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Business Officer Magazine

Turn Over a New Page

Campus bookstores are adapting to multiple new trends—including an explosion of digital content, soaring cost of print textbooks, and lingering effects of the Great Recession. Here are examples of pioneering stores attuned to students’ needs.

By Sandra R. Sabo

*For generations, grumbling about the high cost of textbooks has represented a rite of passage for college students. Wide-eyed freshmen feign heart failure as they pay for new Psych 101, calculus, and unabridged Shakespeare textbooks, while more savvy upperclassmen save 25 percent to 30 percent by scouring the stacks for used titles.

But this simple choice of textbooks—new or used?—no longer sits well with today's students. Driven by the U.S. economic recession, increased tuition, and textbook prices that often rise faster than the inflation rate, they're looking for ways to economize.

“With money being tighter and jobs harder to find these days, students are paying more attention to price and looking for more options,” confirms Estella McCollum, director of KU Bookstores at the University of Kansas, Lawrence, which has 30,000 students enrolled. “Some are sharing books, trying to find scanned copies, or even playing the game of how long they can attend a class without having the book.”

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Such behavior has redrawn the sales curve at the University of Tennessee, Knoxville (UT Knoxville), where David Kent is director of the university bookstore. He notes, “Traditionally, all of the textbook sales came at the beginning of the term. Now, we're seeing more sales through the semester as students delay textbook purchases as long as possible.”

Total sales of textbooks at UT Knoxville, with its 27,000 students, have gradually declined over the last six years; where textbooks once represented 53 percent of the bookstore's business, they now account for 46 percent. Kent predicts a continuing decline now that the Higher Education Opportunity Act requires educational institutions to publicly post the ISBNs of textbooks.

“A few years ago, a lot of the business college stores enjoyed started to bleed away to outside competition, especially online retailers,” Kent says. “Now that students have full access to ISBNs and technology has improved, it's even easier for them to shop online.”

The Rental Option

Price-conscious students purchasing elsewhere led to year-after-year unit declines in textbook sales at the stores operated by Follett Higher Education Group of Oak Brook, Illinois. Ten years ago, approximately 80 percent of the students in a class would purchase their textbooks at the college store; by 2009, sell-through had dropped to about 60 percent.

To become more price competitive, Follett recently introduced Rent-A-Text at more than 750 of its 860 college stores. Five years in the making, the program enables students to rent textbooks at 50 percent or more off the purchase price. Students have responded positively, driving up unit sales and boosting market share.

“Textbook rental has been embraced equally across the board, regardless of whether the institution is a private university or a community college,” says Jennifer Hatton, group vice president of operations for Follett. Hatton, who oversees 120 college stores in the Southeast, adds, “With a rental program, students don't have to decide whether math is more important than history or English—they can afford to secure all of their course materials.”

According to Follett's research, 40 percent of students who rented textbooks used the money they saved to purchase other items in the store. Of that group, most students used the money saved to purchase more textbooks and other course materials, although 40 percent purchased school supplies and 15 percent bought clothing.

Of course, a rental program carries its own price tag, as evidenced by the $120 million Follett invested in the inventory, infrastructure, and staffing needed to support Rent-A-Text. “With a rental program, you maintain ownership of the inventory. That changes both the capital investment and your cash flow, not to mention the additional labor costs of processing the rentals and returns,” observes Gary Shapiro, Follett's senior vice president of intellectual properties.

The majority of Follett stores offer 30 percent or more of their campus's adopted titles for rental. Several staff members are dedicated to tracking textbook adoptions and continually updating national and local rental lists.

“A fair number of our titles can't be rented because of changing editions, because they're consumable, or because their binding won't last through four terms of rentals,” Shapiro says. Still, he predicts both the percentage of rentable titles and rental transactions will grow significantly over the next few years before leveling off.

Textbook rental is booming elsewhere as well. This fall, 1,500 of the 3,000 National Association of College Stores member stores offered textbook rental programs of some kind, up from only 300 the previous year. (For college student survey responses to textbook rental and e-books, see sidebar, “What the Surveys Say.”)

Easy to Compare

KU Bookstores introduced a book-rental program this fall as well, partnering with Students order the books online—on a KU Bookstores-branded site—receive free shipping, and can return the books to the on-campus bookstore.

Offering the rental option is part of McCollum's master plan to rebuild students' trust in the bookstore. Because they've grown up using computers, “students now arrive on campus assuming that everything online is cheaper, that the campus store doesn't have fair pricing,” she says. “This summer, to combat that price-perception issue, we implemented price-comparison and purchasing tools.”

Using Verba Software, McCollum's staff developed a portal that shows the options and costs of each course's materials: in-store new and used prices, the rental price, and the cost to purchase from and The latter two options include shipping costs and an estimated shipping date if the title is out of stock. Students make their selections, dividing their books however they wish among all the options, then complete all transactions without ever leaving the KU Bookstores site. It's one-stop shopping, with a separate checkout process for each book retailer.

