In the coming weeks, millions of students will be returning to college and university campuses. The air will be full of excitement as existing students settle in for a new year and new students look forward to a new chapter. Dorms will fill up with boxes and suitcases and the quad will fill with tables representing campus activities and student organizations. Campus bookstores will offer extended hours as students search for their books and materials. These students will spend hundreds of dollars, some over a thousand, this semester alone. Increasingly, this spend will not occur inside the bookstore.
Growing up, I spent long hours in my local B. Dalton bookstore. I loved every minute spent walking the aisles, exploring the different subjects, and reading a few chapters of whatever title caught my eye. The bookstore was conveniently located just over a mile from home – easy enough to ride over there on my bike. It was a sad day when the “going out of business” signs went up. As I look back now, it shouldn’t have been surprising; B. Dalton, like so many other booksellers, succumbed to the forces of gravity. The force of gravity is a constant – something that simply cannot change.
Booksellers in the 90s and 2000s started to feel the pull of gravity in their business as new online competitors emerged. These online competitors did not need physical space (which costs money), as much inventory on hand (which costs money) and as much labor (which costs money) – and by removing these costs, the online competitors could simply price books at more attractive rates. As a result, many consumers simply chose to purchase online. Despite their best efforts, physical bookstores started shuttering in large numbers. They couldn’t fight gravity.
It shouldn’t be surprising that college bookstores are now feeling the same forces at work in their own retail environment. Simply put, the cost structure of a physical college bookstore is burdened with expenses including retail space, inventory and labor. The natural effect is that the prices for texts in the college bookstore will be higher for students. And, similar to retail bookstores nationwide, students are defecting and seeking out cheaper and more convenient online channels to purchase textbooks and course materials.
In our business, we have a unique vantage point on physical college bookstore sales – they are dropping at an alarming rate - in most cases down 15-35% in just the last 5 years. This downtrend will continue as physical college bookstores grapple with the same forces of gravity that B. Dalton, Waldenbooks, and Borders did nearly 15 years ago. This dynamic is a somewhat new and frustrating problem for college administrators, chief among them CFOs and Heads of Auxiliary Services. The bookstore used to be a dependable source of unrestricted profits. Given the revenue declines and fixed cost nature of retail space and labor, many stores are making far less money or are generating losses. Sometimes these losses are unknown, hiding behind sales of sweatshirts, t-shirts and other high-margin logoware.
Fortunately, there are options available to help college bookstores fight this gravity. The weight of these forces can be redistributed to deliver a better value to students and administrators. Virtual bookstore providers such as Akademos are able to alleviate problems by moving some or all of the college bookstore to a cloud-based, e-commerce solution that is seamlessly integrated with the institution’s SIS, LMS and Financial Aid systems. This course materials platform creates more efficiency through dedicated supply chains and system integrations to offer lower textbook prices to students (25-35% less on average) along with access to multiple format options (new, used, rental, eBook, OER) for additional savings. A virtual bookstore allows administrators to repurpose existing retail space that will more closely align with the needs of the institution while reversing the decline in dollars spent elsewhere.
To learn more about how you can address textbook affordability and help your students succeed, contact us for more information.