'Bricks' Still Strong in a 'Clicks' World
6/17/11
“The Internet has changed the face of retailing forever—and that’s probably an understatement,” said Glenn Cook, CEO, Skor Sports Inc., one of the presenters of the CAMEX 2011 session Bricks ’n’ Clicks: Cultivating Profits and Incremental Sales Through E-Commerce.
Students’ online purchasing of required course materials increased from 2% in 2005 to 45% in 2009, and Cook—who visited more than 300 stores in the course of the past year—sees the same trend in sales of logo campus apparel.
“The Internet has really opened things up,” agreed co-presenter John Wittman, vice president and general manager, Baker & Taylor/Majors Education Solutions.
To get everyone on the same page, Cook and Wittman led their audience through an impromptu SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis on the college store industry. Here’s what the attendees identified:
Strengths
Location on campus/convenience
Connection with the college or university
Knowledge of the customer
Experience
Accurate course information
In-person customer service
Ease of use of a bricks-and-mortar store
Faculty relations
Access to financial aid
Weaknesses
Limited demographics
The speed-to-market of innovation
Staff stretched thin
Price
Public relations/perception
Technology/tools
Space
Faculty relations
Budget restrictions
Publisher relationships
Opportunities
E-commerce
Can connect to campus micromarket
Alumni
Chance to expand market
Incremental business
Disclosure/transparency
Campus and internal networking
Mobile commerce
Branding
Access to students
Availability of immediate credit/resolution for returns
Role as problem-solvers
Threats
Publishers selling direct to students
Online competition (primarily from Amazon, eBay, and half.com)
Easy entry to market
Administration (either by outsourcing operation or by not providing the necessary resources to fulfill the store’s assigned mission)
Faculty
The economy
Overhead costs
Textbook rental companies that circumvent the store
Open-source course materials
Suppliers (“My business is only as good as your business,” as one attendee put it.)
Wittman observed that some items on the threat list could really represent new opportunities. “You need to think of things just that way,” he urged.
In his book, success shouldn’t be measured by income. “Success is customer satisfaction,” said Wittman, citing studies that indicate when a retailer does something right, only one out of 10 customers will acknowledge it, whereas if you do something wrong, all 10 customers will let you know about it. “And if they’re willing to talk to you about it, they’re going to talk to everybody else about it,” he noted.
“Your consumers are surrounded by choice. I love your industry because it’s so fraught with competition. I’ve never seen a group of retailers under such competitive threat. The very people that come and shop at your stores are your competitors.”
Despite that, Wittman said he believes college bookstores have one advantage that no online competitor can overcome. “It’s huge and I just don’t think we realize and market how huge that is,” he said.
While many college stores have an e-commerce solution that provides consumers the ability to buy online, with the accompanying convenience and affordability, having a physical store as well means the customer can come in to return an item in person if it doesn’t fit, if they drop the class, or if they purchased it by mistake—an amenity no e-tailer can offer.
“That’s huge,” Wittman reiterated.
He then returned to the fact that the audience’s SWOT analysis had suggested a fixed retail audience represented a weakness for college stores. “What if I told you that’s one of your greatest assets?” he asked. “Because you have this extraordinarily well-defined consumer.”
A college store doesn’t need to sell to everyone to succeed, only to a fixed micromarket of students, alumni, faculty, and staff, all of whom share with the store a connection to the institution. And even though some may have to work under restrictions about e-mailing students, college stores’ presence on campus means they have a much easier time reaching all of their constituents than a national or international e-tailer does.
Still, cautioned Wittman, “There are no silver bullets. It’s a lot of hard work and you’ve got to touch people multiple ways.”
You also have to touch them multiple times. He indicated that, according to a study by Proctor & Gamble, a store or brand has to touch a consumer 7.2 times to own that consumer’s perception of its brand or product.
“You have to touch with the right message and with the right price,” he said. For instance, if you sell online, are your students saving money there? E-tailers have fostered an expectation among consumers that they will save money when buying online. Wittman suggested adopting a dual price-point strategy, with lower prices for those who buy from you online.
Also, don’t think the big e-tailers are all actually socking away huge profits. “What you’re going to find is that your competitors—these huge competitors that do it extraordinarily well—at the end of the day, if they’re making 2% they’re doing really well,” said Wittman, who projected income statements from Borders, Barnes & Noble, and other companies to illustrate his point.
In the end, he left attendees with three strong recommendations:
1. Outsource wherever you can to drive down costs.
2. Reach your consumer in every way possible with a consistent message about your strengths.
3. Have a marketing plan that not only promotes your products online, but brings people into the store.
By Michael von Glahn
Editor
The College Store magazine
(800) 622-7498, ext. 2304
mvonglahn@nacs.org |
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