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Borders' New Game Plan: Hit or Miss?

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bordersIt seems that Borders, the second largest bookseller in the U.S. and currently a company that's struggling to stay afloat, has hit on an interesting new strategy in its efforts to turn itself around--it no longer wants to be identified primarily as a seller of books.

Instead, it's looking at Canadian chain Indigo as the inspiration for the kind of store it would like to be.

Although Indigo specializes in selling books and music, over the years it has augmented those offerings with lifestyle products ranging from Pilates equipment to flowers. Borders hopes that if it can imitate Indigo's merchandising model, it will be able to overcome the industry-wide challenges currently faced by booksellers.

This is certainly an interesting idea, but one has to wonder if it will be able to help Borders at this stage of the game. It could be argued that Barnes & Noble, Border's main competitor, has been a lifestyle retailer for years. In addition to books, music and movies, it sells gifts, games, toys and chocolates and it operates cafes inside its stores to encourage customers to linger longer and hopefully buy more. Yet while Barnes & Noble seems to be on much more solid footing than Borders right now, it's still facing a formidable threat from Amazon.com and the Kindle.

Indigo-storeA recent story from The New York Times looks at the battle between Blockbuster and Netflix and argues that Blockbuster lost largely because it didn't integrate its brick-and-mortar and online divisions soon enough and seamlessly enough. Following that logic, Border's main focus right now should be on coming up with a strategy that would allow it to grab market share both inside its physical stores and online.

It's made some strides in following Amazon.com and Barnes & Noble into the e-reader business, but those efforts seem half-hearted and have produced lackluster results. Borders still seems more committed to revamping its bricks-and-mortar strategy than to coming up with a unique bricks-and-clicks game.

We'd be curious to find out what our readers think about Border's new idea and it's chances for survival.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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