Amazon is increasing its presence on college campuses by setting up branded mailrooms at a number of universities and institutions where students will be able to pick up packages sent by the online retailer.
The arrangements contained signing contracts that guarantee at least $100,000 per year for the universities. The amount could be much more, considering the institutions keep about two percent of every purchase delivered to their campuses. Some observers worry that the arrangements could hinder the business of local retailers, and could, over time, lead them and the surrounding areas with little to no business.
Amazon opened its first “pickup point” location at Purdue University, located in Indiana, in February of 2015. Containing signs that read “Amazon @ Purdue,” the locations also feature a staffed desk and a series of mailboxes that are brightly lit.
“Amazon is kind of the official campus bookstore for Purdue,” managing director of the university’s treasurer’s office, Robert D. Wynkoop, says. “The university did not have a brick-and-mortar bookstore, so officials weren’t worried about draining sales from another campus unit.”
Mr. Wynkoop also says the partnership includes a co-branded website, which opened in 2014. The university has already made $1-million from the combined pickup points and website.
In June, a similar pickup point at The University of California at Davis was opened in a space adjacent to its campus bookstore. Jason P. Lorgan, director of campus stores at Davis, says his colleagues at other colleges thought he was insane for inviting the online retailer to set up shop at his doorstep. However, Lorgan believes that more students will come to his bookstore if they’re in the building to pick up a package. And that’s what’s been happening so far.
Alongside Purdue and Davis, Amazon has established staffed pickup locations at the University of California at Berkeley, the University of Texas at Austin, the University of Massachusetts at Amherst, the Georgia Institute of Technology, and the University of Pennsylvania.
It also has pickup points near the University of Connecticut, the University of Akron, Texas Tech University, and the University of Cincinnati. It is unclear whether the institutions with off-campus shops also receive the two percent share of purchases.
Four more are planned to be opened this year, at Stony Brook University, Urbana-Champaign, the Universities of Illinois at Chicago, and California State University at Long Beach.
Amazon Is Adding To The Aid Of College Students
Mr. Lorgan states that UC-Davis plans to put aside approximately $80,000 per academic year from the partnership for grants to students who need help paying for course materials. The university expects “well into the six figures” of additional revenue from the arrangement, in which he describes as “very welcome” in a time of tight budgets.
At Purdue, Mr. Wynkoop also emphasized and stressed student savings on textbooks as a reason to partner with Amazon. Purdue’s leaders estimate that students can save around 40 percent by buying the books assigned for Purdue courses through Amazon instead of local bookstores. Mr. Wynkoop however also mentions that students are not required or even encouraged to order from Amazon.
According to Mr. Wynkoop, growth in rentals have had a 20-25 percent jump since installing the pickup points.
A Shift From Campus Retail To Online
A professor of media studies at the University of Virginia, Siva Vaihyanatahn says Amazon is following the lead of many major tech companies in trying to build loyalty with students in the hopes of gaining lifelong customers.
“The thing that makes Amazon special is it has no limits,” he says. “It has no distinctive, definable market that we’re used to thinking of, since it sells just about anything. And that could mean its push has a larger impact.”
In the long run, competition from Amazon could hurt local businesses near campuses, turning them into “dead zones” if stores can’t match the online store’s prices. If Amazon were to lose so much money by giving away so much at such low prices that no one else could compete, it could hurt the relationships between colleges and their surrounding communities, , Mr. Vaidhyanathan argues.
Thomas Borgerding, president and chief executive of the marketing company Campus Media Group, views the pickup points as part of a larger trend of students moving to online purchases. He isn’t as worried about the vibrancy of retail near campuses.
Even without pickup points, students have been moving to online retail. Colleges around the country have been struggling to keep up with the volume of packages arriving on their campuses, mainly from Amazon.
The pickup points are just the newest in Amazon’s efforts to attract college students. For instance, it gives students with a valid college email address half off on its Prime membership and a free 6 month trial.
Amazon has also moved into other areas of campus as the company has grown beyond the aspects of selling physical goods. Amazon Web Services, Amazon’s cloud computing infrastructure, now enhances most of the teaching and learning software used on campuses.
Amazon is even offering grants to researchers who are looking to solve big societal challenges at the University of Washington — even if their projects are not related to Amazon’s business.
The company announced that it would award up to $2-million in grants to students and faculty at University of Washington campuses as part of its Amazon Catalyst program.
Amazon Catalyst’s managing director Adam Siegel says the program has received more than 150 application since its introduction, and has given out nine grants so far. He also says Amazon might expand the program to other colleges.
“Knowing about the problems is valuable,” Mr. Siegel says. “We like to see where problems are in the world.”
Let's hope the innovations keep coming...along with our packages.
Lead Image: Aurelijus Valeiša on Flickr Commons