The Future Is Now for Borders

New concept store uses technology to enhance retail experience

by Edward Nawotka -- Publishers Weekly, 2/18/2008

Online, it's called a “mash-up”—when two different genres of music or video are spliced together to form a distinct but familiar creation. Last week, Borders Group unveiled its new concept store—a 28,900-sq.-ft. bookstore in Ann Arbor, Mich.—that convincingly bridges the online world and the real one.

Development of the new concept began immediately after George Jones replaced Greg Josefowicz as CEO in 2006. “When I started, I knew we needed to do something that would differentiate us from the competition,” said Jones during a recent tour of the Ann Arbor outlet. The store's proximity to the company's headquarters means it will serve as a kind of petri dish for new ideas, with close oversight from company executives.

Inside, the first thing customers are likely to notice is a 15-foot-high lighted tower encased in LCD screens, with the words “Go digital” prominently displayed. Dubbed “The Digital Center,” this 650-sq.-ft. store-within-a-store offers seven computer terminals at which customers can burn music CDs; download music, audiobooks and e-books (currently only into Sony Readers via Sony's e-connect Web site); and print photos. Self-service is an option, though specially trained staff will be on hand to help. While much of this is not entirely new—many retailers have been offering to burn custom CDs for some time—Borders intends to make the process accessible to older, non–tech-savvy customers.

What appears more radical is the way in which the company is bringing previously Web-only activities into the real world. Customers will be able to order personalized Our Name in History books for $39.95, via a partnership with Ancestry.com; photo books through Shutterfly.com; and even self-publishing kits through LuLu.com. These are being sold alongside Sony Readers, Sansa music players, headphones, digital cameras and even solar chargers. The section will be staffed not with booksellers but with “specialists” who will also help ensure the computers continue to run smoothly.

Computer kiosks are not limited to the Digital Center; they are sprinkled throughout the store, and all will be able to search Borders's soon-to-be-relaunched online store. The new Borders.com is scheduled to go live this quarter.

LCD TVs are also prevalent throughout the new store, running loops of author interviews, concerts and featurettes, many of which are produced by Borders and filmed at its flagship store elsewhere in Ann Arbor.

A number of sections have been transformed into self-contained “Destinations”—stores-within-a-store—as well. “It's not 'category management,' ” said Jones, referring to the discarded merchandising philosophy instituted by Josefowicz, “but something better.”

Travel, cooking and wellness books have been grouped together in a large, airy “Lifestyle” section in the middle of the sales floor. These new “Destinations” each offer a computer kiosk and video screen showing Borders programming as well as many sidelines and related items.

For example, in the travel section, Lonely Planet videos play on the LCD, while the Web kiosk allows customers to customize a vacation, recommends suitable guide books and even allows buyers to book their travel, via a partnership with Sidestep.com. In the cooking area, customers can print out individual recipes to “test run” cookbooks and watch cooking segments featuring Food Network chefs and other personalities.

Additional highlights include a redesigned 1,800-sq.-ft. children's section that boasts a 90-foot mural by the Australian artist Colin Thompson and an expanded selection of graphic novels. A dedicated events area includes hardwired AV equipment and a stage that folds down on a “Murphy bed”–style hinge from the wall. The store also features the first retail implementation of Margaret Atwood's Long Pen, which enables virtual signings.

Approximately two-thirds of the store looks refreshed, with new curving fixtures and brighter signage, while the remaining third—mostly offering books in the standard fiction and nonfiction categories—is indistinguishable from a conventional Borders store. And while Jones said additional seats had been installed in the store, seating was still limited.

Jones said that the new concept should be rolled out across the chain over the next three years, with 14 new concept stores being built this year in cities around the country, from New Orleans to Las Vegas. The new stores will stock 170,000 book, CD and DVD titles, with only a slight shift toward additional nonbook items. Jones emphasized that the cost of building such a store was only “marginally higher” than current build-out costs. “While we remain at our core booksellers, we realized that what we really are to people is a headquarters for knowledge and entertainment,” he said. “We wanted to come up with a number of compelling reasons for customers to bypass our competition that also sells books and come to us. We think we've done just that.”