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Business Officer Magazine
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Livening Up the Shelves

Student needs and preferences press for competitive pricing, fair trade products, and alternative textbooks. Such demands further redefine the campus bookstore—changing up the on-shelf and virtual inventory while challenging the bottom line.

By Apryl Motley

*Campus bookstores are already transitioning from mere textbook suppliers to providers of digital and customized content. In the February 2013 Business Officer article "What's Next for Text?" college and university leaders reported mixed results with their explorations in digital formats. Terry Simpkins, director of research and collection services at Middlebury College, Middlebury, Vermont, noted, "Of course, the pilot programs may have nothing to do with the prices publishers will ultimately charge. And because Middlebury owns its own bookstore, we will eventually have to address the bottom-line implications that e-textbooks have for revenue."

Further undermining the bookstore's competitive edge is the mushrooming of marketplaces such as Amazon and Chegg, offering alternatives for accessing hard-copy textbooks, digital content, and other course materials. This comes at a time when, according to a recent survey, "Student Watch: Attitudes and Behaviors Toward Course Materials, Fall 2013," the cost of course materials remains a top concern for college students. The survey, conducted by OnCampus Research, the research arm of indiCo, a division of the National Association of College Stores (NACS), found that nearly 57 percent of students surveyed said that price is their most critical factor, with 30 percent of students deciding against purchasing or renting at least one of their required course materials.

The report, based on 12,000 participants from 20 campuses, showed that upperclassmen were the most-savvy shoppers, showing great interest in campus stores that offered in-store price-comparison software and an instant price quote when buying back books.

Industry partners such as Barnes and Noble College and Follett are responding to these as well as other-than-textbook trends. For example, Barnes and Noble research in buying trends indicates that more than 50 percent of Millennials prefer purchasing products that support a cause they care about, while 40 percent say they are disappointed in companies and stores that don't support a social cause. Consequently, Barnes and Noble's BNspired initiative offers a line of shirts made in a Dominican Republic facility that provides its workers a living wage and that ensures they can afford essential resources. Operation Hat Trick uses hat sales to raise funds for American soldiers and veterans.

Follett's includED program is designed to not only lower costs for new textbooks but also to make sure students have access to their course materials prior to the first day of class. In a pilot program offered across 10 courses at Indiana University-Purdue University, Fort Wayne, students who selected the includED program received all their materials as part of their registration fees, as well as instant access to material through the university's learning management system.

One other factor is the growth in demand for course materials in alternate format, driven in part by the increase in students with learning disorders or mobility problems.

This coalescing of competition, cost-sensitivity, and student needs and preferences has greatly influenced the evolution of campus bookstores, some of which continue to thrive—while others have been closed, are now operated by third parties, or have moved completely online.

Learn how three institutions are dealing with the swirl of change and managing to keep materials on their shelves, both actual and virtual, for students.

Multiple Methods for Modernizing

With three campuses and more than 200 online courses, Broward College, Fort Lauderdale, Florida, is holding its own with its bookstore operation. "Because of the geographic distance between our campuses, we've always felt more was better," says Tom Olliff, senior vice president for administrative services, referring to the college's six full-service bookstores. 

Considering the college's population—more than 67,000 students—the institution has experienced little outside competition, says George G. Masforroll, Broward's associate vice president for auxiliary services. "First and foremost, you have to provide the right product at the right price," he says. "Students recognize the value of our college's bookstores, and they choose to use us as the primary source for their needs."

Yet, Olliff acknowledges that providing content delivery alternatives for course materials will be an ongoing challenge. "Trying to keep up with the technology and compete with the service delivery models from privatized stores and online sellers has been difficult," Olliff says. "Our bookstores have limited online presence and limited home delivery. With capital dollars hard to come by, maintaining the modern look and feel of the actual physical premises has been challenging as well," he continues. 

While the college has no immediate plans to move away from physical stores, Broward's leadership is exploring the option of privatizing the operation. The first step is a request for proposal (RFP) process.

In the meantime, Olliff and Masforroll have taken other measures to make course materials more affordable for Broward students and maintain the college's competitive edge. "Our culture is designed to provide open access for students," Olliff says. "We want to provide them with an education at an affordable cost. We pride ourselves on having the second-lowest tuition in the state of Florida."

