C-store Competitors Join Fight for College Campus Share
NATIONAL REPORT — Sheetz Inc. is not the only retailer finding the value in college students as a key consumer base.
The Altoona, Pa.-based convenience retailer has set up shop at West Virginia University in Morgantown, W. Va., Penn State University in State College, Pa. and Indiana University of Pennsylvania in Indiana, Pa. It also has plans to open several other college locations in it is markets, as CSNews Online previously reported.
However, other retailers are also tapping into the college crowd. In 2014, Target Corp. downsized for a location near the University of Minnesota campus, in the Dinkytown neighborhood. As CSNews Online reported, the store is about one sixth of a typical Target location — measuring 20,000 square feet.
The move toward college campuses — once a traditional domain for college bookstores — comes as retailers find suburbs saturated with retail stores. The rise of online shopping and smaller-format stores is also helping to fuel the budding campus retail wars, the StarTribune reported.
In addition to Dinkytown, Target operates college-focused stores near the University of California-Berkeley, University of Maryland at College Park, California State University, Long Beach and Boston University. The company will open locations near Penn State and the University of Chicago this fall and has plans to be open near the University of Florida in Gainesville in Florida, University of North Carolina in Chapel Hill, University of Southern California, University of California-Irvine and Massachusetts Institute of Technology next year.
"Brands are realizing the economy is slowing a little bit and this is an opportunity to drive sales," said Jason Bakker, chief operating officer of Bloomington, Minn.-based Campus Media Group, which helps companies market to college students. "Freshmen are showing up on campus regardless of how the economy is doing."
Citing a National Retail Federation survey, Bakker told the news outlet families are expected to spend $48.5 billion in back-to-college spending this fall. While a lot of companies focus on trying to capture that splurge at the start of the school year, he added there are plenty of other opportunities throughout the year.
"A lot of brands show up the first week, do some marketing and leave," he said. "It's like, 'Why?'"
Beyond busing in college students for after-hours shopping events, Target saw an opportunity to continue to engage with college students throughout the year, the StarTribune said.
"A lot of college campuses have underdeveloped retail, so the students as well as the people who live around campus don't have a lot of options to shop for a quick trip," said Mark Schindele, Target's senior vice president of properties. "They have to get in a car and drive somewhere."
After reporting a quarterly sales decline last week, Target CEO Brian Cornell told analysts that these smaller stores in urban and dense suburban areas bring in much higher sales per square foot than its bigger stores. "We are accelerating our pipeline of locations we can open in future years, and we expect flex-format stores to be a key driver of future growth," he said.
Target is initially focusing on campuses with enrollments of 20,000 or more, but it will consider smaller schools, too, according to Schindele.
Amazon started offering college students discounted Prime memberships several years ago and is rapidly multiplying its number of college pickup centers. In addition, The Wal-Mart Stores Inc. has experimented with a handful of tiny stores right on campus.
The online retailer opened its first campus location last year at Purdue University, providing a central place on campus where students can pick up and return Amazon orders. Since then, it has opened a dozen more around the United States and has plans for at least four more this year, including one just announced for the University of Illinois at Chicago.
"College mailroom hours aren't necessarily convenient to students' schedules," said Jon Alexander, general manager of Amazon Campus. "And mailrooms are getting clogged up [with online shipping packages] so it also helps with that."
However, as the news outlet reported, finding success in a college market is not easy. Five Walmart on Campus stores that range in size from 3,000 to 5,000 square feet have opened since 2011 at the University of Arkansas in Fayetteville, University of Missouri, Arizona State and Virginia Commonwealth University. But one of them, at Georgia Tech, has already closed.
Company spokesman John Forrest Ailes did not say much about why, but he said the retailer doesn't have any immediate plans to open more.