It’s a reality college bookstores are already aware of – students tend to buy their textbooks online, namely at Amazon.com.
Instead of fighting the retail juggernaut, UC Davis has decided to join forces with the Seattle-based company in hopes of capturing some of the dollars students spend online.
The school in October inked a five-year agreement with Amazon to start a cobranded website where UCD students can purchase textbooks, batteries, whey powder and even dog food. Under the deal, Amazon would pay the university between 0.5 and 2.25 percent of gross sales, according to Jason Lorgan, director of UC Davis stores.
The university received $250,000 during a 2013-14 trial of the program, Lorgan said. The contract is worth at least $1.25 million, but the commission could grow if sales increase, he said. The deal also allows Amazon to set up shop on campus rent-free, installing banks of lockers where students can retrieve packages and a retail counter for customer service.
The goal, Amazon executives say, is to capture the millennial market.
“This is obviously a customer set that interests us,” said Ripley MacDonald, Amazon’s director of student programs. “We’d like to expose them to Amazon and have them as lifelong customers.”
Like its counterparts elsewhere, the UC Davis bookstore has been under assault for several years from online retailers, textbook rental services and new Web-based content. Students traditionally associate campus stores with expensive textbooks and overpriced apparel.
Sales at the UC Davis bookstore have dropped from $22.9 million in fiscal year 2010-11 to $19.6 million in 2013-14.
“There’s no question the trend is going down,” Lorgan said.
In the last three years, UC Davis shuttered two branch stores that served veterinary and medical students in an effort to reduce costs.
Despite the slump in sales, the bookstore remains profitable. Lorgan said he views his mission as helping students rather than making the bottom line. He noted that profits generated by the division are used to maintain the student union, where the main bookstore operates.
In 2010, the campus bookstore rolled out a price-comparison tool, allowing students to check the cost of textbooks from other retailers, including Amazon.
“We were sending business away from ourselves for the benefit of our students,” Lorgan said. “Amazon thought it was pretty unusual.”
UC Davis in 2013 became the pilot school in Amazon’s campus partnership program, which has since expanded to include Purdue University and the University of Massachusetts, Amherst. Last week, Amazon opened a customer-service counter at Purdue, marking the retailer’s first permanent brick-and-mortar presence.
The UC Davis counter has been delayed until at least 2016 because the bookstore will be undergoing renovations.
At UC Davis last week, graduate student Nick Toothman picked up an order from the newly installed Amazon lockers for the first time. Toothman, 26, punched in a special code at a kiosk, and one of the slots automatically swung open. He grabbed his $200 hard drive and shut the locker door. The transaction was complete in less than 30 seconds.
“I knew I was going to be here,” Toothman said. “It’s really easy.”
The clusters of lockers on campus also save Amazon money because couriers don’t have to drop off packages at individual apartments and homes, a service that tends to be more expensive. Amazon has installed the lockers in high-traffic areas like the student union and recreation center, along with each of the three UCD residence halls.
“It makes sense on campus because of the density of students,” MacDonald said. “As a result of those efficiencies, we’re investing the benefits back by keeping prices low. At the end of the day, it comes down to focusing on our customers.”
MacDonald declined to reveal the number of customers served at UC Davis, but he said sales have increased since the partnership with the university began.
The university is allocating about $60,000 per year from the program to support students who need help purchasing textbooks.
To combat the drop in traditional textbook sales, the UC Davis bookstore has focused on renting out materials and selling digital course content. About 15,000 students are using the textbook rental program each quarter.
Asked about the future of college bookstores, Lorgan predicted that campus retail stores wouldn’t go away. What they will look like, however, remains to be seen.
“Is this a period of intense change? Absolutely,” he said. “But it’s a period of intense change for society in general.”
“We’re just going to be selling very different things.”