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Borders sets up a Net hybrid strategy

The U.S. book retailer is rolling out kiosks in its stores, taking a first major step toward linking its online and brick-and-mortar sites.

Borders is rolling out Internet kiosks in its bookstores, taking a first major step toward linking its online and brick-and-mortar stores.

The company will be launching a pilot project this fall that links selected kiosks to its Web site, whereby customers will be able to check a database of some 3 million titles and custom order titles through a store clerk. At the moment, Borders kiosks only allow customers to check the availability of books within the immediate store.

Should the project succeed, sometime next year customers will be able to special order titles directly through the kiosks and have them shipped to their homes or to the stores.

Borders Online president Rick Vanzura said the company will use the kiosks to reach new customers and maintain current ones. He said the kiosks will give customers something they won't find at any of Borders on- or offline competitors.

"Our strategy is to be the most integrated provider in our industry," Vanzura said.

"Pure play" e-commerce retailers such as Amazon.com and eToys quickly established themselves as the dominant players, but observers have been warning that traditional brick-and-mortar retailers could soon make big moves online. Analysts have been advising traditional retailers to adopt hybrid strategies to establish themselves on the Net while taking advantage of their offline strengths.

Borders is not the first brick-and-mortar retailer to try such a hybrid strategy. Outdoor equipment retailer REI placed Internet-enabled kiosks in its stores last year. This fall, Virgin Megastores plans to unveil kiosks in its stores that will allow customers to download music and create customized CDs.

As Forrester Research analyst David Cooperstein puts it, "It's better to leverage an asset than to ignore it."

Still, Borders may need more than kiosks to ramp up its Web strategy. A latecomer to the Web and suffering from unclear direction at times, the site has been trounced by e-commerce leader Amazon and Barnesandnoble.com.

Although Cooperstein said Borders' kiosk strategy won't be an "Amazon killer," he called it "the right move." He compared the strategy favorably with Barnesandnoble.com's, which he said has done little to tie itself to the brick-and-mortar stores owned by its Barnes & Noble parent.

"It's a better strategy to synchronize the two, to make sure the customers of one can use both without having a different user experience," he said.

Borders began rolling out its kiosks this spring and they now are in all of the company's 270 superstores nationwide, Vanzura said. Vanzura declined to say where the company will test the Internet-enabled kiosks or when they will go online, saying only that they will be making their debut this fall, and there would not be a full rollout this year.