What the Surveys Say

Research of college students conducted by OnCampus Research, a division of the National Association of College Stores, indicates that:

On textbook rental

  • Of the students who have never rented textbooks, 44 percent would consider doing so if the option were available. Among those who have rented textbooks before, 72 percent would consider doing so again.
  • Nearly 22 percent of students express a preference for purchasing, rather than renting, their course materials.
  • Price is the most important factor influencing a student's decision to rent a textbook, followed by the length of the rental period and the convenience of the rental process.
  • For every dollar a student spends on a new textbook, the college store makes 6.3 cents.
  • On average, a college store contributes $223,691 annually to the educational institution, often to fund student activities, scholarships, and special programs.

On e-books and e-readers

  • Only 13 percent of college students had purchased an electronic book in the three months prior to the October 2010 survey. Slightly over half of those (56 percent) stated that the book was a required course material.
  • More than three fourths of the students who had purchased an e-book said they used a laptop or netbook to read it.
  • Ninety-two percent of students do not own an e-reader device, and 59 percent of those said they don't plan to purchase one in the next three months.
  • Seventy-four percent of students preferred print over digital for textbooks—the same percentage obtained last fall in an earlier survey.
  • Factors that keep students from considering a digital textbook include cost, inability to take notes or highlight, inability to sell the book back, and inability to access content after the semester is over.
  • Of the 26 percent of students who preferred the digital format, reasons included reduced weight of textbooks, having all required course materials in one place, saving paper, convenience, and price.

“We're making it easier for students to choose the best options for them, not holding them hostage at the bookstore,” says McCollum. “Yes, we're sending business to Amazon—but that would happen anyway with some students, and this way we're receiving an affiliate commission.” McCollum reports that KU Bookstores maintained 80 percent of sales on in-store inventory this fall, with the remaining 20 percent split almost equally between rental and online retailers.

Similarly, the University of Arizona, Tucson, enables its 38,000 students to compare prices and order textbooks from the campus store or several online retailers with which the store has an established partnership. UA introduced the service several years ago, as an integral part of its move to a transparent business model. The underlying idea was simple: Providing information, rather than hiding it, would build student trust and loyalty.

And that's exactly what happened, says Frank Farias, associate vice president for student affairs and UA BookStores executive director. Providing additional value, such as the price-comparison service, has helped the bookstore minimize sales declines and retain the lion's share of campus textbook sales, as well as grow its market share in other categories.

Farias explains, “Strategically, we will never concede our textbook sales. That's why we developed partnerships, so we can enjoy even those sales that go to other options.

“Overall, we've really worked to maintain the bookstore's relevance in terms of value to the entire campus community,” he continues. “In the process, we redefined ourselves.” While it continues to sell many traditional textbooks and computers, for example, the bookstore also serves as the central distribution point for all software licensing and is authorized to repair all desktops and laptops on the campus. In addition, UA BookStores took over several responsibilities formerly handled by the central computing department, such as providing hardware and software training.

Through this vertical integration, the bookstore has positioned itself as the technology expert on campus. “We're anticipating changes in traditional textbooks as more migrate toward a digitized format,” Farias says, “so we will stay relevant regardless of what textbooks look like in the future.”

From Page to Screen

Currently, digital books, or e-books, are barely a blip on the radar screen, representing 2 percent to 3 percent of course material sales, according to the National Association of College Stores. At UT Knoxville, where he serves on an e-textbooks task force recently convened by the chancellor, Kent saw few e-book sales this fall, when just under 5 percent of the 3,000 textbooks in his store's stock were available electronically. But by 2014, he notes, sales of e-books are expected to total about 18 percent of the total market.

“The pace of digital delivery is definitely quickening this year, and we'll see a lot of changes in the next five years,” predicts Chris Tabor, general manager of the campus bookstore at Queen's University in Kingston, Ontario. A pioneer in digital delivery, Queen's began offering e-books to its 22,000 students in 1999. The effort started with identifying course materials available in the public domain, then producing and distributing free digital versions of the most popular titles. Yes, free.

As Tabor notes, “It seemed counterintuitive for a retailer to give away something it was also selling.” Yet book sales did not plummet; to the contrary, about 98 percent of the students who downloaded a free e-book to their computers also bought the printed version. Follow-up surveys revealed that students preferred to read the printed version but liked using the digital version for searching, cutting, and pasting excerpts into their homework.

Thanks to recent improvements, the e-books are now viewable on a range of operating systems and devices, including BlackBerrys and iPhones. Even more changes are coming. “The book of the future will have rich, dynamic content—it will be more like a Web site or an app. Instead of a book that's static and has a picture of a heart, for example, you'll see the heart pulsing before your eyes,” says Tabor, who also serves as president of Canadian Campus Retail Associates, a business consortium of college stores that is developing new e-book technologies.

Although faculty members often approach digital content with trepidation, Tabor says, rising student expectations will move many toward acceptance of digital options. Digital content's market share will continue to grow, adds Follett's Hatton, “as providing a richer learning experience for students becomes the culture of the department or discipline.”

