Dive Brief:
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Office Depot announced Monday it will begin offering same-day delivery in Atlanta and Los Angeles beginning Aug. 28, in the Ft. Lauderdale/Miami area on Sept. 6. and to more markets in coming months, according to a press release emailed to Retail Dive. The office supplies retailer has been offering free delivery as swift as next-day on orders as small as $9.99 in some areas.
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Shoppers on Office Depot's website can schedule same-day delivery between 8 a.m. and 11 a.m., 11 a.m. to 2 p.m., 2 p.m. to 5 p.m. or 5 p.m. to 8 p.m., depending upon the time of day they shop. For a limited time, the retailer plans to waive delivery fees. A spokesperson didn’t immediately return Retail Dive’s request for more details on fees and time windows.
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Crowd-sourced delivery company Deliv is partnering with the office supplies retailer in the effort, according to the release.
Dive Insight:
Competition is heating up in office supplies retail, as Office Depot and Staples each focus on cutting costs and beefing up their appeal, especially in the more stable business supplies market.
Office Depot earlier this month announced a new loyalty program with expanded benefits, including a “VIP tier” for higher-spending customers like small businesses, and last month the company rebooted its “Taking Care of Business” brand platform, aimed at business and retail consumers alike.
Amazon's growing sales in the space overshadow the retailers' efforts, despite the fact that the judge who granted the regulators their injunction against the deal didn’t buy the’ idea that Amazon, then an early upstart, presented adequate competition in the corporate sales space.
Amazon has increasingly muscled its way into office supplies (as have Target, Walmart and other general merchandisers). Yet Amazon’s success in the business-to-business side has been a surprise, says Matt Sargent, senior vice president of retail at Frank N. Magid Associates.
Likely as a result of Amazon's encroachment, Staples Business Advantage, the company’s North American contract business, saw fourth quarter sales flatline year-over-year. “Amazon is penetrating small, medium and large corporations within office supplies," Sargent told Retail Dive in an email. "This is a red flag for Staples given that corporate office supplies are the most profitable segment of Staples' portfolio.”
One of Staples' solutions may be to throw in the towel when it comes to retail, with a stated goal of reducing its brick-and-mortar sales from 40% to 20% by 2020. Plus, last month the companies were reportedly considering a back-door tie-up of sorts that would entail Staples spinning off its 1,500-store retail operation to Office Depot.
Office Depot may be amenable to the idea, in part because it still considers its stores a forte. “With our new same-day delivery and our omnichannel approach, we are utlizing our retail stores as assets and part of our supply chain to give our customers the best possible experience,” CEO Gerry Smith said in a statement emailed to Retail Dive.
