IQ Interactive Special Report: Textbook Case

Booksellers are looking beyond the seasonal sale to lure the college market to the Web. Slap the label "textbook e-tailer" on one of the many online college bookstores and they'll shudder. Just ask Bigwords.com, which calls itself a media business, or VarsityBooks.com, which defines itself as a college marketing company. In an effort to downplay their once-en vogue, currently passe; e-tailing roots, these dot-coms, as well as their competitors, now ballyhoo other aspects of their biz. "It's a slightly different take from the pure textbook focus," says Jonathan Kaplan, VarsityBooks' vp of strategic planning. The seasonal nature of the textbook market coupled with the increase in online rivals has forced these companies to rethink their strategies and expand their scope. Much like their offline brethren, who stock shelves with pennants, sweatshirts and CDs to supplement textbook sales, these online shops are packing their virtual aisles with college-related content, commerce and marketing. "We don't want [students] to come twice a year," says Bigwords CEO Matthew Johnson, alluding to the high-traffic months of August and January. "We want them to come back daily." After the peak, back-to-school buying days, textbook e-tailers usually encounter a slowdown in sales and traffic, notes Jeff Moulten, an analyst for Reston, Va.-based research company PC Data. "You have two months [where] you really have to make it," he explains. According to New York-based Internet measurement firm Media Metrix, Bigwords tallied 889,000 unique visitors in January 2000-typically the start of spring semester-only to experience a 50 percent slide the following month. VarsityBooks captured more than 1 million unique visitors in January. Yet, it suffered a disappointing February with only 285,000 unique visitors, an 80 percent decline. Hoping to thwart the offseason lull, Bigwords.com plans to launch a revamped version of its site this week with the promise of relevant content and commerce offerings. "We want to be the destination for this audience," says Johnson. To this end, Bigwords snagged Michael Dolan and David Keeps, both alumni of Details, and Suzan Colon, former senior writer and editor-at-large for Jane, to produce original content on topics ranging from pop culture to sex, updated at first weekly and then daily. The site will also expand its product inventory, which currently consists of CDs and clothing, to include housewares, health and beauty goods and other paraphernalia. By adding a wider selection to its e-store, Bigwords plans to capitalize on the buying power of the 15 million-plus U.S. college student population. Student Monitor, a Ridgewood, N.J.-based college marketing research company, estimates that college students spend about $105 billion on goods and services annually, dropping $343 a month on items such as apparel, books, music and school supplies. Last year, e-commerce purchases by college students at four-year universities totalled $2.2 billion, up 18 percent from the year before. Seeing the immense value in this population, Bigwords also has started striking online advertising and offline cooperative marketing deals with companies, like travel site Expedia, interested in garnering the attention of co-eds. "We're really about access to the audience," says Johnson, adding that Bigwords' revenues are currently split evenly between commerce and advertising. "Huge advertisers are looking to attract this audience when they are making brand loyalty decisions for life." VarsityBooks.com agrees with this assertion, so much so that the company renamed itself Varsity Group in June and redirected much of its efforts toward marketing. "We have developed into a college marketing company," explains VarsityBooks' Kaplan. "So, we created a new corporate umbrella to better reflect our mission." The business now employs online and offline marketing tactics, originally created to push their product, to promote other companies' goods and services. "We are taking advantage of those assets we've developed and we are making them available to other companies that want to reach the college market," says Kaplan. "Varsity Group reaches college students where they spend most of their time-on the Internet and on campus." With 97 percent of students using the Internet and 70 percent logging on daily, establishing an online presence is almost a "must-have" for companies trying to connect with these early adopters. VarsityBooks helps companies accomplish this task by sending marketing messages to students via VarsityBooks.com and its opt-in e-mail network. In the offline world, VarsityBooks hits students on their home turf by sending out the company's 1,000 campus reps to distribute flyers, hang posters and pass on the word for companies such as publishing giant Time Warner, office supplier Staples and communications network AT&T Wireless. This year, for instance, VarsityBooks plans to dole out branded book bags containing products, coupons and promotional materials from 15 sponsors including outdoor-gear merchant REI, cosmetics company Clinique and gaming site pogo.com to more than 700,000 college students. "There is no effective substitute for connecting with students through their fellow students," says Kaplan, adding that the company holds special