Saturday, November 20, 2010

Undercutting Yourself

Maybe I just don't understand…

The other day Borders sent me an email which gave me ten dollars in Borders' Bucks. A great promotion, to be sure. And I had a book in mind I wanted to buy, but not spend a lot of money on: Jim Butcher's collection of Harry Dresden short stories, Side Jobs.

First check it out online. We have:

List Price $25.95
Online Discount -$11.22
Borders' Bucks -$10.00
Shipping $3.98
MD Tax $0.29

Total $9.00

Not bad, but the shipping price sucks, it will take days to get here, and anyway I want to get out of the house for awhile, so let's go to a nearby Borders and buy it there.

I get to the Borders, and find Side Jobs. The sticker on it says 20% off. Do a little bit of math: 80% of $25.95 = $20.76 - $10 Borders' Bucks = $10.76, + 6% tax ( $0.65) = $11.41. A bit of a rip, compared to online, but I'm here, I've already spent a buck in gas, and I'll walk out with the book.

Except: I then notice that the sticker also says Borders Rewards Plus Members. I'm just an ordinary Borders Rewards member. I checked with one of the sales people, and no, I'm not entitled to the discount. That makes the cost $16.91, Borders' Bucks and tax included. I made a point of telling the guy his store's website was undercutting the store by selling the book for $5 less, including shipping, put the book down, and walked out.

I suspect some marketing guru has it all figured out, but to me this just seems plain old-fashioned stupid. If Borders gave me the online price at the store, or even got close to it, I would have gotten the book then and there. Since I was in the store, I probably would have had a coffee as well. Maybe a cookie. I would have looked at a Linux magazine while I was sipping my coffee, and possibly would have purchase that, too. I would most likely have spent the $5 in the store, maybe more, and I wouldn't have been pissed.

Instead, I went home and ordered the Dresden book online. Even with the $2 gas I just wasted I still saved $3 over buying it in the store. And, instead of waiting for more coupons/bucks to come my way, I went over to Amazon and ordered two books I would have otherwise eventually gotten at Borders (along with more coffee, cookies, magazines, etc.): Lois McMaster Bujold's newest Vorkosigan novel, Cryoburn, and Terry Pratchett's new Tiffany Aching/Discworld novel, I Shall Wear Midnight. Add in a book ChildII wanted, we made the supersaver price, and got free shipping.

In summary: by charging full price for a book in the store, and a deep discount online, Borders lost the sale of at least two books, two-three cups of coffee, a couple of cookies, and maybe a magazine.

It looks like Borders would rather you didn't come to their store. OK, stores cost money to keep up. Employees have to be paid, not to mention heating, lights, insurance, and all of that. But if I come into the store, I'm going to browse. I'll look around, and might well find something else I'd like to buy. Online, I'm going to get the books I want, hit the send button, and go on with my life.

Like I said, some genius with an MBA probably has figured out that this approach makes more sense for Borders, but how that could be is a mystery to me.

The trip wasn't wasted, I drove a mile to the local wine emporium, tasted a couple of wines, and bought a bottle.