When Borders announced in March that it was ending its agreement with Amazon?where Borders all-but-surrendered its online presence to Amazon?it's executives outlined an unusually aggressive plan to turn its stores into models of merged-channel strategy.
The plan was indeed bold and many in the industry have pointed to it as an example of where the industry needs to move. It spoke of moving the physical store far beyond a mere bookstore and into a place that can help achieve desired experiences.
For example, a customer wanting to plan a trip to Hawaii could go to the travel section and then to the Hawaii section. A nearby kiosk would use partner services to book flights, arrange hotel rooms and print out relevant brochures. All could be picked up at the counter, along with visitor guides. A trip to the software section could have the customer leaving with a CD of applications in addition to the instruction books.
Someone visiting the romance section might use a kiosk to access a dating service or possibly even connect with someone in that section, during a wine-and-cheese gathering for customers.
Given that the Web has gotten so good at replicating an in-store experience in cyberspace, it's critical that the actual in-store experience must move beyond what is practical online. In theory, the merged channel movement should push both sides to improve much more rapidly than either would have otherwise.
Starbucks, for example, is the envy of much of the brick-and-mortar retail world for its community-building and the social hub aspects of its stores. And yet Starbucks has been unable to recreate or leverage that sense-of-involvement online.
At Borders, executives are working aggressively to recruit and contract with a wide range of partners to make the in-store launch memorable. But those negotiations are time-consuming and those non-traditional services must be layered atop traditional capabilities. Therefore, in the preliminary beta site triggered live on Sept. 6, only the most faint hints of the new strategy are evident.
At this early stage, that means little, but merged channel aficionados who were hoping for a peek into the Borders merged channel future are going to have to wait a bit longer.
The beta site's layout/design is intended to visually reinforce the chain's roots. "The site now feels like a bookstore," said Kevin Ertell, VP of E-Business at Borders.
The layout/design is tight and attractive but there's a possibility that it's book-shelf appearance might serve to undermine Border's message that this is far beyond a typical bookstore effort.
Ertell eloquently counters, stressing that the core of the chain is?and always will be?a bookstore. All of the new magic is intended to amplify and expand that experience, but if customers don't continue to buy books, the strategy won't work. Therefore, retaining the bookstore persona is not only appropriate, but, he argues, it is essential.
The Borders beta launch is a true beta?unlike the strange Microsoft betas, only to be shared with 80 million of Redmond's closest friends (the world's largest software vendor needs to be read the dictionary and be reminded what a beta program is).
This means that much of the Borders functionality?such as taking payments?does not yet function. Audio clips do, however, play in the Music section.
Still, it's somewhat unnerving that this beta of Borders' online-to-come sports a video section with no video clips and no ability to read book pages (although Ertell said such capability is imminent). And no material outside services.
But this is very preliminary and there's still time, as the Amazon partnership will be in effect until sometime in Borders' first fiscal 2008 quarter, which ends April 30, 2008. Among the in-store priorities will be kiosk search stations, where customers can access their home wishlists via a password and account name. The next generation of that application will be able to use a loyalty card instead, Ertell said.
Hopefully, the rest of the industry will copy Borders' intended merged channel lead. For now, though, we're still waiting to see how far Borders itself can go, given the considerable logistic and political roadblocks in launching such an effort. Whoever said merged channel is easy?