Big Box News Update

Filed Under (The Competition) by Don on 22-06-2007

The latest profit figures show that Staples is still the big dog among the power players showing a healthy 8% growth in sales during the first quarter of 2007.  Office Depot comes in at 3% and Office Max only gained 0.5%.  I think someone needs to put poor Max out of his misery.  They have lost their most valuable sales employees and continue to show unhealthy signs of mismanagement and poor decision  making.

Retailers can’t seem to understand the relationship selling skills required to retain and develop customers.  I guess that’s what you get when your retail stores typically employ people who are only interested in doing what is basically necessary to get their paycheck.  These stores focus on the “shopping experiences” (transactional selling) and don’t take time to know their customers. 

Office Depot got burned with the “Stupid” sticker last year when they purchased Allied Office in New Jersey.  Allied was the #2 US dealer with over $350m in sales.  Typical “Stupid” immediately closed the customer service functions and that caused a mass exit of the sales force much to the delight of many regional dealers who gladly took their sales and customer service people into their employ.  Not a brilliant move when these morons let the best part of their purchase walk out the door due to the “Stupid” sticker.  The end result was a net gain of maybe $150m in sales but probably much less.  I wonder who the brainiac was that made that decision?  Then OD closes the Viking brand in the US.  The Viking brand in Europe is a powerful contender.  I’ll bet the “Stupid” sticker will show it’s ugly head again and OD will end Viking in Europe.  Bad moves people.  Short term gain but long term loss.  If it isn’t broke don’t fix it!  You don’t see Staples closing Quill do you?  Nay!  They (Staples) continue to build and enhance the Quill brand.  Quill will continue to be highly successful for Staples although as a competitor it is easy to sell against them when they charge customers $54/carton for copier paper.  Maybe Depot should be courting a purchase of Office Max, that would put a smile on the faces of many Max shareholders.

Will these ‘players’ ever learn that if they would just focus on providing great customer service and build those customer relationships that their shareholders would eventually reap huge rewards?  Duh!  I doubt it.  So the advantage goes to… the Independent Dealer! 

Corporate Express showed only a 3.6% growth in sales.  Rumors persist that CorpEx is looking for a buyer.  Office Depot is said to be looking them over but will have to pay up considerable dollars.  CorpEx last year decided to focus on “operational excellence” which means cut costs, everywhere.  That’s just corporate speak for “let’s BS the shareholders and public some more!”  At the expense of reducing management, yet another internal reorganization and loss of an effective outside sales force they have completely forgotton how to service the customer.  Therein is the biggest looser here, the customer.  This loss of effective customer service resulted in a 7% loss in sales in the fourth quarter of ’06. 

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