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Amazon is about to expand its school bookstore empire beyond running unstores for several US universities.

Capital New York reports that the NYC Board of Education is about to award Amazon a five-year, $64.5 million contract for the retailer to run an ebook marketplace where public schools would buy ebooks.

The contract will initially last three years and cost $30 million, and there’s also an option to renew for an additional two years, for an additional $34.5 million. (The odd accounting comes from the plan to phase the marketplace in over the first three years, building up to the third year where it is projected to cost $17.2 million.)

The contract is waiting on a formal vote at a Panel for Educational Policy meeting in late August before it is officially awarded, but it is expected to be approved. It will take affect this fall.

According to the RFA, this contract will make Amazon the NYC DOE’s primary distributor for digital textbooks and related educational materials. Amazon will distribute both contracted materials such as the standard textbooks and curricula, and it will also sell ebooks and other content to schools.

The RFA is less than clear on the technical details, but it does note that the marketplace will leverage Amazon’s three-year-old Whispercast platform. Whispercast was developed so educators could manage the content and devices used in their schools. It was recently updated with better license management, more admin options, and the option to buy apps and ebooks in bulk and distribute them remotely.

The DOE had been looking for a vendor since March 2013, and choose Amazon out of a field of fourteen proposals. Amazon’s offer is described as the best by far, and is expected to save the city money. DOE spokesperson Devora Kaye said that the deal was "fiscally savvy for the City—the DOE is not paying for the development of the new marketplace, and the robust competition and our procurement process will ensure that we continue to get the best prices for school texts."

image by Jim Bauer, flickingerbrad

Amazon may know all there is to know about online retail but there are still a few details about brick and mortar retail which escape them.

For the past four months Amazon has been running a virtual bookstore, or unstore as I call it, on the campus of Purdue University. That unstore is more of a staffed pick up and drop off location than a retail store, but it still fills the same role as college bookstores.

That includes buying textbooks back from students at the end of the school year, an evolution that usually involves paying students cash for their books. It turns out that Amazon needs to learn a thing or two about handling cash, or rather they need to be more careful in the temporary employees they hire to handle that cash.

The Lafeyette Journal Courier has been reporting that Amazon suffered a smash and grab robbery last month. Someone grabbed the cash box when it was left unsupervised at the book buyback location in Earheart Hall, ran out of the building and was driven away by an accomplice.

There is no info on the amount of cash stolen, and there were no reports of injuries.

The thief was later identified (by the Journal Courier) as the parent of a girl who was working the book buyback, and the get away driver has been identified as his son. The police allege that the girl left the cash box unsupervised so her father could steal it, making Amazon the victim of a low-rent Ma Barker and gang.

As someone who worked retail both as a temp and as a regular employee, I am surprised at this. Yes, this kind of thing happens, but better hiring policies can lessen the risk. And with Amazon aggressively pursuing the college bookstore market (the Purdue unstore is just the first of four locations so far), clearly they’re going to have to work on those policies.

Thanks, Dr M!

image by Sean McMenemy

B&N Education may get a lot of press due to its parent company’s general disarray but it’s not the only company to operate college bookstores. In addition to Amazon, there is also Follett, which operates nearly a thousand college bookstores.

Or at least it did yesterday. Follett announced on Friday that it was acquiring Nebraska Book Company’s retail store division, Neebo. That unit currently runs more than 200 college bookstores, bringing the total number of college bookstores operated by Follett to more than 1,150 in North America (along with 1,600 virtual stores).

Follett is getting both the both on-campus and off-campus stores as well as the related facilities, contracts, and other assets. PW reports that the retail unit had been Nebraska Book Company’s best performing unit before the sale; post-sale the company plans to focus on distributing to independent bookstores. It has also cut 60 staff positions at its HQ.

Edit: I think PW missed the bigger story; this unit’s revenues declined every year for the past 4 years, and the most recent 9 month period showed that revenues had dropped even further.

This relatively mundane story caught my eye because Follett isn’t just a competitor to B&N Education, it is a larger competitor which just outbid B&N Education for the store contracts (or at least I hope B&N had entered a bid).

B&N Education is about to be spun off from B&N, and it is being pitched based on its ability to expand. Well, here are 200 plus stores which B&N Education won’t be acquiring.

What’s more, Follett’s virtual store offering puts it in a stronger position than B&N Education in fending off Amazon. The latter is only running a few unstores, but it is aggressively recruiting.

PW

image by LeafLanguage

Editor’s Note: This is a repost to replace a post that somehow vanished into the ether.

Pundits have been speculating on the topic of Amazon and retail for over 4 years now (longer, in fact than Google’s own retail efforts). In all that time most of the arguments could be summed up as "wouldn’t it be cool", but yesterday The Telegraphreported on what they think is a killer reason for Amazon to open a retail store: customers want it (in the UK, at least).

A poll conducted back in March found that 53% of respondents wanted the retailer to open a store in the UK.  Amazon was in fact the only online retailer that the survey group actually wanted to open a store; the second most popular response came from the 32% of respondents who said they would not like to see any online retailer on the high street (Ebay came third, with 28%).

