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Retailer’s Competitive Advantage: B&N vs. Borders

I have always wondered what the differentiating factor was between two competing brands that entails success for one but failure for the other.  Is it its competitive prices?  Or perhaps its store location and store layout? Then it hit me; the root of all retail success is the ability of the retailer to specifically capture a niche market, cater to its clientele, and generate revenue by maximizing its use of the latest advanced technology

To test out this theory we can look at many competing retailers but let’s focus on two for now.  Take Barnes and Noble versus Borders for instance; both are well-known corporations yet one failed and the other managed to survive.  Do you think that each one’s leverage over advanced technology and its innovations utilizing its knowledge over said technology proved to be a key factor in one’s success over the other?

One key aspect has to do with detail orientation; Barnes and Noble managed to pick niche locations geared towards clientele who would not only visit bookstores but make it a priority to spend quality time in them whether it was to read a book, catch up with friends, or have a cup of coffee.  Its locations cater to a wide array of demographics while remaining focused on expedient service and effective branding.  Barnes and Noble knows that in order to be successful it must be knowledgeable in the most current trends, be up to date with the latest technology, advertise its branding, and connect with the customer.  However, there is such a thing as “too much of a good thing”; Borders, for example, had aesthetically captivating stores with a varied selection of books but it lacked in the planning department.  For instance, in San Francisco there were three super stores within a mile of one another; overpopulation of stores in close proximity with one another eventually leads to decreased sales in all of the stores. 

Another reason for B&N’s success is credited to its ability to provide comfort to its consumers.  Even though all Barnes and Noble stores are huge, the customer never feels as if he or she is helpless.  The reason for this is the expedited service each employee gives the customer as a result of utilizing technology.  The Book Master system that Barnes and Noble operates is an example of said advanced technology; each customer service representative is trained to know how to utilize the Book Master system which gives the latest arrivals, the latest deals, and the frequently asked questions so that he or she may know how to cater to each customer quickly and carefully.  This system is built into all of the computers, registers, and spread throughout various kiosks in the stores so that each employee has immediate access and can address any consumer questions promptly and knowledgably.  

Furthermore, Barnes and Noble’s latest technological system allows the customer service reps/other employees to quickly gauge each customer using the membership and customer profile feature to know what types of books/music he or she likes and tailor that customer’s shopping experience thusly.  With a simple phone number, the employee can quickly look up the customer’s information and provide countless options to cater to that specific customer; this not only broadens the customer’s literary horizons but also creates a bonding moment with the consumer and the retailer. 

Yet, the biggest reason Barnes and Noble survived and Borders faded, in my opinion, is a result of its ability to focus on one aspect of the book industry and expand that through the use of the latest technology.  Barnes and Noble predominantly focused on the book industry, although it does have a music section, and sought to expand this sector with the aid of ecommerce.  Shortly after Amazon launched its Kindle in 2007, Barnes and Noble instantaneously followed up with its Nook e-reader the following year.  The Nook allows consumers to select from numerous discounted titles and access various other apps on its device; this not only adds another revenue generating aspect to its book industry but also allows B&N to tap into the revolutionary e-commerce business.  Borders, conversely, coupled with its heavy reliance on DVD’s and CD’s for producing revenue and its delayed entrance into the e-reader market proved to be the core reasons for its demise. Investment researcher Peter Wahlstrom quoted “[Borders] went heavy into CD music sales and DVDs, just as the industry was going digital,” and “Barnes & Noble was pulling back,”  Borders invested too much of its resources into a sector that was not advancing technologically. 

Overall, between these two stores the one who kept informed of the latest trends and utilized technology to advance is the one who managed to survive.  At Barnes and Noble the consumer does not feel as if he or she is just a dollar bill but a person with a name, face, and feelings; this evokes a sensation of comfort and allows the consumer to feel at ease. Barnes and Noble touts its Nook technology and offers incentives for consumers by effectively utilizing the internet to its advantage. The internet is a great tool for people everywhere but it is most certainly a detriment to retailers who cannot flexibly adjust to the evolutionary technological trends.

Therefore, it is essential that retailers utilize these advancements to their advantage.  Built upon a strong foundation of knowledge and awareness Barnes and Noble will always ensure that it has one leg up over its competition.

Thank you for reading the second segment in the “Retailer’s Competitive Advantage” series.  Stay tuned for more blog posts!

By: Anuja Gaikwad Team Groupsoft

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      Thanks for reading! 🙂

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