Borders: New Concept Is Excellent

Borders (BGP) opened its first new "concept" store in Waters Place shopping plaza on Lohr Road in Pittsfield Township, Michigan last Thursday.

"You can expect to see a completely different store compared to existing Borders stores," said company spokeswoman Anne Roman recently. "Embracing technology - as George (CEO George Jones) talked about in his early days - is clearly evident throughout as we have new digital options as promised."

Borders' plans to launch its own e-commerce Web site, which is expected to go live by April and the company is terminating its current affiliation with Amazon.com (AMZN). Borders' site is expected to play a crucial role in connecting Borders' bricks-and-mortar stores to its online presence. As for the "how's" of the plan, that has not been disclosed yet either. For those interested, Borders has been testing the site and taking customer feedback at beta.bordersstores.com.

After a quick glance at the site, it looks like a cross between Apple's (AAPL) iTunes site and Amazon's own. That is not a bad thing. It has a unique navigation feature for scrolling that is very user friendly and personalized list based on user interests.

The New Store Concept

In a word, Borders' (BGP) new concept store is "excellent". A big hit is the "digital center". There customers have access to multiple computer stations to download to their MP3 players and explore the digital world. Wisely, the "center" has trained personnel to help customers who are not "techies" learn how to use computer programs such as Shutterfly, the online photo processing service.

If you already know how to use the online services and programs you are welcome to work on personal projects at the store, said Kevin Ertell, vice president of e-business for Borders. You may buy devices such as digital cameras, iPod speaker docks, the Reader Digital Book and MP3 players at the center. Also available are starter kits for Internet services like Ancestry.com and the aforementioned Shutterfly.

In the travel section, an interactive kiosk allows shoppers to research, plan and even book a trip, while the cooking section has a kiosk to print recipes from cookbooks. Based on initial results, Borders is transforming its stores from a place to go buy a book, to a place to interact with knowledge and the digital world. That is a powerful combination as at the same time it:

1. Does not alienated the core older book buyers;
2. Entices younger people to enter the stores;
3. Digitizes a previously "paper" operation.

All these will expand Borders' customer base by offering wider and more current services to a hugely broader demographic of potential shoppers.

Pershing's Bill Ackman now owns 26% of the outstanding shares of the company and has more than doubled his exposure to the company in the past 6 months. Hard to make money betting against him....

Disclosure : No position.

Comments

[ballsschweaty]

bricks and mortar book retailing is toast. Most Americans are too stupid to read. They veg out on tabloid TV all night.

The few Americans who do read buy their books from Amazon. Borders will be bankrupt by 2011 in my opinion.

Enjoy!

[Richard Mason]

The whole affiliation with Amazon was such a stupid idea to begin with. I don't have any confidence in Borders management at all. And I say this as a past shareholder and past happy customer who would like to see Borders succeed.