Last March at Camex, the National Association of College Stores’ annual trade show, NACS CEO Robert Walton announced a program aimed at stemming the loss of independent campus stores to corporate leasing programs by revamping the organization’s IndiCo subsidiary. “We get an F if our goal is to retain independent stores,” he said. “We’re losing a store every four days” to these programs, run primarily by Follett and Barnes & Noble Education.

IndiCo’s program, the Independent Campus Stores Collaborative, gives colleges and universities the option to allow IndiCo to manage their campus stores or provide custom services. When it was launched at last year’s Camex, there were roughly 2,000 indie stores.

Whitlow Campus Store at Clarke University in Dubuque, Iowa, was the first of three college stores to sign with IndiCo for full store management. Sarah Haas, the store’s manager, said, “We knew this was the best decision we could have made. We’re very happy. Fall was a learning experience for us all. Spring was better. Everything is just getting smoother.” Although store processes have changed, she added, the only thing students have noticed is a drop in textbook prices beginning in the second semester.

Over the past few years, other school stores have gone independent, but not all through IndiCo. “I’m not sure [the transition] is a complete success,” said Jim Huang, director of the bookstore at Bryn Mawr College in Bryn Mawr, Pa. “There was a lot of skepticism [among faculty] about what we do that’s different” when the college took over store management in spring 2015 from Follett. Huang said that books are the focus of the revamped store. Currently textbooks account for 40% of sales, with spiritwear and spirit gear another 40%, and 20% of sales generated from other items.

The 55-year-old Odyssey Bookshop in South Hadley, Mass., has been selling textbooks for Mount Holyoke College since 2001. Last summer Odyssey became the official school store after the college closed its longtime campus store, which had been managed by Follett, to make way for a community center. Odyssey added a dedicated area, painted with Mount Holyoke’s colors, for spiritwear and spirit gear. The bookstore also has a new tagline: “Home of the Mount Holyoke College Store.” For Odyssey owner Joan Grenier, the store’s expanded relationship with the college is an opportunity to create a new revenue stream. It has already boosted Odyssey’s online sales.

Feminist bookstore Charis Books & More in Atlanta is making even bigger changes in order to become a campus store. The shop is moving to Decatur, Ga., to become the campus store of Agnes Scott College and will sell everything but textbooks.

For RJ Julia Booksellers in Madison, Ct., adding its first college store—Wesleyan RJ Julia Bookstore in Middletown, Ct.—last May brings a new kind of managed store to its portfolio. (It has also managed other trade bookstores.) Wesleyan wanted to offer its community the kind of trade book presence and events the Madison store provides. “There was a learning curve, and there still is,” said general manager Lori Fazio. “We’re still understanding what the students, staff, and community want to see.” For now, Fazio said, “we are very pleased.”

Yet even with those additions to the independent market, the number of independent campus stores continues to drop. Barnes & Noble Education added 700 virtual bookstores and a textbook wholesaling company with its acquisition of MBS last year. It now operates 777 physical bookstores and 706 virtual stores.

Follett has nearly double that number, with close to 1,200 physical stores and more than 1,550 online stores. The company is bullish about retail in general and continues to open two to three stores per month, and it has begun tinkering with its model to make its stores more like community centers, adopting some of the words and phrases that have become associated with the thriving independent trade bookstore market. “We want to be the store of the community,” said Roe McFarlane, chief digital officer at Follett Higher Education Group.

E-commerce continues to be important to Follett, which will roll out a new omnichannel point-of-sale system soon. At the same time, it is testing a new campus store model to create more of a lifestyle experience. “They’ll be much more student focused, with more soft seating and integrated services like coffee and a mail hub,” McFarlane said. “These are places where students want to hang out.”

By reorganizing course material by author at Texas Christian University, University of Texas at Arlington, and Notre Dame, Follett has been able to shrink the physical size of its course material area by 30% to provide more open space. McFarlane anticipates opening three more lifestyle stores at other schools soon.

