The ROI on Innovation: Borders Books

When most people think about the process of driving innovation within an organization, they tend to think that to be innovative, the idea - or change - needs to be BIG.  Too often the feeling is that if it's not big, then it's not innovative.

But often, the strongest returns come from the smallest innovations.

Some of the best innovations come from ideas that don't, on their surface, seem very big at all.  For innovation to have an impact, the thing that needs to be "big" is the risk of changing the way things have historically been done, not the idea. 

A great example of this can be found in Borders Books. There's an article in today's Wall Street Journal about how Borders is changing the way they display the majority of their books in their stores. 

So what's the innovation?

Well, to jumpstart sales, Borders is drastically increasing the amount of books it displays on shelves with the cover face-out, rather than relying on the traditional way of showing just the spine. 

So at first blush you're probably thinking - "Duh! That sound pretty obvious, no? Innovative??"

But, in fact, to make this change, Borders stores will have to reduce by 5% to 10% the number of titles they stock. In the age of the Long Tail, where book stores have to compete with the deep inventories of Amazon.com, this change is not that small.  From a business standpoint, It's actually quite big.

The Journal states:

"The new display strategy is the brainchild of CEO George Jones, who says he learned when he was a buyer at Dillard's Inc. early in his career that dresses sell better when the entire garment is shown rather than hung sleeve-out. So he recently decided to test sales of books shown with the cover visible at a newly built prototype store in Ann Arbor, Mich., where the company has its headquarters. Results were so encouraging after the first two weeks -- sales of individual titles were 9% higher than at similar Borders stores -- that all of the retailer's superstores have been told to adopt the new strategy. The concept store gave us the opportunity to start from scratch and do it exactly as we wanted to do," Mr. Jones says.

For me, these types of innovations are ultimately the most effective ones because what they end up doing is breaking what is the most powerful roadblocks to innovation: "This is the way we've been doing it for years." 

There's a terrific quote in the article from John Deighton, the editor of the Journal of Consumer Research. He says"

"Breakfast cereals are not stocked end-of-box out. You want to your product to be as enticing as possible. It's a little bizarre that it's taken booksellers this long to realize that the point of self-service is to make the product as tempting as possible."

For me, true innovation is about taking a risk and changing the way your business is done.   

Comments

[Mike]

So, I guess while you may not be able to judge a book by its cover, you can sell it.

[Jonathan Salem Baskin]

I'm not convinced (and neither are most consumers, it seems) that Borders could ever merchandise or promote its way out of its crisis. There are few apparent, and fewer compelling, reasons for bricks-and-mortar book stores, and Borders has never come to terms with the ways Internet distribution has redefined the very premise of its own business model. More book facings? Coffee cafes? This is just nibbling at the, er, borders of true strategy change. I'm just a brand marketer, but I think there's lots more it could have (and perhaps still could) do.

I've riffed a bit about it today at DIM BULB if you'd like to check it out: http://dimbulb.typepad.com/my_weblog/2008/03/borders-reprint.html

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