Challenges Ahead for the Office Supplies Sector
The office supplies retail business has gone through ups and downs, but no matter what, they’re here to stay.
Staples will post more than $25 billion in sales this year. Sales have been growing in small increments over the last few years in a sector that has never shown stellar numbers.
Also, Staples is one of those bricks and mortar retailers that have used the synergy of in-store selling and website selling to its advantage. Both its competitive pricing and expert use of technology have elevated its position among consumers and businesses.
But in April, Amazon forged into the industrial and office supplies category by establishing amazonsupply.com, which goes head to head with Staples, the No. 1 retailer in the category.
Staples has responded by establishing its E-Commerce Innovation Center in Cambridge, MA. The office supply giant hopes to compete with Amazon in online sales and information technology. About 60% of their total revenues is based on their business-to-business sales and it’s what has propelled Staples to grow its top line.
Still, Amazon had little to risk in this latest venture since it had most of the infrastructure in place to support this expansion. The only addition Amazon made was putting a separate customer service department in place, specific to this area.
Staples may have to pull a rabbit out of its hat to get the same payback that Amazon hopes to get.
Based in Boca Raton FL, the second largest office supplies retailer, Office Depot, has over 900 stores in the U.S. Hoping to gain more ground, Office Depot had a $41 million profit in the last quarter which was a reflection of the strength of its Business Solutions division. This segment focuses on items like printers and office furniture, which is sold through their catalogs and web site.
Bringing up the rear, Officemax, headquartered in Shaker Heights, OH, operates almost 1,000 stores in the U.S. With flat sales, store closings and a rough outlook ahead, Officemax has not fared that well. Changing management endeavors to develop a new strategic plan, which includes more store closures, improving its supply chain, curbing promotions and emphasizing high-margin private label brands.
That’s not to say the employment outlook for part time or full time work is necessarily bleak here. Job seekers shouldn’t be thwarted by company restructures and store closings. Management will be seeking changes and redistribution of staff positions, and recruiting firms specializing in Retail staffing are experienced in finding the people for the right jobs for chains not only exploding in growth but those dependent upon reorganization.
Even with the rise of on-line purchases, when it comes to things like buying fax machines or even printers, there are lots of people who like to physically go to stores to check things out in person. It’s tough to know how comfortable on office chair is on something that ends in ‘.com’.