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A Bookstore Battle

July 31, 2003
Related Topics: Corporate Culture, Candidate Sourcing, Featured Article, Staffing Management
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Tattoos, piercings, long hair and good books. It’s an odd combination that helps bookselling superstore Borders distinguish itself from the competition. Borders goes for funky, edgy employees who use their personality and passion to sell the products.

Barnes & Noble, its closest competitor, prefers clean-cut employees in pressed shirts who smile brightly while helping customers find whatever they’re looking for.

It’s not just employee attire that sets the two companies apart. In the otherwise eerily similar bookselling atmospheres, it is only through the employees that each shop’s business philosophy, inventory and zeal for the product itself are revealed. To support these distinctions, each shop recruits a different style of employee to deliver its own brand of customer service. What follows is a look inside the two companies, and at how those different recruiting styles play out in the competitive book business.

Different passions
    Borders and Barnes & Noble have been different from the get-go, which is obvious to many customers. Borders focuses on offering the widest assortment of titles, whereas Barnes & Noble draws customers with low prices on the most popular books. The result is that while both companies say "passion" is the most important quality in an applicant, what they are passionate about, and how they express that passion, varies dramatically with each store.

Barnes & Noble hires people with a passion for customer service, a "love of books" and a scholarly background, says Mitchell Klipper, chief operating officer. "Our booksellers are nice, educated people. They wear collared shirts and have a cleaner look, as opposed to tattoos and T-shirts." They’re also committed to providing excellent customer service, he says. "Putting the book in the customer’s hand and fast cashiering are the two principles the company was founded on."

That means employees are expected to walk customers to their book of choice and encourage them to browse. But when that person is ready to leave, employees are there to check them out without a wait. If the book isn’t in stock, it can be delivered in 24 to 48 hours from the company’s warehouse--which holds a million books, Klipper adds--further enhancing the company’s adherence to swift customer service.

The Borders approach to passion is more about the books themselves. "We want employees who are passionate about what the customer wants," says Dan Smith, vice president of human resources for Borders Group, based in Ann Arbor, Michigan.

Borders employees also dress however they like, often sporting tattoos, piercings and an array of fashion styles. "We pride ourselves on diversity. We want our people to be comfortable and to show their personality," says Julie Johnson, general manager of the Michigan Avenue store in Chicago. Ultimately, the goal isn’t just to let employees dress creatively; there’s a business purpose behind it. "Our challenge is always to have a diversity of thought and a group of people who are crazy about their favorite subjects." Even if that means sending customers elsewhere to find what they’re looking for, adds Ann Binkley, Borders’ director of public relations.

Binkley proudly tells a story about shopping with her brother at Borders for a book on Indian mosaics. When he asked for assistance, the bookseller sent him to an Indian specialty store across the street. "The guy had no idea who we were; he was just so passionate about this topic and wanted to be sure my brother got exactly what he was looking for," Binkley says. "It’s employees like that who help us make our inventory even better."

Service vs. knowledge
    The level of intensity Binkley talks about is critical to Borders’ business strategy. The company wants employees who radiate excitement about particular books and music, and it relies on them to suggest topics and titles that reflect the interests of the community. In Alaska, for example, piloting books are popular, whereas stores near college campuses carry more traditional literature, poetry and local music. "Part of the bookseller's job is to identify trends," Smith says, noting that 50 percent of each store’s inventory is unique. "The longer a store is open, the better the selection becomes, thanks to the input of our employees."

Barnes & Noble employees, on the other hand, work the entire store, so their service skills and general knowledge of the inventory are more critical. "We look for educated people who can provide world-class customer service," Klipper says. "They know how to listen, anticipate and lead customers to what they need." They also tend to have more retail experience than employees at Borders. "People from any retail segment and those with direct knowledge of our products are a big plus for us," Klipper says.

Profiting by expansion
    Despite their differences, both companies continue to rule the book-selling industry, creeping steadily into every corner of America. In an industry where profits increase in direct proportion to expansion, the ability to open and staff a new location efficiently determines the success of both businesses, says John Beaulieu, financial analyst for Morningstar.

Both stores see an average sale of about $240 per square foot of retail space, with a total inventory turnover about twice a year. "It’s hard to get big returns when your inventory is so massive," Beaulieu says, noting both companies grow primarily through new store openings. Barnes & Noble opens an average of 50 new stores a year, while Borders opened 41 stores in 2002. The continual openings--even in a down economy--have kept both companies’ stock prices in the high middle of their four-year range, with Borders around $18 and Barnes & Noble around $25.

Borders has gotten really good at the way they prep a new store for opening, Beaulieu says. "It’s like the army starting a new division. They take a small core of their best employees and build a crew around them." As a result of this hands-on employee involvement in expansion, no opening has ever flopped and Borders has had only one store closing in the last three years.

Fortunately for both stores, there’s an ample pool of potential employees to choose from in almost every market they enter. It’s not uncommon for Barnes & Noble to receive 2,000 applications at a job fair, Klipper says. Similarly, Borders receives up to 150 inquiries for each job opening. This wealth of potential employees means there’s little competition for talent between the two companies. "It’s surprising how few people we hire from Barnes & Noble," Smith says. "Their environment is very different from ours."

Borders also puts little emphasis on past retail experience when recruiting new employees. Because the inventory is so varied, it prefers to hire specialists for each section of the store. "If I had an opening for the children’s section and I had two applicants, someone with bookselling experience and a retired teacher, I'd take the teacher because she’d know the product," Smith says.

Training enhances the vision
    Once employees have been hired, the focus of the training programs at each shop further widens the gap between the Borders and Barnes & Noble experiences. When a new Barnes & Noble store opens, recruiters hire about 120 people, who spend 15 to 30 days training for all departments, including cashiering, making coffee and shelving books to get to know the inventory. Of the original 120, 30 quit early and 30 are let go because they aren’t right for the store, leaving the remaining 60 who have "bookselling in their genes," Klipper says. This system ensures that each new store has the best possible people representing it when it opens to the public.

New employees at Borders receive about 40 hours of training over the first two weeks, geared to giving them a general knowledge of the core inventory. They spend much of that time at the service desk helping customers locate books on the software system and taking customers to their selection. "That’s the best and fastest way to learn the store," Smith says.

To add to employees’ knowledge of their products, Borders offers a "books on loan" program, and each store holds daily meetings to discuss what everyone is reading and share advance copies of books from publishers, Johnson says. After six months on the job, employees also receive a $30 monthly stipend to buy products. "It helps our booksellers learn the products, and they see it as a huge perk," she says. "They learn about great new authors, and they can take that knowledge back to the customers."

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