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As someone who works in IT at Office Depot, I can say that the Office Max merger isn't even close to half way done from a technology standpoint
Wouldn't it make more sense to convert all the stores to microcenters? microcenter.com
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I have no idea how they keep the lights on. Whenever I go in, usually during peak business hours, it's unusual if there's even another customer in there. I'm usually just buying a pack of cheap pens or something, maybe once every 6 months. Many moons ago, it used to be an underappreciated place to buy cheap computer parts, but even SD cards are grossly overpriced these days.
Staples has a shockingly large (at least to me) online business. They're the second largest online retailer in the US (second only to Amazon): http://www.fool.com/investing/general/2014/03/27/staples-is-...
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I have no idea how they keep the lights on. Whenever I go in, usually during peak business hours, it's unusual if there's even another customer in there. I'm usually just buying a pack of cheap pens or something, maybe once every 6 months. Many moons ago, it used to be an underappreciated place to buy cheap computer parts, but even SD cards are grossly overpriced these days.
Staples has a shockingly large (at least to me) online business. They're the second largest online retailer in the US (second only to Amazon): http://www.fool.com/investing/general/2014/03/27/staples-is-...
These businesses are most certainly NOT "on their way out". Office supplies is one of the largest categories in ecommerce. Staples and Office Depot are each doing billions in annual sales online. The idea that Amazon has already won in this category is simply not true (yet, but still). Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online only. Staples sells more online in pure dollars than Ap…
Staples and all the other office suppliers do best in two areas: printing services and consumables. Printing services have massive margins. And consumables, particularly remanufactured toner, are big cash cows. Business machines are low margin or loss leaders.
The stores are money losers. They would close them all if they could. They're used as feeders for their print business, value add for their contract customers, and sources of toner cartridges to be remanufactured.
Walmart, with its school supply aisle, is the largest office supply retailer in the world. Their supply chain is far superior to anything in the traditional office supply world, and in retail pricing, it shows.
Same goes for Amazon. They have massive economies of scale and a very well tuned supply chain.
Walmart has been aggressively putting the hurt on the retailers, particularly in Back-to-School season (Christmas for office supply retailers) in the form of advertising and moving the supplies towards the front of their stores.
Amazon dipped it's toe in the water with Amazon Supply. I'm surprised they haven't built an on-the-ground sales force to really expand it. I suspect that when they do, they'll take a big bite out of Staples.
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Realistically the only way they can go is down. People just aren't even going to buying more of what they sell. The threat isn't Amazon, it's Apple. People are going to continue to use devices more and pens less right up until no one uses pens any more. Also, bear in mind that you're quoting an article from 2013, and Staples stock fell by about 25% in 2014. They've picked up a little since then, but they're not going…
Like the paperless office? Still waiting...
These businesses are most certainly NOT "on their way out". Office supplies is one of the largest categories in ecommerce. Staples and Office Depot are each doing billions in annual sales online. The idea that Amazon has already won in this category is simply not true (yet, but still). Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online only. Staples sells more online in pure dollars than Ap…
Amazon could (and probably should) be doing a lot better in this market.
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> People are going to continue to use devices more and pens less right up until no one uses pens any more. And what prevents Staples from adjusting their product offerings to lean more towards "devices", and less towards "pens"? Amazon used to sell only books....
Nothing at all, but their past performance of selling pens is not an indicator of how well they sell devices, or if there'll even be a market for selling other manufacturers devices in the future. Staples are very good at repeat sales of core business stationary. That market is not going to exist for that much longer. Maybe they'll move to a different market successfully, maybe they won't. They wouldn't be the first…
How long do you imagine 'that much longer' to be? That sounds too weaselly to be accurate.
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Staples has a shockingly large (at least to me) online business. They're the second largest online retailer in the US (second only to Amazon): http://www.fool.com/investing/general/2014/03/27/staples-is-...
That doesn't make up for their empty retail stores though, unless those stores really are local warehouses/depots in the scheme of their online operations -- is that their model ? Former retails promoted to faux retail/consumer warehouses ? Does having that high profile physical presence drive their online retail, so the costs are worth it ?