Learning Curve

Amazon heads to college

Nova Safo Feb 3, 2015
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Learning Curve

Amazon heads to college

Nova Safo Feb 3, 2015
HTML EMBED:
COPY

Amazon has struck deals with three major universities to create online university stores, which will sell course textbooks and other university-branded goods.

University of Massachusetts, Amherst, estimates that its students will save about $380 a year in textbook costs because of Amazon’s lower prices. The other institutions are Purdue University and the University of California, Davis.

“This is something that students have already started to do,” says Ed Blaguszewski, a spokesman for the Amherst campus. “Online sales of books have been increasing.”

The online retailer will establish an on-campus distribution system at the three universities to deliver textbook orders within one day. It will also offer to deliver other goods in one day for students who purchase a Prime plan Amazon’s customer loyalty program – discounted to $49. The plan also includes access to its streaming video service.

The deal with Amazon will take over an expiring contract with Follett, one of the retailers licensed to operate many university bookstores, Blaguszewski says.

Another such retailer in the $10 billion college bookstore market is Barnes & Noble. “Definitely, this continues to put pressure on Barnes and Noble,” says Sucharita Mulpuru, a Forrester Research analyst. “This is yet again another example of how Amazon is gaining share.”

“When any entity of that size comes into the marketplace … that is going to be a formidable competitor, ” says Todd Summer, who runs a university-owned bookstore at San Diego State University and is president of the board of trustees of the National Association of College Stores.

Summer says his store can compete with Amazon: “We’ve got a very dedicated staff that’s tied into the campus.”

The college store association says there are some 4,500 college and university bookstores in the United States, and a majority are owned by the schools. That still leaves at least hundreds that are operated by Follett, Barnes & Noble and others. They are likely targets for Amazon once existing contracts with schools expire.

And while research analyst Mulpuru says three stores do not constitute a disruption of the market, she sees Amazon’s move as one of building habits: Getting young people used to its online services, which could yield dividends well after students graduate.

For now, she says, it’s an interesting experiment.

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