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Wednesday, January 26, 2011

Will Borders be Here in 2012? It Might be--If Amazon Steps In


We have all heard the news that Borders is in serious financial straits. If we want to use a tired metaphor, the chain is RMS Titanic, the iceberg has been struck, and the captain is running the pumps to buy an extra hour or so afloat. According to Business Insider (and other recent news), Borders has stopped making payments to some publishers because it is simply cash-strapped and in a desperate condition.
Rumors are flying about what its ultimate fate will be. Will Barnes and Noble purchase the chain? If so, what will that mean for the average book buyer? How many stores would close? Will Borders be able to refinance its debt and pay its bills going forward? Will it simply be allowed to file bankruptcy, remainder its stock, and cease to exist? Who knows.

Here's an idea that might rescue the chain: A-M-A-Z-O-N.

You've heard of them, right?
The ongoing eendemic problems coursing through the halls of Borders represents an extraordinary opportunity for Amazon to make the leap from virtual to brick-and mortar-bookselling (and everything else it cares to sell). In my opinion Amazon.com has the leading brand in the industry. Its customers feel engaged with the company and there is deep brand loyalty. Still, the consumer cannot interact with Amazon beyond the computer monitor or the Kindle tablet. The demise of Borders might make that possible--and profitable.

What would happen if Amazon took over Borders and re-branded it as Amazon? What would you do if you saw a former Borders' store with the AMAZON logo affixed above the door? Would you go out of your way to pay the store a visit? I certainly would, and I bet you would, too. I think people would flood into the stores. Amazon is a well-run company; Borders is not. A smooth-functioning Amazon store offers amazing opportunities for cross selling between online and brick-and-mortar. And imagine what it would be like to browse ALL of Amazon's stock while in store on your Kindle. You could do that.

I hear some of your shouting at your monitor, "Savas, are you nuts? Brick and mortar is old school--a decaying way of doing business." Really? What about Apple? The naysayers were entirely wrong when some years back they said selling out of stores was a bad idea and would never work. How's Apple doing these days?

And who has a brand as powerful as Apple that also begins with the letter A?

Amazon was launched with the idea of being a virtual company. But the pending breakup and sinking of RMS Borders might offer Jeff Bezos and Company a fabulous opportunity to turn the world upside down yet again--and still be in the driving seat.



J David Petruzzi said...

Very interesting. That brand does mean everything... most other companies wouldn't be able to pull this off, but I'm starting to agree with you that Amazon could.

dw said...

It's 2011 Savas. When are you finally going to push that junk aside and put a shiny new iMac on your desktop?

TPS said...

Mr. DW

Come on! I praised Apple in the blog post! LOL. Seriously, the iPad is amazing. I just have too many things to keep track of now. Someday.


dw said...

Keeping track? There's an app for that.

Anonymous said...

Amazon stores--brilliant idea. Walking around with a Kindle accessing all the books available on Kindle--I love it. I heard you can do that in Barnes and Noble with their reader. Seriously, Amazon stores... Hmmm. I like it a lot.


Anonymous said...

When the VCR came out, the experts predicted the doom of Hollywood. The opposite happened. The big loser: TV networks.

Is publishing the biggest loser in the Internet Age? Think MALLS and secular religion.