AE Monthly

Articles - January - 2012 Issue

2011 – No Turning Back

Store interior close

Store closings.

If the older generation of book sellers ever doubted a new era was at hand 2011 confirmed the new scheme of things was not only here, but here to stay.

The weather vane event was the demise of Borders.

As recently as January of 2010 Borders Books employed more than 19,000 workers at over 500 US stores and another 175 smaller outlets. One year later, in February 2011, the company filed for bankruptcy. By September the retail chain founded in 1971 with a single Ann Arbor location was history. From sheer brilliance to total oblivion in only 40 years; the books, the stores and the people were all gone -- gone for good.

Most observers in the financial world thought liquidation was the price Borders paid for not keeping up with tech and marketing techniques developed by e-tailers like Amazon.

Though that observation was true, many in the larger world-of-books believed Borders’ demise was the logical result of dumbing down, diluting and cheapening of what was once the gold standard for American new books. “That’s what you get,” said the wise men, “when you entrust the running of your book stores to people who only read bar codes.”

But even that opinion was wide of the mark.

In the world of big time book selling real knowledge of books and what’s in them is no longer a basic ingredient for commercial success. In fact 2011 was the year that the Amazon business model ate the lunch of not just every other book seller but every other retailer period.

This is the model based on mathematically generated formulas, ranking by merchandise by sales volume, passing the shipping costs back to the shipper (better at least than eBay which passed the shipping cost back and then took a commission on it too). Both Amazon and eBay declined to collect or pay the sales taxes in most of the 50 states, but only Amazon had the chutzpah to reinvent the sweat shop.

Their a how low can you go moment came in December when Amazon offered a discount to customers willing to use its Price Check app to browse at a brick-and-mortar store but buy the goods from Amazon’s website.

“Enough is enough,” came the resounding backlash loud and clear from smaller old school vendors. It was quite a reaction considering that the Price Check promotion lasted only one day.

AE Monthly


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