Textbook Rental Solutions for Stores

Transcription

1 12 SEPTEMBER 2010 COLLEGE STORE EXECUTIVE Textbook Rental Solutions for Stores s the demand for textbook rental programs in college bookstores increases, the impact on students wallets is expected to decrease. One of the basic tenets behind stores implementing rental programs is to help students save money by renting a new or used textbook, rather than buy a book at the full retail price or get a minimal return at buyback. In addition, textbook rentals can increase margins and allow stores to retain market share and compete with other available options, such as renting online. Most importantly, more students will walk into stores to rent their textbooks for the semester. In the second of a two-part series, College Store Executive spoke with representatives from point-of-sale (POS) companies to discover the different types of rental program solutions they provide for stores to take advantage of the textbook rental craze. Budgetext Budgetext is ramping up its textbook rental program within its store system in order to make things simple for college bookstores. We put together a rental program, not Budgetext itself, but in the store system as a group, said Tresa Hannah, systems sales and service manager. Budgetext, as a company, is not running the textbook rental program. It s an actual program built into our store systems package. This is not a company-sponsored rental program. Hannah explained how the rental program works. It s just like any other rental program that s out there. You come in, everything is bar coded. You have your standard rental inventory; everything is bar coded, so when you re at the register and you bring up your customer, it allows you to rent items to them, and keeps track of overdue rentals and things like that. When they come back, all you have to do is scan the book in and it checks it back in. We try to make it pretty seamless and easy, because first of all, rentals are complicated on the paperwork end and the faculty end. So we try to make the store systems side be less complicated. South Eastern Book Co. will roll out its textbook rental program to bookstores at 50 schools in the fall. Kenny Roth, president, South Eastern Book Co., said the company is confident that the new program will go as seamless as possible. We want to bring more money back into the stores. Bookstores will decide on how many titles to rent out to students. Textbooks can either be picked up in the store or delivered to the dorms. One unique feature of the rental pro- Currently, Budgetext has three stores actively doing a pilot rental program on campus. The three schools are the only ones actually using the program because they re starting a program on their campus, Hannah said. The rental package is not anything extra; it s already built into the system. We re not charging anything extra for that. The rental program s features reflect the theme of simplicity. It s simple integration; it s simple to put together; it s simple to start a rental program; it s simple functionality, she noted. We didn t make it complicated it s just Here s your rental inventory; start renting it. Bring it back in; do your reports, accounts receivable (AR) stuff. All of that s in there. If they want to put a rental program together, they ve got everything they need to start a program. Bookstores decide which books get rented. Generally, it s the hot books like your basic accounting, your English 101, books you re going to be using for multiple terms the core classes, Hannah explained. Budgetext does all the training associated with the rental program, and stores must have the company s store system to use the rental program. Thus far, feedback edback from the three pilot schools has been good, Hannah noted. They said they liked it, and they like that it is simple and easy to use. South Eastern Book Co.

