We have witnessed Amazon transform retail as we once knew it when it began selling books through its e-commerce model in 1994. Therefore, it may seem a natural fit for this giant to open its first physical store in a venue that predominately sells books: the Campus Bookstore – a concept similar to what we have increasingly seen this year as pure plays move into brick and mortar (check out our recent blog Why is Google Opening a Store Now? Google’s First Store in London, U.K. for a complete analysis).
The Amazon@Purdue Concept
What? A store with no inventory? That’s just part of this store’s value proposition. Let’s remember, the student of today has grown up digital and e-commerce is a given to meet their shopping needs.
When students visit the Amazon@Purdue store, they will not find the endless rows of textbooks. Rather, they are able to order their books using kiosks with the support of on-site staff, with the promise of one-day shipping. The store is also a convenient pick up site with the ease of the Amazon locker system. When the product arrives, a notification email or text with a barcode is sent to the student. They simply visit the store, scan the barcode and pick up the order at one of the self-service lockers or go to the pickup desk where a store staff member can provide assistance.
With no need for inventory and streamlined operations, the store footprint is dramatically reduced from the typical 10,000 sq. ft. campus model. This is an added bonus for campuses short on physical space.
Amazon.com has slowly been gaining market share in the campus bookstore arena as a source for textbooks and other resource material. Similarly, Amazon’s affiliate program has become a major source of revenue for many College stores. This program has also proven to be a logical partner, extending Amazon.com’s vast product offering of convenience and other products not typically available on campus.
The Affiliate Program
An affiliate program is an arrangement in which an online merchant site, such as Amazon.com, pays affiliate websites a commission to send them traffic. Amazon Associates was one of the first online affiliate programs. The Amazon program helps website owners (such as campus stores) make money by featuring thousands of products from Amazon.com not carried in the store’s physical location. When website owners (who are Associates) create links and their web customers click through those links and buy products from Amazon.com, they earn referral fees of up to 10%.
The affiliate helps make the sale, but Amazon.com does everything else – take the order, collect the money and ship to the customer. This is a great proposition for campus stores, as they don’t have to have the inventory or staff to realize added revenue while providing customers with thousands of products.
“If you can’t beat ‘em, join ‘em”
Campus store operators are recognizing that customers were choosing Amazon to fill their needs where the campus store fell short. Rather than try to compete, or worse, back away from the business, together with the affiliate program the experience seems to be fulfilling the needs of all stakeholders.
How Affiliate Programs Work, Tom Harris, howstuffworks.com
Photo: Purdue University