Dive Brief:
-
Wal-Mart Stores Inc. plans to test delivery of office supplies to business customers through its Sam’s Club wholesale unit, The Street reports.
-
Sam’s Club Chief Member Officer Tracey Brown disclosed the delivery plan ahead of the retailer’s shareholders meeting Friday, but divulged no additional details about when or where the pilot would start or whether it would entail a contracts-based approach similar to delivery services offered by office supply retailers Staples and Office Depot.
-
Surveys have found that a significant portion of Sam’s Club members are very small businesses owned by women who often shell out their own personal funds for supplies.
Dive Insight:
In arguments for their now-abandoned merger, Staples and Office Depot maintained that Amazon’s entry into the business supplies space represented a significant competitive threat. Now Wal-Mart’s Sam’s Club stores may present another challenge to the venerable office supply brands.
Since the merger was scuttled, Office Depot CEO Roland Smith declared his company’s future will depend on “bold new action" and said it’s considering selling some of its European operations, increasing markets like break room and cleaning supplies, and possibly making its own acquisitions. Staples, meanwhile, said it will work to dominate in core office supply categories like ink, toner and paper, and possibly divest its European operations while exploring other acquisitions.
Outgoing Staples CEO and Chairman Ronald Sargent addressed the challenge of competition from Amazon or “anybody” in a May 18 call with analysts, saying that its physical stores "still provide a competitive advantage.” Of course, Sam’s Club enjoys that same brick-and-mortar advantage—plus Wal-Mart’s famed dedication to low prices.
The Street notes that Sam's Club has experienced muted business customer sales in recent months as business owners have cut costs. Still, delivery options—like the retailer’s move to provide small business loans—could help boost membership and sales.
Sam's Club parent Wal-Mart is also betting on delivery services to drive revenues. Last week Wal-Mart revealed it is piloting same-day delivery initiatives in partnership with startups Uber, Lyft and Deliv.