Doing it My way
by Stephen WhiteAndrew Schneider, director of global brand management at Staples, explains why the company thought that while the market was on a downtrend it was time to go upmarket.
Jevin Eagle is proud of the newest member to Staples' growing roster of own label brands. "This brand should be so good you could envision a standalone store," says the company's EVP of merchandising.
The brand in question is called M by Staples (the 'M' stands for My Style, My Way) and was rolled out in late 2007. "The products are more than just functional tools to get the job done. They stand out with personality, quality and unexpected details," says Andrew Schneider, the company's director of global brand development.
The range that includes an assortment of high-end journals, pad folios, notebooks, colourful file folders, stationery and luggage, are designed to reach "both men and women on an emotional level by allowing for more self-expression in the workplace," he explains.
Set apart from traditional office supply offerings, the new M by Staples collection includes features such as soft leather, gold-gilded journal edges, quality craftsmanship and elegant designs.
It is a style of product that Office Depot with its 'Foray' range ventured into first but a product with a high profit margin is difficult to ignore in times of economic uncertainty for the retailer. Is the public really ready to personalise everything that surrounds them in an office environment, from pads to thumbtacks?
"We heard from our customers that they wanted products that stand out with style and that allow for more self-expression in the workplace," comments Schneider. "The addition of this new range is part of a larger effort by Staples to develop a collection of exclusive products to differentiate itself from its competitors.
Heading for 30 percent
The company has already achieved impressive growth with its own label products. In 2003, sales were just 8 percent of total revenues. By the end of 2007 the share of own brand products had grown to 22 percent.
During the same period gross margins rose from 24 to 28 percent. Staples is confident that its own label brands have a strong consumer base and is predicting this trend will continue and meet Staples CEO Ron Sargent's target of 30 percent in the not-too-distant future.
That growth will not all come from a premium brand such as M by Staples, but it is a crucial part of the company's recession-beating strategy, cornering both those looking to down and up-trade their purchasing. "We are depending on our customers to determine sales and growth for our Staples Brand products and M by Staples. We're all about providing the products our customers are looking for.
"Ultimately, it is about fulfilling our customers' desires and expectations for the highest-quality products at incredible values. Regardless of the economic climate, business people want to project a high level of professionalism," adds Schneider.
The development of M by Staples was a corporate-wide effort that, according to Schneider, "was cross-functional and drew heavily from our merchant organisation, the Staples Brand team, and the corporate marketing organisation".
Eagle has been instrumental in product development becoming Staples own label catalyst, overhauling the basic Staples-brand products before adding the premium line. It was Eagle who studied retailers such as Marks & Spencer, Target and Tesco, and replicated their moves in providing a new line of higher-quality offerings, marketed with a Staples logo.
Focus groups and shop-alongs
M by Staples took nearly two years of extensive customer and product research to develop. In that period everything from the logo to the gold gilded edges were shaped by a dedicated design and development team. Focus groups and shop-alongs probed the shopping habits/retailer preferences, product likes/dislikes, and even colour and pattern affinities of the target demographic.
"We sought customer feedback on 2D images and early samples to help refine and hone the assortment. We listened to thousands of our customers and know we are making it easy for them to get a quality line of products which they can't find anywhere else."
Following the launch, Schneider has been pleased by reaction to the range, especially once customers have got hands on: "People really like interacting with this product." In-store, according to Schneider, two types of consumers are starting to emerge and return to the designs of their choice.
"Many like the variety and really relish the thrill and excitement of discovering something new when they visit our stores. Others gravitate toward a specific style or colour palette and then go deep with many products within that group," he says.
The brand has also found itself flattered in the most 21st Century way possible: attracting the attentions of bloggers.
Business analyst Rita Gunthar Macgrath in her blog in March strongly advocated Staples' new concept. "Customers take low prices, convenient hours and lots of in-stock items for granted, leading the company to need to do something else," she wrote.
"It is too early to say if the new, upscale offers will have the desired effect, but I wouldn't be surprised if they do well, particularly among customers who would enjoy a little more pizzazz in their workday surroundings."
Internally, reaction has been equally positive. "These products speak for themselves. We have sampled them with our general managers and other leaders throughout the company. We find our own associates become the best brand advocates after they have integrated M products into their work and personal life," Schneider points out.
The 18 months lead time was a careful, longer process than usual, but Schneider explains that now the brand is set, development can be speeded up for future launches. "From inspiration to in-store typically takes between nine and 15 months depending on the type of product, though we are trying to reduce that lead time to better capitalise on key fashion trends."
Office Depot announced that Foray would be available in Europe earlier this year and Schneider adds that M by Staples will follow suit with a limited overseas distribution.
"These products are primarily for the US and Canada markets, but many products from this line are currently being introduced in the UK. As we continue to watch adoption, we'll continue to evaluate distribution."
Is he worried that more of his competitors will imitate the move upscale? "We cannot control what our competitors do, but I expect they may follow suit to try to address this market niche," he says confidently. "Staples is building a differentiated brand and customer experience. And we have a deep pipeline of crave-worthy products. It will be difficult for our competitors to replicate that."