New Approaches

With college stores less dependent on sales of traditional textbooks, they have branched out to provide other products and services. “It's key to be part of the campus community on a daily basis, so you're bringing in customers at times other than the first day of classes or book buyback day,” says Hatton. To that end, campus bookstores have moved to:

On-demand printing. Last year, the University of Arizona bookstore purchased an Espresso Book Machine that enables it to custom-publish books from electronic files provided by the publisher. For several classes, the bookstore printed all of the textbooks right on campus, removing the risk of running out of a title and thus losing a sale.

This year, KU Bookstores has joined two other institutions in a pilot program that uses Hewlett Packard's on-demand printing solution. The system can print in either full-color or black and white, laminate covers, perfect-bind the pages, and trim the whole book to commercial-grade quality, all while a student has a cup of coffee.

“It takes less than eight minutes to print a book, from start to finish, and you can't tell the difference between a book we printed and one from the publisher,” says KU Bookstores' McCollum. With no shipping, warehousing, or returns to worry about, she adds, “print-on-demand titles are creating efficiencies for us and, eventually, we hope to negotiate a price break for the students.”

The print-on-demand center at the University of Kansas's KU Bookstores can produce a printed and bound book in less than eight minutes.

New store concepts. The University of Arizona's nine bookstore operations include the Student Exchange, where students can buy and sell clothing, furniture, and dorm-related items. The Student Exchange opened in 2008, primarily to support the concept of institutional sustainability.

“It's not a major moneymaker, but it never was intended to be,” says UA BookStores' Farias. “It's a service the students wanted, to cut their expenses by buying used items and to make some money by selling unwanted items.” Another bonus: The store provides practical experience for UA students majoring in retailing.

At Kansas, diminished sales volume at the on-campus trade bookstore prompted McCollum to reconfigure part of the space into a discounted books area. “To attract bargain hunters, we created a section in the back of the store that offers price points anywhere from 35 percent to 75 percent off the new price,” she explains. “Instead of sending all of our dead stock to a wholesaler, we're keeping some to resell at discounted prices and mixing in remainders that we've bought. This enables students to afford fun reading materials.”

Students buy and sell clothing, furniture, and dorm-related items at the Student Exchange, a new project at the University of Arizona's bookstores.

Expanded offerings. McCollum also rebranded a portion of the gift-and-clothing section of the main KU Bookstore to better compete with the more than two dozen competitors in town plus others online. Rather than marketing some T-shirts and select merchandise as “Student Savers,” as in the past, the bookstore now boasts the Crimson Corner, featuring Kansas Jayhawks merchandise for all ages. All items in the Crimson Corner are priced lower than similar items throughout the store, with the highest price being $25.

“We wanted to change the perception that the merchandise was only for students, to attract more families and alumni,” says McCollum. She also expanded beyond logo merchandise to offer more affordable solid-color basics that coordinate with the university's crimson and blue colors.

The UT Knoxville bookstore's Kent decided to go in the opposite direction by no longer selling unbranded gifts. “Because of space considerations, we decided to focus on what makes our operation unique—apparel and gifts with affinity to the school—and it has paid big dividends for us,” says Kent. In the last three years, branded apparel and gifts have proved to be the bookstore's most profitable items. Last spring, Kent reallocated floor space again, slightly reducing the general book and school supply areas to further increase the square footage dedicated to branded apparel.

Students who obtain their books through Follett's Rent-A-Text programs use money they save to purchase other store items.

On-campus partnerships. This fall, UT Knoxville's bookstore assumed the responsibility of operating souvenir concessions for the athletic department. That means selling gifts and apparel at all events related to 18 men's and women's sports. Two of the sports stores—one in the football stadium and another in the athletic center—operate six days a week, while others are built-in or pop-up locations that open only in conjunction with an event.

Previously, the university's athletic department had contracted with an outside partner for souvenir concessions. Making the change to an on-campus partnership took six years and required the full support of the chancellor, the vice chancellor of finance, and the athletic director. With the bookstore now serving as the main retailer on campus, says Kent, “there's a continued revenue stream for athletics and a new revenue stream for the university.”

Farias is another big believer in partnering with other campus entities. UA's bookstore, for example, recently inked a deal to operate a pro shop at the campus recreation center. Bookstore personnel facilitate sign-ups for the rec programs, in addition to selling merchandise and equipment related to aquatics, fitness classes, outdoor adventures, and so forth.

“Capitalizing on business opportunities on campus requires a different way of defining the traditional campus bookstore,” says Farias. “You have to think of the bookstore in a philosophical sense, not just as a physical footprint of a store.”

Sure, digital books will eventually supplant traditional textbooks, opening up space that bookstores have long devoted to shelves and shelves of print inventory. But Queen's University's Tabor doesn't believe the relevance of the college store will decline along with physical book sales.

“Bookstores have advantages built on their trusted relationships with students,” he says. “Going forward, bookstores will probably exist in a different form and do things differently—but they'll still be here.”

SANDRA R. SABO, Mendota Heights, Minnesota, covers higher education business issues for Business Officer.