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What Can You Learn From Borders' Bankruptcy?

I hate to kick a company when they’re down, but I can see at least one reason why Border’s is in so much trouble. There’s no question that customers shifting from brick-and-mortar and hardbacks to clicks and e-books hurt them. But the bigger question is, why didn’t Borders, one of the “…original big box superstores that rewarded shoppers by offering thousands of book and music titles in a single location” not see this coming?

Give me a second and I’ll let you know why. But first, a story…

A couple of weeks ago, I learned on a Saturday that I needed a specific DVD on Sunday (I’ll spare you the gory details, but, suffice to say… teenagers). Clearly, there was no way to order it online and have it delivered before Sunday. Neither Netflix nor OnDemand offered the movie for viewing. And, we could find no one from whom to borrow the blasted thing. (Again… teenagers!)

Happily, I found a “click and mortar” solution that let me reserve the DVD online then pick it up in-store the next day. While there, I fell for a terrific in-store promotion targeted at loyalty club members (of which I am one) and picked up a second DVD at a discount. I cheerfully handed over both my credit card to buy and my loyalty club card to complete the purchase.

As it happens, the second DVD (the impulse buy) was defective, featuring two disks of special features within the package, instead of one disk of special features. No fault of the retailer, mind you. And, whoops, I’d tossed out the receipt after getting the disk home (apparently, I can’t blame teenagers for everything).

But, no biggie, thinks I, I’ll just go to the store and have them look up the purchase using my quote-unquote “loyalty” membership. Oh, if only life was that easy. When I got to the store and explained my lack-of-receipt, I was told, effectively, “bummer, dude, can’t help you.” Admittedly, not a direct quote, but, believe me, the intent was clear.

“But,” I say, “I’m a loyal guy. I gave you my membership ID when I purchased. Surely you can use that to verify my purchase?”

Boy, am I dumb.

Turns out, the store doesn’t use the loyalty program for anything other than to send me coupons and partner offers. They don’t know anything about my individual purchases. My loyalty to the store helped me not at all.

Only after I pulled up my credit card statement online (via my iPad), and showed it to the store’s manager was he willing to go find the original purchase record and let me swap out the defective DVD for one with a disk I could actually, y’know, watch.

Give you one guess as to the store name.

Yep… Borders.

As I see it, Borders’ financial woes and my recent in-store disappointment were due to the same thing: a failure to adapt to their customers’ needs. As the ACSI study I mentioned earlier this week shows, customer service matters. Borders, despite great locations and good ideas (as the “reserve online/pickup in-store” story demonstrated), seems to have missed their customers’ changing needs. Sometimes, customers want to get their merchandise in-store, sometimes online. Borders gave away the second one to Amazon. Sometimes customers want paperbacks, sometimes e-books. Amazon won that second battle, too. And sometimes, customers want to be treated as a loyal customer, not just someone to market to.

It’s no secret that I believe the most important things you can do are to listen to your customer and learn from what they tell you. The evidence suggests that Borders didn’t do that. The more important question is, do you?

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Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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