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3 14 SEPTEMBER 2010 COLLEGE STORE EXECUTIVE PHOTO COURTESY OF FOLLETT HIGHER EDUCATION GROUP) gram is that South Eastern Book Co. will provide customized packing slips with the bookstore logo to make it easier for students to know where the books should be returned. The Logi-Text point-of-sale (POS) system, powered by South Eastern Book, features a textbook rental option so bookstore personnel can track the titles rented out, and make sure that inventory is always available for students. Roth noted that renting textbooks will save students an average of percent, as opposed to buying them. It s a win-win for all parties, he said. Renting is taking traction in the bookstore industry. It saves students money, and at the same does not ruin the bookstore s relationship with students. A pilot rental program was instituted in the spring at four schools, with very positive feedback, Roth said. It s another way we can serve our customers, he added, and we want to truly be a wholesale college book company. We want to find our niche with our customers in how we can serve them. MBS Textbook Exchange, Inc. MBS Textbook Exchange, Inc. recently introduced a solution for college bookstores looking to jump into the textbook rental craze with the launch of MBS Rental. The MBS Rental program kicked off at the Campus Market Expo (CAMEX) in March in Orlando, Fla., and thus far, more than 500 member stores have signed on in advance of the official launch in the 2010 fall semester. The reason we came up with the program is that rental is the hottest topic we have right now in our industry, said Lil Howard, MBS corporate marketing representative. That is what the students want, so how can we help stores get into that rental market? Howard explained that stores face two major obstacles in their quest to start a textbook rental program. Typically, for a store to have a rental program at all, there are two main things that stop them from doing that the first one typically is the capital expenditure up front of having to buy all the books. Then you re renting them at a very low price, and you re renting them again two and three terms at a time before you really start to see any return on investment. That s hard for stores. Also, getting the faculty to commit to a book that long can be problematic. With bookstores facing these challenges, MBS came up with a program where the two obstacles were eliminated. As a result, stores can now get into the rental market and be able to compete with online rental companies. The nice thing about the program is that we don t have a lot of restrictions for stores, she said. We wanted them to be able to have their own rental program. We re just giving them the tools they need to make it happen. Each store is able to manage the program completely how they see fit. Books available for rental are determined mutually between MBS and its customers, and customers can set their own prices on rental books. MBS pays a premium of up to 46 percent for the new shelf price for the books designated for rental in each participating store. Textbooks can be acquired from any and all sources, and stores do not have to buy the books they offer for rental from MBS. MBS Rental offers several benefits for stores and students. I think the biggest advantage for stores is that students will be able to use their financial aid as a tender within the store, she explained. They re not able to do that when they go online; they re not able to use their financial aid. By renting from their store, students know they have the right book. I think students are only going to inconvenience themselves to go online so much. If they know their local store has a rental program where they can go and rent their college books, I think they re absolutely going to go to that store, as compared to going online and having to pay a shipping fee and then having to ship the books back. Another advantage for students is that they have more leeway in terms of highlighting and writing in the books they rent. We re in the book business; we ll do anything we can do to help our customers succeed, Howard said. If the stores succeed, we succeed. If we can keep them going, and help them get into these rental markets, as long as we re keeping the store relevant, we stay relevant. A store can use the MBS point-of-sale (POS) system to help manage its rental program, but it is not a requirement. A store does not have to be on our system in order to take advantage of the rental program itself, she noted. The rental program is for the store to manage. We re just providing what the stores need to have a rental program. Howard said that bookstore managers are really excited about signing up for MBS Rental. They re excited to have the opportunity to offer rental to their students because they want to be able to do this as much as we want to help them. They want to be able to have that lower price for the students too. It s a pretty simple process. This is what the students want. They want that rental price; they want to be able to rent their books. This is something the bookstores are now going to be able to provide for them. I think it s absolutely going to take off. It s going to be great PR on many different levels for the bookstore. One of the main objectives of the rental program is to increase foot traffic in bookstores. If they re coming in the store to rent the book, they re going to come back in the store again to return it, Howard pointed out. That was one of the key reasons we wanted to come up with something to help stores. How can we get the students back in their stores? Sequoia Retail Systems Jim Zaorski, CEO, Sequoia Retail Systems, notices the trend by new companies and established wholesalers to rent books as a challenge to bookstores. If stores do not offer a rental solution, they will abandon this business, losing profits and customer loyalty, he noted. Zaorski added that book rentals will make fewer used books available at buyback, so stores may no longer be able to rely on their wholesalers to get them the used books they need. It is foreseeable that wholesalers may not have access to the same quantity of books, and what books they get they may need for their own rental programs, thus limiting what stores should expect, he explained. We think stores will not only need to adopt a rental

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5 COLLEGE STORE EXECUTIVE SEPTEMBER program, but will also need to get creative to find used stock for these programs in order to make these programs successful. In order to meet the challenge, Sequoia released a new textbook rental module and leveraged its existing e-commerce, wireless and textbook management software modules to help its customers obtain the used books needed to start a program. Zaorski noted that having a good rental tracking program may not be enough if a store does not have enough used books to rent. If a store has to buy all new books to start a program, it will lose money on the program in the first year, he said. In today s tight budget climate, this is unacceptable. Starting with used books, the payback period is much quicker and a rental program can get off the ground with a lot less investment and subsequently grow much faster. To increase the number of used books available for buyback, Our customers are using our cascade ordering, which allows them to run want lists through all wholesalers; our multi-guide buyback, which compares prices among wholesalers at buyback and gives the student the highest price; and our wireless partner product, which gives real-time buying capability at remote sites around the campus. They are also posting real-time buyback prices on their epos websites to promote traffic, and using our Bookshare product to exchange unneeded texts with other schools. Ideas planned for the next release of Bookshare include incorporating text messages for students to return textbooks, and allowing stores to provide online rentals. Total Computing Solutions Total Computing Solutions offers a textbook rental module called SmartRental for stores to compete with other textbook buying opportunities available, including the Internet. SmartRental had been beta tested since November 2009, and was officially introduced in March at the Campus Market Expo (CAMEX) in Orlando, Fla. Senior Account Executive Steve Winters explained that SmartRental allows students to rent textbooks, as well as general merchandise. It is tied into the company s other SmartSuite modules, including SmartText, the textbook management module; SmartPOS, the point-of-sale (POS) module; and SmartGM, the general merchandise module. It provides real-time information and allows the student to rent a book, vs. purchasing it, he explained. The upfront cost is greatly reduced by renting. SmartRental offers full reporting features, and stores can keep track of customer information by tying into the company s customer loyalty database. It will send out automated e- mails for reminders on books that are coming due, as well as past due notices. If a student does not return a book, the system will charge the card he/she used for the deposit. The list of titles available for rental is determined by the bookstore and prices are also set by the store. The benefit of SmartRental is it will allow the store to compete even greater with the ever-increasing Internet market, Winters noted. It will allow students to get their textbooks for a lower upfront cash outlay. For stores, it will help bring in new customers and keep existing customers shopping in their stores. The benefit to us is it increases interest in the rest of our system, but it s something our customers have demanded for about a year. We re just keeping up with the latest trends and technology. A number of schools have SmartRental in place now and are just starting to use it. Feedback at the schools that beta-tested Smart- Rental during the 2009 fall semester was very positive, Winters said. It worked really well. CSE

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