Loyalty & Rewards

Amazon Taps Into College Networks

Amazon already has a marketplace for college textbooks on its site, so its most recent move with three major universities to team up to sell more college-related goods seems like the next logical step to tap into the college market.

Its three newest partners in the college space include Purdue University, the University of Massachusetts Amherst and the University of California Davis in a co-branded project that will sell textbooks and university apparel, according to The Wall Street Journal. While universities typically like to reserve branded goods to their own stores, the reality of the market is that college students are turning to e-commerce giants like Amazon to shop. The universities now recognize that, and Amazon has found another way to capitalize on the market.

WSJ reported figures from the National Association of College Stores that says the college textbook industry is a $10.3 billion industry for schools and book companies like Barnes & Noble and Follett already have a large stake of the space — and not shocking, Amazon wants a piece of the textbook pie.

College kids turning to online to find cheaper deals is not a new concept, but Amazon is offering new perks like unlimited next-day delivery on campus to Amazon Student Prime members for $49. Other course materials will be eligible for one-day shipping, regardless of if a student has an account. Amazon is also looking to add distribution centers on each campus to pick up packages.

According to WSJ, here’s how the deal with the universities will work: “For the privilege of tapping into the schools’ course-selection software, Amazon will pay the schools 0.5-2.5 percent for purchases made through its college website.”

Prime has been paying off for Amazon, which is now seeing better days — profit wise. The company said last week that Prime and high holiday shopping helped generate a strong quarter for the e-commerce company, which beat analysts’ expectations on both profit and revenue. The data shows that Amazon Prime membership, which has hit 40 million, now spends an average of $1,500 a year, compared with $625 for non-members. Of its customer base, the figures show 45 percent of Amazon users are Prime members. Another report from Consumer Intelligence Research Partners shows Prime members are more likely to have higher tickets.

“Amazon Prime members spend more than other customers, on average shopping 50 percent more frequently, and buying more expensive items each time,” said Josh Lowitz, partner and co-founder of CIRP.

Now that Amazon has proven its Prime strategy has benefited its bottom line and main customer base, extending the perks to its most active online community — college students — appears to be the next step in Amazon’s loyalty plans.

 

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