E-Commerce Goes Varsity
Sept. 3, 2000 -- The Varsity Group, a Washington, D.C.-based Web site that formerly only sold discounted college textbooks, will be distributing book bags to 700,000 students nationwide this fall. However, inside the bags will not be books, but rather promotional items from companies like AT&T Wireless and Staples.
The aim, says Jonathan Kaplan, Varsity vice president, is to transform the bookseller into a company that specializes in marketing products to college students.
Just as Amazon.com has found that selling books on the Web is not enough to survive as a business, online bookstores just for students are looking for new sources of revenue from the rapidly growing student population.
Market Shows PromiseThese days most students have high-speed on-campus Internet access, making it easier for them to conduct e-commerce transactions, explains Kaplan. What’s more, he adds, for companies like Varsitybooks.com, selling textbooks online offers a lesser profit margin than its new business venture: marketing products to students.
And students are ripe for marketing, according to the Internet research firm Jupiter Communications, which reckons that college students are the most wired segment of the U.S. population, and will be for the next three years.
By year-end 2000, the online college population will increase to 12.5 million, Jupiter predicts. The online college audience will grow from 92 percent in 2000 to 95 percent in 2003, according to Jupiter.
What’s more, although 81 percent of college students report making an online purchase in a recent survey by Greenfield Online, an Internet research firm in Wilton, Conn., only 25 percent use the Net to purchase textbooks. By contrast, 64 percent use the Internet to buy CDs, and 58 percent buy books for pleasure, according to Greenfield.
“Students spend over $100 billion a year on products and services, and they are at an age when [they are] making lifetime brand loyalty considerations,” explains Varsity Group’s Kaplan. “They are at age when they are trend setters in the marketplace and that makes them a critical demographic.”
A Crowded MarketVarsity isn’t the only book company angling for the student market. Online bookseller Bigwords.com in San Francisco is transforming its business into a destination portal for college students to access content and e-commerce. And Edu.com, an e-commerce site exclusively for college students, offers discounts on items for school, such as computers, textbooks, and banking services.
“We manage the relationship between the population of 15 million students and Fortune 500 companies,” explains Adam Kanner, CEO of Edu.com. The company specializes in selling student products like computers, text books and audiovisual equipment, he says, and aims to find deals for students from big companies in return for delivering back information aboutstudents’ likes and dislikes, and what they are buying online.
“We’re all about building relationships,” says Kanner. “Companies spend millions to build a relationship with their customers, but students are treated so poorly. They are really important customers because they will be around for quite a while.”
Building RelationshipsDavid Sklar, chief technology officer at Student.com, a Web community for students started by six college students at Yale and Columbia, thinks the increase in student spending online can be attributed to the fact that students spend a great deal of time online, and so they are well informed about the Internet. Their busy lives means that buying something online and having someone deliver it to their dorm suits them well, he adds.
“Buying something online isn’t special to them, but going to the store is something out of the ordinary,” says Sklar. “Students take for granted that the Internet is woven into the fabric of their everyday lives.”
And when it comes to marketing their products, companies should think about students’ tastes, argues Elissa Moses, head of global consumer and market intelligence for the Netherlands-based electronics firm Philips, and author of The $100 Billion Allowance: How to Get Your Share of the Global Teen Market, a study of teen consumerism in 44 countries.
“These days marketers are staring to sound like high school girls,” says Moses “They are talking about having relationships with young clients.” In return, young people are open to hearing what companies have to sell, she says. “So if you can sing a good song and a do a good dance you will be rewarded.”