Edu.com strives for service and value for college students

Internet Strategies for Education Markets: The Heller Report, Oct, 1999

The first noticeable thing about edu.com is that the domain name was available. That, says Adam Kanner, founder and ceo, was the good luck of picking a name that happened to be up for auction. He paid the winning bid of $6,000. The second most distinctive thing is that this commerce site for college students makes unique agreements with every vendor to guarantee that students will receive a discount for being a student. While a few companies, especially hardware and software companies, have always offered students discounts, edu.com brings in a whole new range of vendors. Also interesting, the primary revenue will eventually come from vendors paying edu.com for access to the channel and information on buyer behavior generated from the site.

Edu.com allows students to register, confirms their student status and identification number with their school's registrar, and offers them a bargain shopping service. Vendors, says Adam Kanner, founder and ceo, want to see the channel work. They are readily offering discounts, and those who have always offered student discounts trust the edu.com system to assure that buyers are indeed qualified.

The site sells computer hardware and software, books and magazines, telecommunications, and financial services. Edu.com assembles their own merchandise in every case except textbooks; for those purchases, the site is partnered with Varsitybooks.com.

The Channel, Not Transactions, Drives Revenue

The site will generate revenue by regulating access to the channel rather than relying on transactional revenues. Where edu.com can take a transaction share, they do, but they will forego that revenue if it would make the offering less than the best deal out there.

The price of entry to the channel, says Kanner, is to provide students with the absolute best value. In an effort to build the greatest value for students, Kanner says that vendors get greater access to the channel as they offer deeper discounts and additional customer service. Edu.com offers vendors extras such as brand awareness programs, getting real time market research, being able to offer the student email campaigns, tracking product purchases by SKU and other market information. The services will eventually come at an additional charge to those who have gained access to the channel, but Kanner's current goal is simply to provide incentive for vendors to give his audience superior service and value, thus creating a stronger site.

He finds vendors happy to comply. Beyond college students spending $120 billion a year on goods and services, says Kanner, these students are buying for the first time and building habits. That, he explains, is why marketers spend $14 billion a year reaching this demographic. These are the demographic numbers behind businesses such as portals Campus Pipeline and mybytes.com (see ISEM, Sept. 1999) and lifestyle sites such as the recently relaunched OnTap.com.

Edu.com will be bringing students to the site through local marketing campaigns. Most begin with a college agreeing to supply a link to the page in order to participate in the related fundraising program, which gives a share of each purchase to the school. Schools can participate for free, and therefore have an incentive to promote the online store to students. Additionally, edu.com will work with campuses to help students purchase computer goods that comply with each school's recommended configurations.

A rewards program encourages students to return and participate in surveys. Vendors purchase the reward points for the students, and students can apply them however they wish. Survey results never reveal personal information.

Kanner says that they absolutely needed to launch for back-to-school, but the current site does not reflect many of the plans for the business. The site will include more sophisticated personalization services, as well as additional vendors and new categories, such as telecommunications, travel, and health and beauty.

The site, says Kanner, is likely to remain independent and unpartnered with another education portal. Saying that institutions are pushing back from combining commerce and education, Kanner plans to establish edu.com as a clear outsourcing product that is separate from the school home page experience.