Staples to grow 10 Billion $ online retail and cut 15% retail floor space but needs to re-think business model

One does not realize that Staples has a $10 billion online retail presence and is considered by some to be second only to Amazon.com, according to the Wall Street Journal. Now Staples understands that they need to save by cutting down 15% of the retail floor space that includes 15 stores in the US, relocate or reduce 30 US stores and shut down 45 European stores. Probably  Staples needs to re-think its business model and re-define its business.

Similar to Best Buy customers many folks visit Staples for only the immediate necessities like printer cartridges, files and folders that can't wait. For all higher valued items from computers to printers customers are reluctant to actually buy from Staples before checking online prices. And like Best Buy Staples sales folks are very knowledgeable and cannot be faulted for changes in consumer behavior.

On the business buy side, Staples does have strong B2B relationships and here too business buyers would like to handle most items through a master contract as apart of the indirect spend. Businesses would like to order custom printed stuff for some items like letterheads but for most of the generic stuff businesses like to order online and pay by P-Card against a negotiated master contract.

The biggest change that Staples is trying to deal with, is the whole scale digitization of business. A traveling salesperson is moving away from a bulky presentation folder with each slide neatly put away into a plastic sleeve. Instead, the iPad or tablet helps deliver a constantly refined pitch as illustrated in the Salesforce.com example of the Rossignol sales rep revving up the sales presentation on the iPad while waiting at the client's lobby. Naturally if salespeople are moving away from plastic presentation folders you can imagine that Staples business is down.

So what is the future for the office supply business? It's exciting and sometimes scary to think about because technology and globalization is changing the office so much. Many offices are giving up office space as people either work from home or work on the move from the cloud. Offices do have meeting spaces and a few folks to keep up physical appearances. Naturally these physical appearances do not include files, paper, filing cabinets or staples- if you think about it. You need paper to staple together and the movement away from paper does make Staples seem like a dinosaur!

Redefining its business as helping the 21st century office just as staples and staplers were helpful in the 20th century office could be the way to go. Instead of offering to take digital copy for printing and pick-up at the store copy center, Staples and other office stores might want to offer services that help the modern digital road warrior. For example, the digital road warrior might provide some excel data and need a slick digital presentation in 24 hours while on an international flight. Imagine that Staples is able to deliver the drafts and the finished presentation through a virtual assistant to the travelling executive. Sounds like higher value and margins than paper and staples. Contact StratoServe.