Amazon continues rapid expansion of college-based pickup centers

Dive Brief:

Amazon Tuesday said that later this summer it will open a staffed pickup location on Georgia Tech University’s Atlanta campus.
The 2,500-square-foot space will take in orders for pickup, including free same-day pickup for Amazon Student and Amazon Prime members.
Amazon's campus-centered operations now include co-branded bookstores at University of California at Davis and Purdue University, and manned pickup at Purdue University, University of Massachusetts Amherst, University of California, Berkeley, University of California, Santa Barbara, and University of Cincinnati.

Dive Insight:

College-based bookstores a bit of a niche in the book retail world, but they’re a handy way for Amazon to pump up its brick-and-mortar operations. Students, after all, constantly need books and often want other things—which is essentially, of course, Amazon’s product assortment.

Amazon’s college-based business is still nascent, but in addition to the new Georgia Tech location, the company plans to open four more similar locations in 2016 at the University of Pennsylvania, University of California, Davis, the University of Texas at Austin and University of Akron.

Amazon's on-campus effort poses an increasing challenge to Barnes & Noble Education, which dominates the space. Barnes & Noble spun off its college bookstore unit about a year ago, in an effort to better focus on what is one of the strongest facets of its business. But the company reported a loss in its most recent quarter on lower revenue and slowing same-store sales, leaving it especially vulnerable to Amazon’s incursion.

Meanwhile, by bringing on customers during their impressionable college years, Amazon is also likely ultimately acquiring more of what it wants most: New Prime members. Prime subscribers are extremely sticky for the retailer, with nearly three quarters (74%) converting compared to 13% of non-Prime members, according to a study last summer from Millward Brown Digital.

The number of Amazon Prime memberships rose 35% in 2015 to 54 million, or nearly half of all U.S. households, according to a Consumer Intelligence Research Partners report published earlier this year.