Need an ink cartridge or a cash register? Not a problem. Office supplies are available just about everywhere, including warehouse stores and discount chains, online and — oh, by the way — at office supply stores.
The office supply market has become fiercely competitive. Office supply retailers such as OfficeMax, Staples and Office Depot have found themselves competing with Walmart, Costco, Amazon, Best Buy and other retail chains.
To cut costs and distinguish itself from the pack, Office Depot, the nation's second-largest office supply company, after Staples, plans to relocate or convert more than a third of its 1,100 North American stores to a smaller format over the next five years.
Today, Office Depot opens one of the first of its smaller- format stores in Omaha. The new 7,200-square-foot store, located at 603 S. 72nd St., replaces an 18,000-square-foot Office Depot store at 717 S. 72nd St., which closed in June. The Florida-based retailer, which opened its first small-format stores in Denver last month, plans to open a total of 100 in the next 12 months.
“We wanted to build an entirely different experience for our customers, not just a smaller box,” Kevin Peters, president of North America for Office Depot, said in a statement.
On Tuesday, the new Omaha store's vendors and crew of 13 employees, including manager Christian Holz, were stocking the aisles with binders, batteries, laptops, tablets and headphones. Despite its smaller footprint, the new store will carry 7,000 products. Full-size Office Depot stores typically offer about 10,000 products, Holz said.
The front portion of the store was being outfitted with a display of BluWire electronics and accessories. The electronics retailer, which operates 14 kiosks and stores at several major U.S. airports, including Denver, Minneapolis and New York's John F. Kennedy International Airport, has paired with the office supply firm and will make its products available at select Office Depot stores.
A new copy and print center, located at the store's center, greets customers and offers shipping through UPS and the U.S. Postal Service, computer troubleshooting, security software installation and virus removal and custom printing services. Larger 24-inch wide printers will allow customers to print blueprints and schematics, Holz said.
Throughout the store, wall and shelf displays are designed to coax shoppers to “try on” products, whether it's a pair of headphones or a Keurig single-cup coffee maker, Holz said. The new format also features free Wi-Fi and a PC Bar where people can sit down and plug in their laptop or tablet. There is also a computer rental station, plus a charging station for mobile phones and other devices.
The store's staffing will be similar in number to the chain's two larger Omaha and La Vista stores, Holz said. “It's all about customers,” Holz said. “People shop from people, not stores.”
Office Depot chose Omaha as a test market because of its flourishing small-business community, Holz said.
“Omaha was named the third-largest small-business growth market,” he said referring to the city's 2009 ranking as one of the “Best Mid-Sized Metros for Small Business Startups” by CNNMoney.
“Small businesses like the interpersonal interaction, so that's where our customer service is focused.”
Whether the smaller-format stores can draw more customers remains to be seen. The new Office Depot store is a few blocks from an OfficeMax store, a FedEx Office store and a 24-hour Walmart Supercenter, some of its biggest competitors.
The company is banking on winning over customers by giving them a simplified shopping experience. The move to downsize is a “direct result of customer feedback and executive store visits,” said Kim Metcalfe, a public relations consultant for the chain.
Trimming square footage is one way to remain competitive, said Sheri Bridges, a marketing professor at Wake Forest University in Winston-Salem, N.C.
“Firms have to think about fixed costs — those are the checks they have to write regardless of the sales they make,” Bridges said. Fixed costs, such as rent and utility payments, “can eat a company alive.”
However, more bricks-and-mortar retailers are realizing they can “reduce the size of their stores and do a lot more selling online. When you lower those fixed costs, a lot more goes into the piggy bank,” Bridges said.
And recent studies suggest the smaller-store formats hold greater appeal for women, Bridges said. “Smaller stores feel cozier, and we know that cozy is very important to women.”
Why is that important? “Because,” Bridges said, “a lot of the people in organizations who are buying office supplies are women.”
Office Depot plans to relocate or convert 395 North American locations to the smaller format in the next five years. The chain, which was founded in 1986, also plans to close about 60 of its stores over the next several years, according to the company's third quarter 2012 report.
Will the switch to a smaller retail format boost the company's bottom line? Office Depot's third-quarter sales this year were $1.2 billion, down 5 percent from the same period a year ago, the company reported.
“I think it gives them a fighting chance,” Bridges said.
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