Office supplies retailers want to become co-working and business service companies
Staples no longer wants to be thought of as a place to buy office supplies.
In a brand revamp, Staples this week repositioned itself as “the Worklife Fulfillment Company,” or a place where it says workers can feel happy and productive, reminiscent of WeWork. Staples wouldn’t say if this means it’s going to launch co-working spaces of its own (it ended a co-working trial with startup Workbar earlier this year), but it’s rolling out new private-label technology and office products and yet-to-be-announced business services. It’s also launching a business-focused content-marketing platform called The Loop.
“The focus on Worklife means providing services, products and solutions and an improved digital experience that allows our customers to work wherever, whenever and however they want,” a Staples spokeswoman told Digiday.
Among office supplies companies, a services focus isn’t unique to Staples. Office Depot’s Los Gatos, California location, for example, includes 5,000 square feet of co-working space. Called the Workonomy Hub, it has flexible hot desks, a Starbucks kiosk and a dedicated area for shipping. Any business or worker can sign on for subscriptions or à la carte services.
The pivot to services, including shared-office space, along with agency-style marketing, advertising and other business services, is a way retailers can monetize unused space, generate additional revenue from co-working customers, and build an ongoing relationship beyond one-off interactions or purchases. The co-working market, however, is highly competitive. Beyond industry heavyweights like WeWork and Regis, there are an estimated 200 co-working companies across the U.S. that have at least one location that’s 5,000 square feet, according to real estate company Cushman & Wakefield. Retailers, particularly office-supplies companies, are betting on services and co-working as a means to lock in regular revenue from clients already in their ecosystems.
“We have a very large physical footprint across the country as you can imagine with almost 1,400 locations; we’re always looking for new ways to reimagine how we can get more value out of that square footage,” said Kevin Moffitt, Office Depot’s chief retail officer. “It’s also is a way for us to continue to develop our communities. With our business customers, we have very strong relationships.”
Relationships, in turn, make way for additional service offerings and product purchasing opportunities. It’s a follow-on effect that resulted in increased sales, Office Depot CEO Gerry Smith told investors last November. After opening the initial co-working space and office services center in Los Gatos in August 2018, Office Depot added new locations in Irving, Texas, and Lake Zurich, Illinois. Meanwhile, Staples rolled out a new line of private-label brands associated with its new mission, including office supplies products line Tru Red, Nxt Technologies, a tech product line, CoastWide Professional, a facility supplies brand, and breakroom essentials label Perk.
While the growth of co-working and service arms are natural areas for expansion for office-supplies companies, one disadvantage they may have when compared to pure-play co-working companies is a physical space that looks and feels more boxy and less niche.
“I’m not sure that office supply stores are that attractive as destinations,” said Forrester retail analyst Sucharita Kodali. “Part of the appeal of WeWork is that they are in interesting locations and have attractive layouts that make the space appealing to members.”
Meanwhile, companies that specialize in setting up co-working spaces are seeing increased inquiries from big-box retailers. Industrious, which runs its own co-working spaces and designs them, said it’s seen an increase in the number of big-box retailers that want help redesigning their spaces, and Kettle, a subscription-based service that allows restaurants to be used as co-working spaces, also said it’s also seeing an uptick in interest from retailers.
“It lowers the barriers to entry to allow people to come and stay, they’re surrounded by your branding and it offers opportunities for new customers,” said Kettle co-founder Daniel Rosenzweig.
Compared to co-working companies, office-supplies companies say they’re uniquely positioned to cater to businesses and mobile workers because they offer on-site services on demand which other companies could be challenged to provide at scale.
“You go to other competitors, and they may have a single printer available for 300 folks who are working there, while we have end-to-end marketing services available within a 20-foot walk from your dedicated office, and you can get your laptop fixed right there,” said Moffitt.
Member ExclusiveDespite hungry VCs, DTC brands are rethinking their fundraising approach
This is the latest installment of the DTC Briefing, a weekly Modern Retail column about the biggest challenges and trends facing the volatile direct-to-consumer startup world. Join Modern Retail+ to get access to the DTC briefing–as well as all articles, research and more. Before 2020, some founders and investors were starting to warn that most consumer […]
Member ExclusiveA cautionary tale: What the FTC’s attempt to block P&G’s Billie acquisition means for CPG startups
Thanks to record e-commerce sales, it’s been a good year for direct-to-consumer founders. Except, maybe, for founders of direct-to-consumer razor startups.
Member ExclusiveDTC brands are preparing for nightmare holiday shipping delays and out of stocks
After surviving the Black Friday rush, direct-to-consumer brands have a new challenge at hand: how to ensure their holiday sales aren't hampered by long shipping delays and going out of stock on certain items
SponsoredVideo: How employer rewards and incentives changed in 2020
The nature of employer rewards programs has transformed, accelerated by the events of 2020 — a year of sweeping change. Employees shifted to digital, their preferences moved to digital wallets and they asked for new and surprising ways to use the rewards their employers delivered. In these new interviews, employer rewards experts talk about the evolving […]
Member ExclusiveDTC brands aren’t feeling the Black Friday pressure
In the five days following Thanksgiving, there's usually a wave of retailers offering anywhere from 20% to 50% off of their products. This year, that wave will feel more like a never-ending tsunami.
Member ExclusiveAs its ecosystem grows, companies are becoming reliant on Shopify for more parts of their business
Eight years ago, startups turned to Shopify primarily to sell products online. Now, a startup might turn to Shopify to help fulfill orders, get some cash for their business or use its point-of-sale system when it opens a physical store.