Amazon is Prepping for a Conquest of College Bookstores
One of the better ways to get a customer is to catch them young. this is why Amazon has a Amazon Student membership deal, and it could be why Amazon has started a pilot program to test affiliate partnerships with college bookstores.
There’s been no announcement from Amazon, and the program doesn’t even have a name yet, but for earlier this Fall Amazon started a year long pilot with the University of California – Davis bookstore.
Update: Amazon formally announced the pilot in late January 2014.
UC Davis Stores has a dedicated portal page on Amazon.com (davis.amazon.com). The portal launched in mid-September and offers a selection of Amazon’s stock similar to what the bookstore would stock (in other words what a student is inclined to buy). This portal is functionally a part of Amazon (and not UC Davis Stores’s servers or stock system), and any order placed there is filled by Amazon via their network of warehouses and partners.
The school collects an affiliate fee (2%, in fact) on any sales made via the portal page, and they also get an affiliate fee on any purchases made by students that sign up for the Amazon Student membership program and list UC-Davis as their school. On an unrelated note, college students can sign up for a free 6 month trial of Amazon Student; benefits include free 2-day shipping and Prime Instant Video.
According to Amazon, UC-Davis is the only school participating in the pilot, which is planned to last a year and will also include the installation of Amazon Lockers in a couple locations on the UC-Davis campus.
There are no plans for this pilot to integrate Amazon Source, the recently launched program which encourages indie retailers to sell the Kindle in their stores in exchange for a small commission on hardware and ebook sales. That program has proved exceptionally unpopular among a number of exceedingly vocal pundits, booksellers, and the "Death to Amazon" crowd at Melville House books, but I don’t think college bookstores will feel the same way. There’s a chance they will look at their market position rationally and acknowledge the fact that cash-strapped students are going to do their best to avoid the higher prices in the college bookstore anyway.
Jason Lorgan, the director of UC Davis Stores, is in favor of the pilot program because he realized that the bookstore was not going to take away any of Amazon’s market share, so he might as well profit from it.
According to the NACS Campus Marketplace newsletter, Lorgan said: "We have all kinds of marketing programs to drive people into the store, but the truth is most college stores have about 50% market share today. Do I want to get a small piece of that 50% I don’t have, or do I just want to give it up? Consumers have a lot of choices and all retailers have to adapt to the fact that they are just one of many options."
And Lorgan is not the only one to note that students are avoiding the college bookstore; earlier this year ed tech startup Akedemos commissioned a poll of college and university CFOs. 89% of the respondents in that survey believed that students are increasingly turning away from campus-based bookstores in favor of third-party providers. Cost was cited as being the primary reason for students to bypass the college bookstore (78%).
College bookstores don’t have the same position that they held 20 years ago, and thanks to laws like the Higher Education Opportunity Act, passed by Congress in 2008, they’re probably never going to regain it.
So if college bookstore management are smart they will welcome it with open arms.
Well, Follett and B&N College won’t; these 2 companies operate around 1500 college bookstores under contract (Follett is larger, with 800 odd stores). But the several thousand stores that run either independently or under the management of the university should consider the deal Amazon has with UC Davis Stores (assuming the pilot works out).
And it would be a smart move for Amazon; in the long run it will probably reap dividends as the students graduate and continue to shop with Amazon. A similar ploy certainly worked with me; I got my start at Amazon via the Amazon Student program (a long time a go, back before it included streaming video).