivered electronically?

When Borders came to Singapore, it became the bookstore with probably the best selection of books in stock. It easily became my favorite place to browse and buy books. Two recent incidents stood out which made me realized that Borders was in trouble before I became aware about all the news of it really being in trouble.

They replaced their information counter with a computerized system that failed miserably in helping me locate a book I wanted. The book in question was Carlos Ruiz Zafón's 'The Angel's Game'. My friend had shared about the book over dinner and some of us had decided to get a copy. We went down, searched for it using the computerized system, was informed that the book was available (at least that's what the system seem to be saying). It could not be found anywhere on the shelves (where the system said it was supposed to be); more importantly, none of the staff could help us. In short, the new information counter was useless.

In the early days, the information counter was run by people who knew and loved books. The proof of that was: 1. They could always help locate the book physically. 2. If the book wasn't in stock, they would also be spot on in recommending a similar book that would interest me. It was the second point that got me buying a couple of extra books.

The lost of knowledgeable counter staff in hindsight was indicative of a culture shift in Borders from that of being a place where people passionate about books gathered to a place where shit got sold and it just so happened to be books.

The second incident was noticing that valuable store space was being used to sell toys and kitchenware. Yes, kitchenware in a bookstore.

In the end, I got 'The Angel's Game' and Carlos Ruiz Zafon's 'The Shadow of The Wind' at a local store http://www.booksactually.com/. I recommend this store to anyone who love books and is in Singapore. Clear showcase of how domain knowledge and intimate customer relations can help a local institution compete against the scale and supposedly lower prices of steam rolling multinational companies.

This is doubly funny because both _The Angel's Game_ and _The Shadow of the Wind_ take place in or around Sempere and Sons, a small bookshop in early 20th C Barcelona. The proprietor is always a "Senor Sempere" who is integrated with the neighborhood and understands its needs; much of the appeal of the shop is, of course, the books, but it's the Sempere(s) working there who make it different. Words like "integrated with the community" have been so debased by politicians and others that they barely mean anything, but if they still did, they would apply here.

The depictions of Sempere and Sons are certainly romanticized, but they still point to a desire for knowing someone who really, deeply knows books. If Borders once had that desire or those kinds of people on staff (even in corporate), the OP in the Atlantic indicates they no longer do.

Haha. Yes! Growing up with the ubiquity of libraries and books, I found it quaint that finding a book was something considered difficult enough that it was a job of professionals and that a premium was paid for the effort to locate the book. I can imagine how quaint I would look when sharing with my children about the process of physically browsing to find hidden gems; "Dad, you mean you didn't find books liked by your friends from your Facebook wall?"

Which of the two books did you prefer?

Years ago, I worked at a Borders competitor for a little while: Joseph-Beth in Cincinnati, Ohio. Things might be different now, but back then, that store kicked ass! Somehow, the store managed to have a bunch of passionate people working there, and it showed.

One of the things that we did was "don't give up" customer service. We absolutely did not give up on finding something until the customer did. Google was new in those days, and I also remember multiple "oh my gosh, that's freaky" moments from customers coming in with the vaguest, weirdest clues and still somehow finding the book for them.

I remember going into a Borders around that time and noting that the help wasn't nearly as persistent, but I went into a Borders about a year later and thought: "Hey, they must be copying Joseph-Beth now!"

I worked at Borders after the dot-bomb, since my car was broken down and it was the only job I could find that I could ride my bike to. I bought a bunch of programming books with my employee discount and then realized what a complete chump I was - the exact same books, online at Amazon, were cheaper including (free!) shipping than in the store with my employee discount. I quit soon after and got a job writing code.

Amazon should buy them. Then you'd be able to go to your local store, browse and buy right there. Also you could ship your order directly to the store for free the same way walmart does.

IANAL, but my understanding is that this would give Amazon a 'retail presence' in most US states, thus requiring them to charge sales tax on online transactions.

I've thought that since Borders originally partnered with Amazon. But that would give Amazon a local presence and eliminate their advantage of not having to collect sales tax. If the "internet sales tax" was ever imposed, brick-and-mortar Amazon stores would make more sense, but still not a sure thing.

Agreed. Have a much larger selection of books, and offer a 'discount for delivery' if the customer is prepared to wait.

That's a misunderstanding of tax law.

Borders partnering with Amazon does not give Amazon a local presence within the meaning required for Amazon to be subject to that localities tax authorities.

Amazon buying Borders (the company) would have the same result, because Borders would remain a separate taxable entity.

Amazon buying Borders' assets (i.e., the stores, inventory, etc) would be the only situation in which Amazon would acquire a local presence allowing the locality to tax Amazon.

Borders has no competitive advantage if the book isn't in stock. The minute it has to be ordered Amazon becomes the better solution.

Sadly true. As pleasant as brick-and-mortar retail bookstores can be (and I've never said this about a Barnes & Noble), their space constraints force their inventories toward lowest common denominator titles -- meaning NYT bestsellers, Oprah Winfrey selections, and self-help books. Internet retailers have the so-called long tail sewn up.

Another indicator of retail inventory shortcomings is the "special order" process. It's been several years since I've special ordered a book from a brick-and-mortar retailer, but it generally involved a two-week wait, and you were often requested to examine the book on the spot without leaving the cash register area. If the big bookstore chains have removed the friction from this process, I don't know about it.