sessions to teach its representatives the art of marketing. Last week, VarsityBooks' campus reps convened for a training conference that covered marketing best practices, codes of conduct and team management skills. "[VarsityBooks' rep network] is a key reason why companies come to us to reach the college market," says Eric Kuhn, president and CEO of Varsity Group. Although these companies have shifted focus, they have not abandoned their textbook origins all together-and for good reason. Full-time undergraduate students at four-year universities spent an estimated $3.1 billion on 71.3 million textbooks last academic year. In the past, these textbook e-tailers waged war against the traditional brick-and-mortar campus stores, claiming lower prices, quick delivery and no lines. They infiltrated college campuses with eye-catching campaigns, free stuff and on-campus, frat-boy rep crews, some clad in bright orange jump suits. And to an extent, they achieved success. Student Monitor estimates that 13 percent of the undergrad population bought from an online textbook retailer last spring, up from 8 percent in the fall. Further, 24 percent plan to purchase from an textbook e-tailer this upcoming school year. "Convenience is a huge factor in our business," says Bigwords' Johnson. "Going into a brick-and-mortar is not convenient." For most students, however, price cuts rank as the No. 1 reason to try an online alternative. According to Student Monitor, 49 percent of students logged on to realize cost savings, while only 9 percent visited the e-bookstores for the convenience factor. For these e-tailers, however, it's no longer just an online-versus-offline differentiation game. Increasingly, these front-runners are feeling the crunch from other online contenders, such as efollett.com, ecampus.com and Barnes & Noble affiliate Textbooks.com, as they vie for a piece of the college market pie. This year, efollett.com's "No Nightmares" marketing message takes a stab at its online competitors by referencing student complaints about back orders, incorrect textbook shipments and higher-than-expected costs. Last year, Oak Brook, Ill.-based Follett Higher Education Group launched efollett.com, an umbrella site uniting more than 600 campus bookstores online. Within hours of their ad campaign kick-off during the Fiesta Bowl, efollett.com reported 5.5 million visits to the site. In terms of marketing to and acquiring customers, the company argues that the marriage between traditional and interactive gives them a leg up on the competition. "Efollett.com combines the 24/7 convenience of the Internet with the personal service that only a local bookstore can offer," says Fred Weber, efollett's senior vp of strategic planning. Orders placed on efollett.com are processed and fulfilled by partner stores, so customers have the choice of pick-up or delivery. From a marketing standpoint, efollett's on-campus relations allow the company to access students in a variety of ways, explains Weber. The company uses campus retail locations, along with campus media and local marketing representatives to support national media and online promotional activities. This fall, for instance, efollett reps will disperse more than 2 million game pieces in their "No Nightmares" Sweepstakes, making students eligible to win free scholarship money, shopping sprees, CDs and mountain bikes. Like Bigwords and VarsityBooks, efollett.com stocks non-textbook-related products and dabbles in marketing in order to supplement its income. Unlike VarsityBooks, however, Follett's core business remains academic retailing. "Our investment and our future is in selling course materials, general books for a college audience and collegiate merchandise," says Weber. "However, by building strong multichannel capabilities, we have created an opportunity for select companies to reach the college market." Contrary to other online textbook retailers that hesitate to call themselves e-tailers, Lexington, Ky.-based ecampus acknowledges that it is in fact an e-commerce business. Known for its tagline "We know you're broke. We make you less broke," ecampus carries textbooks, trade books, supplies, electronics, gifts, college emblematic apparel, general apparel, and more. Ecampus also entices consumers with free shipping, a major incentive for cash-strapped students. As the school year approaches, the textbook retailers and e-tailers will continue to spar in an attempt to separate the boys from the men. "Competition weeds out the weak," says PC Data's Moulten. By launching clever campaigns, deploying fanatical college reps, running appealing contests and the like, the companies will try desperately to herd students through their physical or virtual doorways. "As long as the bottom line is less money-why would you not log on? To me, I would rather do that than deal with the crowds," says Moulten. "We've only dealt with a few cycles so far, so there hasn't been a chance for a fallout yet. Maybe we'll see these other aspects of their sites generate revenue during the offseason." As these companies hurriedly stock their virtual shelves with content, commerce and marketing know-how, they hope this prediction rings true. n

Brand Marketing

IQ Interactive Special Report: Textbook Case

Ann M. Mack

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Ann M. Mack