Contributing Member of the Consumer Goods & Services Councils

GLG News by this Author

Identity Theft--Bane to Business/Boon to the Office Supply Channel

April 24, 2006

Analysis of:STAPLES to Help Ease Consumers'Vulnerability to Identity Theft... | investor.staples.com

In an effort to assist both businesses and consumers become less likely targets of identity theft and document fraud, STAPLES has partnered with a well known personal security expert to provide 6 "EASY" steps to ensure the future safety of private and confidential information. Statistics gathered from sources such as the FTC, BBB as well as the Association of Certified Fraud Examiners shows that business losses due to document fraud and counterfeiting exceed a staggering $400 billion each year while in 2005, 9.3 million citizens were victimized by identity theft.

What this all means is that as incidences as well as dollar losses continue to mount, retailers and particularly the principal players in the Office Products sector will benefit from increased sales of products that will help stem the tide of illicit activity. Helping the consumer and business own the right tools to combat criminal activity will definitely create footsteps, topline sales and increased profits for STAPLES as well as OD and OMAX.

Within the six tips suggested by STAPLES to ensure the safety of identity and information fall the following product lines carried in all their stores---shredders, security software, i.e., antivirus/anti-spyware/firewalls, secure cordless phones, locking files, password management software, and finally locking safes to store thumbdrives, CD's and floppies. While Americans continue to struggle with the criminal activity and how to best deal with the problem, the Office Supply sector will do its part to not only help with the solution, but to simultaneously drive up sales by selling the solutions.

THE "EASY" LIFESTYLE-BUILDING THE BRAND AT STAPLES

April 24, 2006

Analysis of:LOOKING FOR THE EASY LIFE? STAPLES HAS THE TICKET WITH THE LAUNCH OF ITS "WIN THE EASY LIFE" SWEEPSTAKES | investor.staples.com

In its quest to continue to grow brand identity and awareness in the mind of the consumer and small business, STAPLES has once again fortified its position with the launch of the "Win the EASY Life" sweepstakes. This promotion runs from mid-March until May 23rd, 2006 utilizing stress as the platform to build interest in the Marketing strategy. Playing off of the past success of sales of the EASY button, STAPLES has gone a step further by announcing that 10 hidden winning tickets will be seeded inside the popular EASY button sold in stores and online, providing the fortunate winners a choice of 5 "stress-busting" professional or personal services to help ease the pressures of everyday life.

EASY has been a Marketing triumph for STAPLES thus far; the relaunch of the EASY message "This is your Year" on January 1st coupled with the ability of the private and business sectors to download the EASY message onto personal and work PC's
set the stage for their Brand fortification in 2006; finally, the airing of its new breakout spot, "the Wall"  on February 26th further positioned STAPLES as a differentiator in terms of making life easier while creating a strategy that STAPLES is the clear choice when buying Office Supplies, cosumables and technology. There is no doubt that the sweepstakes will generate traffic, incremental sales, loyalty, and above all, image and brand identity in the minds of its customers. This all adds up to the opportunity to continually grow their market share by continually driving the message that they are willing to be a great business partner to their customer base on both a professional and personal level.

Office Depot's Highest Priority in 2006--Remodeling to the M2 Format

April 17, 2006

Analysis of:M2: A New Concept in Retail | mediarelations.officedepot.cc

Since the opening of its first M2 store in Venice , Florida on June 30, 2004, Office Depot continues to place a high priority in the continued development of this prototype as a key to operating more efficiently and increasing profits in 2006. Because the stores are less expensive to open, more efficient to operate and easier to shop, it is clearly evident why Chuck Rubin, President of North American Retail,  has put the remodel of the 800+ stores not in the M2 format, high on the radar screen for remodel in FY 2006. Much of the earnings expectations at ODP in 2006 ride solely on the company's ability to convert the existing store base to the M2 format as quickly as possible--the specifics of how and when the remodels will get done have not been disclosed, but the responsibility will lie with Rubin to help create the M2 synergies that complement the tie-in between the openness of the layout and the pods of product groupings with his belief that Office Depot has great product assortment along with knowledgeable sales associates who are ready to help customers find solutions to their needs.

