The Office Depot ECommerce Systems Information Technology Essay

Office Depot Inc., founded in 1986, is one of the leaders in the office supplies industry with its head quarters in Boca Raton, Florida, USA. The Office Depot’s supplies include business machines, computers, softwares and office furniture whereas the services cover printing, copying, document reproduction, shipping and mailing. The customers to the company include individual customers, small office/home offices, and medium-/large-sized businesses.

The sales are obtained through numerous channels which comprises of office supply stores, an outbound telephone account management sales force, internet sites, direct marketing catalogues and call centres.

Office Depot Inc., deals to customers in 52 countries all around North America, Europe, Asia and Latin America. The company operates more than 40 separate websites in the International Division.

While the word e-commerce refers to all the online transactions, B2C stands for “business-to-consumer” and goes for any business organization that sells its products or services to consumers on the Internet.

The business model followed by Office Depot is B2C e-commerce model. The model provides both strategic and operational benefits to the company. The model helps in low order processing costs; brand recognition; improved customer service; market extension to locations where no office supplies store exists; reduces labour cost due to streamlined internal process; and improved information system integration.

The company follows click-and-mortar kind of B2C model where the company allows customer to buy products and services online as well as they have physical stores located at various locations. The model tied the e-commerce frontend to the company’s inventory and order management systems, and conducted real time inventory checks to ensure stock was available nearby. The model is build in customer centric e-commerce systems were intended to make customers so satisfied with their online shopping experience that they would not bother looking elsewhere on the Internet to save a few pennies. Customers were able to check warehouse inventory in real-time, place orders online, pay for orders online, and arrange for returns at a local store.

4. Customer Value Proposition

The customer value proposition basically means the benefits which the vendor is providing to the customers in return to the amount charged for the specific products or services. The Office Depot assures a broad selection of quality office products and services. These products and services encompass the following characteristics: great quality, innovation, value and satisfaction guarantee.

The major challenges that officedepot.com has tackled reasonably are simple to use, have an improved search capability, an expanded range of item availability, and they are meeting the expectations of customer’s with shipping quality and timely delivery.

5. Revenue Model

The main goal of introducing B2C website is to bring down the cost or improve customer service, however, the primary aims remains to be generation of revenue and earn profit. The officedepot.com is the website providing products as well as services to its customers. This is the most common type of e-business model for generating revenue. In this model, the electronic catalogue is made available to the consumers; they can select the desired products or services from the catalogue and put it in the shopping cart. Then the payment received from the customer is the source of earning revenue.

After the successful implementation of the B2C model, the total sales revenue of the firm has gone up considerably because of e-sales. With over $4.9 billion in e-Business sales during 2007, Office Depot is one of the largest online retailers in the world. They believe in offering customers the best choice of electronic trading solutions available, with different purchasing options according to their needs. The figure1 indicates the sudden rise in the sales after the implementation of the website and the continuous rise thereafter.

6. Marketplace

Office Depot deals in the segment of office products and services. They are in competition to be the market leaders in the segment. The range of products office depot sells includes business machines, computers, softwares and office furniture whereas the services cover printing, copying, document reproduction, shipping and mailing. The growing prevalence of the internet access has enabled new markets to emerge online. To tackle with the market of consumers and businesses of all sizes the company is being segmented into three the retail division, the business solution division and the international division.

Office Depot operates over 1,200 office supply stores in North America.  Internationally, the company operates another 400 retail stores in 48 countries. 

7. Main Competitors

The main competitors to Office Depot are Staples and Officemax. Together the three companies are the market leaders in the office industry. However, together they account for about only 10% of the total estimated $300 billion market. They rest of the market is divided widely between supermarkets, wholesale retailers and smaller independent companies.

Office Depot stands second to Staples in the total sales and profits but had greater sales and higher operating margin in the international market than the leading competitor.

Office Depot by the division of the retail and business solution sales in the international market is trying to take advantage in the international market by acquiring contract office suppliers around the globe in profitable markets such as Asia and South America.

Staples: www.staples.com

OfficeMax: www.officemax.com

8. Comparative Advantages

The Office Depot was the first to introduce the concept of shopping, ordering and managing shipments online for the office products and services segment.

Office understands the nature, reasons, needs and concerns of customer by realizing that all the customers are not the same level. Every other customer has different wants and needs.

The company has added the brick-and-mortar catalogue on their website and thus have successfully increased choices, selection and searching capabilities.

Officedepot.com provides lower prices by discount offers, auctions and promotional prices. Special discounts are given to the schools.

The product descriptions are clear and concise, and usually have measurements included, sometimes in graphical format as well.

Officedepot.com has the advantage of belonging to a well established distribution infrastructure that can handle peak demand. It also has an established brand with a good and trustworthy image, large customer base, expertise and facilities to serve customers with catalogue sales, and has stores for handling product returns. Bricks-and-clicks retailers enjoy significant advantages over Internet pure-plays including lower customer acquisition and smaller marketing-related outlays.

Officedepot.com website is designed with proper attention and it is capturing, dynamic, changing, offering new things and promotions, user friendly, not crowded or overwhelming, efficient and easy for navigation, just in time information for out of stock items, and easy to read text.

9. Market Strategy

Office Depot targets consumers and businesses of all sizes. They range from individual customers to the small offices/home offices to the large offices and organizations. The main strategy is to provide maximum possible options combined with special discount offers.

The basic market strategy followed by the officedepot.com to keep the customers intact and at the same time providing satisfaction is:

Intelligent Search Facilities – an amazingly easy way to locate the correct product every time

Bulletin Board – an effective online communication tool to reach all end users with important information

User set-up and Management – Office Depot Online is a self service solution putting our customers in the driving seat

Controls – tailored approval processes and budgeting are available to help you to manage your business

Multiple Shopping lists – list all your favourite items in one place to create your orders with

10. Conclusion

Officedepot.com is one of the finest examples of the business-to-customer e-commerce model. The officedepot.com was introduced by Office Depot in order to meet the increasing requirements with the rapid growth of the Internet. The website officedepot.com is a click and mortar kind with inclusion of brick and mortar catalogue and thus increasing the options available to select from. The revenue generated is simply through the selling of the products. Officedepot.com does face stiff competition but with the kind of infrastructure and service it is being able to attract customers to itself.

11. References

http://www.officedepot.com/

http://en.wikipedia.org/wiki/Customer_value_proposition

http://www.living2xcess.com/2010/06/office-depot-strategic-analysis_01.html

http://www.slideshare.net/socialcoop/ebusiness-models

http://www.buzzle.com/articles/b2c-marketing-a-guide-to-business-to-consumer-marketing.html