Borders Mgmt Admits: What Killed Borders Was Having Too Large an Assortment of Books

Consider this interesting quote from an internal memo by a Director of Merchandise Planning & Analysis at the now defunct Borders bookstore chain:

“[Borders suffered from] Over-reliance on assortment size to compete as opposed to efficient operations – Borders was renowned for its wide and quality assortment of titles. The very large assortment size was an advantage early on before Amazon. However, by its very nature the internet was better at quickly and efficiently connecting customers with obscure titles and bringing the ‘long tail’ to market. Thus, competing on assortment size was especially vulnerable to internet retailing and Borders suffered disproportionately as the ‘long tail’ customers abandoned them.”

(Granted, this Borders exec was talking back in 2009, but subsequent events vindicate everything he noted at that time.)

So exactly who is it that benefits from ‘long tail,’ large assortment inventory practices? Obviously, midlist writers. They need retail venues to have a large assortment of titles, so that their books will be available to readers and purchasers. A small assortment of titles is fine for James Patterson and J. K. Rowling — everybody even a few steps farther down the ladder is out of luck, given that business model.

What exactly is going to be the takeaway from the Borders bankruptcy, for other real world, brick-&-mortar book retailers? Except for a few dogged independents, the answer will increasingly be, “Cut back your inventory, or suffer the same fate as Borders.”

Which is why the action for midlist writers is increasingly going to be at and the other online retailers such as B&N. That’s where their titles are going to be stocked and sold; that’s where the audience for midlist writers will go to find the books they want to read. Why should they bother going to whatever bookstore is at the mall, just to find stacks of this month’s bestsellers and little else? And of course, if they do want those bestsellers, they can get those just as easily from the online retailers as well.

So basically, there’s a good chance that the brick-&-mortar book retailers’ survival strategy has their own annihilation at the end of it. Slash inventory to keep costs down; become less attractive to readers by doing so; slash inventory some more; become even less attractive to readers; declare bankruptcy.

Borders today; the other brick-&-mortar retailers tomorrow. Put your wagers down at the betting window, as to who goes next.

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