Inventing the college store of the future

Campus Technology has an article this week about what happens to college stores if "dead tree tech" gets edged out by digital textbook alternatives. It is an interesting piece which echoes some recommendations we have made in the past -- and re-emphasizes that a shift to digital does not need to mean the end for physical stores. One of the early quotes in the piece -- from Isabella Hinds at Follett, captures this idea well. She notes:

The advent of this technology isn't going to eliminate the need for college bookstores. It's disruptive--or it will be, eventually--but the role of the bookstore is already evolving. The college bookstore of the future is likely to be a very different environment. The digital textbook is going to be one of a range of course-material offerings...delivered on a variety of devices. As these options proliferate, the expertise of the bookstore personnel will be much more important. They will become trusted advisers who can talk knowledgeably about the strengths and weaknesses of increasingly sophisticated and complex products.

Hinds' comments reflect similar recommendations and reactions here at the National Association of College Stores (NACS), and can be found in our report, Defining the College Store of 2015, which is available to members.

It is about creating value and relevance for students and faculty in new ways. Two additional quotes from the article:

"The stores that are becoming the resident experts on these educational technologies are gaining tremendous favor points with professors, administration, and students," Gallagher notes. "It's about maintaining a relationship with the customer and adding value in the form of expertise." -- K Gallagher, Bowker

"College stores must earn students' 'love' by being relevant to their specific, evolving needs and expectations. Growing share of campus life must be a top priority for campus stores--followed by communicating this valuable role to key stakeholders." -- NACS

Indeed, we are already seeing a number of stores create "genius bar"-like concepts designed to help faculty and students understand their digital options and how to access them. Have a problem accessing a digital textbook, or don't understand how to access one publisher's content versus another (or why they are different)? Well, that is a role that the store will be able to help answer.

Given the early stages of many of these technologies, another challenge for students and faculty is matching content to devices. Stores will ultimately be the device and format agnostic providers, and will help students make sure the content they are buying is not only the right content for the course, but the right content for their device(s). It also means that stores must explore multiple approaches to delivering content -- print or digital. Yet another quote from the piece highlights this point:

"There's absolutely no doubt that the long-term survival of the college bookstore will require some strategic adaptations," he says. "And you really just have to embrace the technology. We decided our best bet would be to invest in multiple approaches, to jump right into the deep end with both feet.

"My words of wisdom to my colleagues are pretty simple. You can't do all this in a tepid fashion--you have to commit all the way. You have to invest in multiple approaches to hedge your bets on the shifting winds of the technology. And monitor your results. The evolution of this thing we call a bookstore isn't over." -Jeff Levin, Varney's Bookstore

The article contains a number of interesting points and quotes -- from discussing the lingering preponderance of print, to print-on-demand (POD), to talking "tech rather than textbooks," building relationships with students, textbook rentals, open source textbooks, and redefining retail. In the end it is really all about adding value and reconsidering the retail role of the college store:

"If textbooks do go mostly digital, then the campus bookstore simply has to become more of a retail center. [The college bookstore is no longer the place] where you have to go to get everything. Students have more choices now. There's local competition, as well as the internet. But we're convinced that there's still a lot of value to the college bookstore. Students aren't paying for shipping charges, returns are easier, and they get help to make sure they're buying the correct book. In the end, it's about adding value." -- Sue Riedman, NBC

All-in-all, a great piece that covers a lot of textbook and college store ground in a short space. It is great to see a positive and opportunity-focused piece on the college store industry. However, the piece does make one thing clear -- the business is ours to lose. College stores are uniquely well positioned to make it through a transition to new business models. However, success in doing so requires intention and willingness to experiment and move toward an as yet somewhat unclear future vision.

Future of e-books or e-textbooks on college campuses

Recently there was a posting on the NACAS listserv that essentially asked the following:

I have been reading and seeing a lot of articles lately regarding the perceived or not, influx of e-books and how they may or may not change the way we handle our textbook business on campus. We are looking at a 5 year plan for our bookstore, and the shift to e-books and increasing textbook rentals seems to be a reoccurring theme.
I am curious how other campuses are looking at e-books and what effect they may have on your bookstore and your students over the next 2, 5, 8, 10 years. If anyone has any thoughts or a crystal ball that might help us shed some light on this vague but fast changing trend, I would appreciate hearing them.

I have some of my thoughts on the topic, but Jeff Nelson from BGSU posted a great response to the inquiry. I have included most of that here with Jeff's permission. Jeff has been very active as a channel steward for the industry, helping other constituencies better understand the realities around textbooks and the college store. This is another example of his thoughtful approach to the topic. Thanks, Jeff!

BTW -- I inserted some of my comments inline to Jeff's [MN:] in a few points.

A crystal ball would be nice, but I can at least offer some insight since I can't predict the future, at least not with any precision. One of the first observations I can make is that there is more hype over ebooks than there is actual impact, at least for today.

