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March 28, 2000

Your letters to my print column and this E-mail forum ask some serious questions about managing information technology in today's world. Since today's world is essentially absurd, my serious responses may sometimes sound a little whimsical, and my occasional whimsical ones, serious. In any case, if you want to participate, write to me at lovelace@home.com. I'll respond to those letters that I can. I reserve the right to edit for size and content. Just sign your E-mail the way you want it to appear online.

Dear Herb:
I just finished reading your article "Barnes & Noble: Hit Back" and I agreed with you 100%. I have shopped more and more on the Internet for products and services ranging from online stock trading, books, toys, and mortgages and houses. I just thought something was missing every time I finished the transaction. It is exactly that kind of "personal contact" or "product touch" that you mentioned in the article. It will be very hard for a pure virtual company such as Amazon to gain market share if Barnes & Noble takes your advice.

Sincerely,
Roger

Dear Roger:
I completely agree with you. The Internet provides not just another channel for businesses to sell their products, but also an opportunity to create a synergy among its channels. Synergy is a very overused word and, therefore, I employ it reluctantly, but in this case it fits perfectly. By combining electronic and traditional merchandising, the result will be greater than the sum of the parts. Recently, I wrote "Merging Clicks And Bricks," which tries to make just that point.

It is interesting to note that many articles in the media are now talking about the importance of using both the Internet and the physical stores to beat the competition. I am even starting to see the use of the term "clicks and bricks." Maybe the message is starting to be accepted.

Dear Herb:
Great column on how Barnes & Noble can better compete with Amazon. Reading it, I see that you're a dedicated Barnes & Noble shopper. As Borders.com's site editor, I respect that, but will press on anyway with my letter.

Your description of how B&N can better compete with Amazon caught my attention because converging our Internet site with our valuable brick-and-mortar side has been a primary corporate strategy at Borders for more than one year now--part of our 1998 annual report to shareholders, in fact.

We've received much press of late--some of it in your own publication--for our groundbreaking efforts to utilize our largest asset (and that which differentiates us from Amazon and other stand-alone Internet businesses). Publisher's Weekly, ComputerWorld, InformationWeek, the New York Times, and others have all written stories about our strategy, known internally as "retail convergence," but nicknamed "clicks and mortar" at a recent conference by Schwab CEO David Pottruck. Here's a sampling of what we're doing:

Borders is installing Internet kiosks in pilot stores next month and will roll them out to all stores next year.

Borders kiosks will allow customers to order online from the store, eventually allowing for on-site credit-card swiping to create a no-wasted trip to the store. You will be able to ship to the store or ship to your home.

Borders customers will be able to order any book and have it shipped to any store they wish. Traveling? Have it shipped to the store at your destination. Our kiosks will also allow you access to the in-store inventory of the store of your choice--reserve a copy (or pay for it online) and have it waiting for you when you arrive.

In addition to access to our millions of Internet titles (and the in-store inventory with a map to the section), Borders kiosks will offer access to the mounds of review material, staff and customer reviews, and other helpful detailed information that is found on title detail pages and throughout our site.

Down the road, this intrastore network will provide a high-bandwidth highway for in-store readings and other events at Borders stores around the world to be Webcast live (or stored for on-demand viewing). And we will allow for our cafes to be upgraded to Cyber Cafes, with two-way chats, reading groups, and customer reviews.

Everything you suggest that Barnes & Noble should be doing, we are launching now. With more than a year of work behind us, our infrastructure is way ahead of any competitor.

Borders online is also perfectly positioned for this upcoming converged retail environment. We have not spun off our online wing into a separate company with separate leadership or separate shareholders; we have not sold portions of our online division to outside companies. In other words, we are not separating, we are bringing together. We are not trying to out-Amazon our competitors; rather, everything we have done has been carefully crafted to differentiate ourselves from our competitors and utilize, rather than ignore, our biggest assets.

Maybe I'm wasting my breath, but perhaps you'll change your mind about our stores down the road.

Take care and thanks for reading,
Rich F.

