Newly Launched Site Builds On Customer Loyalty Program

Borders Group is hoping to bring the store feel into customers’ homes with the new website, which has been in development for two years since George Jones joined the company as president and CEO. To reintroduce Borders’ ecommerce business, the 1,100-store retailer had to break ties with, which has been the sole Internet source for Borders merchandise for the past seven years.

The plan for the new site was initiated by Jones shortly after he joined the company in July of 2006, says Kevin Ertell, vice president of e-business. “Then we kicked into full gear building the site about 18 months ago,” he notes. In addition to using in-house design resources, Borders employed a number of outside sources to build the site including IBM, Sterling Commerce, Cheetah Mail, Choice Stream, Allurant and Endeca.

Coming in just “a little late and a little over budget,” the site is expected to break even in its first year and become profitable during its second year of operation, says Ertell.


Cementing customer loyalty
Expanding its widely successful Borders Rewards program to its online customers will be a key component of the success of the new site, says Ertell. With more than 26 million members, the Borders loyalty program was not accessible via “One of the biggest requests we have received from customers is the ability to use their Borders rewards online,” notes Ertell. “Customers are really excited about having that ability.”

Borders also is hoping to secure additional brand loyalty through custom site components, including the “Magic Shelf” and numerous video offerings. The Magic Shelf is literally a virtual bookstore online which allows customers to scroll through offerings as if they were walking through the store.

In the Borders Media section of the site, customers have access to exclusive and original programming, including virtual book club meetings that feature authors, cooking lessons, poetry readings, in-depth interviews, self-help advice and more.

Cross-channel coordination
Acknowledging that the online business will never overtake consumers’ desire to shop for books in brick-and-mortar stores, Borders has instituted a number of cross-channel efforts that support its customers’ shopping preferences. In-store kiosks, for example, now connect to, allowing customers to access their wish lists and purchase items that may not be in-stock in the store.

The connected kiosks are currently rolling out to the 500-plus superstores throughout the U.S., according to Ertell. Each store will offer seven to 16 kiosk stations, depending on the size of the store. The online inventory of books, music and movies is approximately 10 times the number of titles available in stores.

Both online and in-store shoppers have the option to purchase items online — at the kiosks or via their home computer — and have them shipped to their home or to the store for free.

All loyalty members also receive a weekly email that includes offers and coupons that can be used online or in-store.

The big picture
While the new site is receiving customers’ kudos and substantial media attention, speculation remains about the future of the company. In both 2006 and 2007 Borders profits were down more than $150 million, even though revenues have been increasing. To combat the decreasing profits, Borders made the decision to trim $120 million in annual costs through the elimination of corporate staff.

On June 3, 2008 Borders announced a 20 percent executive staff cut, including 156 jobs lost at the Ann Arbor, Michigan headquarters; and Borders Group also may be up for sale. In fact, Barnes & Noble has reportedly been researching the possibility of making an offer for its largest competitor.

The close proximity of the two announcements – the layoffs and the new website – is not related, according to the company. “The job eliminations were a broad cost-cutting measure and have no connection to the introduction of the new site,” reports a company spokesperson.

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