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Get on Board with Borders

Angela BrownRachel Fisher

Jahmela McGheeNing Qi

Lenora Wilkinson

Lakers Research Group

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Outline

Executive SummaryBackgroundU.S. Readers and

BuyersCompetitor AnalysisQualitative

ResearchIn-Depth Interviews

SurveyProjective

TechniqueFocus GroupConclusionDiscussion References

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Executive Summary

Borders has seen an significant loss in sales over the years and have tried different strategies to gain sales and loyal customers

To help solve this problem, Lakers Research Group has conducted four different types of qualitative research to learn the habits and preferences of Shoppers who frequently visit Borders

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Background

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Brief History

Opened in 1971Purchased by K-Mart

in 1992Became publicly

owned in 1995Stores are tailored

to the local community [1]

Losing money for the past 3 years

Average annual sales $2.8 billion

2007 sales – lost $157.5 million

2008 sales – lost $151.3 million [2]

[1]

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2008 – Unveiled a new concept store in Ann Arbor, the first of 14 planned nationwide [3]

New Look for Borders

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Target Audience “Our research clearly is telling us that we

have a predominantly female customer, and we are a family-and-community-based destination”

Borders CEO Mike Edwards [14]

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Borders’ Strategies 2007-2010

Borders slashed music and video inventory following the closing of Circuit City

Borders introduces e-book: KoboShrinking the number of storesAn expanded rewards program for customersBetter customer service Expanded non-book offerings in its stores“Borders for Everyone”Teen MarketBorders Signs deal with Wi-Fi Advertising

Company

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S.W.O.T. Analysis

Strengths Weaknesses

Large scale of operations

Strong performance of the international segment

Strong distribution capabilities

Heavy debtDeclining revenues

from Waldenbooks Specialty retail stores

Weak operating structure

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S.W.O.T. Analysis, cont’d.

Opportunities Threats

Enhanced features on Borders.com would attract more customers

Recent store openings at airports

Improvement strategies would increase profitability

Economic slowdown in the U.S.

Increased minimum wage in the U.S.

Increasing competition

E-book boomPopularity of Internet

retailers

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Problems for Borders

Experiencing sales losses [1]“The poor coordination results in a lack of

execution in carrying out book promotions and on some occasions stores failed to display all the titles that were part of the promotion,” stated a publisher. [14]

One sales manager said, “Employee turnover-the staff is constantly changing. They have a lot of inexperienced buyers who are not managed by people with experience in the book business.” [14]

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U.S. Readers & Buyers

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U.S. Book Readers [6]

Myste

ry/D

etec

tive

Juve

nile

Roman

ceSc

i-Fi

Espi

onag

e/Th

rille

r

Relig

ion

Autob

iogr

aphy

/Bio

grap

hy

Histor

y

Cooki

ng

Busin

ess/Ec

onom

ics0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Top 10 Book Genres

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U.S. Book Readers, cont’d. [6]

Teens Generation Y Generation X Baby Boomers Matures0%

5%

10%

15%

20%

25%

30%

35%

40%

Unit sales by age group

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U.S. Book Readers, cont’d. [8]

2009 NEA report on adult reading increased

Spurred by groups whose reading had previously declined

Still 21% of adult Americans considered “functionally illiterate”

BrandWeek focus group on e-Readers revealed 3 types of readers: Purist, Pragmatist, and the Educator/Student

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Competitor Analysis

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Bookstore Competition in 3 Categories

•Barnes & Noble

•Books-A-Million

Traditional Book Retailers

•Amazon.com

Online Booksellers

•Target

•Wal-Mart

Retail Megastores

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Competitors’ Background

•Annual sales are $24,509.0 million

•Its website offers millions of books, music, and movies (which account for most of its sales), not to mention auto parts, toys, electronics, home furnishings, apparel, health and beauty aids, prescription drugs, and groceries

Amazon.com

•1st U.S. bookseller

•Annual sales are $5,810.6 million

Barnes & Noble

•3rd U.S. book chain

•Made for readers who are not millionaires

Books-A-Million

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Qualitative Research

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Research Methods used

7 rounds of IDIsSurveyOne Focus Group10 rounds of Sentence Completion

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Research Method Rationale

IDIs- Direct (non-disguised), observing behavior as it occurs, gets opinions of respondents

Survey-Focus Group- Direct (non-

disguised),observing behavior as it occurs Projective technique: sentence

completion- indirect (disguised), observing the effects of behavior

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Research Objectives

Reveal consumer needs, motives, perceptions and attitudes

Understand consumer vocabulary, which can be useful for ad campaigns

Find areas of Borders stores that are frequented and areas that go unused

Show what in-store activities Borders customers take advantage of

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Hypothesis of Qualitative Research

Borders was successful for a short time but was unable to navigate waters with frequently changing administration

Prices at Borders stores are higher than competing outlets

Borders locations are convenientBook buyers have embraced online

shoppingBookstores serve a purpose that online

shopping & e-books cannot

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In-Depth Interviews

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IDI Questions

How often do you visit bookstores/Borders?

