Office Depot - Integrated Supply Consultants

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17 Φεβ 2014 (πριν από 3 χρόνια και 6 μήνες)

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Who’s My Competition in
the Office Products
Channel?



Presented by


David J Pydlek

Integrated Supply Consultants LLC

Integrated Supply
Consultants, ISC

Why Develop a Business Products
Vertical Market?


Business products is currently a $270B industry!


All combined power channel entities (OfficeMax,
Depot, Staples, CorpEx) constitute 16% ($43.8B of
approximate $270B) of market share in North
America


It’s still a fragmented industry


Mass merchants


Drug & food retail chains


Government


Integrated suppliers


Manufacturers direct


E
-
Commerce distributors

Integrated Supply
Consultants, ISC





*The fastest growing on
-
line product
category in sales was office products


$10.3B on
-
line OP sales in 2005 (15% of total
sales)


Total sales among top 500 was $68.9B


The category accounts for 2.2% merchants
among top 500 on
-
line retailers


Top 500 internet retailers experience 60% sales
growth on
-
line in this category!






Office Products Channel:
Market Facts

*Source: Internet Retailer Top 500 Guide

Integrated Supply
Consultants, ISC

OP Channel Fast Facts


2005 total office products industry sales
estimated at $270B overall


Includes electronics


Retail portion estimated @ $205.9B


Projected growth of ~4
-
5% per year for the next
5 years


*Private label is growing aggressively


>30% of sales are targets for all players



*Source:The Stockwell Report

Integrated Supply
Consultants, ISC

*2005 Total Sales Revenue ($B)

Among Big 4

Company


2005

2004

2003

CAGR

1998
-
2005

OfficeMax

$9.1

^$8.8

$4.0

2.26%

Burhmann/

Corporate
Express

$4.3

$3.9

$3.7

1.1%

Staples

$16.1

$14.4

$13.1

9.51%

Office Depot

$14.3

$13.6

$12.3

4.04%

Grand Totals:



$43.8

$40.8

$33.1

*Source: Company reports and analysts projections; includes international sales

^Actually saw a overall sales decline due to divestiture of paper businesses

Integrated Supply
Consultants, ISC

*Fast OP Channel Facts: Internet
Retailer

“Consumers have responded to the new
technology
-
driven service, thrusting office
supplies retailers Office Depot Inc.; Quill’s
parent, Staples Inc.; OfficeMax Inc. and CDW
Corp. into the top 10 largest online retailers,
according to the 2006 edition of the Internet
Retailer Top 500 Guide to Retail Web Sites.”

*Internet Retailer

Integrated Supply
Consultants, ISC

*Quotes from Internet Retailer


“Indeed, fulfillment has emerged for multi
-
channel retailers in
general as one of the keys to overall success. In a study of retail
fulfillment practices last year by Aberdeen Group, more than
70% of retailers said they considered it
“very or extremely
important” to meet customer expectations for multi
-
channel
purchasing and delivery options.

But while order fulfillment has become front and center among the
concerns of many retailers

a far cry from the early days of the
Internet

its cost for many merchants is rising. Aberdeen found
that
46% of retailers expect order fulfillment costs to rise over
the next two years, 29% expect no change and only 25% expect
their fulfillment costs to decrease.”

*Internet Retailer

Integrated Supply
Consultants, ISC


*
3 year Trends Among Big 3

2005

% Sales
Change

2004


% Sales
Change

2003

% Sales
Change

2005

Channel
Share %

2004
Channel
Share %

2003
Channel
Share %

Staples

11.29

9.61

13.67

40.7

39.2

43.7

Office
Depot

5.27

9.76

8.82

36.1

36.8

41.0

Office
Max

3.46

NA

(3.27)

23.2

24.0

15.3

*Source: Company reports, analyst’s estimates and
DSN Retailing Today

research

Integrated Supply
Consultants, ISC

*Op Private Label Trends

Company

Private
Label
Sales
($B)

