Looking for a way to improve their bottom line and focus more on what the company calls the “knowledge and entertainment market,” Borders Group Inc. (BGP) is ramping up a whole new e-commerce plan to meet the fast-changing Web world. As a result, at the end of 2007, they will no longer be using the services of Amazon.com (AMZN).
The major changes will include a consolidation of its Web sites using IBM (IBM) WebSphere to build its internal e-commerce engine. Part of the current problem with Amazon is that they don't offer comprehensive cross-channel integration for the company.
Another move they recently made in January was the launching of a co-branded Web site with Gather.com where the company can offer its customers an opportunity to earn loyalty points which can be exchanged for purchases or cash when they participate in their online forums or share personal content online.
The company also began an online original series they've called "Borders Live at 01." The series will offer a monthly broadcast of readings from authors, music shows and a number of events that are presented in the companies first store in Ann Arbor, Michigan.
"We need to reinvent our business to exploit the rapid changes taking place in how consumers access information and entertainment," says Borders CEO George Jones. "Our ultimate goal is to make Borders a vital community gathering place where people come together to see, touch, interact, and learn—online and in-store."
While this is a good move by Borders, hopefully for them it isn't too late. The company lost $73.6 million in the fourth quarter alone last year, on sales of $1.5 billion. Total losses for 2006 ended up at $151.3 million on overall sales of $4.06 billion. You can't absord too many years like that before you're in big trouble, which they already are.
I'm just wondering why they've taken this long to take these steps - Borders has been struggling for years.
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