September 2011 Archives

A Life without Borders

September 27, 2011 10:26 PM | Comments (0)

Borders, as everyone should know by now, has closed its chapter in Singapore.

Many of us took for granted that it would always be there, and it was said that this branch was more profitable than the stores in the US. What happened? I have a few theories:

1) Too many “Read-only” users

Borders’ closure was heavily covered in the media and I can’t recall exactly where I saw this, but what a little boy said when interviewed, summed it all up. He said he would miss reading books at Borders.

If you only want to sit around and read books, go to a library. And if your fingers have already indented every page in a magazine, just buy it and stop blocking the aisle so that other customers can get to the titles they want.

You see, the US model of allowing customers to browse books while sipping coffee, which Borders attempted to export, doesn’t quite work in Singapore. The US has a tipping culture, more active volunteerism, and people feel that they should give back to a cause or an institution. Over here, the mentality among the majority is still very much ‘take all you can’, photocopy all your textbooks and only pay the minimum, if you really need your own copy.

This is why some local bookstores go to the other extreme and wrap up all their books - which make me feel like not buying any of them, either, unless I already know the contents of the book and it’s selling at a good price.

2) Lack of focus

Other factors were more within Borders’ control, such as the selection of non-book items, which was said to have diluted the focus on its core. I found the stationery items suitable as gifts for others, but not worth buying for myself on a regular basis.

Similarly, I am a music lover and an avid supporter of copyright but I hardly purchased any CDs from Borders because they were simply more expensive than other stores. It was ‘neither here nor there’ for me. If I wanted variety, I would go to HMV; if I wanted a more upmarket selection and personalised service, I would go to That CD Shop. At Borders, I could sample some albums but not all of them, and I was pretty much left to my own devices if I wanted to explore a new genre.

3) More affordable alternatives

The Amazon mobile app was also a huge dissuader of purchases at Borders, on my part. Scanning the bar codes of books, I would look at their marked-up Singapore prices and decide not to buy most of them. The discounts at Amazon were so great that even with shipping costs factored in, I would save money. Offline, local bookstores like Popular would sell the same business titles but at a much cheaper price, and for me, the choice was clear again. I would not buy at Borders. Not unless someone gave me a gift card, or I desperately needed the book (which was seldom the case).

Yet the Straits Times cited industry sources who felt it was Borders’ price cuts which did them in. I still feel there was a big markup. Obviously something along the value chain wasn’t quite working. Meanwhile, e-readers like the Kindle, Nook and even the iPad have become popular as substitutes to physical books, and they are here to stay.

Perhaps Borders’ high prices and low margins were caused by expensive rent, which is to be expected if you are situated along Orchard Road. In fact, many things in Singapore are expensive largely because of the high rentals (a discussion on which can warrant a thesis on its own) and the fact that many desirable objects are not made in Singapore, but imported from distant lands. Stores have to make a profit too, so these high prices are passed onto the Singaporean consumer.

4) No more oomph in the service

Last year, a senior executive wrote in the papers about how he enquired about books on two different Presidents of the United States, but the young Borders assistants did not know who they were. When he expressed his surprise, their response was that it was not taught in school. This may have arisen from a rigid adherence to learn only what comes out in exams, and a lack of curiosity about anything outside of one’s immediate concern.

If this is any indication of what the future of our workforce will be like, then we in Singapore (and not just Borders) have something to worry about.

And if paid human labour isn’t adding much value to the customer experience of a physical store, I may as well turn back to Amazon’s intuitive interface, which at least tells me what other titles I may be interested in, and makes me want to buy more.

On a similar note, there’s a reason why customers in the US make appointments to see a Genius in the Apple Store, and why they continue to buy from Apple. There’s quality assurance in there, together with personalised service. But Apple’s margins, as an innovator and not just a retailer, are surely fatter than a bookseller’s.

5) It’s the industry, stupid

Let’s face it: The physical book retailing industry isn’t particularly creative. Local bookstores like Times and MPH have long been marginalised, downsizing their own flagship stores over the years and selling their wares at relatively low local prices. The only worthy big players left, in my opinion, are Kinokuniya and Page One, which have a more discerning selection of titles, and, from my experience so far, more knowledgeable service staff.

Local online stores such as Opentrolley may also have whittled away at the customer base. Popular Bookstore will remain a behemoth in the low-price and textbook market, with its staple audience of students and other mainstream local customers, and it has cleverly diversified its portfolio through its middle-class Harris and higher-end Prologue stores, while passing on the benefits of membership throughout all 3 segments of its customer base.

Interestingly, boutique stores like Books Actually may be on their way up, as they differentiate themselves through niche selections and clearly focus on a very different audience from the mass market. I particularly like how it supports local authors.

I believe we must support retailers that dare to do something different. Otherwise, what we will have left are stores that only stock mainstream products. It can be a slippery slope as more business decide to play safe, and plunge deeper into the red ocean.

What I say is entirely my own opinion, through my own experiences as a customer; I do not have perfect knowledge of what actually happened behind the scenes to Borders or other retailers. But this surely has to be a wake-up call, not just for the book retail industry but any other institution that has failed to adapt to change.