Borders' Way Out: Ultra-Local Digital Content

Ever since Borders' bankruptcy became official, commentators have been falling over themselves offering the chain advice. At least one column was encouraging employees of the chain's closed stores to buy the stores themselves and to reopen them with an all-local focus, selling books and whatnot about local residents. That idea is both wonderful and awful.

The problem with most of these suggestions is that they are trying to figure out ways to breathe more life into dead-tree book versions. This is akin to suggesting to Blockbuster, a fellow retail resident of the critical care unit, that its revival key is to get more people to buy DVDs and to reinvest in VHS and Betamax marketing.

But the idea of converting a bookstore into a place for events and ideas with an exclusively local twist has strong potential. And the reason why is deep in new technology: E-books and even more simple electronic documents are so cheap to make and distribute that it has vast potential.

One of the problems with Borders—and other remaining book chains, especially Barnes & Noble, aren't any better—is that it is trying to be a national chain. That makes little sense. Amazon is a national book chain. The best approach for Borders would have been to function as a huge number of very local stores. These stores, though, need to have only a very small area in the back for dead-tree books.

What if the content was exclusive (differentiated) and entirely local? Have a citywide baking contest. The winner gets to write his/her own cookbook and it's only sold (downloadable) from that shop, either in-person or on the site. Local musicians cut albums, and the agreement is that it be only available through that store. All revenue to be split.

The store could videotape local events (high school graduations, parades filled with locals, school shows, community theater, etc.). The downloads could be sold for low prices and yet still leave enough for splitting. Business execs doing business books, filled with local examples.

This is a way for book stores to offer differentiated products profitably. Want to compete with Amazon? Offer things it can't.

The irony here is that this is actually how Borders began. In its early days, Borders was obsessed with local. But the local was locally made choices about which nationally published books, audio and videos to offer, as opposed to true local content. This was long before Amazon, when a book only available at the store on Elm Street was about as exclusive as it needed to be.

Today, there was insufficient differentiation. And it's at a time when daily newspapers are dying, which means that the best sources for local content are also dying. Win-win. It's a little late for Borders, but it might be just in time for smaller retailers across the country. And if a large national chain wanted to create a network of tens of thousands of ultra-local shops, all the better. Hear this, Barnes & Noble?