August 26, 2009, 12:00 AM

Scholastic goes to school on a new customer segment

Having honed an e-commerce business that generates $350 million in annual web sales primarily from educators, Scholastic now sees an opportunity in another audience: parents.

Having honed an e-commerce business that generates $350 million in annual web sales primarily from educators, Scholastic Inc. now sees an opportunity in catering to another audience: parents.

More than a year ago Scholastic, No. 42 in the Internet Retailer Top 500 Guide, added new features to its web-based book club, Club Ordering Online, that gave parents the option to purchase books and other educational materials on the web and have the items shipped directly to their child’s school. Previously teachers could place orders online, but parents were limited to making a purchase by using printed order forms distributed by teachers and then sent home with students.

With more parents now shopping online, Scholastic also is rolling out other features and functions that give them more options to research books and education materials, interact with teachers and chart their children’s academic progress. Parents now have the option of creating a customized page on the site similar to teachers’ pages, which will display grade-specific products and information, create a class home page, track homework assignments and other projects, and access a library of free downloadable learning and activities material.

“By concentrating more on parents, we see the emphasis shifting from a focus on business-to-business to more business-to-consumer,” says Scholastic executive vice president and president of Scholastic Book Clubs Judy Newman.

A more diversified customer base, including more online book club orders from parents, helped Scholastic grow its e-commerce business in a tough economy. For the 2009 fiscal year ended May 31, web sales for Scholastic grew about 5.1% to $350 million from $333.2 million in fiscal 2008. With more parents placing orders on the web, Scholastic was able to process 62% of all book club orders online, compared with 55% in fiscal 2008.

Over the course of the next two years, Scholastic will also develop a digital books strategy and move Club Ordering Online, and, a pair of companion e-commerce sites, onto a universal technology infrastructure. “All of these will be linked together as we target more business-to-consumer e-commerce opportunity,” says Newman.

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