How 100-Year-Old Campus Bookstores Are Reacting to Gen Z

How 100-Year-Old Campus Bookstores Are Reacting to Gen Z

By Ian McCue, content manager
7-minute read

In short:

  • Many campus bookstores have watched physical textbook sales sink, posing a problem for their age-old business models.

  • To fill the gap, some major bookstores have placed a greater focus on clothes, e-books and more while investing more in e-commerce.

  • Though campus bookstores face a common challenge, each one’s winning tactics are different -- and worth observing no matter which sector of retail you’re in. 


Until recently, college students usually had just one option when buying textbooks: the campus bookstore. Large universities might’ve had one or two competing stores in their town, but just about every student relied on the school store for course materials.

That captive audience and minimal competition put campus bookstores in a great position to succeed over the past 100-plus years. However, online competition and the climbing expectations of consumers have changed that once-bulletproof business model and forced these school stores to match the painless omnichannel experiences competitors provide.


Students have more options for textbooks

One of the biggest reasons behind this changing landscape is declining textbook sales. It would be easy to blame that on the recent dominance of Amazon -- after all, the e-commerce giant started out selling books -- and while Amazon is part of the culprit, students also have numerous other online options to buy or rent both physical books and e-books. 

Widely popular learning management systems can reduce or eliminate the need to purchase course materials, as well. 

Alternatives like e-books and learning management systems have gained popularity in response to the rapidly rising cost of textbooks. From 2006 to 2016, textbook prices increased a staggering 88%, according to the Bureau of Labor Statistics. That spike can be attributed to a lack of competition, more books with access codes for supplemental online content and professors selecting books without considering price.

“Textbooks flipped quickly because of college students tending to be early adopters in the digital realm, so that hit us hard and fast,” said Jer-el Martinez, director of information systems at the University of Texas at Austin’s University Co-op.

University Co-op is a popular destination for students looking for Longhorns apparel, textbooks and more.

Some universities now offer “inclusive access,” where textbook costs are rolled into the cost of tuition and fees each semester. The school provides the appropriate books digitally, meaning students never need to step foot in a bookstore. 

“There’s a lot of different avenues to distribute course materials now. Additionally, there are many different formats to distribute it in, which is a national trend that really no one can stop,” said Chris Cave, associate director at Cornell Retail Services in Ithaca, N.Y. 

“The writing was on the wall as iPods came out back in the day, everybody said the next digital disruption will be books,” he continued. “So the shift to digital course materials has been a little bit slower to be adopted, but the transition is now happening rapidly.” 


 "The shift to digital course materials has been a little bit slower to be adopted, but the transition is now happening rapidly.”   


 

College bookstores focus on apparel, digital books

Digital books make up 20-25% of all textbook sales at The Cornell Store, 19% at The Duck Store for the University of Oregon, 18% at the Co-op and 12% at the University of Washington’s University Book Store. That’s a marked increase from a few years back for all four retailers.

College retailers already faced low margins on textbooks prior to the rise of digital books, as most of the revenue from books goes to the publisher, and these new digital formats have made the room for profit razor-thin. Many campus stores have made up for it with general merchandise, i.e. items like apparel, accessories and gifts, which have much higher margins. 

That’s true for University Co-op, the independent campus store for the University of Texas at Austin, where general merchandise accounts for a large percentage of all sales. It helps that the Longhorns have one of the most popular collegiate athletic programs.

Sales are more evenly split at The Duck Store, where Ducks-theme apparel and merchandise makes up roughly 50% of revenue, compared to 46% for academic materials (including textbooks, technology and art supplies). 

Similarly, at The Cornell Store, apparel, accessories and the like make up 42% of revenue. However, that’s an increase of about 10% from 2013, and academic materials revenue has dropped by 11% over that same period. In light of that shift, the university-owned retailer opened a cafe at its main store on-campus to increase foot traffic (much like Target putting Starbucks cafes in many stores) and changed store layouts.

“A lot of our shift now with academic materials is focused on moving things digital,” Cave said. “As that digital transition furthers, we’re utilizing that floor space with different products, trying to open it up for more general merchandise so that we can have increased square footage for those high-margin product areas where we are seeing growth.”

Additionally, of the five new locations Cornell Retail Services has opened since 2012, four focus on general merchandise and none sell textbooks.

However, this is not a universal trend. Course materials are still the top seller at the University of Washington’s University Book Store, though those sales have fallen over the last several years. Washington Husky-theme apparel and merchandise is the company’s second-most important product category, followed distantly by school supplies, trade books and general retail items like clothing and cosmetics.

The University of Washington's University Book Store is one of the shrinking number of bookstores that still count course materials as their top sales generator.

