Content Matters

To much fanfare, struggling bookseller Borders (NYSE:BGP) launched the new Borders.com website this week. Borders ended its seven-year partnership with Amazon, which was born after it shelved its original site, and has now launched its own ecommerce site at www.borders.com.

Visually, the site is rich yet a bit overwhelming. Borders has created what it calls the "magic shelf", which tries to capture the essence of a bookstore bookshelf. The bookshelf aims to provide improved personalization, but as a new user, it just shows me the basic shelves of new fiction, new nonfiction and new DVDs. Since what I buy is typically not on the bestseller lists, those shelves do little for me. Their search is powered by Endeca, whose guided navigation is definitely a step up from typical ecommerce search.

Other than the Magic Shelf, the main benefit that Borders is pitching here is the integration with its brick & mortar stores. Users can order from the website then pick up at a local store. Unless you live somewhere you can't accept deliveries, I don't see that combination of online+bricks as a huge benefit. Certainly less so than Blockbuster's ability to return rented DVDs at the store (which has hardly been the Netflix killer they thought it would be).

So, the main question for me becomes "what will drive the typical Amazon customer to instead visit Borders.com"? To start, let's look at the three things that typically drive users to Amazon:
1. Selection: their search tools are strong and their recommendation engine is compelling
2. Reviews: they have the biggest audience and the most reviews.
3. Price: their prices are consistently among the least expensive on the web (though not necessarily THE cheapest).

I don't see how Borders can beat them on either selection or reviews, so it comes down to price.  I did a quick (unscientific) sample of two books, checking Borders.com and Amazon. Here's what I found:

The hardcover edition of The Big Switch by Nicholas Carr has a list price of $25.95. Amazon sells it for $17.13, while the new Borders.com has it at $20.76.

Scott McClellan's new book, What Happened, will be released on Tuesday. The cover price is $27.95, while Amazon has a presale price of $15.37. Borders.com presale price is $27.95 - full boat retail. Interestingly, when I searched on Borders.com for "what happened", the new McClellan book was about the 10th entry listed, while it was #1 in Amazon. I like Endeca's guided navigation but clearly Borders has some more tuning to do if it can't showcase the presale of a book likely to be near the top of the bestseller list next week.

While I'm an atypical shopper (probably more than 90% of my durable good purchases are made online), I'm a reasonable candidate for Borders, primarily because the ground floor of my office building (100 Broadway in NYC) houses a Borders store. At various times, I've gone to Borders to buy a book only to find that it's selling for 20-30% more than via Amazon. If Borders can't be competitive on price, it doesn't matter what neat features they can add. No one will be there to find out. And that's why I believe that the new Borders.com will fail.