Here are some of the actions the college has taken to address affordability and access:

  • Readings for rent. About 18 months ago, the college launched a textbook rental Web site (http://broward.bookrenterstore.com). "Textbook rental saves you truckloads," the site advertises. Olliff says, "Our goal was to provide the widest variety of content that we could on a rental basis." Student use of the site was fairly slow at the beginning, but has consistently increased.
  • Electronic efficiencies. The college recently launched an online campus where all of the courses have free text materials in digital format. "Our goal is to find materials that are of no cost to students," Olliff explains. He admits to some pushback from faculty, whose acceptance of electronic textbooks has been slow. "The majority still think a physical textbook is better than an electronic one," he says.
  • Customized content. "We're very supportive of customized content, which has been shown to lower costs for students," Masforroll says. The college has been fairly successful at negotiating contracts with publishers when faculty members create customized or self-produced content. "Publishers have been willing to keep materials at standard prices even when they are customized by our faculty, who provide customized content every two to three years that publishers embed into textbooks," Olliff says.
  • Super student service. "Prior to the Internet, the college bookstore was the only place that you could get your course materials," Masforroll says. "There was no incentive for providing good customer service. But, the Internet has changed all that-and our philosophy has had to change along with it. We're more customer-service centered and focused on helping students address their needs, actions that mirror the college's overall philosophy." (See sidebar, "Customer Care Tops Priority List," for more details.)

In moving forward, Masforroll believes the greatest challenge will be the college's ability to respond to the needs of the community. "We need to be responsive to changing material needs, and they are always changing," he says. "We're going to have to pay more attention to format and device. Now, there are some formats that don't work on all devices. Eventually, we'll end up becoming format and device agnostic."

Online Orders Only

"We started with a traditional bookstore," says Mark Virello, chief financial officer of Labouré College, Milton, Massachusetts. "Quite simply, we sold books and some college apparel, and the bookstore revenue offset expenses."

However, Virello says the Internet pretty much eliminated any profit margin the college had maintained through the years: "The bookstore was draining resources from the college, and at a small college, apparel sales don't generate significant profit."

Six years ago, Labouré College shut down its physical bookstore and partnered strategically with Akademos to provide the college with an online store that became Labouré's "official textbook provider." Virello describes Labouré as an "early adopter" of the virtual program administered by Akademos, a provider of custom, college-branded Web sites and marketplace services for educational institutions.

Founded in 1999 by a former student and professor at Cornell University, the company claims to have provided more than $4.8 million in total textbook savings to date. Through its site, Textbook X, students have one-stop access to an inventory of new, used, rental, and e-book options for their course materials.

Even private institutions like Labouré have found it difficult, and sometimes costly, to make all of these formats readily available to their students. Virello acknowledges that "sometimes the prices of books are still too high," but the hope is that as a result of the benefits of the new arrangement, students' total cost for tuition, fees, and books is lower. "Although the bookstore is no longer a contributor to the bottom line," says Virello, "since we are a small, private school, we focus on the total costs incurred by our students."

Further, there's no cost to the institution for selling books online through the new partnership. "It's a free service," Virello explains. "It doesn't cost us anything to be in the arrangement. However, we did have to enter into a multiyear agreement, so the company gets a return on investment from the relationship." The college has the option to earn commissions on sales, but the leadership has chosen not to do that, Virello says. "So, additional cost savings are passed on to our students, and they are better prepared for classes because their materials are affordable."

The effort to maintain affordable course materials has resulted in consistent store usage during the past seven years, with average book costs remaining flat. Comparing that with the overall trend of book costs running well ahead of inflation, Virello considers "flat" a big win for Labouré students.

Alternative Access for All

An area in need of additional support at most institutions is that of providing alternative textbook and course materials to students with visual, cognitive, and other disabilities. Susan Kelmer, alternate format coordinator at the University of Colorado, Boulder, estimates that she processes close to 500 books per semester for this purpose. Of the 1,500 students registered with the disability services office, almost 10 percent require course materials in alternate formats.

"It's been much busier than in the past," Kelmer says. "We started with the very smallest requests from a few vision-impaired students. Within the last three to four years, that's changed dramatically to include more kinds of students, such as those with learning disorders or mobility disabilities."

At the same time, the university is using more tools to support the growing needs:

  • Helping staff work smarter. Kelmer remembers a time when the majority of materials for these students were hand-scanned, which would be difficult to do today, given the increased demand. Fortunately, the university is a member of the AccessText Network (ATN), which Kelmer says, "brings together publishers, students, and higher education institutions to make the process of producing alternative formats easier for everyone."

