Office supply vendor and retailer OfficeMax is dipping into the channel world through a new “store-within-a-store” concept in which the brand is establishing a network of retailer “partners.”
As of January 2013, 25 retailers including A&P and Safeway are part of the OfficeMax partner network, according to Matt Gruber, National Account Manager of New Business Development for OfficeMax. Designed to help retailers streamline SKUs, as well as identify inefficiencies, the program has empowered clients to achieve significant growth in office supply sales and profits.
Tapping historical and consumer data that hones in on regional trends, OfficeMax is helping retailers make smarter decisions regarding category management, product assortment and merchandising. These insights also have a distinct impact on marketing strategies, Gruber explained. For example, states on the East Coast typically start school later than other areas of the U.S., so OfficeMax ensures partners release circular ads and deals on the East Coast later than other areas.
“We pinpoint these little nuances in localization and try to make them custom to each market,” Gruber explained. “I like to consider us a super vendor, and sometimes a little bit of a consultant. We always work with our retail partners as much as possible because they’re always going to know their stores and customers better than we will. A lot of times your merchants are so spread out across categories, so we allow them to focus on key categories while we take care of the rest. Rather than retailers spending weeks planning back to school, now it only takes days for them.”
Approximately 15 years ago, consumers only purchased office supplies at specialty superstores, Gruber noted. But in a new, ever-evolving culture of multitasking and “one-stop-shops,” big-box retailers such as Target, Wal-Mart and Walgreens now are carrying pens, pencils, paper and other office supplies.
The defragmentation of the category was a new reality for OfficeMax, Gruber said. “Because there was nothing we could do about it, we wanted to partner with other retailers to get more business.” Through the partner program, OfficeMax offers retailers private-label products, but also acts as a distributor for brand partners: Gruber reported an inventory split of approximately 15% to 85%, respectively.
A key goal for OfficeMax in 2013 is to expand the partner program by targeting both national and regional chains. “I want [this program] to be like how Hallmark has its own greeting card aisle in each of their partners’ stores,” he said. “I believe Hallmark identifies itself uniquely in each retailer’s brick-and-mortar store environment; people really stop and acknowledge the brand’s presence. We hope to achieve that kind of differentiation.”