Amazon vs. Borders

A lot has already been written about the Borders Books failure.  Many case studies will continue to be written where scholars will opine on Borders’ brick-and-mortar locations and their physical book inventory.  They’ll question how any “physical company” would dream of competing against an “internet company”.  Seldom do they question an essential business process.

But in case anyone forgot, Barnes & Noble is doing just fine.  Additionally, there are hundreds of boutique book stores still in business.  They all have very real physical presences and physical inventory.  Thus the easy answer of Internet versus Physical may be more smoke than reality.

Essential Business Process:

So if the easy answer is all smoke, what did cause the failure?  As with most companies that have dire problems, it was clearly obvious.  All you had to do was try a buy a book in a Borders Store.  Then try buying at Amazon.  When it comes to an essential business process, Borders may have been the worst, while Amazon can be argued to be one of the very best in the world.  Most small business accounting professionals call this essential business process:  The Order Processing and Billing Cycle.

In other words, Amazon makes it easy for you to find what you want, easy for you to place your order, easy delivery and easy for Amazon to collect the money.  Compare this to the Borders disaster.  Occasionally I would try buying at Borders because I wanted the book now, not next week.  So I’d pop into a Borders and get it, so I thought.

First of all, at the Borders near me, they constantly moved everything around.  I could never just walk in and find books in the same location.  The only Borders employees available were the cashier and coffee barista.  I’d try the in-store terminal.  You know the one; it had the worst search engine ever.  And if I did find the book, there still wasn’t a current map of the store!

When I finally found where they hid “my books”, it’d take another 15 minutes just to check out.  Luckily they rarely had my books in stock.  So by this time, I was no longer interested in finding it, even if it was only 5 miles away at the next store.  Instead, I’d return home and with 3 clicks of the mouse, it was delivered the following week.

Customer Relationship Management:

Only 3 clicks of the mouse to find and buy; how does Amazon do that?  Amazon implemented a very powerful,  yet natural extension to their basic OP&B process, Customer Relationship Management.  Amazon understands the single most important principle of customer relationship management.  It cost a lot less to sell to an existing customer than to find a new customer.

So on top of their exceptionally efficient OP&B process, Amazon added an extensive database of all their customers’ activity and interests.  Thus, they make it even easier for customers to find and buy.

How does your business compare?

Are your processes more like Amazon’s or more like Borders?  Do you make it easy for your customers to do business with you?  Does your chief financial officer use terms like relationship management and CRM software?  Is your IT technical support concerned about workflow and business analysis dashboards?  Or is it only focused on the ERP system?

At Professional Business Intelligence of Tampa Bay, Florida, we’re in the business intelligence business.  We can help your sales force move from simple contact management to competitive intelligence.  For the very best results, we combine business process management, reporting and analysis with predictive analytics.  Be like an Amazon, and you’ll never have to worry about the Borders.