On Barnes & Noble and Borders

I heard at work today that Barnes & Noble has made an offer to buy Borders.

There may be some anti-trust investigations, but it’s a formality. Much as when GameStop — itself a division of Barnes & Noble — bought EB Games three years ago.

The real issue is probably online sales. I’m sure part of B&N’s decision to buy Borders is to figure out how to improve their own online presence. Borders has a partnership with Amazon. Barnes & Noble has had their own online store for a good ten years. The Borders team that handles the interfacing with Amazon could come in handy.

I can’t remember the last time I bought anything from B&N Online. It’s been a couple of years, definitely.

The ironic thing is that I find B&N’s website easier to navigate than Amazon’s. Amazon has added a ton of bells and whistles. I mean, who needs author blogs in a retailing site? I understand what Amazon is trying to do — they’re trying to meld a MySpace experience on top of their retailing operations to create a sense of community — but it’s a real turn-off and kill website usability for people on slow ‘net connections. I want to look for books. I don’t need to read about how an author is coping with the hernia that’s killing his productivity.

(One thing B&N could do to improve online would be to make a deal with Firefox, to have Firefox ship with a B&N search box. Currently it ships with an Amazon box, but there’s no reason B&N couldn’t top whatever price Amazon pays. Just take money out of GameStop to pay for it.)

Yet I wonder.

Online sales is a piece of the puzzle, but it’s not the whole puzzle.

You ever wonder why it seems like there’s an EB Games or a GameStop on every corner? It’s because that’s what fueled the expansion of both companies’ growth. GameStop put in a store in a shopping center, so EB Games put in a store in the shopping center across the street. Or at the other end of the shopping center. Stores cannibalized other stores’ business. There was a nascent market, so the other side would try and jump in to claim it. My EB Games store in Raleigh had three other EBs or GameStops within five miles, ten within ten miles. I had to drive past three other stores to reach my store. And I only lived eight miles from my store.

The bookstore business is probably similar. There’s certainly parallels to the coffee shop industry. Where someone pioneers and creates a market, competitors smell blood in the water and move in.

But what happens is that it creates situations where the finite pool of consumer dollars is sliced too thin. EB Games and GameStop ran into this headlong in many markets. Business cannibalized business. There’s only so much revenue that can be pulled out of a given market.

Changes will comes to the book superstore business. Stores may well be closed. Non-profitable stores — even marginal stores — from both B&N and Borders will close. B&N would have expanded into areas where Borders is strong and vice-versa. So there are going to be markets that are overserved, where stores will be eating into each others’ business. And stores on a bubble will be closed, because it makes financial sense to close the ones that exist simply to eat into the other company’s business.

But more than that, just based on the experience of going through the EB Games/GameStop merger — which, despite corporate assertions to the contrary, was emphatically not a merger — Borders stores themselves will change. Barnes & Noble won’t leave Borders management in place. Oh, it may physically be the same people, but the corporate directives to the post-B&N Borders will be the same corporate directives that B&N stores get. They won’t run the companies as two separate companies. It’s like my experience with GameStop — they can put all the pretty words on the situation about how this is a merger, but at the end of the day in the struggle between the two companies someone won and someone lost. Borders stores will turn into Barnes & Noble stores in all but name. And it will literally happen overnight.

Is this happening to shore up two companies in a weakening economy? To create a single, stronger company able to weather the coming recession? To fend off the online retailers?

It could be. But I think that, in many ways, online retailing is an overblown threat.

The reason is very simple. It’s called “browsing.”

The problem with online retailers is that they’re very directed in the way you find things. Casual browsing is damned near impossible. In a B&N you can wander from science fiction to history to travel books, pretty much as the spirit moves you. You don’t have anywhere near the same with an online retailer, because if you’re looking for a product, the software isn’t going to recommend something entirely different. It’s going to recommend things like the things you’ve recently looked at. Or that you’ve recently bought. Or that people who have bought things like the things you’ve bought have recently bought.

Search engines are very directed. If you’re looking for something specific, you can find that. If you’re looking for something vague, however, you’re not going to find information in a general area; you’re going to find information in a specific area.

Take, for instance, libraries. Card catalogs can tell you were a specific book is on the shelves, but then when you actually have to go and look for it, you’ll find all sorts of similar products. It’s a stumbling upon process.

Online searches take that stumbling upon process away. Students writing papers today who rely upon online information sources are at a significant informational advantage to students who can use physical information sources. Ease of use with online searches is a trade-off with depth of information in physical searches.

The key change that online retailers need to make is to enable some sort of randomness functionality. Maybe the next generation of search engine technology can make that change. Maybe it will have to come with Second Life-style online environments.

In any event, random browsing is something that gives brick-and-mortar establishments an advantage that online retailers are going to have a difficult time matching, at least over the short term.

I can’t say that this buy-out would affect me much; there’s a Borders near the office, but it’s not convenient, and there really aren’t a lot of Barnes & Nobles in the area. Baltimore seems underserved by bookstores. Raleigh had me spoiled — you couldn’t swing a cat without striking two book superstores. I still like the feel of browsing a bookstore; Amazon is nice, but I use it for very specific purposes. There are things about the bookstore experience that an online retailer can never duplicate.

And for those who love the Borders experience more than the Barnes & Noble experience, get that experience while you can — the days of the Borders experience are falling into twilight and shadow.

Published by Allyn

A writer, editor, journalist, sometimes coder, occasional historian, and all-around scholar, Allyn Gibson is the writer for Diamond Comic Distributors' monthly PREVIEWS catalog, used by comic book shops and throughout the comics industry, and the editor for its monthly order forms. In his over ten years in the industry, Allyn has interviewed comics creators and pop culture celebrities, covered conventions, analyzed industry revenue trends, and written copy for comics, toys, and other pop culture merchandise. Allyn is also known for his short fiction (including the Star Trek story "Make-Believe,"the Doctor Who short story "The Spindle of Necessity," and the ReDeus story "The Ginger Kid"). Allyn has been blogging regularly with WordPress since 2004.

2 thoughts on “On Barnes & Noble and Borders

  1. I have used both, but for the past year I have been using Barnes and Noble more. I got the membership card with 10% off, and combining that with a 25% coupon has lead to some Amazon-like prices for items. Borders doesn’t have a membership card, which is a shame, because I would have probably preferred to use them since there’s a Borders Express in the local mall.

  2. And for those who love the Borders experience more than the Barnes & Noble experience, get that experience while you can — the days of the Borders experience are falling into twilight and shadow.


    Borders doesn’t have a membership card, which is a shame, because I would have probably preferred to use them since there’s a Borders Express in the local mall.

    Actually, they do have a card. It doesn’t guarantee you a discount, but you a) generally get a “20+% off one item” coupon in the e-mail at least every other week; and b) get a $5 coupon for each $150 you spend per calendar year (whereas the B&N card has no reward program).

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