As an education technology company that provides online bookstore services to schools and their students, Akademos has always had anecdotal information from clients and students regarding the changing landscape for textbook services. We sought to validate the concerns that college chief financial officers (CFOs) had expressed to us about the future of their textbook services given the challenges presented by a vast marketplace of external competition, and the requirements of meeting new digital delivery needs presented by growing online curriculum.
Thus, we commissioned the first comprehensive survey of college CFOs regarding the future of bookstore services, with the results published in March 2013 here in a white paper. Here is a snapshot of some key findings:
- 89% of respondents confirmed that students are increasingly turning away from campus-based bookstores in favor of third-party providers, citing, on average, 28% of students are shopping elsewhere.
- Respondents pointed to price as the primary reason students bypass the college bookstore (78%), with students’ inclination to purchase online a distant second (12%).
- Survey respondents indicated that on average, 56% of textbook sales are transacted with financial aid.
- Respondents ranked giving students access to high-quality, low-cost textbooks as the most important service institutions can provide regarding the sale of textbooks.
- 88% believe textbook costs impact student retention and persistence.
- 82% indicated that textbook sales have been flat or down over the past three years.
- 18% stated they believe textbooks will be sold exclusively in a school online bookstore, while 80% are of the opinion that their school will utilize both an online and brick-and-mortar store.
Overall, textbook delivery and bookstore services are only now becoming a prominent issue for CFOs (the topic doesn’t even come up on previous surveys about CFOs’ general responsibilities). This rise in priority is likely due in part to increasing attention to the costs vs. outcomes of higher education from students and their families, accreditation committees, and the government (e.g., HEOA). The question becomes whether the competitive and technical challenges of serving student-needs in an increasingly online world can be met by the current model, particularly by college bookstores that sell textbooks in a brick-and-mortar environment.
Competition from online, third-party providers is of major concern for the viability of the textbook business at campus bookstores. Students are leaving the school-sanctioned bookstore because of better pricing elsewhere, and this loss of customers is driving schools to more closely examine their textbook affordability, both for business reasons—revenue from textbooks appears to be in decline—and for educational reasons—charging students exorbitant mark-ups on course materials to help fund school initiatives is becoming an increasingly questionable practice in higher education.
Below is a summary of top outcomes and analysis from our survey on textbook delivery and bookstore services.
Textbook costs impact retention and persistence
The impact of college affordability on student outcomes such as retention, persistence and completion is becoming more evident, particularly in those programs where the cost of textbooks could exceed the cost of the course.
The majority of CFOs (89%) indicated textbooks costs do have some impact on retention and persistence. Given students are reporting that they do not buy all of their required books for a course, and graduation rates are tied to accreditation and other funding, textbook costs are joining tuition and fees as a potential cause of attrition.
Students are shopping outside the school-sanctioned bookstore for textbooks—predominantly choosing third-party, online retailers
Whether you are a college CFO, a faculty member, a student or parent, or just a member of the general public, you likely recognize that students are shopping online in order to find lower cost textbook prices.
Most CFOs (89%) confirmed that students are indeed shopping for textbooks outside of the school bookstore. What percentage of students shopping outside the school bookstore is too much? We think that is, and will continue to be, a central question in bookstore services. If you are a CFO reading this, do you know how many student customers are buying their books at your bookstore and how many are leaving?
CFOs in our survey reported that on average, 28% of their students are shopping elsewhere. Yet in the recent National Survey of Student Engagement (NSSE), between 25% and 33% of students reported not even buying required textbooks. So who is shopping at the school bookstore for their texts (see Financial Aid point below in this post)? In our experience, the portion of students perceived as shopping outside the bookstore is under-reported. The majority of schools are either not tracking this data, or not analyzing this data in an actionable way. Additionally, one-on-one feedback from school administrators across the country in the last year actually points to the contrary—that less than 30% of students are shopping in the school-sanctioned bookstore for textbooks. This discrepancy is surely a challenge to be reconciled by schools and their bookstore providers.
Further, a follow-up focus group indicated an interest in understanding how many of those students are purchasing the majority of their books at the school bookstore.
Cost is the biggest issue chasing students away
It is likely no surprise that respondents pointed to price as the dominant reason (79%) for students shopping elsewhere, with the belief that students are more inclined to purchase online as a distant second (12%). When you put these together, it confirms an overall trend we have heard from administrators and students alike: Students are increasingly buying textbooks on third-party websites because they can find better deals there than at the school bookstore. And, again, it is no surprise that school bookstores are experiencing challenges competing when you consider the costs of running a brick-and-mortar with limited or local inventory vs. an online operation with national inventory.
Access to high-quality, low-cost textbooks is the most important service schools can provide
The “most important service schools can provide students regarding the sale of textbooks,” as ranked by 53.5% of respondents, is to provide “access to high-quality, low-cost textbooks.”
Additionally, in the open-ended answers, textbook affordability was listed as the second most-cited concern about bookstore services (after staying competitive).
Used books are the most important resource to the future of schools’ bookstores
When asked to rank resources such as new, used, digital, rental, and OER (Open Educational Resources) in order of importance to the future of the school’s bookstore, nearly 80% of respondents ranked used books as number one. It is interesting to note that a majority of CFOs rated both supplying used books and supplying rentals as very important, yet revenue from new books is still outpacing that from both of these categories combined.
Financial aid, designed to assist financially-challenged students, is actually leading them to the most expensive options for textbooks
On average, new books make up approximately half of all textbook sales at respondents’ school bookstores. New books are also the students’ most expensive option. If our neediest students buy elsewhere, they are forgoing their aid. But, if they buy at the school bookstore, they are likely spending more than they need to on textbooks. This Catch-22 is contributing to both the rising student debt burden and mounting budgetary pressures on financial aid.
In the face of competition, schools still believe they will be in the business of selling textbooks out of a brick-and-mortar in the coming years
This might be the most surprising outcome of the survey. A majority of CFOs believe that their school will continue to sell books at their brick-and-mortar bookstore. Only 18% of college CFOs believe textbooks will be sold solely online. It is particularly surprising given CFOs recognize that cost is the biggest issue chasing students away, and that financial aid is binding students to shop at stores where costs are less competitive than online alternatives.
How feasible is it for schools to balance textbook pricing for their online bookstore and their brick-and-mortar store, particularly without unnecessarily inflating prices for students?
When the responses were posed to a focus group following the survey, some cited long-term contracts for brick-and-mortar services and the inability to consider alternative options until those contracts expire. The question then becomes, if the bookstore is not competitive in current times, how will long-term contracts affect schools’ ability to keep up with changing trends and technologies five or ten years into the future?
Staying competitive is a top business concern
What are CFOs’ top concerns in their own words? The open-ended answers revealed a consistent set of issues relating to textbook delivery/college bookstores, but staying competitive was the top cited issue.
What Can You Do? Best Practices Bookstore Services Audit
If you wish to further examine the issue of textbook affordability at your school, what can you do? We recommend starting with an audit of your bookstore practices, taking into consideration how the economic model is changing as well as how student preparedness affects overall student academic performance. We have put together the Akademos Textbook Affordability Best Practices Audit to assist you with evaluating both the health and the mission of your textbook practices. As always, you can also reach out to us directly to have a conversation about your textbook delivery mission and practices.