It appears textbook sales will continue to shrink in the years to come as the digitization of books enables publishers to sell directly to students or integrate with a university’s learning management system. 

“One of the biggest challenges is that the biggest publishers are all moving their products to completely digital and trying to do away with physical books, which has them in the driver’s seat in terms of pricing and distribution and rights,” University Book Store Course Materials Manager Matt Schleede said. “That’s an ongoing problem, and as that shift happens over the next few years it will be interesting to see how some of the midsize and smaller publishers follow suit.” 

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Student increasingly crave seamless omnichannel experiences

The impact of this digital shift doesn’t end there. Beyond the changing landscape of textbooks, bookstores founded in the late 19th or early 20th century have been forced to adapt to rapidly rising and ever-changing customer expectations. They’ve had to rebuild the online and in-store customer experience to match the convenience offered by Amazon and other cutting-edge retailers.

A painless customer experience is crucial because much of college retailers’ customer base is young undergraduates who grew up with great online shopping experiences and fast delivery. Its shoppers came of age with Amazon and mobile shopping. They don’t distinguish between online, in-store and mobile channels and expect to move between them freely. 

“Students want their course materials as inexpensive as possible, delivered to them as quickly as possible, with minimal effort to themselves, and this is pretty much our guiding principle,” said Erin Olinick, CIO at University Book Store. “We’re always asking ourselves how do we make it faster, easier, better and how do we do that all while communicating … how we’re intimately connected to the University of Washington and why they should shop at the bookstore.” 


"Students want their course materials as inexpensive as possible, delivered to them as quickly as possible, with minimal effort to themselves, and this is pretty much our guiding principle."   


 

College bookstores jump on the e-commerce wagon

The Co-op closed multiple satellite stores throughout Texas with the thought that those customers would be better served shopping online.

“We’re very focused on the website as being the satellite store because regardless of if you’re in Alpine, Texas, or you’re in Houston, Texas, we can get our store to you,” Co-op CEO Cheryl Phifer said. 

All four campus stores were all held back from providing those experiences by legacy technology, three of them using systems designed specifically for campus bookstores. The e-commerce sites for University Book Store and The Cornell Store lacked a modern look and feel and were not mobile-friendly. The former had separate carts for different departments, meaning a student buying a Huskies hoodie and two textbooks had to check out twice. Students that wanted to rent books from the Co-op could not do that online, having to go through a totally separate registration process at the store.

Apparel like sweatshirts has become an increasingly important product category for The Cornell Store over the last five-plus years.

To fix this, each of these companies had to overhaul various facets of its technology so that, from a customer standpoint, it didn’t matter whether they purchased a product online or in store. It was important that online buyers in particular got a real-time view of inventory availability, were able to pick up items in store they had ordered online and could earn discounts through omnichannel loyalty programs. 

“Our customers especially, they shop with their thumbs first and so if they don’t see it online, they don’t know that we have it,” Co-op VP of Merchandising and Marketing Leslie Smith said. “So having everything that we do more or less available on our website I think has helped us meet our customers’ needs.”

But technology is not the only component of this overhaul. Cornell Retail Services reorganized its corporate structure, dedicating more staff to e-commerce and retail purchasing and making other strategic changes to support its new business model. The Duck Store moved its online operations to the basement of its flagship store to utilize employees from both the store and online teams in an effort to expedite order processing and shipping. 


Campus stores stand to stay in business thanks to their adaptability

This transformation is still in its early days for college retailers, but they now have the tools and organizational support to adjust to future changes in shopper preferences. Though campus bookstores occupy a special spot in the retail landscape, they face the same realities as other established brands.

“The answer for many stores to stay competitive and to stay relevant is we have to invest in technology and that is a huge shift from where we traditionally come from in this industry,” said Alex Lyons, CIO at The Duck Store. 

The University of Oregon's loyal fanbase is responsible for a majority of The Duck Store's overall revenue.

“The expectations and demands of the students who are showing up on campus now are much, much different than they were 20 or 30 years ago,” she continued. “Unless we react before it’s too late, there’s an element there of protecting ourselves and making sure that we have what we need to stay relevant.” 


“The expectations and demands of the students who are showing up on campus now are much, much different than they were 20 or 30 years ago."  


 As more students opt for e-books and inclusive access gains widespread popularity, textbooks will be increasingly irrelevant to the success of college stores. That will continue to be a central challenge to growth for these companies.

However, lest we forget, all of these retailers are more than 100 years old, and they’ve dealt with constant change over that history. Forward-thinking bookstores will continue to accommodate customer demands to shop how and when they want, remaining a destination for students, alumni and visitors.