Hindsight is 20

By Evan Schuman  |  Posted 2007-03-23 Print this article Print

-20"> But Mulpuru disagreed with Vanzuras assessment that the 1999 decision—which he was intimately involved in—was the right one, even at the time. "In the long term, I think its important for them to own their e-comm channel. Yes, it was a mistake to not have decided this seven years ago, but hindsight is 20-20 and though theyre late to the game, e-comm is still in its adolescence. Theres still opportunity.""I think the companies that did deals with Amazon at that time—such as Toys R Us—made decisions due to the frenzy surrounding the promise of the dot-com channel and the inability of their internal IT teams to dedicate appropriate efforts to build out an effective Web presence," Mulpuru said. "My perspective? Sure, it would have been bloody expensive, but I dont think its smart to have taken your most promising channel, the one growing the fastest that is actually eroding store sales, and then to go give a chunk of that revenue to your biggest competitor in that channel. That doesnt seem very logical to me."
Another major change for Borders has been what customers expect and demand. The moves for video and audio away from brick-and-mortars to the virtual world make sense, but—Vanzura argues—books are different and they have a permanence that doesnt lend itself to being entirely digital. That said, consumers are now insisting on integration with the Web in-store, with everything from cellphones, PDAs and social networking having an essential role.
"Customers expectations of technology being an integral part of what you need to deliver to be a headquarters for knowledge and entertainment—which is our mission—are a lot higher now," Vanzura said. "Customers have an expectation that they will be able to consume knowledge and entertainment in the form they want it, where they want it. Social networking has emerged, crossing into the mainstream."Although he wouldnt specify what kind of digital services the chain will deploy, he gave one example that a consumer interested in travel would be able to do "more than find a good travel guide."Book chains are feeling intense pressure from various Amazon.com capabilities, such as Search Inside, which tried to take in-store book browsing and replace it with a Web version that can search much more efficiently.Indeed, Borders has found financial difficulties running its book chain. On Thursday, at the same time as it announced its new Web strategy, it also announced a $74 million quarterly loss.The online changes are just one part of Borders new strategy. The overall plan includes a pullback from its international superstore effort (it will be selling or franchising many overseas locations) and it will retreat from many of its Waldenbook stores and start to create more original content with direct-author deals.But the cornerstone will be a major e-commerce presence to be launched February 2008, with various pilots slated for the latter part of this year."Our companys performance has fallen short in an industry that is increasingly competitive, technology driven and price sensitive. We recognize the urgent need to go on the offensive and drive significant change," said Borders Group Chief Executive Officer George Jones, in a written statement.The chain will also bring in new technology leadership. "The companys long-term systems direction and overall technology strategy will be under the leadership of a new Chief Information Officer, expected to be named soon," Jones said. That new CIO will report to Vanzura, who reports to Jones.Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com. Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.

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