As Borders finally takes control of its online store from Amazon (NSDQ: AMZN), the books retailer has a lot of uncertainties ahead of it. AP provides an overview of Borders' challenges: despite denials of hopes of "out-Amazoning" Amazon as an online retailer, Borders will have a tough time convincing book buyers to make their purchases on its site as opposed to its partner for seven years. Borders is placing a lot of emphasis on its "Magic Shelf," which is designed to offer a simulacrum of being in a bookstore with "staff picks" and the usual online recommendations based on previous purchases.
But the new website's main selling point, if there is one, is that shoppers will be able to pick up their online purchases at a Borders outlet within two days. Secondly, Borders hopes at least some of its 26 million "loyalty club" members, will want to redeem purchase rewards online, which they couldn't do on the former Amazon-run site. All of this is supposed to make the online store profitable by next year, but Fred Crawford, managing director for retail consultant AlixPartners, doesn't have high hopes for Borders' being able to compete with its erstwhile ally: "Amazon just dominates. Amazon is nearly unassailable."
By David Kaplan