So, Borders filed for Chapter 11 today. It's lagged behind Barnes and Noble for years, of course.
In high school, I lived in a town called Snellville, GA, that was sort of in a transitional period between being a small town and being a suburb of Atlanta. There were a couple of streets full of strip malls and chain stores, and a new movie theatre by the Wal-Mart. SHortly before I moved there, the only theatre in town had been a place called The Septum (I'm not making this up) that had five screens and smelled like popcorn and death. With no mall of its own, no town square, and nothing pedestrian friendly, Wal-Mart was essentially the city's downtown.
Until my junior year, when Borders moved in near the Target.
Well, Wal-Mart was still downtown at that point, but at least "the rest of us" had a place to hang out. And Borders at the time felt like a place to hang out. The music selection made it the best record store in town (before this, buying stuff more obscure than what they'd have at a Wal-Mart CD section basically required a trip to Athens). And, most importantly, there was a dynamite cafe (also better than any other in town at the time) that had live music every friday and Saturday night. I would have preferred a local, independent bookstore/cafe, but we didn't really have many local, independent places in town to begin with. The one indie coffee shop we had (which was in the same strip mall as the new theatre and Wal Mart) closed. The closest we had to "indie" stores was probably the pawn shops. Hanging out there was hardly recommended, unless you liked hanging out in places where the owners threw the n-word around freely.
I'll cop to having hung out at Wal-Mart now and then (it was a logical place to go after the movie, especially after the cafe closed), but once Borders opened, I hardly ever missed a Friday or Saturday night there. I saw and met musicians that I still follow today. At the time, Borders was being really supportive of the musicians, even arranging for them to go on "tour" at various Borders locations. Some of the acts began to attract a large following, and the cafe would be crowded with fans when they played there.
But things changed. The world changed. Finding obscure music got really, really easy, so the CD section was no longer such a draw. Amazon came along, so finding a hard-to-find book got easier, too.
The biggest change to me, though, was that they cut drastically back on the live music. It was an expense for them - a new band would get 50-75 bucks in gift certificates (or, anyway, that's what they payed my bands when we played there). Some of the bigger acts got cash, and they probably didn't pay for themselves. A lot of things started changing in the retail world around the time the Clinton era ended; finding a retail gig in the first place got hard (in high school, every store in every strip mall had been hiring. Some offered signing bonuses), and stores began to cut back on expenses like live music and events. Borders started to feel less like a place to hang out and more like...well, more like a store. It doesn't even have that "book store" ambiance to me anymore.
It's understandable, but if I had to guess where Borders started to lose its way, I'd say it was when they stopped having live music and feeling like a place to hang out. Ebooks are here to stay, CD stores are history, and most brick and mortar book stores can't compete with the online guys on price or in-store selection.
But no matter how much they build social networking into their sites, web pages will never be places to hang out, to see and be seen. This is the advantage brick and mortar stores will always have. I'm no retail expert, but I really think the key to book store's surviving is to to start thinking of themselves as the new downtown.