Case Assignment 1 – Staples
Staples is in the office products industry with two other main competitors: Office Depot and Office Max. Their new competitors are warehouse clubs, supermarkets, anchor stores and discount retailers. Thus, Staples have shifted to business-to-business to gain more market shares. Staples was founded in 1986 with a mission of reducing the costs and hassles of buying office supplies. It is crucial for Staples to develop and maintain customer relationship besides offering availability of merchandise. Customers have specific needs for multiple products, so Staples must use various marketing channels to address these needs.
Staples has a goal to become the leader in office products and services. Different channels of distribution is integrated into one seamless customer experience. Internet channel is the focus of this integration, because Internet channel can take away customers from the retail stores. Online retailing is the new platform for office supply industry for Staples, but there are many giant competitors such as Amazon. Internet can show all merchandises to the customers, while the retail stores have limited space. There is a challenge to keep a balance between the retail and the Internet stores.
There is also a fierce price competition in the office supply industry in both business-to-customer and business-to-business. Thus, Staples had to differentiate itself from other office supply retailers by adding more value to office supplies. Staples launched stand-alone Copy and Print centers where customers easily access make the copy and printing services at their convenience. These centers also sell basic office supply products which customers can buy without having to drive further to the big-box retailers.
- Assess the extent to which Staples has developed a successful multichannel strategy. What factors have contributed to its success?
Staples already had anchor stores, extensive warehouses, distribution channels, and a web site. They have many channels to sell products such as: big retail stores, small stand-alone centers, Internet, business-to-business orders and the good old catalogues (mail orders). Their strategy is to have the most number of channels as possible but still integrated and optimal. Too many channels that are not compatible can lead to cannibalism, for example, Internet could take over retail stores. Thus the second strategy is to balance or build complement channels. One exists to fill in the gaps that others cannot do, and bring more values to customers. For example, the Internet website brings more products which could not be shown in stores.
- 2. What are the advantages and disadvantages of using kiosks as a part of its approach?
Advantages or things they are doing for customers: reaching more customers, providing more services and values to customers, and gaining market shares in strategic locations where big-box stores cannot enter because of lack of space.
Disadvantages: hiring more staffs, maintenance, opening more locations cost money. Limited size also limits the number of SKUs to be displayed and sold, thus the revenue is capped. It is not a scalable investment, it is more like a small scale service. In order to make more money, they have to open more kiosks.
- How should Staples assess which SKUs to keep in its stores versus on the Internet?
Staples should keep the essentials and new SKUs in stores for display, and refer customers online if anything is out of stocks. For SKUs that are too specific to customer needs, Staples can switch to B2B ordering and auto-replenishment. Customers can have customized office supply order, which can be put on auto-replenishment. For individual customers, the stores should keep the SKUs that customers prefer to see a demonstration of the products such as PCs or tablets. Other items that do not need demonstration or hard to transport can be sold through the website. Customers can use the convenient shipping to get the items instead of hauling them from the stores.
- How do the Staples Copy and Print centers differentiate it from the competition?
The competition has the copy and print centers but often in their big-box and anchor stores. These are often far away from business center and office buildings. Business users are the main users of copy and print centers. They can go to Fedex or Kinko’s for these needs, These stores are small and also sell basic office supplies such as markers, scissors, paper, tapes or boxes. Staples can get into this market by providing small kiosks centers providing copy, printing, fax services and basic office supplies. These kiosks reach customers in the business and busy residential districts. These customers have needs for Staple’s services and products, but they are not near the big retail stores. These kiosks act as an effective channel to reach such customers.
Levy, Weitz and Grewal. (2014). Retail Management. 9th ed. New York: McGraw-Hill