When you think of the traditional American home office or corporate office in 1990, what comes to mind? Maybe a lot of pens and paper, big PC towers and cube monitors and manila files, a lot of manila files. Now let’s fast-forward to 2015, a typical “office” for home or corporate can consist of just a laptop or smart phone! Your paper trail can now be stored electronically, email can replace the written letter and an e-tablet can replace paper note taking. What does this mean for stores who have specialized in large brick-and-mortar retail outlets just for office supplies? It means consolidation of retail space and an increase in e-commerce. More specifically for companies in this specific market it means merger.
Office depot and Office Max merged in 2013 and now Staples is buying Office depot for over $6 billion to stay in the market. Big box stores such as Wal-Mart are making it hard for the large office supply retail real estate to profit when the incentive for the average consumer to walk in their door over Wal-Mart is negligible. Staples is battling this by providing more office related services like copying and catering to small local businesses janitorial supplies. The CEO of Staples, who will remain the CEO after the merger with Office Depot, commented on the industry’s issue by saying Staples must, “more effectively compete in rapidly evolving competitive environment.” Staples does remain one of the top online retailers sitting in 3rd place just behind Amazon and Apple.
Other stores that are hurting from online commerce and market diversification are small electronic stores like RadioShack. RadioShack currently has around 4,000 stores, which is making them saturated in a market where the consumer can purchase all of the business’s retail elsewhere for a better price. In summary, American’s want a deal, they want products quickly and they want to enjoy buying their products, businesses must cater to these trends.
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