Staples' Desperate Back To School Deals

[Anonymous]

Staples' Desperate Back To School Deals

Deep discounting on school supplies indicate that Staples now views Wal-Mart and Amazon.com as its primary competitors.Staples seems to be financing deep discounting by reducing its operational footprint. Staples might lack the resources and revenue needed to compete directly with Amazon.com or Wal-Mart.

Staples might need to transform itself into an online retailer to survive.

Staples is proving what a desperate situation it is in these days with a new back to school deal. The office supplier is offering a 110% price match guarantee on school supplies.

Staples is not only promising to match any competitor's prices on school supplies as the school year opens but it is offering an additional 10% off. That's right; Staples is running a massive promotion that seems guaranteed to lose money. The retailer is admitting that the only way that it can get customers in the door is to practically give some of its products away.

The latest move by Staples seems to verify a thesis I put forward a while back that Staples is being squeezed by larger competitors. The 110% offer in particular seems to be designed to counter deep discounting by two of those competitors: Amazon.com Inc. and Wal-Mart Stores Inc. . Both Wal-Mart and Amazon.com are using office supplies as a loss leader to attract additional customers.

In particular, Staples needs to kick start both its online and brick and mortar sales because of escalating revenue losses. As I noted in my last article, Staples' TTM revenue fell from $24.17 billion in April 2013 to $22.95 billion in April 2014. I have to wonder how much of that revenue loss is caused by the discounting Staples is doing to keep up with Wal-Mart and Amazon.com.

Nor are Wal-Mart and Amazon.com the only retailers that are practically giving school supplies away this year. The Arizona Republic uncovered some incredible school supply deals, including:

· OfficeMax (now owned by Office Depot ) is selling one subject spiral notebooks for just 1¢ a piece to parents that buy $5 worth of school supplies.

· Walgreen  is selling pocket folders for 10¢ to holders of its balance reward cards.

· CVS Caremark Inc. is offering 25% on a wide variety of school supplies, including Crayola crayons.

It looks like the battle for Americans' school supply dollars is turning into a bloodbath. The competition is getting fierce because the stakes are so high; That is why companies like Staples are heavily dependent on back to school.

Staples' Desperate Back To School Deals

Deep discounting on school supplies indicate that Staples now views Wal-Mart and Amazon.com as its primary competitors.Staples seems to be financing deep discounting by reducing its operational footprint. Staples might lack the resources and revenue needed to compete directly with Amazon.com or Wal-Mart.

Staples might need to transform itself into an online retailer to survive.

Staples is proving what a desperate situation it is in these days with a new back to school deal. The office supplier is offering a 110% price match guarantee on school supplies.

Staples is not only promising to match any competitor's prices on school supplies as the school year opens but it is offering an additional 10% off. That's right; Staples is running a massive promotion that seems guaranteed to lose money. The retailer is admitting that the only way that it can get customers in the door is to practically give some of its products away.

The latest move by Staples seems to verify a thesis I put forward a while back that Staples is being squeezed by larger competitors. The 110% offer in particular seems to be designed to counter deep discounting by two of those competitors: Amazon.com Inc. and Wal-Mart Stores Inc. . Both Wal-Mart and Amazon.com are using office supplies as a loss leader to attract additional customers.

In particular, Staples needs to kick start both its online and brick and mortar sales because of escalating revenue losses. As I noted in my last article, Staples' TTM revenue fell from $24.17 billion in April 2013 to $22.95 billion in April 2014. I have to wonder how much of that revenue loss is caused by the discounting Staples is doing to keep up with Wal-Mart and Amazon.com.

Nor are Wal-Mart and Amazon.com the only retailers that are practically giving school supplies away this year. The Arizona Republic uncovered some incredible school supply deals, including:

· OfficeMax (now owned by Office Depot ) is selling one subject spiral notebooks for just 1¢ a piece to parents that buy $5 worth of school supplies.

· Walgreen  is selling pocket folders for 10¢ to holders of its balance reward cards.

· CVS Caremark Inc. is offering 25% on a wide variety of school supplies, including Crayola crayons.

It looks like the battle for Americans' school supply dollars is turning into a bloodbath. The competition is getting fierce because the stakes are so high; That is why companies like Staples are heavily dependent on back to school.

[Author]

August 14, 2014 at 11:04 AM