Is Staples' Services Strategy Enough to Save the Office Supply Giant? | Fast Five Shorts

Staples appears to be angling for new relevance with services on top of office supplies, according to modern retail other than pens and computer paper, business retailer Staples says these days they derive traffic from services like printing, shipping and passports.

Chris Most recently this includes a pilot with Verizon to sell phones and devices in store, plus business specific services like Internet and phone plans.

President of Staples US Retail Marshall Warkinton said that the company introduced the partnership with Verizon in five stores earlier this year and will expand it to 30 more stores later this summer.

Once a mainstay of the Fortune 500 list, Staples lost ground in the office supply sales during the mid 2010s amid competition from e commerce players.

An attempt to acquire Office Depot and Office Max in 2015 failed on antitrust grounds and the company then pivoted to a B2B strategy and was bought by Sycamore Partners in 2017.

As a private company, Staples doesn't share revenue or profit figures, but its future relies on its ability to provide business services.

Out of about 945 locations that are within roughly five miles of the 90% of the US population, printing is still the main driver for the they can print from the design service Canva, which allows users to pick up items store.

In 2022, it introduced same day passport photos and processing services, and about 200 stores also offer TSA PreCheck enrollment, yielding about 1 million approvals a year.

Chris that was a lot of information.

Are you buying the services salvation story at staples?

Absolutely not.

100%?

No, I'm not buying it one iota.

And, and the reason for that is pretty simple for me.

Like if your core business, as the article says, is still printing, that's a dying business.

Like at the end of the day, there's no two bones about it.

It's a dying business and the services that you're offering that you're purporting are helping you.

Passport photos, TSA precheck and mobile phone activations particularly those are the three that were called out the most.

They're all one offs and have nothing to do with printing.

Absolutely zero to do with printing.

So long term there are many competitors in all of those spaces and other options, which means the customer acquisition costs for these services will be relatively higher for Staples than it will be for other people while your printing business is still dwindling.

So no, I'm selling this.

It sounds like a completely crafted narrative to make Staples sound better than it potentially is.

That's, that's my take, and I hate to be blunt but that's what I feel.

Luckily no one is holding stock in this company right now, so they don't have to be too worried about just the private investors.

The private investors.

Um, but so I, when I read this story, it reminded me of a conversation that I had with the president of Office Depot, Kevin Moffett, back at Etail.

We were talking about, you know, I asked him this question point blank and I was like, what, why are you still relevant?

Like what's, what is, what needs are the Office Maxes and Office Depots of the world still serving?

And while I agree with you that there will be burnout and he, he agreed that like their businesses is evolving quite a bit, he still sold me on the value that they're providing small businesses.

I do think that we're in, we're in a slow phase out of the mass printing like we used to see the, you know, the copying paper and all the things like that.

But I do, when he explained to me like they have the fastest in store pickup, buy online pickup in store of anyone in the world, he said, so within 20 minutes or less, you can go to an Office Depot, you can get the things that you need.

And to be within five miles of 90% of the country, like there is still some value there.

For a lot of the small businesses that do depend on them as their one stop shop, it's their printer, it's their, you know, shipping location, it's, it's a place that they can go and do all the things in one place.

But I do agree that eventually we will find new ways of doing this.

The menu example, printing off new menus every day like that will likely go by the wayside some, something will change there.

So I don't, I don't think I'd be putting my money on this one for the long term, but I do think it's going to be a bit more of a slow burn than, than most of us would expect.

Yeah, it's, I mean it's a smart, it's a smart pitch and a smart way to try to get extra business like get TSA PreCheck applications going through your store.

And they do get a lot like Office Depot and Office Max do that too.

And he said it's crazy like the amount of volume that they get.

But I'd rather go there than the airport for 100%.

You know, I mean, if I'm a retailer listening, I'm like, why are not, why not, why not?

Why aren't I doing that too?

Like if I'm Costco or Sam's Club or whatever.

Like, why aren't I doing that?

Why am I letting this business go to go to the go to Staples?

Like, people are in my store more often.

Why aren't I setting up these things?

Right.

I don't know.

But are people are people buying the, you know, $500 office chair while they're there?

Probably not.

And that's the thing that you have to look at, like, how much that's the that's the business that you're making the real margins on.

Are you going to see people do that behavior?

Probably.

You know, they're probably looking online for that stuff to find the best price.

And I don't know that Office, Office Max Depot or Staples are are going to be that for them.

Yeah, 100% agree.