What aspects of Borders are most appealing to you?

What sections of the store do you frequently visit?

Do you shop at Borders for gifts or personal use?

If you could change something about Borders what would it be?

How do you feel while visiting Borders?

How do you browse? What types of items do you

buy? Are you a Borders’ rewards

member? What have you gotten with

your membership? Do you attend in-store events? Do you sit and read in store? If

so, how long? Where else do you feel this

way? Do you shop alone, with a

friend (s) or with a family member?

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IDI Respondents

Shop by themselvesLike the atmosphere calm, stress free and

invitingDo not attend in store eventsRead in storeThink the stores are too crowded 

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Survey

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Overview

20 questionsMix of mainly open-ended questions51 respondents46 are Borders Rewards Card Members88.2% (45/51 respondents) completed

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36

37

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What aspects of Borders appeal to you? “It’s a big store with a great selection, and it doesn’t

only focus on just books. I love their paper chase things they sell. I could always go kill 1 hour there and never get bored. And they have hot chocolate in winter!!!”

“The whole idea of being able to find whatever type of book your looking for, and then being able to crack it open and read it if your intentions were to spend your time there.”

“The layout is very appealing. It is difficult to walk out of the store without a purchase.”

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Borders Member Rewards

What have you gotten with your membership?◦12/23 respondents said discounts◦4/23 said nothing or not sure

Are there any ways you would improve Member rewards?◦11/22 responded no, can’t think of any, or they

need to use it more before deciding on changes◦More coupons, more free items

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How do you feel when you’re in Borders?

ComfortableCalmSereneSense of

peacefulnessRelaxed

Overwhelmed “ I feel like I’m shopping

as opposed to browsing or relaxing (like at Barnes & Noble)”

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The Death of the Book?Have you considered

an e-book? Yes (25)No (20)

Which one? Kindle (13) iPad (10)Nook & Sony (1

each)

Concerns/ Considerations

Cost after device purchase

Looking at another computer screen, eye strain

Like holding a book, turning pages

Library borrowing

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Survey Questions

What is your favorite book?How important is reading in your life?

(Extremely, very, somewhat, not very)How do you select a book?

(Suggestions from friends, reviews in newspapers or magazines, in-store employee suggestions, NY Times Bestseller list, other- please specify)Do you walk into the store knowing what you want to buy? (Y/N)What types of items do you normally purchase?

(Books, magazines, stationary, music, DVDs, food/drink, other- please specify)

What sections do you frequent (for purchase or browsing)?(Fiction, non-fiction, children’s, mysteries/thrillers, sci-

fi/fantasy, history/biographies, cooking/lifestyle, art, business, self-help, other- please specify)Where do you usually purchase books?

(Online, in a store (new), secondhand)What aspects of Borders appeals to you?

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Survey Questions, cont’d.

Are you a Borders Rewards Card Member? (if no, skip to question #13)

Why did you sign up?What have you gotten with your membership?Are there any ways you would improve Member rewards?When visiting a Borders store do you…?

(Attend in-store events or stay & read)Could Borders add or improve any sections? If so, what?How do you feel when you’re in Borders?What makes you want to spend more time there, or what keeps

you from spending more time there?Have you considered an e-book?Which one?What is your primary e-book concern/consideration?Share with us a memorable Borders experience!

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Projective Technique

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Projective Technique Respondents

15 sentences15 respondents 12 females- 1 child3 males

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Key Findings from Projective Technique

Sentences Answers

I like books because…I visit the _____

section(s) when I go to bookstores/Borders

I feel that Borders prices are…

I feel that Borders is missing…

Relaxing, informative and like taking mini vacation

Best sellers, gift, business, Music

Reasonable, fairInternational news,

one big lounge area, coat check

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Key Findings from Projective Technique, cont’d.

Sentences Answers

After I buy a book I… If I sit in Borders its

because…The biggest difference

between Borders and Barnes & Nobles is

The difference between bookstores and online is…

I go home to read it, I give it to some as a gift

I want/am drinking coffee, I want to read a little, I’m browsing

Borders is lighter, Borders has more selections

The physical touch at bookstores, online is cheaper, brief summary of books online, atmosphere

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Focus Group

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Focus Group Respondents

2 females and one maleThere were a total of 16 questions

covering purchasing habits, store improvements and emotional response

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Focus Group Questions

Where do you usually buy your books? Bookstore vs. Online

Have you considered buying an e-book?

How often do you go to Borders?

If you owned a Borders store, and they told you the DVD/music section would have to be replaced with something, what would you put in its’ place?

