Amazon Expands Its Reach on Campuses

Amazon is stepping up its presence on college campuses, setting up branded mailrooms at a number of institutions where students can pick up packages sent via the online retailer.

The arrangements appear lucrative for colleges, with some signing contracts that guarantee at least $100,000 per year, and possibly much more, since the institutions pocket about 2 percent of every purchase delivered to the campuses. But some observers worry that the arrangements will squeeze local retailers and could, over time, turn the surrounding areas into strips of empty storefronts.

Amazon opened its first “pickup point” location at Purdue University in the spring of 2015 — one in the Purdue Memorial Union and another in the Krach Leadership Center. They’re brightly lit, with a staffed desk and a series of mailboxes, with signs that read “Amazon @ Purdue.”

“Amazon is kind of the official campus bookstore for Purdue,” says Robert D. Wynkoop, managing director of the university’s treasurer’s office. The university did not have a brick-and-mortar bookstore, so officials weren’t worried about draining sales from another campus unit, says Mr. Wynkoop. The partnership also includes a co-branded website, which opened in 2014, and the university has already made $1-million from the combined pickup points and website, says Mr. Wynkoop.

The University of California at Davis opened a similar pickup point in June in a space adjacent to its campus bookstore in the student union. Jason P. Lorgan, director of campus stores at Davis, said his colleagues at other colleges thought he was “insane” for inviting the online retailer to set up shop at his doorstep. But he believes that more students will come to his bookstore if they’re in the building to pick up a package. And he says that’s what’s happening so far.

In addition to Purdue and Davis, Amazon has established staffed pickup locations at the Georgia Institute of Technology, the University of California at Berkeley, the University of Massachusetts at Amherst, the University of Pennsylvania, and the University of Texas at Austin. It also has pickup points near Texas Tech University, the University of Akron, the University of Cincinnati, and the University of Connecticut. Amazon did not make clear whether the institutions with off-campus shops also receive the 2-percent share of purchases.

It plans to open four more this year, at California State University at Long Beach, Stony Brook University, and the Universities of Illinois at Chicago and Urbana-Champaign.

Materials Aid for Students

Mr. Lorgan says UC-Davis plans to set aside about $80,000 per academic year from the partnership for grants to students who need help paying for course materials. Even so, the university expects “well into the six figures” of additional revenue from the arrangement, which he describes as “very welcome” in a time of tight budgets.

At Purdue, Mr. Wynkoop also stressed student savings on textbooks as a reason to partner with Amazon. Purdue’s leaders estimate that students can save 40 percent by buying the books assigned for Purdue courses from Amazon instead of local bookstores, though Mr. Wynkoop says students are not required or even encouraged to order from Amazon.

Since installing the pickup points, the university has seen a spike in students’ renting textbooks from Amazon, Mr. Wynkoop says: “Growth in rentals has been pretty dramatic this year. It’s probably a 20 to 25 percent jump.”

The National Association of College Stores filed a public-records request for the contracts between Amazon and Purdue, and then filed a lawsuit after it received only a heavily-redacted document. The university later released more information, and the organization dropped the lawsuit.

Shift in Campus Retail

Siva Vaidhyanathan, a professor of media studies at the University of Virginia, says that Amazon is following the lead of many major tech companies in trying to build loyalty with students in 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, he argues.

In the long run, competition from Amazon could turn the retail strips near campuses into “dead zones” if stores can’t match the online store’s prices, Mr. Vaidhyanathan argues. “Amazon’s MO is to lose so much money by giving away so much at such low prices” that no one else can compete. And if that happened, it could hurt the relationships between colleges and their surrounding communities, he adds.

Thomas Borgerding, president and chief executive of the marketing company Campus Media Group, sees the Amazon pickup points as part of a larger trend of students moving to online purchases. He isn’t as concerned about the vibrancy of retail near campuses.

“There will certainly be dollars that will be peeled off local stores and retailers, but I don’t think it’s going to shut down the retail stores near campus,” he says. “Students are still hanging out and going out and doing new things. I think we’ll see more specialty stuff near campus.”

And even without pickup points, students have been shifting to online retail. In fact, colleges around the country have been straining to keep up with the volume of packages arriving on their campuses, largely from Amazon.

The pickup points are just the latest in Amazon’s efforts to court college students. It gives students with a valid college email address half off on its Prime membership, for instance. And this summer the company briefly offered Amazon Prime members a reduced interest rate on student loans through a partnership with Wells Fargo — though the company abruptly ended that deal late last month.

Amazon has moved into other areas of campus as the company has grown beyond the sale of physical goods. Amazon’s cloud computing infrastructure, called Amazon Web Services, now powers most of the teaching and learning software used on campuses, for instance.

At the University of Washington, Amazon is even offering grants to researchers looking to solve big societal challenges — even if their projects have nothing to do with Amazon’s business.

The company announced last year that it would award up to $2-million in grants to faculty and students at University of Washington campuses as part of its Amazon Catalyst program.

Adam Siegel, Amazon Catalyst’s managing director, says the program has received more than 150 applications since its start, and has given out nine grants so far. He declined to elaborate on the projects, though he said Amazon plans to release descriptions of them within a few weeks.

He said Amazon might expand the program to other colleges. “We’re seeing how it works and what happens with it,” he says.

What’s in it for Amazon?

“Knowing about the problems is valuable,” Mr. Siegel says. “We like to see where problems are in the world.”

Jeffrey R. Young writes about technology in education and leads the Re:Learning project. Follow him on Twitter @jryoung; check out his home page, jeffyoung.net; or try him by email at jeff.young@chronicle.com.

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