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Online retailer Amazon.com is expanding its brick-and-mortar presence in a deal that will allow shoppers to pick up online book and music orders at their neighborhood Borders Book Shops.

In an announcement earlier this week, the two retailers unveiled an in-store pickup program that they hope will make it more convenient for customers to find the products they're looking for and give them an easy way to exchange or return online purchases in nearby stores.

Terms of the multiyear deal between Ann Arbor, Michigan-based Borders Group and Seattle-based Amazon.com weren't disclosed. Even the exact length of the agreement wasn't released.

In a related move, Borders, which also owns the Waldenbooks store chain, announced that a co-branded Web site will be created with Amazon.com for Waldenbooks, just as Amazon joined with Borders last year to improve that company's online presence using Amazon's successful sales and shipping systems.

Holiday Shopping Season

Ann Binkley, a Borders spokesperson, says the new online capabilities will be ready at more than 365 Borders stores in November, just before the holiday shopping season.

Online shoppers will be able to research their book, CD, and DVD purchases online at Borders' site on Amazon.com, then check availability at as many as five local Borders retail stores based on their ZIP code. Customers can then choose an in-store pickup option so that books and other products will be held for them in the stores, Binkley says.

"This is an added customer enhancement" that had been sought by shoppers, she says.

Merchandise will be priced at national Borders prices or at store prices, if they are lower. Customers will receive an e-mail confirmation of their orders, and while no shipping charges will apply, local taxes will be collected.

Best of Both Worlds?

Amazon.com has similar arrangements with electronics and appliance retailer Circuit City Stores, whereby items can be ordered online and picked up in local Circuit City stores.

"This agreement is an important next step in the extremely successful alliance we've experienced with Amazon.com," says Greg Josefowicz, Borders Group chairman, president, and chief executive, in a statement. "Customers overwhelmingly indicate a desire for the convenience of in-store pickup, and we're delighted to offer it to the world's largest online audience of book, music, and movie lovers."

Bill Curry, a spokesperson for Amazon, says the deal "combines the best of both worlds" for consumers by making it easier for them to shop without wasted trips to the mall. By using the Web site, customers also have access to reviews of items and other information that can be helpful in making their purchases, he says.

Return Trips

Analysts say the move is a smart one for both companies.

Carol Baroudi, an analyst at Baroudi & Associates in Arlington, Massachusetts, says the arrangement helps Amazon.com deal with one of its greatest shortcomings--a less than dominating presence in brick-and-mortar storefronts, which offer added sales opportunities and purchase channels for customers.

"I think they have to do something," Baroudi says. "Amazon really needs a brick-and-mortar outlet, if for nothing but for returns."

For customers, the idea of being able to research purchases online and have the items confirmed as available and waiting for them upon arrival in the store is perfect, she says. "Customers don't want to have to wait," she says. "If they can find it and [store clerks] will hold it for them, it's a big deal."

Successful Examples

Neal Goldman, an analyst at The Yankee Group in Boston, says having online and brick-and-mortar stores continues to be a model of success for retail bookseller Barnes & Noble, which sells online at Barnesandnoble.com. "There's value to the consumer based on the multichannel approach," Goldman says.

Other retailers with multiple ways to shop include clothing retailers J. Crew Group in New York and L.L. Bean in Freeport, Maine, he says.

Barrett Ladd, an independent analyst in Concord, Massachusetts, agrees.

"The whole 'order online and pick it up in the store' model is the next level of convenience that businesses can provide," she says. "It's just making sure that you don't have to take an unnecessary trip to the store. I think we'll see more deals like this."

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