In fact, it seems that Barnes & Noble and Borders have responded to Amazon's inventory advantage by actually gutting their selection further and dedicating more space to tchotchkes like Michael Bublé CDs and chocolate truffles. A shame.

I love the Borders experience; is there some way "books + cafe" can work with some other business model? Maybe... an internet cafe, but with Kindles plus a book-binding machine?

Would there be any benefit to a virtual bookstore, where you can first-person-browse the shelves? Sounds silly, but you get some of that serendipitous discovery. It would probably need ridiculously high resolution for book spines to be readable from the distance one normally browses at.

Of course, all that could be done from home if you have an espresso machine.

I always enjoy spending time at borders for the coffee and the chance to browse books that I wouldn't think to pull up on Amazon. One thing that I that really annoys me is that sometimes I'm comfortable, I am deep in thought and then one of the workers is near by and their radio starts to crackle. Usually they are being asked to come to the front of the store or check the availability of an item. I know they need the radios to do their job but it really destroys the ambiance. After they go through all that trouble with the lighting and the decor to create a space where you can disappear into a book why don't they invest in some bluetooth headsets or something to communicate with their employees? I'm not sure if it is Borders but some stores also buzz messages over the PA systems and I think why??

Purveyors of dead trees need to take a serious look at printing books on demand in the store at price that competes with online prices. Stock the shelves with a few full-price deluxe copies, and print discount copies on demand in store.

I used to be a huge Borders customer, but over the past few years, they became useless at having anything in stock or being able to easily check if anything was in stock without calling the seven or so stores in the greater Phoenix area. I like being able have a book in my hands the same night I hear about it, so I prefer brick and mortar stores (and I don't like e-readers much).

If they can solve this problem the way Powell's in Portland has (one giant bookstore with everything in stock and two or so subject-specific bookstores), then I'd still be their customer.

I used to frequent the borders in provo utah. The computer science section was actually decent for a while (I snagged a copy of ansi common lisp, the little schemer and the structure and interpretation of classical mechanics) from there. The last time I was down there they were seriously playing country music. I'm not trying to be a snob (maybe I am) but this was like garth brooks esque pop not johnny cash - this was lyrics about boot skootin and drinking - the absolute diametric opposition to reading. Good riddance.

I have very fond memories of that first store in Ann Arbor. Perhaps it is too bad that the Borders brothers sold and did not keep pushing their vision as they expanded.

I like the concept of "niche" stores that happen to sell books. Case in point, here in Portland, we have a New Age bookstore that sells all kinds of stuff from books, cds, dvds, clothing, all kinds of accessories and conducts events for the community, and of course has knowledgeable and passionate staff and so it has become like the hub for the New Age folks. It's doing very well too.

I wonder if this is the way to go for other niches too.

Summary: slow to adapt to internet; didn't have "book people" running it, whatever that means.

> whatever that means.

Let me put it this way. You're looking for a new CEO for a fashion outlet. You have two top candidates: one who has an encyclopedic knowledge of shoes, dresses, designers, and how to spot a knock-off from the genuine article. The other guy ran a very successful chain of grocery stores.

Now, on one level, selling clothes is just like selling anything else -- groceries, toothpaste, power tools. You have your marketing, your in-store experience, etc. But your grocery store guy will lack the one thing the fashion guy has: namely, an intuitive sense of what makes an otherwise rational consumer spend far too much on some shirt just because it says "Armani" on the collar. Your fashion guy knows who his customers are, who they talk to, what they read, and what motivates them to open their wallets. That does not mean the fashion guy will do a better job, but he does have a distinct competitive advantage over the grocery guy.

What happens when you don't have a guy like that at the top? Well, Apple nearly tanked after they pushed Steve Jobs out the door in 1986. Jobs' replacement, an ex-CEO of PepsiCo, simply didn't understand the Apple customer the same way Jobs did.

Hence "book people." People who understand why people buy books, and how books are different from socks and celery.

Great comment, rtperson! Probably the most succinct description of the importance of domain knowledge I have read. I especially like

Your fashion guy knows who his customers are, who they talk to, what they read, and what motivates them to open their wallets.

Bulletin board material.

I think part of it was not just the CEO, but the buyers were not as good as they used to be. Thus the books chosen were not the right selection, leading to further deterioration.

Might I pimp my previous comment on an earlier Borders-related thread? ... http://news.ycombinator.com/item?id=2056531

Actually, it's not obvious to me that the knowledgeable guy is the better candidate for CEO. Depending on why the second guy was successful at running grocery stores, he might actually be the better choice.

This is the lesson I've got from the fall of Borders and other big retailers: they didn't seem to know which business they were in. Borders was in the retail and hospitality business, not in the books business. Because of an identity crisis, they did a poor job at both.

Instead of trying to survive by ignoring Amazon, they would have probably done better to go into the grocery, apparel or restaurant business.

Your comment is insightful, and I agree with it generally.

On the other hand, I literally worked for a company called Book People, and let me tell you, you don't necessarily want "book people" running a business.

To be fair, the guy who recently fixed on the big car companies (either Ford or GM, I don't remember), had no experience with cars but is said to have done an amazing job.

Since the 90s, Borders had a staff policy of referring to 'product', not 'books'. It was all marketing theory, and management became actively hostile to people who like reading for its own sake.

Sounds like at least one college bookstore I've seen.

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