Economist Writing Every Day

An analytics textbook is usually full of success stories (i.e. XYZ Corp. invested in a data warehouse and everything got better). I decided that my students needed to hear a downer for balance. What better example than Borders?

Borders was a fixture of suburban New Jersey in the 90’s. You could browse books or media and get coffee there. When I asked undergraduates in 2018 if they remember Borders, I learned how far south Borders had expanded (to Nashville, but not to Birmingham).

Never fear. All of my students knew the Kanye West song “All of the Lights”. The lyrics are:

Public visitation
We met at Borders
Told her she …

Borders was immortalized, it seemed. The connection to Kanye made it a hit with students. That song was released in 2010 and Borders went bankrupt just months later in 2011. Now I’m starting to wonder if it’s dying a second death in the sense that it’s now even passing out of memory. Before it becomes completely irrelevant, I’ll share some of my lecture notes.

The internet made Borders obsolete, but “the internet killed Borders” is too simplistic. There were many strategic errors. If Borders executives had recognized that consumers were moving to the internet, then they might have flourished online or at least held out much longer against Amazon. What Borders actually did was initially outsource their online sales to Amazon, which handed Amazon all their precious sales data.

Other problems:

• A large section of Borders was devoted to physical CDs and DVDs. First iTunes and now Netflix has come for that.

• Barnes & Nobel décor was so much better. Borders never felt fancy.

• Borders opened too many large store buildings and signed 20-year leases on those buildings.

An interesting part of the story I learned was that, in the 1970’s, University of Michigan graduates developed an inventory tracking system that, by the standards of the time, was sophisticated. There had been a time when Borders was on the frontier of technology. When the 1990’s came, instead of building a great website, they tried to expand their hulking warehouse stores into the United Kingdom.

Based on how other people on Google are thinking, maybe I’ll have a new case study to talk about soon (hope not)