To be clear, that survey came from the UK, but if consumers in the US show similar interest then Amazon could expect a friendly reception should they expand their retail efforts beyond the handful of unstores operating on college campuses.

So does this mean Amazon erred when they passed on buying Borders' store leases when that chain collapsed in 2011? Did Amazon make a mistake when they didn’t acquire Radio Shack leases earlier this year?

I’d love to hear what you think, but this blogger would have to say no.

Consumer interest is great and all, but that amounts to little more than buzz.  It tells us that consumers like the idea but not that they would patronize the stores, and it doesn’t tell us how Amazon would make the space pay for itself. What would the staff do in said store?

I don’t know, and in fact I don’t think Amazon knows for sure; that’s why they only have those handful of unstores on college campuses. They’re testing the idea.

Sure, Amazon has physical operations both in its warehouses and in the Amazon Lockers dotting the landscape in the US and UK, but those are antithetical to a retail operation. They follow Amazon’s established practice of using a high capital investment to defray operating costs, while a retail store would involve hiring employees and paying a monthly lease plus utilities.

If you ask me, I think Amazon’s future retail efforts are going to look more like Amazon’s physical retail efforts in Japan and India. Amazon hasn’t opened stores in those countries; instead, the online retailer has been partnering with small retailers like gas stations and convenience stores. The local retailers act as local agents for Amazon, enabling Amazon’s customers to pick up and drop off packages.

Edit: A reader informs me that Amazon already has that kind of arrangement with post offices and stores in the UK. Thanks, Mike!

Apply that idea here in the US and we would have Amazon partnering with, for example, Mailboxes etc (or the UPS Store as it is now known).

I don’t know how this would translate to the UK, but in the US a partnership with the UPS Store would give Amazon all the advantages of a network of retail stores without the headaches of store leases, payroll, or other ongoing expenses.

Now tell me, wouldn’t that make more sense than Amazon opening their own retail store?

image via BGR

It’s been some two weeks since RadioShack officially announced its bankruptcy, and there’s still one major question left unanswered: What’s happening with Amazon?

Rumors circulated in the days before the bankruptcy that Amazon was interested in acquiring some of the store leases, but when the smoke cleared Amazon was nowhere to be found. Instead, RadioShack’s leading debtor/investor is going to peel off between 1,500 and 2,400 of the 4,000 RS stores in the US, and then sublet space in around 1,700 stores to Sprint.

If Amazon is still interested, no one is talking.

I was reminded of that silence earlier today when Janet Asteroff pondered on  Mediashift on the topic of what Amazon might do with the space:

It is widely believed that Amazon will want some of the remaining stores for their advantageous real estate locations to provide the e-commerce giant with a physical venue for products and services.

If Amazon were to buy RadioShack locations now, or establish a physical presence at some point in the future, what are the likely outcomes and what would we like to see happen?

The short answer is that Asteroff thought that Amazon would use the former RS spaces in much the same way that it is using the unstore it launched on the Purdue University campus earlier this month (although Asteroff didn’t explicitly make the connection).

I happen to agree with the conclusion that Amazon would use the space for delivery/returns, customer service, and so on, but I’m not so sure that I share her assumption that everyone believes that Amazon is still interested.

I was expecting to hear the news 12 days ago, and when it didn’t happen I began to doubt that it would. And as each week goes by without any rumors, much less an announcement, I think the odds that Amazon is still pursuing the option continues to shrink.

But I could be wrong; what do you think?

The rumors that Amazon is interested in RadioShack store leases has lead some to wonder what Amazon would do with the spaces, and today Amazon spontaneously answered that question.

The retailer officially launched its new something at Purdue University today. Purdue is one of the three US universities that has an affiliate deal with Amazon, and like UMass-Amherst Purdue has a contract for Amazon to supply textbooks. But one way that Purdue differs from other schools is that it now has an Amazon "unstore" (my word) open on campus. (Amherst has a textbook annex where Amazon will probably install an unstore, but that hasn’t happened yet.)

According to the press release, the square footage of the location is about 2300 sq ft, and it isstaffed by Amazon personnel. It’s located in the Krach Leadership Center at Purdue University, and is described as a "customer order pickup and drop-off location". Amazon also shared this render of what it looks like:

As you can see, this isn’t actually a store. There are lockers, a customer service desk, and a drop off location, but no actual product on display.

In fact, I wouldn’t even call this a retail location, which is why I coined the term "unstore". Amazon’s pop-up stores came closer to being retail stores than this new unstore, but in spite of the incongruity of that comparison I think this image says a lot.

If Amazon does secure those RadioShack leases, this is about what I would expect the stores to look like after they are remodeled. This image probably also offers a few clues about the customer service location which Amazon is said to be planning for the office building it recently leased in Manhattan. That will likely have a very different interior, but both locations will share certain elements.

What’s more, we might even see this idea replicated on other college campuses. As I pointed out last August, Amazon is encircling US universities with delivery lockers located in off-campus convenience stores. If the Purdue location works out, Amazon could decide to rent space on other campuses.

Of course, all this speculation could be a case of putting the cart before the horse. We don’t know yet whether the idea will work, much less whether Amazon wants to expand.