Borders opens bookshelves to digital services

When you walk through the doors of Borders' bgp new concept store, the place feels familiar. As with any big-box bookstore, you'll find a coffee shop over here and some strategically placed leather chairs over there. And, of course, lots of books.

But follow the table of books snaking off to the right, and you'll come face-to-face with Borders' newest retail strategy: a digital center where you can download music or books, burn CDs, research family histories, print pictures and order leather-bound books crammed with family photos — with help from clerks who know how to do those sorts of things and won't embarrass you if you don't.

Borders, the nation's second-largest bookstore chain, hopes to reverse years of sluggish sales by reinventing itself as a hub for knowledge, entertainment and digital downloading. Exhibit A is the new store that will open to the public here Thursday — the first of 14 that Borders plans to unveil this year. Borders' plans underscore the anxiety in the bookstore industry, which has been hurt by the growing footprint of online-only sellers.

Can it work? CEO George Jones thinks so.

"We had to build something that would cause the consumer to drive five or 10 minutes past the competitor's store to come here," says Jones, who joined the company 1½ years ago from Saks sks.

Since then, the notion of a Borders that seamlessly links the digital world with a physical store has been a top priority.

"I was thinking back on stores I'd been to, and I thought to myself, 'Was that a Borders or a Barnes & Noble?' " he says. "There's an opportunity to have a good experience at both, but they're not differentiated enough."

Barnes & Noble bks doesn't offer digital downloading and hasn't unveiled plans to do so.

At the Borders concept store, new themed book islands are built around lifestyle genres, including travel, cooking and health. The digital centers, meantime, are geared to welcome people of all levels of tech know-how. Staffers will guide customers through the process of burning music to CDs, downloading songs to most digital music players (except iPods, which, for now, work only with Apple software) or books to a Sony digital reader. They'll even print the cover art and fold it into a CD cover for you.

The strategy reflects Jones' effort to capitalize on the very technology that has helped flatten his stores' book and CD sales — and in doing so, perhaps overtake industry leader Barnes & Noble. Despite the economic slowdown, Jones says, traffic at Borders stores is up. Holiday sales for the nine weeks ended Jan. 5 rose 2.4% — which, in a tepid shopping season, was almost something to brag about. (Barnes & Nobles' same-store sales were off 0.4% in the same period.)

Grabbing customers

Working in Jones' favor: The average customer already spends about an hour in Borders, which makes browsers, in theory, susceptible to being pitched products well beyond books. Jones' hope is that the new store format — blending a warm, homey atmosphere with high-tech dazzle — will produce longer stays and more customers, from online music buyers to teens indifferent to books.

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