2005 %
of Total

2004 %
of Total

%
Change
04
-
05

Staples

2.9

18

15

34.2

Office
Depot

2.5

18

15

24.4

OfficeMax

1.7

19

16

22.8

6.1

*Source: Company reports; Industry Analysis

Integrated Supply
Consultants, ISC

*Burhmann/ CorpEx Facts


Smallest of the big players


$4.4B 2005 NA sales


20.4% overall sales
growth


9% organic growth


3 Divisions: Australia,
North America, Europe


No retail


Corporate Express private
label represents 25% of
total sales


*Source: 2005 annual report

Integrated Supply
Consultants, ISC

Corporate Express NA (cont’d)


68% of sales comes through
E
-
Way


“OneShopExpress”


One order, one invoice, one payment over multiple product
lines


40,000 OneShopExpress orders processed in 2005


Biggest threat to T.O.P.S. single supply chain solution (still
not as comprehensive)


*CorpEx: 18.3 Brand Power Rating (only one to
decrease over last 3 consecutive years as reported
by CoreBrand)


Use salesforce.com to manage sales team


Integrated Supply
Consultants, ISC

*Office Depot Facts


North American
Business Solutions
Division produces 30%
of overall sales


46% is retail


$4.2B internet sales
(#2 overall)


21% of total revenue


~30% GP


25.6% operating
expenses


$273M net earnings

*
2005 annual report

Integrated Supply
Consultants, ISC

Office Depot (cont’d)


Viking mail order went away


Only in Europe


Private labels include Office Depot, Foray,
Ativa, Christopher Lowell


*Brand power ratings are highest for OD @
54.7%


*Reported by CoreBrand

Integrated Supply
Consultants, ISC

Office Depot Websites


State
-
of
-
the art public
Internet sites:


www.vikingop.com


www.officedepot.ca

in
Canada


www.techdepot.com


www.officetechcenter.com


www.janitation.com


www.computers4sure.com


www.solutions4sure.com


www.school.com


http://bsdnet.officedepot.com



Integrated Supply
Consultants, ISC

OfficeMax


Primary customer: Fortune
500 Companies


Contract segment represents
$45.7M with 21.9 % GP


9.4% increase


19.7% operating costs


Same store retail sales flat


Store closings in
unprofitable markets


* (#6 overall)


29% of total US sales




*source: 2005 annual report and

Internet Retailer

Integrated Supply
Consultants, ISC

OfficeMax Facts (con’t)


*OfficeMax Brand Power Rating: 51.2


OfficeMax Impress launched November 2006


Re
-
branding of Document management solutions


*Reported by CoreBrand

Integrated Supply
Consultants, ISC

*Staples Facts


#1 OP company


Projected 2006 $16.08B


28.5%GP


North American Delivery = 3
business units


Staples Business Delivery


Quill


Staples National Advantage/
Staples Business Advantage


11.3% 1 year sales growth


$3.8B online sales 2005 (#3
overall)


24% of total sales


27% increase over 2004

*source: 2005 annual report

Integrated Supply
Consultants, ISC

Staples Facts (cont’d)


StaplesLink

is the B2B online ordering
program


70% of contract sales expected to come
through
StaplesLink.com
B2B website ’06


Use WebSphere Commerce version 5.4



*
Staples: 52.4 Brand Power Rating



Stock approximately 13,000 items



*Reported by CoreBrand

Integrated Supply
Consultants, ISC

Key to Success: A True Integrated
Purchase Order for all Services


Integrated Supply
Consultants, ISC

eQuantum Integrated PO

Integrated Supply
Consultants, ISC

Kramer
-
Smilko Integrated PO

Integrated Supply
Consultants, ISC

Focus for the Distributor Sales
Team


You have an excellent single source, supply chain
solution with your Forms & Print legacy system


Market proactively to your end user


Demo to your customer on their PC and save as Favorite


Highlight & market your private label


E.g. Innovera, Universal and Alera


Use stockless model and ride on fulfillment partner’s
low operating costs to serve your customer


Market fulfillment excellence


Market the fact you sell the category as part of your
service solution portfolio

Integrated Supply
Consultants, ISC

Conclusions & How to Compete?


Have an e
-
commerce solution


Have a viable private label to compete (e.g.
Innovera, Universal)


Leverage low operating costs (assume distributor
partner’s operating costs)


Don’t re
-
create the wheel and add operating costs


Brand your company (how do your customers know
you?)


Market excellent fulfillment capabilities


Make the ordinary extraordinary


Margins are high enough to make money


Use a variable margin matrix