To blame bankruptcy on being behind the curve in the adoption of books as a digital enterprise represents a fundamental misunderstanding of multichannel marketing.
Let's start with the concept of debt.
You have a brand like Bed Bath and Beyond. They don't have any debt. Now, this prevents them from expanding and growing at an unfettered pace. But they have a level of flexibility that allows them to ride out economic highs and lows.
Consider the financial situation of two individuals.
- Individual #1 earns $100,000 per year, taking home $6,000 per month. Individual #1 makes a $2,000 monthly mortgage payment (debt), and has financial commitments for $3,500 per month in expenses, yielding $500 each month that can be "saved".
- Individual #2 earns $90,000 per year, taking home $5,400 per month. Individual #2 does not have a mortgage payment (no debt), and has financial commitments for $3,700 per month in expenses, yielding $1,700 each month that can be "saved".
What happens if each individual is required to take a 10% pay cut?
This is what debt does to a retailer. Or to anybody. It cripples a person, family, or brand.
The multichannel vision was a simple one ... built on the premise that customers loved to shop, they loved to shop offline or online, and they loved online and offline advertising. This required businesses to "do everything". It's really hard to "do everything". If you want to do everything, you almost have to borrow money. And when you borrow money, you have no margin for error.
Multichannel marketing requires "margin for error". Channels grow, and channels die ... heck, look at the music industry. Flexibility is of the utmost importance. Retail, unfortunately, is fixed, inflexible, and often debt-laden.
The retail channel limits innovation ... you simply cannot take a risk in retail that would cost you sales, or you'll need to borrow more money. This is what causes a business to not be able to invest in digital books in the same way that a more solvent business, or a single-channel business (Amazon) can invest.
You cannot tell me that all Executives at Borders were so blind to digital innovation that they completely missed the Kindle/Nook revolution. And let's not blame them for partnering with Amazon ... heck, half the pundits in 2000 thought it was pointless to have an e-commerce website when one could achieve "scale" by partnering with Amazon. It's ok to make bets that are wrong.
The real issue is debt.
Wall St. wants retailers to take on debt.
Some vendors want retailers to take on debt, because that means that retailers will spend money with said vendors.
Focus, instead, on doing what is right for the customer.
And stay away from debt, if at all possible. Multichannel marketing requires flexibility, debt takes flexibility away.