Shares in the big-box retailer Staples (SPLS ) have risen more than 30% in the last year, but doubt has been cast on the future of the entire office supply sector as the need to stock up on things like paper and staples declines in the digital era and competition from e-commerce rivals builds.
Staples, for its part, has adopted a new strategy over the last year to try to win over a greater share of the small business and startup crowd, adding more than 225,000 products online to offer everything a business may need. This broader offering ranges from stethoscopes for a medical practice to mannequins for a retail store. And earlier this month, the company re-launched its brand along with a new ad campaign to try to get the message out.
We sat down with Shira Goodman, Staples' executive vice president of global growth, when she was at the Nasdaq to ring the opening bell, to find out what the payoff has been so far. Check out the video to find out how businesses are responding and what Staples is making progress on so far.
When it comes to the competitive landscape, most people might be surprised to find out that Staples is the second biggest online retailer in the U.S., after Amazon (AMZN).
So how is Staples taking on its number one competitor?
First, consider that Amazon caters to businesses with its Amazon Supply site, selling office equipment and industrial supplies. And the online retail giant has seen success attracting customers including small businesses with its Amazon Prime program, which offers free unlimited shipping for millions of products for $79 a year. Amazon doesn't disclose numbers for Prime membership, but said more than 1 million customers became subscribers in the third week of December alone. One analyst has put the total number of subscribers at 20 million (a number that Amazon says it has never confirmed).
When it comes to Staples' ability to compete, Goodman believes the "secret weapon" is the combination of its e-commerce business with free next-day delivery, along with its brick-and-mortar retail store footprint (Staples Rewards members get free shipping and there is no cost to join). Goodman says customers can order products online and pick-up in stores, or check out products in the store and order them online -- in other words, they have optionality.
And Goodman says this holistic view of the business may be the thing some investors and analysts miss about the Staples story -- and so the company is hoping the new ad campaign will educate Wall Street along with Main Street about "what the L is going on at Staples" (yes, that's part of re-branding).