Well, there may be a reverse effect. One little-observed impact of the growth in computers, particularly mobile devices, is the decrease in demand for office supplies. Sure, things are occasionally printed out and pens, binders, ink cartridges, notebooks and those wire trays for holding reports you dont know what to do with are still useful. But the cash-less economy is being preceded by its paper-less cousin.
So forests in Brazil, Indonesia and a host of other nations are being saved not by heightened environmental consciousness, but by falling demand for paper products.
The result is that office products retailers are finding they have more space - and more products - than they need or consumers want. So they are cutting back in retail in order to increase their online presence. Building on that Brazilian theme, they are finding etailing behemoth Amazon in their face, but are taking the strategic redirection one step further. Some, like Staples, Office Depot et al, want to provide services rather than stuff. They were already moving into the report preparation game and the ancillary printing, collating, binding. Now, they are considering ways of becoming one-stop shops for large, small and medium size businesses. They hope to perceived as a more focused partner who can affordably manage at scale many of the tasks others enterprises can not provide effectively for themselves.
That everyone is chasing the same dream probably means that not everyone will make it. And whether the market responds remains to be seen. But the unintended consequences of digital economics may include ancillary benefits from branding to brokerage which no one imagined. Which may provide further opportunities for the swift and the sure. JL
Dale Buss reports in Brand Channel:
For decades, pundits have been saying that the rise of the computer would vanquish paper to the trash shredder of history. But they haven't been right.
Maybe, that is, until now.
Because the whole issue of the feasibility of paper products may have reached a tipping point with the news that Staples is realigning its retail and e-tail strategy in a massive rethinking of its business.
The company announced that it "will integrate its retail and online offering, increase investment in its online businesses, reorganize its operations, implement leadership changes, initiate a multi-year cost savings plan, and restructure its International Operations."
Specifically, it plans to slash its U.S. store footage by 15 percent and invest the savings in its e-tailing business. In addition to shrinking its U.S. retail footprint, it's closing 45 stores in Europe. It's also rebranding its Australian business "as it continues to move toward one global brand."
Add the strategy shift to the hasty retreat in bricks-and-mortar space also being undertaken by rivals OfficeMax and OfficeDepot, and you may finally have a situation where the need for paper truly is being obviated by the latest digital advances.
“Our vision is to establish Staples as the single-source product authority for millions of businesses,” stated Staples chairman and CEO Ron Sargent. “We are building on the strengths that are the foundation of our success by focusing on five key priorities: accelerate growth in our online businesses; fully integrate retail and online; improve retail store productivity; restructure our International Operations; and return cash to stakeholders.”
"The No. 1 reason for softness in this business is the iPad," Gary Balter, retail analyst for Credit Suisse, told the Wall Street Journal. "Look at how much less we print today."
Yes, look at it. Staples executives certainly are. Their turnaround plan includes closing 30 of their 1,500 U.S. stores and reducing the size of others, in large part reflecting the simple reality that we need less paper and fewer implements for using it as younger consumers, especially, move more and more of their business and personal lives onto purely digital platforms.
But Staples' moves aren't purely defensive or designed only to attempt to cope limply with the sea change in its core business that finally has arrived. The company also has been doing a brisk business online — it claims it's the No. 2 internet retailer after Amazon — and wants to bolster that operation against incursions by competitors, including in the mobile space.
And it wants to move beyond purely offering office products online. It isn't clear what categories the chain might have in mind for e-tailing expansion, but clearly the precedent is there for an online retailer that is known for one type of product expanding beyond that category. Amazon, of course, which began only as a retailer of books and DVDs, is Exhibit No. 1 for how successful a product-diversification strategy can be.
Meantime, Staples' strategy will be saving a few trees.
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