In its second-largest acquisition, Amazon buys the company for $970 million.
Borders Group Inc. will allow customers at Borders.com to order a book and pick it up at a nearby Borders store.
Talk about dot-com pure-plays going multi-channel. The grand-daddy of the pure-plays has struck a deal that will let online shoppers pick up merchandise in the store.
In time for holiday shopping this year, Amazon.com Inc. and Borders Group Inc. will offer an in-store pickup option to shoppers at Borders.com. Amazon has operated Borders.com for the past year.
Borders, which operates 365 stores, will make available for in-store pick-up the 40-50% of inventory that it considers the best sellers. Customers who buy one of these items will be alerted that store pick-up is an option. If they choose that option, the site will display five nearby stores that have the inventory. The customer will choose the store, which then will receive the order via a wireless device or an e-mail. The store will double check availability, then send an e-mail to inform the customer of the item’s availability. Borders expects stores will reply within minutes of receiving the e-mail and no more than an hour.
Local store inventory will be updated at Amazon nightly and Amazon will decrement each store pick-up sale against the inventory. Customers will pay for the item online. If the customer uses coupons or is entitled to other store discounts, the original transaction will be reversed at the store and the store will initiate a new transaction at the lower price. For starters, existing store personnel will pick the items from the shelves. Borders says it has not determined whether stores will have dedicated fulfillment staff.
The move is good for Amazon because it extends Amazon’s reach beyond the web, say observers. But they caution that the execution may be difficult to achieve. “They are going to find it’s a whole lot more work than they expected,” says Duif Calvin, vice president of the retail division with consultants Scient Inc. “The retailers that have been the most successful with store pick-up have been the big box operations like Circuit City, where the products are not on the shelf to begin with and the customer has to come to the counter to get the item.”
Other retailers who have tried similar plans have found that store pickers were sometimes competing with customers for products. And they often found that what they thought was on the shelf was not—that the few items that they thought were in inventory have been sold or lost. That is why Borders is limiting its initial offering to best sellers, Borders says. “We will offer the 40-50% of our inventory that is in most demand and that we have a higher degree of inventory on,” a spokeswoman says. She says Borders has no expectations as to how many orders stores will receive.
Stores will record the sale of items that customers pick up; Amazon will receive a commission on sales.