Borders: Tone Deaf to Technology

Tweet

Borders, I loved you! But you blew it fair and square. This week's announcement that the book superstore chain is filing for bankruptcy protection came as no shock to me. And this time you can't blame it on the economy or even the public's increasing disinterest in buying books. Neither of those factors helped, but it is hardly the smoking gun.

Nope, Borders is a victim of its own bad business practices. Primarily, ignoring technology.

Let me count the ways:

1. No Internet strategy that I could see. Early on when online retail started to cook, Borders outsourced that piece of the business to Amazon.

2. Shameless data-mining without giving back. Borders Rewards sucks. I've had a Borders Rewards card for years and still don't understand how the program works. All I know is that I don't get a 10 to 40 percent member discount off every book in the store like I do at Barnes and Noble. After a while, I stopped bothering to use mine when I made a purchase. I got the feeling its more about data mining for Borders and not enough customer rewards in exchange for me.

3. Borders is heading to bankruptcy court in large part from its overwhelming debt. This is mostly due to mismanagement of the supply chain. Just last month, Borders shut down one of its three distribution centers. Only now after the poop hits the fan is Borders going back to its publishers to talk about drop shipping books directly to stores. In this day and age with so many advances in business IT, there is no excuse for a chain of this size to be warehousing so much extra inventory that it's a factor leading to bankruptcy. I hope reorganization includes reorganizing the back-end of the business, or bankruptcy won't help.

4. Memo to Borders: People aren't buying music CDs any longer. When they do buy a DVD or Blu-Ray DVD, they expect prices that compete with WalMart. P.S.: Avid readers are snapping up Kindles and other eReaders faster than you can say Harry Potter. You had a choice to change your strategy or die. Clearly, you chose death.

5. This is purely anecdotal on my part, but in recent years I have found more often than not the in-store technology available to customers doesn't work. I use to spend hours discovering new music at the listening stations back in the day. Now, I can't remember the last time I found one that worked. The one or two computers set up for customers to look up available inventory in the store? Also typically offline.  

6. One last thing, inconsistent leadership. Borders ripped through four CEOs in five years.

Renee Oricchio is a technology writer and former supervising news producer for CNN Financial News. She has been covering the computer industry since 1987. @oricchio