Tuesday, April 05, 2016

Staples Need A Turnaround Strategy

Staples has filed a demand to merge with its main competitor office depot. So far the move has not been approved by the authority. Indeed, the new group would be far too dominent in the business of office supply retailing.

Staples has worked out a plan to shut down 50 stores out of 300 in order to lower its operational costs, and to work on new category of products in order to prevent from declining sales. 

The main issue Staples has to fail is that most of its supplies are seeing a clear lowering in demand, due to the digitalization of some part of the office. Indeed, Staples, need to find new categories of product, that are still linked with its core trade of retailing office supplies. 

This is the kind of challenge French retail la Fnac had to face once he saw its cultural goods sales plumetting due to digitalization. They found out 5 new categories, that now account for 15% of the French retailer.

Staples also needs to find out a way to boost its Ecommerce revenue, probably by providing extended services online. Especially because Amazon has enter the market, but also because in this new digital age, customers are expecting new services online.

It will be interesting to see how Staples will be able to find out the clear strategy that will allow to give them a mid to long term growth.