Will branded services help lift Staples’ results?
Since the merger between Office Depot and Staples was blocked in May of 2016, each chain has raced to find a new approach to doing business. Staples appears to be taking an opposite tack from its main competitor in the challenging world of brick-and-mortar office supplies. Staples is experimenting, not so much with what can bring people into its stores, but with what services online and outside of the store it can sell under the Staples brand.
Staples is licensing its name to provider GRM Information Management Services to sell a branded line of business conveniences, reported Bloomberg, including secure online storage and document scanning. The company also intends to license its name for other disparate services, including business insurance and flooring.
One wonders if, by expanding into areas only tangentially related to office supplies and remote from physical retail, the chain is waving the white flag in the battle for brick-and-mortar office supply survival.
The office supply big box struggle is hardly new. For years, those with home offices have been moving to more convenient online sources for office supplies. But recently, the traditional business model has started looking worse. For instance, IoT-enabled smart devices capable of auto-ordering offer even less room for the remaining brick-and-mortar office supply chains to woo customers, or even draw customers to their websites.
One analyst went as far as to suggest, in an article on TheStreet, that Amazon should consider purchasing the flagging Staples chain as part of the e-commerce titan’s ongoing move into the world of physical retail (despite the legal scrutiny that such a move would draw).
But Staples’ remaining major competitor still appears to see hope for brick-and-mortar office supplies, albeit in a form different from the traditional big box storefronts. Office Depot has been attempting to modernize its physical presence to draw traffic and build loyalty. The store recently gave its “Store of the Future” concept an official debut. The concept is a smaller, more stripped-down with more on-hand home office-related services and more contemporary-looking signage.
- Staples’ Licensing Push Moves the Company Beyond Office Supplies – Bloomberg
- Why Amazon Should Buy Staples – TheStreet
- Can a revamped Office Depot compete with digital? – RetailWire
DISCUSSION QUESTIONS: Do you see Staples’ diversification beyond brick-and-mortar office supply sales as a healthy move? Or do believe Office Depot’s strategy — i.e., putting more faith in the future of physical retail — is the stronger position?