Few retail channels have suffered as much in recent years (well, possibly with the exception of the entertainment players focused on music and books) as the office specialists.
Few retail channels have suffered as much in recent years (well, possibly with the exception of the entertainment players focused on music and books) as the office specialists. The global big three – Staples, Office Depot and OfficeMax – were all hit by the global financial crisis, which resulted in companies reducing investment on office refurbishments and equipment upgrades while consumers cut back on purchases for their own home offices (partly the result of a slowing property market).
All of the big three therefore experienced sales declines from their retail operations. Office Depot, for example, suffered a sales tumble of 16% in 2009 alone. In response, and in order to stabilise sales and profits, the big players have all taken steps to revitalise and reinvent themselves in order to broaden their reach and reduce their dependency on their traditional customer groups.
Last week, for example, OfficeMax announced a strategic pilot partnership with consumer electronics retailer RadioShack. Under this agreement, OfficeMax will sell a RadioShack Mobile offering in about 15 to 20 stores in San Francisco, beginning in January 2012. RadioShack employees will be deployed to the locations to give advice and sell mobile products and services, including pre-paid wireless products and service plans.
OfficeMax president and chief executive Ravi Saligram suggested similar additional deals may be in the offing. “We are evaluating a range of strategic retail partnership arrangements that will improve store productivity and make our stores a highly attractive destination to our customers,” he said.
Indeed, a key range strategy for all of the big three is to widen and diversify their product range in order to take in new categories. Electronics is a prime example. Shoppers are now able to walk out of a Staples, OfficeMax or Office Depot superstore having purchased a digital camera, e-reader or the latest tablet computer. Introducing new ranges of office furniture and stationery created in collaboration with well-known designers also seems a key strategy to bring in female shoppers that have traditionally been hard to attract to the stores.
These are therefore dynamic, albeit still difficult, times for the office specialists. Their success in being able to reinvent themselves means that they could emerge the other side of the global financial crisis in relatively good shape.
- Rob Gregory, global research director, Planet Retail.
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