Staples has a new battle cry as it fights to stay on top of the world of office supplies: We make copies easy.
The nation's No. 1 office-supply chain is beefing up its copy business by moving its copy centers to the front of its stores, adding services such as on-demand digital printing, and delivering jobs directly to customers' doorsteps.
"There's a lot of emotion attached to copies," said Robert Schlacter, Staples Inc.'s vice president of business services. "These are items that can help move businesses and careers ahead — proposals, resumes, presentations. So the copy business allows you to build a personal relationship with the customer."
To make a big play in the copy space, however, the Massachusetts-based retailer must not only outdo rivals OfficeMax Inc. and Office Depot Inc. but also go head-to-head with the king of copy — Kinko's. The copy chain, bought earlier this year by FedEx Corp. and renamed FedEx Kinko's Office and Print Center, is the copycat in the $12 billion industry. And it is targeting the same clientele as office-supply superstores — the owner of a small- to medium-size business.
The fight for the copy customer promises to be quite a showdown. Demand for copies is flat, and growing competition is pushing down prices. The market for business printing and copying is growing at a rate of less than 2 percent annually, according to Weymouth market research and consulting firm InfoTrends/CAP Ventures.
A big reason is technology: With the Internet, e-mail and home printers, people don't need to make as many copies. Managers e-mail memos to employees rather than sending printed copies. Manuals are posted online. Consultants print color presentations on home-office printers.
"The pie isn't growing," said Holly Muscolino, director of production work flow solutions at InfoTrends/CAP Ventures. "It's the way the pie is distributed that's changing."
For Staples and its rivals, however, the copy and printing industry spells opportunity. The profit margins from copy centers are double what they are on office supplies, according to analysts. People with printing and copying needs also tend to visit stores more frequently, and they shop while waiting for copies or after dropping off or picking up an order.
Bob Duca, a self-employed consultant, estimates that he spent more
than $10,000 on copies and printing last year at Staples' Shrewsbury, Mass., store. He often places orders for as many as 500 copies of a training manual he uses to teach sales representatives and managers in the electronics industry. He shops for his office supplies at Staples, applying reward points he earns from the copy center to his bill.
"It brings me back into the store," Duca said of the copy center. "You go there, and you're happy, so you keep going there."
Office superstores are looking to steal business from chains like Kinko's and from mom-and-pop shops, which currently account for more than half the copy and printing market nationwide, according to InfoTrends Cap Ventures. (FedEx Kinko's alone has a 10 percent market share, while office-supply chains account for 14 percent of the sales.)
Staples, OfficeMax and Office Depot are investing in expensive digital equipment to produce quality, color copies at the push of a button. Already, all three office-supply giants offer full-service copy counters and self-serve copiers. They print business cards, letterhead, brochures, banners, checks, and signature stamps. They even add color to black-and-white presentations, collate and bind them.
Meanwhile, traditional copy and print shops like Kinko's, Sir Speedy Inc. and Minuteman Press International Inc. are branching out into document management and other services to defend copy revenues and fuel growth that the copy business alone no longer provides.
FedEx Kinko's 1,100 U.S. retail outlets now offer professionals on the road an office away from the office. In addition to printing and copying everything from business cards to banners, FedEx Kinko's stores are outfitted with meeting rooms, teleconferencing capabilities, computers, Wi-Fi access, and shipping services. A company can e-mail FedEx Kinko's a computer file of a presentation that can be printed at any Kinko's shop, allowing employees in the field to pick up the document at a local store.
"It's all about giving small- and medium-size business customers everything they need so they can do it all in one place," said FedEx spokesman Howard Clabo.
The small- to medium-size business is a key customer segment for copy, print and office-supply providers. Small businesses, defined as firms with fewer than 500 people, employ roughly half the nation's working population, according the Office of Advocacy at the Small Business Administration, and have been a key area for new job growth in the economic recovery.
"For office superstores, it's really become a battleground category," Bill Golder, Office Depot's vice president of copy, print and shipping, said of the copy and print services. "It's a service-oriented business, which is important as a differentiator for all of us."
For many, Staples isn't the first name in copies. The chain has offered copy services since it first opened in 1986 but kept the operation hidden toward the back of the stores. Spurred by competitive pressures — OfficeMax began its copy center push about 2 1/2 years ago — Staples decided to test a new copy and print center concept in a Baltimore store.
The goal: improve quality, add staff and offer more services. It worked. The Baltimore store's copy center sales increased, and the average order size grew.
So starting in January, the retailer began a year-long roll out of its new copy center in all of its 1,200 stores nationwide. The chain is investing millions of dollars in equipment, training and additional staff with the aim of generating 10 percent of North American retail sales from its copy and print centers. Currently, the copy center contributes about 4 percent of those revenues, or about $312 million.
The new copy centers will be where most shoppers look first — directly to the right as they enter the store. As opposed to the red signs and red-shirted employees in the rest of the store, the copy and print center is decorated in light shades of blue and gray. The staff wear blue shirts, and sign their names on completed orders to help ensure quality and accountability.
Though service is key to retail success, people typically shop for commodities like paper, files and notepads based on price. Staples is counting on its copy business to instill a sense of brand loyalty in their customers. Duca, the consultant, developed such a strong bond to the Shrewsbury store that he drives a half-hour to get there, rather than switching to a new Staples that's just 10 minutes from his home near Worcester.
"It sure is compelling for business owners to be able to get everything from office supplies to printing services in one stop," said John Burke, Staples' senior vice president of business services.