The timing of this initiative is right as Office Depot seeks to create a less "warehouse" looking store, similar to what OfficeMax hopes to accomplish with the rollout of its Award winning design prototype, Advantage. OfficeMax has plans to open up to 70 stores this year in the Advantage format, and has already opened up 1 store in the Minneapolis market with 8 additional stores opening in this market in the months to come. 

Private Label-Growth Engine in the OSS Channel

April 17, 2006

Analysis of:Staples, Inc.Reports Record Fourth Quarter and Fiscal 2005 Results | investor.staples.com

In announcing the macro accomplishments of FY 2005, this author noted that the first bullet point highlighted was that Staples own brand products grew to 18% of total sales for the year. The most obvious implications of this explosive growth in Private Label offerings are:
1.Creating and fortifying a strong brand statement and continually building the brand.
2.Enhanced Gross Margins/Operating margins and turn ratios.
3.Opportunity to produce multiple item sales and increase average ring size as Staples continues to "tie-in" its Private Label product with its "buy more, save more" initiative.
4.Private Label ties in well with marketing and the quest to increase the base of small to midsize businesses.
5.Private Label plays well into the "EASY" message and offers a tremendous value proposition to the customer.

All in all, the growth of Private Label is a huge opportunity for all the players in the OSS sector to grow Operating margins. Staples has done this initiative extremely well in-store with broader selections across categories as well as enhancements to packaging which makes the products even more recognizable and desirable. Staples also took Private Label beyond the realm of its own brick and mortar locations when it decided to strike the deal with Ahold and put product in grocery chains to further build brand and increase market share.

OfficeMax opened a dedicated sourcing office in China in Fall '05 to further enhance its penetration of store brands. Although there are no specifics tied to the total penetration % of store brands, it is clear that this strategy will only continue to grow as positive consumer acceptance and margins continue to fuel continued assortment growth. 

Ink "wars" Heating up the OSS sector

April 12, 2006

Analysis of:OfficeMax Launches Nationwide 900+Store Rollout of Ink Refill Station | officemax.mediaroom.com

This article highlights the importance that OfficeMax places on a new concept designed at challenging consumers to be environmentally responsible while saving money on their purchases of refilled cartridges vs the purchase of new ones. The "behind the scene" thrust of this initiative are to build footsteps with its consmer base and more significantly, build relationships with small business customers who have the responsibility of not only supplying their business with its needs, but doing so in the most cost effective manner as possible through the anticipated savings of up to 50% of the price of a new print cartridge.

Additionally, the customer can either drop off the cartridge for later pick up or they can wait for the refill while at the same time, browse the store and increase the opportunity for sales associates to speak with them and provide "upsell" opportunity for add on naturals such as photo quality paper, memory, and CD Media which are all related to the Digital Imaging needs of the customer. Bolstering not only the average ticket but also the Gross Margins in all these categories should give a nice lift to store comps as well as operating profit.

OfficeMax Advantage Store Format-The First of 70 New stores in 2006

April 12, 2006

Analysis of:OfficeMax to Open Nine New Concept Stores in Minneapolis and Minnesota | officemax.mediaroom.com

In keeping with its 2006 Business Plan initiatives, OfficeMax opened its first of 70 new stores on March 23rd in the Mineapolis suburb of Lakeville, MN. Currently the market leader in the Mineapolis area, the new store provides a customer centric shopping environment for the small business and consumer through impeccable sight lines, color, graphics and "worlds" of product that compliment the shopping experience. The format also gives the customer an opportunity for a fun experience by providing WiFi accessibility, a cafe, a technology hub and the opportunity to puchase basic items from brightly colored bulk bins at the front of the store. Last, but not least, the stores will feature a state of the art ink refill station that is geared to saving customers up to 50% of the price of purchasing a replacement cartridge for their print needs. The ink refill station is also designed to increase footsteps and repeat traffic into the stores, thus giving OfficeMax an opportunity to grow traffic, average sale and margins. This concept will give OfficeMax the true
"ADVANTAGE" over Staples and Office Depot and helps them compete with the current $3 off any purchase with the return of an empty cartridge to its competitors stores. Finally, it positions OfficeMax as an "environmentally responsible" retailer and fits in nicely with its Company-wide Ink initiative to be the total ink solution store for its customer base.

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