And now, 40 years after Borders Book Shop opened, Borders Inc. is closing, undone by a perfect storm of book digitization, the growth of Amazon, and an inability to turn a brick-and-mortar company into a zeros-and-ones business. The book chain announced this week it is liquidating 400 stores and laying off 11,000 employees.
The sharp rise and swift fall of Borders is a sad, but predictable, conclusion of a paper store in a digital age. Of course books and music are the first stores to fall in the digital age. Which store is next?
It's premature to think about the end of retail at a time when Walmart leads the Fortune 500 with $420 billion in revenue and employs enough people to fill Wyoming three times over. What's more, it's wrong to talk about technology as a general menace for retailers. Inventory technology and off-shoring helps large companies control costs. Online coupons accessible by phone give small vendors a way to clear merchandise in slow hours. Smartphones as credit cards make it easier for consumers to swipe-and-go and could even give merchants information to target with advertising. In more ways than I can count in this paragraph, technology is more of a giver than a taker for most retail companies and a variety of merchants.
"All retailing is vulnerable," says Joel Kurtzman, senior fellow at the Milken Institute and former editor-in-chief of the Harvard Business Review. "I've spoken with executives at many major big box retailers, and they're all very worried about how the digital world is changing their business."