Over the past few semesters the University of Kansas Bookstore and a growing number of independent college stores have begun taking advantage of the way students comparison shop for textbooks by sharing their competitors’ prices on their own store’s Web sites and/or pricing books dynamically using that data. “You’d have to be extremely naïve to think students aren’t pasting ISBNs [for course books] on their favorite sites, like Chegg and Amazon,” said James Rourke, assistant director of the University of Kansas Bookstore in Lawrence, Kans. While some stores list pricing for their two biggest competitors, Amazon and Half, others post as many as 10 alternatives plus availability at the local library.
But it’s not just independents that are exploring price transparency as a sales strategy. The Follett Higher Education Group, which manages more than 900 college stores, is participating in a pilot program with Verba Software. “For us, the big opportunity is recapturing those customers who’ve left the traditional bookstore channel,” said Elio DiStaola, director of public and campus relations. “It’s about recapturing the customers who are going straight to Web searches and comparison engines to find their books at the lowest price.” The company’s Skyo unit, which provides textbook and digital book rental to consumers, participates in the Verba marketplace. Although the other large college store managers, Nebraska Book Co. and Barnes & Noble College, declined to participate in this story, that doesn’t mean they’re not exploring price transparency, too. “We have begun some processes for textbook transparency,” said Nebraska spokeswoman Karey Koehn.
Some educators link textbook pricing transparency to the Higher Education Opportunity Act, which requires colleges to post retail pricing for their students on their Web sites. It’s also been driven by recent college graduate entrepreneurs convinced that there should be an easier way for students to find the best price for course material. Ryan Petersen and Jared Pearlman (Harvard ’08) founded Verba as an outgrowth of a student government project on price comparison. Jonathan Simkin (Harvey Mudd College ’10) developed a similar product, Swoop That, during his senior year. Like Verba, Simkin’s software, renamed HubEdu earlier this year before being purchased by Rafter, was originally intended for students. Both are now directed to college stores to make them more competitive. Rafter, which offers a platform of services, won’t begin piloting its price comparison piece until January. It offers bookstores other tools as well, such as mobile checkout via iPad.
“Stores may not win in all cases, but the data we have shows that stores that provide their students with price comparison tools have on average seen double-digit increases in sell-through compared to stores that have not introduced the same technology,” said Mark Nelson, CIO of the National Association of College Stores and v-p of NACS Media Solutions. UK Bookstore, one of the first to try Verba, is a case in point. “It’s actually helped us tremendously as far as sell-through,” said Rourke. “To be able to confidently tell a student or parent during rush that you’re 75% to 80% competitive, that’s a game changer. Our foot traffic was record-breaking this fall.”
One of the things that Follett and indies are exploring is the sweet spot in price. “For us it’s really understanding how pricing works. How far can the gap in price go?” said Noel Burkman, director of e-commerce for Follett, who noted that buying or renting textbooks isn’t only about the price. There’s also the convenience of shopping at the school store and of returning materials there.
Not all stores are sold on the concept of sharing pricing information with students. “I think the tools are important, because stores are thought to be much more expensive,” said Todd Summer, director of the campus stores division, San Diego University, which has more than 80% of its titles available for rent, and which uses Verba on its back-end. “Our students are telling us the pricing is very good. So we don’t see the need to have the front-end. Being able to help, possibly, improve the learning experience with lower prices is something that outweighs top line and bottom line analysis.”
Others, like Bowling Green State University in Bowling Green, Ohio, which has branded its price comparison service BGSU Choose, prefer to make competitors’ or partners’ prices visible. “By offering price transparency and comparing the bookstore price to those of major online companies, now up to 10, the bookstore accomplished two goals,” said director Jeff Nelson. “Far fewer defected to online companies, and for those who did buy from the Internet using BGSU Choose, the bookstore earned an affiliate commission.”
Income from BGSU’s partners—this fall 10% of the students who used BGSU Choose ordered through partners—has grown substantial enough that the bookstore is working on several initiatives with its partners, including in-store sales of Kindles; a pilot program related to textbook buyback through an intermediary partner; and a cross-promotion for both Amazon and Barnes & Noble (BGSU sells the Nook) for electronic content in-store and online along with the e-readers and tablets.