Founded and funded by the Association of American Publishers and leading textbook publishers, AccessText is administered by AMAC Accessibility Solutions at the Georgia Institute of Technology, Atlanta. AMAC founder Christopher Lee says, "While it's difficult to calculate the cost savings of ATN membership for specific institutions, it gives them peace of mind; it unties them from worrying about alternative media."

Through the network, Kelmer is able to get materials much more quickly, and requesting them is easier as well. She describes the network as a clearinghouse that makes communication between higher education institutions and publishers more efficient.

At the same time, she acknowledges that 90 percent of the books being used at the university won't come from AccessText. "If we can't obtain the electronic files through the publisher, AccessText, or Bookshare, then we can scan the student's copy," she explains. "If more publishers would get on board, that would be great."

  • Fulfilling student expectations. With each generation of students, the demand for course materials in alternative formats is expected to increase. "Services for students with cognitive disabilities have improved in K-12," Lee says, "and these students are transitioning to college expecting to get alternative text materials because they have had them in the past.

"Given the anticipated increase in the volume of students, institutions need to be able to get materials faster," he continues. "AccessText is one tool that makes their jobs easier."

"The students have the direct relationships with the schools, and there will be pressure on institutions to provide these materials," offers Robert Martinego, project coordinator for AccessText. "Textbooks are not going away anytime soon, so institutions and publishers will have to work together more cooperatively."

"We're finding that institutions are not built to handle management of alternative materials," he continues. "Usually, it's a handful of really good people on their campuses that are passionate about this, but overall management of the process has not been institutionalized." Meanwhile, the company received 80,000 requests for books last year, which was a 20 percent increase from 2012.

Despite the many changes in demand, delivery, business model, and physical versus virtual format, most bookstores are holding their own. Although students have more options than ever when it comes to acquiring course materials, the NACS' Student Watch survey found that on-campus bookstores remain the No. 1 place for students to obtain their materials. To keep that prime position will take vigilance. And, as Middlebury's Simpkins said in "What's Next for Text?": "The worst thing a school can do is pretend that none of this is happening."

APRYL MOTLEY, Columbia, Maryland, covers higher education business issues for Business Officer.

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Buying Books on a Budget

To buy or not to buy? This is the question that more and more higher education students are asking, as the cost of textbooks continues to rise.

During fall 2013, Student Public Interest Research Groups (PIRGs) conducted a survey of 2,039 students from more than 150 different university campuses regarding their experiences with textbook and course material purchases. Here are some key findings from the survey report, "Fixing the Broken Textbook Market," that illustrate the difficult choices some students make because the cost of their texts is beyond their budgets:

  • Sixty-five percent of students decided against buying a textbook because it was too expensive.
  • Ninety-four percent of students who had forgone purchasing a textbook were concerned that doing so would hurt their grade in a course.
  • Almost 50 percent of all students surveyed said that the cost of textbooks influenced how many and which classes they took each semester.
  • Eighty-two percent of students felt they would do significantly better in a course if the textbook was available free online and the purchase of a hard copy was optional.

These findings are significant for chief business officers because the results show a direct correlation between purchasing textbooks and student success. If students continue to forgo textbook purchases, fiscal consequences for colleges and universities would come not only from lack of bookstore revenue but from lower completion rates as well.

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Customer Care Tops Priority List

"The most challenging part of speeding up the bookstore checkout process is that of serving nearly 10,000 customers during a short time period," says George G. Masforroll, associate vice president for auxiliary services at Broward College, Fort Lauderdale, Florida. He knows that a quick transaction is high on students' growing list of expectations for the college's six bookstores. During his more than 30 years at the college, Masforroll has been well aware of the necessary shift in providing improved levels of customer service to students, in order to remain competitive with outside sellers.

"We want to be their one-stop shop for academic needs," he says, "so we strive for customer satisfaction. Creating a customer-friendly experience is our top priority."

According to Masforroll, consumers—in this case, students looking for service in the bookstore—are driven by three factors that influence their overall level of satisfaction:

  • Buyer confidence: "I purchased a book from you, and I know that I can get a refund." Masforrroll says students value what they perceive to
    be a fair refund policy that allows them flexibility in returning materials to the bookstore.
  • Price: "I could do comparison shopping, but I don't have to." Masforroll says the college's bookstores are "recognized as having reasonable prices."
  • Convenience: "I am able to interact with employees who have a good understanding of course materials and ancillaries." Having knowledgeable employees makes it more convenient for students to locate and purchase what they need.

Masforroll believes careful attention to these three areas translates to a positive bottom line for the college. "Obviously, the more people who shop at your location, the more opportunity there is to generate revenue."

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