But shrinking textbook margins and declining sales could be problematic for Follett and B&NE’s plans, which are dependent on sales of course materials, offering indies an opportunity to rebound. “We’re waiting patiently,” Walton said. “We’re really playing the long game here. B&NE and Follett need to make a minimum of 25% margin on books. And the new minimum is 18% if you’re lucky. Publisher rental programs are 10%.”

In another indication of the challenges in the college store landscape, Walton pointed to Amazon’s decision to drop out of the customized course material business this summer. In the fall it canceled contracts with New York’s Stony Brook University and UMass Amherst to be their college textbook provider.

“If Amazon, with unlimited resources, doesn’t want to enter this business, how can [others] do it?” Walton asked.

Not that Amazon is leaving the college market entirely: “Students can purchase and rent textbooks, as well as shop hundreds of millions of items every day, on Amazon,” said Amanda Ip, an Amazon spokeswoman. “With more than 30 locations both on and off college campuses across the country and plans to expand in 2018, Amazon is making it even easier for customers to get the things they need, when they need [them].”

Even as Amazon pulls back a bit on the college front, independents are facing new competition from Target. Since it opened its first small-format store near the University of Minnesota in Minneapolis in 2014, Target has been expanding its presence on or near college campuses. It has 12 locations and will open stores near the Florida State, Ohio State, and Northwestern University campuses later this year. Two additional stores, at Loyola and Michigan State, are slated for 2019. The most popular items are grab-and-go lunches, snack items, school supplies, and tech accessories, according to Target spokeswoman Erin Conroy. The stores “offer a unique on-campus retail experience, with each one designed for quick and convenient trips and stocked with locally relevant products at affordable prices,” she added.

Last May Walton wrote a blog post questioning whether campus stores should profit from course materials. “If higher education institutions are truly serious about affordability and student success,” he wrote, “they’ll start examining ways to get their margins on course materials as close to zero as possible.” He received a lot of hate mail.

In the intervening months, academic publishers have moved to direct rental of textbooks, campuses have experienced an uptick in the use of open educational resources (OER), and sales of printed textbooks have continued to decline. When Walton delivered a similar message at a college store gathering in Anaheim, Calif., earlier this month, there was no pushback.

Walton told PW that independent college stores need to explain to college administrations that they can no longer fund other parts of the university. (College store income is often used for scholarships.) He added that they’re also going to have to make more money on general merchandise and services. Instead of being silos, he said, they need to share responsibility with other college and university departments.

To help, IndiCo is introducing an array of services at Camex 2018 in Dallas (March 2–6). Among them is an automated locker service that operates similarly to those of Amazon and FedEx, with 24/7 secure parcel pickup. It’s also offering Suitable Attire, a turnkey interview suit rental and sales program, to remove a barrier to student success. Eighty-five schools have already indicated that they’re interested in the program.

Walton also expressed excitement about new IndiCo programs such as Direct, which will enable independent campus stores to buy general merchandise at substantially lower costs, with no minimums. Ten thousand distinct items will be available by the end of the year. Direct Custom enables stores to source and place large custom orders. (For college stores, IndiCo will handle the process and even hold orders in its distribution center and ship quantities on request for up to two years.) Direct Group will allow stores to take advantage of group purchasing opportunities on special merchandise buys every quarter.

With Custom Decorating, stores will be able to get free, on-demand laser engraving, embroidering, printing, and embossing on orders of any quantity with no minimums and no set-up fees. Store Essentials will provide low-cost fixtures and displays, as well as loss prevention technology. And Institute offers a weeklong immersion program for store staffers on global trade and international alliances.

Much of last year’s presentation at Camex about IndiCo and the importance of independent stores was much more about the underlying philosophy than how, specifically, IndiCo would support stores. Walton said that one of the criticisms NACS got was about the lack of concrete details. The new services being launched are just a part of the organization’s response. “We’re still getting started,” he added.