Dive Brief:
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Staples is upping the ante for the back-to-school shopping season as it works to come back from its failed plans to merge with rival Office Depot, Bloomberg reports.
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The office supplies retailer is adding more than 1,000 items to its assortment, including an expanded range of tech products (which studies show are a major part of back-to-school shopping), along with a wider online selection and same-day delivery options.
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Research shows that Amazon is looming ever larger over the back-to-school season, which for Staples is bigger than the holidays, according to executives there.
Dive Insight:
Both Amazon and eBay have moved into the lucrative B2B supplies space, and in their ill-fated court battle against the Federal Trade Commission, Staples and Office Depot contended that their combined efforts would still face challenges from upstarts in the segment. But the judge didn’t buy that argument, agreeing instead with the FTC’s assertion that Amazon’s entry into business supplies sales isn't enough to guarantee sufficient competition.
There’s now plenty of evidence that Amazon’s incursion into the back-to-school market poses a real threat to traditional office supplies merchants: Amazon just pushed past Staples as the third most popular destination for school supplies. Just last year, Staples was the preferred back-to-school shopping option for 39% of parents, ahead of Amazon at 38%, according to research from tech-based ad firm the Rubicon Project.
Back-to-school sales this year are expected to rise 3.3% to $540 billion, up from $523 billion a year ago, according to research firm Customer Growth Partners. That increase lags the 4%-plus gains reported the past two years.
“Back-to-school shoppers in 2016 will be cautious in spending, but relentless in searching for value,” Customer Growth Partners President Craig Johnson told Bloomberg. “The retail winners will be those that provide real newness, relevant to consumers and how they like to shop today—at a great price.”
According to Customer Growth Partners, Amazon will account for some 25% of this year’s $17 billion increase in back-to-school sales, which the research firm said could go even higher considering this year’s big Prime Day event.
But Steven Matyas, Staples' president of North American retail, told Bloomberg that the retailer is confident it can meet the challenge presented by Amazon because it has the advantage of physical stores as well as an e-commerce presence, and because it’s offering deals well beyond 24-hour events like Prime Day. “We don’t really care what customers buy, if they want to buy online or in-store,” Matyas said. “As long as they buy from Staples, that’s all that’s important.”