It is important to understand that eTextbooks can be very different than the type of eBook you might download to a Kindle. The availability of eTextbooks is still relatively limited, whereas most novels or other contemporary "pleasure reading" books are now automatically made available in electronic form. For example, at BGSU we provide eTextbooks as an alternative to the printed book whenever they are available and that represented only 11% of the book list for the spring semester.

[MN: I agree with this public misperception. Average we see is about 10%, with ranges from 5% to 17% depending on the type of school and particular faculty content choices. Inventory availability is still a barrier, even though that is changing. While most of the largest textbook adoptions nationally might be available in digital formats, most adoptions in general are not. In other words, for most college campuses, on average about 90% of the titles selected by faculty do not have a digital option available yet.]

Another misperception is that not all eTextbooks are created equal for many reasons. Most consumers don't realize that a textbook can have many copyright holders and not all of those copyrights permit electronic distribution. So every chart, graph or photograph can be a different copyright holder and if permission to distribute electronically is not granted, that ebook may have a "placeholder" that states the illustration isn't available. And many of the eTextbook titles are simply a PDF-type version of the printed book and have limited functionality which depends upon the eBook reader software, as opposed to being "digital native" where you can have more robust content and interaction.

The hardware options can also have an effect upon the adoption. Because there is not a well-defined eTextbook device yet (like a Kindle), the students will typically use a laptop or desktop to either download the book to the computer or access it via the internet which requires network connectivity. Our CIO expects "tablets" (think iPad) to have a 40% penetration this fall and that could have a big effect on eTextbooks.

[MN: Wow. 40%? That would be a scary adoption rate. Nationally we saw 8% this past fall, and anticipate maybe 15% this spring (currently collecting data). 40% by fall seems agressive to me, but possible (and scary). Laptops are still the predominant tool students use to download digital course materials.

Another challenge though is availability of content per device. Consider this: ebooks are currently available in the following formats (at a minimum): .Lit, .mobi, AZW, PDB, FB2, PDF, RTF, BBeB, EPUB, HTML, RB, CHM, and OEB. DRM standards include: MS Reader, Adobe Adept, eReader, Mobi, Apple FairPlay, DNL, and several others. The buying decision for students to know what they are getting when they buy a particular digital book requires more education than buying a print book. Not all digital files are created equal.]

Finally, there is the price and this area is the subject of many debates. We all know the traditional printed new textbooks can be very expensive. If the average savings for an electronic version of that same book is 50%, it may sound like a good deal. However, we consider what I call the "net cost of ownership" which factors in the upfront cost and the resale value.

Let me give an example of how the pricing works. If a new textbook is $100 and it is reordered for the following term, the student can usually sell it back at the end of the term for $50 (or more online) and that brings the net cost down to $50, about the same as an eBook. Not only can eTextbooks not be sold back, many have a license that expires after one or two semesters, unlike the book you buy for your Kindle which is yours for life.

So, how does this compare to other alternatives? If the same student above bought the printed book as a used book, they would probably pay $75 (maybe less on the internet) and could get the same amount at the end of the term, bringing their net cost down to just $25. If they rented that book, they would have received the savings up front and paid a net cost of about $40, but still need to turn it in at the end.

So, that is the current landscape, but let me give you some hard numbers. Although 11% of the BGSU book list is available in electronic form, ebooks represented just 0.1% for this past fiscal year and we have been selling ebooks since 2005. That quadrupled for the spring semester to 0.4%, but a fourfold increase of a very small number is still a very small number. Contrast that with rental textbooks which represented just 0.3% of sales for last year, but increased to 7.4% of sales for the spring semester. The rental results may not be typical because we took a very aggressive position for the spring because of increasing competition.

I"m not sure anyone really knows when eTextbooks will take off, but it is safe to say that they will at some point in the future. It isn't unusual for technology trends to double, then double again and continue until there is a wide adoption which means it could happen very fast. For this reason, it is very important for college stores to be "in the game" and selling ebooks. Even if the penetration is not there today, it will be in the future once the stars align and so we need to be ready.

[MRN: Also, the titles where adoption is likely to happen the fastest are in the large-adoption areas, creating a disproportionate effect. This is one reason the rental number shift had such a big impact in a short time as that model matured quickly.]

We are also watching related technology trends closely and have expanded our technology presence significantly in terms of selling the devices that may empower students to more readily adopt ebooks. All it takes is one game changing move like Apple expanding the iBookstore to include eTextbooks and the landscape can change amazingly fast. Right now the rage is rental textbooks, but that can change.

The final comment I will make is that the suggestion made by another member to conduct some research is a solid idea and if it can be expanded to include rental textbooks, that would be even better. Because I am passionate about the topic of "textbook affordability" I follow these topics closely, but I have more questions than I do answers.

I know this is a lot to think about, but I hope the readers of this thread will find it useful information. As I said, it represents the experience we have had at our institution, but that is not necessarily indicative of the entire collegiate retail industry.

Lots to think about -- but a good perspective in the store voice.