Staples have just announced a major new push into the world of e‑commerce, taking a leaf out of Amazon’s book and diversifying its product offerings in the process.
The move, which will alert the attention of many an intrepid e‑commerce manager, web content manager and e‑commerce analyst, is set to deliver $250 million in cost savings by the end of the financial year 2015.
The retail trend to e‑retail
Staples isn’t alone amongst big box retailers in turning to e‑commerce. We recently reported that Home Depot made a radical switch from bricks-and-mortar to online sales in its Chinese operations, but that was largely motivated by the specific demands of the Chinese consumer. Wal-Mart, too, has recently invested heavily in improving its e‑commerce activities by launching a new search tool based on semantics technology, guaranteeing online customers a vastly more accurate results page when they browse for goods.
But Staples almost certainly has Amazon’s business model in mind and is taking the bold step of reconfiguring its sales emphasis from the traditional store based approach (which comes with massive square footage and painfully high costs for occupancy and rent), to an online sales strategy offering a much broader range of products.
Should Amazon worry?
How realistic is the ambition to become a competitor to the Goliath of e‑commerce, Amazon? Dydacomp CEO Fred Lizza believes that Staples is no Amazon “wannabe”. He said, “Actually, Staples is much closer to an e‑commerce powerhouse than you might think, and the reason is they have invested heavily in IT infrastructure and supply chain capabilities,” he told the E‑Commerce Times. Look at how rapidly they turn around orders for office supplies and other products and efficiently deliver them to small businesses located virtually anywhere.”
There’s a little additional work to be done to attract customers to the website rather than to the stores, Lizza believes, but the really tough part – the technological infrastructure to launch online sales operations – is very definitely in place.
Staples’ e‑commerce move was endorsed by industry expert Stephen Wyss, an assurance partner at BDO USA’s retail and consumer products practice. He said, “Since a large portion of Staples’ customers are small business accounts that don’t need to browse the aisles at the brick-and-mortar locations, the shift in strategy to online makes a lot of sense.”