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Key Findings from Focus Group

Most read on public transportation & before bed

Some combine online and in-store purchase together

Online purchasing comes with the added benefit of suggestions based on past purchases

A quiet atmosphere is appreciated Rewards Program is not top of mind

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Key Findings from Focus Group cont.

Non-book items not competitively priced Preference over actual book vs. e-book

(the physicality of the actual book)E-books are a nice choice People like to visit the store and see

offeringsCompetitive pricing is key when

purchasing

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Conclusion

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Inductive Reasoning

Most want quieter places to go inside the store Browsing opportunities are key People will compare prices and selections with other

stores and online stores E-books are not thought about as much There is a combination of purchasing online and in-

store People seldom buy DVD because its too expensive Most people really don’t see the benefit from the

Rewards Program Focus on books more There is more freedom at bookstores Showing purchases to friends

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Analytical Research: Latent and Manifest Needs

Latent Needs Manifest Needs

Some people have a feeling of community when they enter a bookstore

When reading computer monitors, TV screens and phone screens it places strain on the eyes from day to day usage.

The state of the current economy has created a need for escapism.

Appropriate pricing is key

Provide competitive pricing and a inviting atmosphere

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Analytical Research: Cultural Analysis

IndividualityCommunityDiscoveryFamiliarityEnthusiasticPassionateSharing

59Creative Brief

What is the

opportunity and/or problem

the advertisin

g must address?

What do we want people to do as a result of seeing

this advertisin

g?

•We want people to make use of Borders’ member rewards program

•We want people to stay in stores longer.

How do we

believe the

advertising will

work to achieve

this?

•CRM (member rewards program)

•Television ads

•Promotions

• Advertising can address the opportunity of the suggestions we made.• It needs to address the problem of pricing.

60 Creative Brief cont.

Who are we

talking to?

• Women

•Students

What’s the Key

Response we want?

•Borders has the selection and prices

•Borders has nearby locations to serve all book buying needs

What information/attrib

utes might help

produce this

response?

•The different inventory in different areas of the U.S.

•A bookstore on every corner

61 Creative Brief cont.

Why should people believe

this?

•Borders will live up to its advertisements by acting immediately

What aspect

of brand personal

ity should

the advertisi

ng express?

•contemporary

•Modern

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Recommendations

Get rid of DVD and music sections in stores

Partner with a company through the Borders website for items other than books

Coffee and stationery try putting in a “quiet area”

More ads Give coupons in-store on even

days of a month no matter if they are a rewards member or not

Can utilize social media to keep more in touch with Borders’ fans and create activities among our fans/readers

Partner with public schools to start book club

Improve the member rewards Enhance the student factor

with book buy backs Build a database for

members Compare prices with other

leading bookstores or online bookstores

Sales person should make recommendations based on customer’s book of choice

Enlarge the kids and teens book section and keep the space trendy to appeal to kids and teens

Outside seating during warmer months

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Suggestion for Future Borders’ Research

Ethnographic researchNetwork samplingSnowballing samplingComplete observerComplete participantPure observation research

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References

1. (1997). The Bookstore in America: Borders. Review of Contemporary Fiction, 216-250. Retrieved from Academic One File.

2. (2009). Crossing Borders. Billboard, 121(8), 11. Retrieved from Academic Search Premier database.

3. (2008). The Borders Experience. Retail Merchandiser, 10-11. Retrieved from EBSCO database.

4. Timm, J. (2010). A Gadget to Kill Kindle. Canadian Business, 83(6), 23. Retrieved from Academic Search Premier database.

5. (August 2010). Value-Priced Kobo eReader Takes Patience to Use. PC World. Retrieved from EBSCO database.

6. (20 July, 2009). New Report Examines Book Market, Buyers. Publishers Weekly, 2-3. Retrieved from EBSCO database.

7. Feldman, G. (2009) US sales stagnant, as ‘avid’ readers decline. Bookseller, (5386), 11. Retrieved from Business Source Premier Database.

8. (2009) The Readers. The Economist, 390(8614), 33-34. Retrieved from Academic Search Premier database.

9. Corrigan, T. (2010). A New Publishing Frontier. Brandweek, 51(26), 13. Retrieved from Academic Search Premier database.

10. Dolliver, M. (2010, Sept. 23). Many Readers, but few e-Readers. Adweek. From AdWeek Interactive newsletter.

11. http://www.reuters.com/article/idUSTRE6803CC2010090112. http://www.myfoxboston.com/dpps/news/bookstore-borders'-loss-widens-as-sales-fall-

dpgonc-20100901-gc-_945199113. Buggey, T. (2007, Summer). A Picture is Worth…. Journal of Positive Behavior

Interventions,9(3), 151-158. Retrieved December 14, 2007, from Academic Search Premier database.

14. www.publishersweekly.com