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Borders goes digital

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Struggling bookseller Borders Group (NYSE: BGP) has opened up a new concept store as part of its plan to re-invent itself. According to the USA Today, the new prototype store in Michigan contains "a digital center where you can download music or books, burn CDs, research family histories, print pictures and order leather-bound books crammed with family photos - with help from clerks who know how to do those sorts of things and won't embarrass you if you don't."

A few problems: Why would anyone go to a store to download music or books or burn CDs when you can do that at home for less money? Leather-bound books filled with family photos? That hardly seems like the kind of thing that will turn around this flailing behemoth.

The problem for Borders has been that it's having a hard time competing with Amazon.com (NASDAQ: AMZN) which is more convenient, less expensive, and offers a broader selections. Features like "Search inside" are further depleting the few advantages that brick and mortar bookstores have left.

I wouldn't bet on Borders' transformation. The company's isn't coming from a position of strength: Borders is a book retailer that's been watching its relevance decline for years and now it needs to essentially change its business model to compete.

Reinventions rarely work, and I wouldn't expect the Borders one to succeed. If the strategy is simply to offer customers more services that they can get for less money on the internet, I'd say this is a turnaround that's destined to fail.

Borders plans to open 13 more concept stores this year.

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Last updated: November 25, 2009: 05:58 PM

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