The demise of Borders in the Internet world

July 22, 2011

For those who still take comfort in the tactile sense of picking up and then reading a book, the demise of Borders was yet another affront. More proof positive that businesses that don’t keep pace with societal change are destined to obsolescence. But what about the Borders brand, its value and its promise, its loyal users, employees and stockholders? Does the brand have any value, even when it has physically disappeared?

It is not the first retail brand to die and it won’t be the last. Remember Circuit City, the electronics super store that was all the rage when the personal computer era was in full blossom? It went belly up when costs and competition outpaced it. But shrewd liquidators reinvented it as a discount Internet brand. Does having the Circuit City moniker attached to selling commodity electronics products at a discount have any value? The people who bought and then used the brand name certainly thought so. And as a consumer, I somehow get a reassurance when their name is there. Admittedly that is a completely irrational response — but the value-added, while intangible, is real.

The pace of brick and mortar bankruptcy will no doubt begin to accelerate as more and more use the web to purchase goods. It is now estimated that three billion of the world's six or so billion people now have cell phones. That is a higher percentage than those who have indoor plumbing and I don’t know about you but given the choice between a cell phone and a toilet I think I would prefer the toilet. Over two billion now have Internet access. So the idea of building a retail brand through brick and mortar expansion may be an antiquated notion — quaint, from a previous era, like the horse and buggy.

There is still something comforting about the physical experience of bricks and mortar stores — especially bookstores. The serendipity of picking up something you never thought about because it was on a display is irreplaceable. The clandestine feeling of reading something that gives you a guilty pleasure that you normally would not have read — like a tabloid or gossip magazine — is fun. Or, perhaps missed most dearly, is the ability to just sit and look at the other human beings around you — how they dress, their hairdos, what they are reading and the occasional chance encounter of a conversation with another human-being in a real, physical world.

Like a brand, those things are also thought of as intangibles. But they are real. And they have value. Whether it exists in the physical world or the ether of the net, intangible aspects of a brand have real value. Even when a brand is dead in the physical world, it can still live on. Look at Circuit City.

I suspect we have not seen the end of Borders. Some sharp marketer will undoubtedly take the assets it does own (customers who have a feeling and memories of their real experiences) and repurpose them in the net. I for one will miss the smell of the spines.

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