OfficeMax school/office program drives sales, profits, saves space
NAPERVILLE, Ill. —Through a turnkey category management solution that OfficeMax currently is introducing to a number of national retailers, the office-supply warehouse operator has managed to generate as much as 20% growth in small office, home office and back-to-school sales and gross profit margins for its retail partners by tailoring an appropriate selection retailer by retailer.
And that growth has been realized with fewer linear feet dedicated against office supply across the chain, noted Ryan Vero, EVP and chief merchandising officer for OfficeMax, in a recent interview with Drug Store News. In one case, as much as 10% of the linear footage that had previously been dedicated to office supply sales was ceded back to the retailer.
OfficeMax debuted the category management service some 18 months ago with Safeway, and earlier this year added Food Lion to its list of clients. “You’ll see us [branching out] into a number of different kinds of retailers, testing a lot of programs” in the near future, Vero said.
The program is advantageous anywhere office supplies are not considered a core competency, Vero suggested. Because even though OfficeMax outlets serve as office supply supercenters, and therefore a destination for the category, somewhere between 80% and 90% of office supplies are bought outside the office-supply warehouse channel.
At Safeway, OfficeMax not only optimized the set—SKU counts were reduced by more than 70%—but also created a more homogenous planogram across the grocer’s footprint. “This is one of those categories that ends up getting flexed all over the place,” Vero said. In some stores, home office and back-to-school sets were underdeveloped; in others, there were too many linear feet dedicated to the set.
Each program is tailored to the individual retailer, Vero said, as opposed to creating one OfficeMax-themed set and fitting that set into stores. “This is really about us managing a category like a good supplier category manager would do,” he said. “So if you go into a Safeway, depending upon the store, you might see some limited [OfficeMax] branding, and Food Lion might be a little bit different.”