The type, nature of, and demand for store fixtures is changing rapidly as a result of Amazon’s success in reshaping the landscape of the retail industry. The depth of Amazon’s impact on the retail industry varies by sector. For example, despite its entry into the grocery delivery business, Amazon has only gained 1% market share of the U.S. grocery industry, whereas in industries like publishing, consumer electronics, and easy-to-ship consumable products, Amazon has made a huge dent and has caused massive disruption.
At the end of 2015, the Wall Street Journal ran a column entitled, “Predictions: What to Expect in 2016.” The article featured 17 prominent experts who presented their view on the most significant developments they anticipated for 2016. The ideas presented were big: how technology will transform the financial services industry, advances in behavioral genetics, the fall of the Islamic State, and so on. Surprisingly, on the list of 17 major predictions was the following: The Return of Bookstores.
The author of the prediction was Ann Patchett who argued that, despite the popularity of Amazon and e-readers, in 2016 customers would return to supporting their community book stores. The fact that this prediction was even mentioned on the same level as The Fall of the Islamic State says something about the importance and credibility of this major cultural shift. To support her prediction, Patchett argued that people are growing tired of pointing and clicking and dealing with computer screens in general. What’s been missing, she asserted, are stores that sell good books, have a staff of smart readers, a thriving children’s section, and maybe a couple of shop dogs.
What Patchett was getting at was really about changing the game by creating an experience that Amazon could not reproduce without a physical store. This insight has not been lost on Amazon, for as we all know, the company has begun to open its own physical bookstores. However, despite the promise of a staff of smart readers and shop dogs to save the day, there is one segment of the bookstore market that is about to experience a fairly radical transformation in order to survive: college bookstores.
A recent New Times article entitled “As Amazon Arrives, the Campus Bookstore is a Books Store No More” describes the way in which college bookstores are surrendering the textbook and study materials business to Amazon. Stony Brook University, Queens College, Purdue University, and University of Massachusetts no longer sell textbooks and instead are partnering with Amazon in the name of offering their students more affordable options and better serving their primary constituents (i.e., they can’t compete with Amazon).
By the end of the year Amazon will have pick-up locations at 17 universities. These universities will have little need going forward for store fixtures to merchandise books. They are repurposing their retail space to sell campus merchandise, but we suspect it won’t be long before campus “bookstores” realize that they will inevitably lose the battle to Amazon on campus merchandise as well. The thing about campus bookstores that is different than independent bookstores is that their clientele is college-aged kids who prefer to do their shopping online.
Universities which partner with Amazon receive a 2% revenue share, a fraction of the profit they made in their heyday. Once Amazon establishes a pick-up location on campus, it’s pretty much game over for college bookstores as we know them.
Jim Hollen is the owner and President of RICH LTD. (www.richltd.com), a 35+ year-old California-based point-of-purchase display, retail store fixture, and merchandising solutions firm which has been named among the Top 50 U.S. POP display companies for 9 consecutive years. A former management consultant with McKinsey & Co. and graduate of Stanford Business School, Jim Hollen has served more than 3000 brands and retailers over more than 20 years and has authored nearly 500 blogs and e-Books on a wide range of topics related to POP displays, store fixtures, and retail merchandising.
Jim has been to China more than 50 times and has worked directly with more than 30 factories in Asia across a broad range of material categories, including metal, wood, acrylic, injection molded and vacuum formed plastic, corrugated, glass, LED lighting, digital media player, and more. Jim Hollen also oversees RICH LTD.’s domestic manufacturing operation and has experience manufacturing, sourcing, and importing from numerous Asian countries as well as Vietnam and Mexico.
His experience working with brands and retailers spans more than 25 industries such as food and beverage, apparel, consumer electronics, cosmetics/beauty, sporting goods, automotive, pet, gifts and souvenirs, toys, wine and spirits, home improvement, jewelry, eyewear, footwear, consumer products, mass market retail, specialty retail, convenience stores, and numerous other product/retailer categories.