Back-to-school sales may help Staples turn the page on its failed merger

July 15, 2016 02:54 PM

(Bloomberg)—Staples Inc., looking to bounce back after a failed megamerger, is bulking up its online selection and shortening delivery times to make the most of the back-to-school shopping season, which is more important for the office-supply retailer than the winter holidays.

More than 1,000 products—including a wider assortment of technology products, such as headphones and tablets—have been added to its e-commerce store, and same-day delivery is now available, the Framingham, Mass.-based company said this week.

While back-to-school is always critical for the office-supply retailer, it’s especially important this year after Staples’ plan to merge with Office Depot Inc. in a $6.3 billion deal was quashed by regulators in May. Staples, No. 5 in the Internet Retailer 2016 Top 500 Guide, has the added challenge of fending off an incursion into its business by web behemoth Inc. (No. 1), which on Tuesday hosted its annual Prime Day sale. Steven Matyas, Staples’ president of North American retail, said that his company will gain an edge by providing bargains throughout the season.

“Our role is to make sure we’re there for customers with the lowest prices guaranteed,” Matyas said in an interview.

Slower gains

In a little more than a month, U.S. children will be returning to school, and parents will be sending them off in new clothes and wearing new backpacks full of freshly purchased supplies, including gadgets. Back-to-school sales this year are expected to rise 3.3% to $540 billion, up from $523 billion, according to research firm Customer Growth Partners. That increase is slower than the 4%-plus gains the past two years.

Amazon will account for about a quarter of this year’s $17 billion increase in back-to-school sales, the New Canaan, Conn.-based firm said.

“Back-to-school shoppers in 2016 will be cautious in spending, but relentless in searching for value,” Customer Growth Partners president Craig Johnson said. “The retail winners will be those that provide real newness, relevant to consumers and how they like to shop today—at a great price.”

The threat from Amazon takes on special significance for Staples because the Federal Trade Commission blocked its planned tie-up with Office Depot (No. 9) partly on the rationale that the two bricks-and-mortar retailers faced little significant outside competition. Staples had argued that Amazon also participated in the market and was a growing adversary.

Matyas said Staples has some advantage over Amazon in that it’s still able to draw customers to its physical locations, in addition to its online store. The company also was one of the earlier e-commerce adopters and doesn’t lag Amazon’s capabilities like some of other traditional retailers, he said. For instance, Staples’ same-day delivery option this year will be able to get packages to customers’ doors in two hours.

“We don’t really care what customers buy, if they want to buy online or in-store,” Matyas said. “As long as they buy from Staples, that’s all that’s important.”




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