Answer Dear Rich:
Thanks for your letter, and thanks for sharing your strategy with me and the readers. What you are planning makes perfect sense. It must be frustrating, however, to you and your management to see your stock languish even though you are making a good profit and have innovative ideas for the future. I am pulling for you to succeed, and I think that some of your potential alliances, such as the one with Sears for installation of kiosks, are very creative.

In deference to your very gracious missive, I want to tell you that I recently made a comparison trip to my local Barnes & Noble and then swung over to the nearby Borders. I may have to rethink my loyalties. The selection was great, the service was courteous and helpful, and best of all, the cappuccino was delicious.

Dear Herb:
I agree with your article about the need for Barnes & Noble to use the brick-and-mortar establishment that it has. I would offer another suggestion--offer drive-through pickup at stores. The customer would just place an order on E-mail and indicate the store where he or she would like to pick up the merchandise. This feature would require Barnes & Noble to link store inventories to their Web site so as to provide the customer notification of a pickup time in case the book is not in stock at the store. However, it would give the consumer the convenience of Internet shopping and the ability to get a book in a hurry, if needed.

Raj

Answer Dear Raj:
I hope that Lenny Riggio at Barnes & Noble is listening. I know that Rich F. at Borders is.

Dear Herb:
What is your assessment of Compaq? What do we at Compaq need to do to come back? Will Compaq be the Comeback Kid or will we be Dead On The Vine?

Do you have any foresight on this issue?

Doug

Answer Dear Doug:
If I had foresight, I would have made a fortune on the last Super Bowl game. However, I do feel comfortable that Compaq has a very good opportunity to strengthen its position significantly in the market.

Although my colleague Bill Schaff is infinitely more qualified than I am to comment on the potential of Compaq, I think the company is on the road to recovery. Product line gaps and service issues are being addressed. Perhaps of more importance, it seems to me that your new CEO, Michael Capellas, understands his customers and the business of serving them. Since he is an ex-CIO, I am hoping that he succeeds. If he does, it would be a good indication to observant boards of directors that the CEOs of tomorrow may well be in the trenches building today's systems.

Dear Herb:
I am writing to you in hopes of gaining some direction with respect to my career aspirations. I am a 27-year-old major account manager for a major telecommunications company. Before this, I spent five years with a prominent supplier of electronic data interchange and other E-commerce-related products and services, in both sales and business development positions. As a result, I've become very intrigued by the convergence of business strategy and information technology.

My educational background includes an undergraduate degree in business administration from a small mid-Atlantic college and a few graduate-level business/IT courses. I am interested in working as an analyst or consultant merging information technology and business strategy, which requires knowledge of such topics as E-commerce and high-level business strategy.

The challenge I face is determining what "skills" and "tools" I need to be attractive to an organization. I am in the process of sitting for the GMAT so as to study for my MBA. I am considering a well-known university in the mid-Atlantic area that is adding an E-commerce concentration as part of it's MBA program. I am also weighing the need to obtain either graduate or undergraduate courses in computer science.

Based on your experience and prediction of the future, how would you suggest I proceed? Should I be concerned about attending courses on a nighttime or part-time basis? Will that be looked down upon by the type of organizations I am seeking?

I certainly appreciate any advice or direction that you can provide.

Shane

Answer Dear Shane:
I think that you are going about achieving your objective in the right way. The formal education of an MBA with a concentration in E-commerce will be useful on your resumé. Given the competition among companies for talent, today, I doubt that anyone will be upset if you have gotten your degree in the evening. In fact, experience is a huge plus in this field, so you should use your day job to the most advantage. It probably will mean more to the hiring manager than anything.

You said you are an account manager. Do your best to get close to your clients and find out what they are doing. Help them achieve their objectives. My sense is that you can make yourself very attractive to a potential employer by honing your skills at understanding your customers' problems and finding solutions to them. That ability fits perfectly the template of talent needed either by a consultant or an analyst.

Herbert W. Lovelace shares his experiences (changing most names, including his own, to protect the guilty) as CIO of a multibillion-dollar international company. Send him E-mail at lovelace@home.com.

NOTE TO READERS: As I've mentioned, I am planning to put my InformationWeek columns together into a book with a little bit of additional commentary around the events and people about whom I write. If any reader would like to be notified of such an event, please drop me an E-mail. Just use the word BOOK as the subject line.