Staples stocks up on data to segment its customer base DIFFERENT CUSTOMER segments have different needs, so Staples.com is employing a tactic one could call “diversify and conquer.”
The site – which went live in November 1998 and has 1 million registered users – is capitalizing on features like a loyalty program, called Dividends, and a Business Solutions Center to give customers reasons to visit the site. These reasons go well past just picking up a roll of double-stick tape and a dozen legal pads.
“The content and business services attract customers, simplify their decision-making process and keep them coming back,” says Deborah Hohler, spokesperson for Staples. “But it’s the broader offerings that build relationships.”
They’re also building business: In just one year, Staples.com has increased sales from $94 million in 1999, to an anticipated $450 million for 2000.
Sixty-five categories of services are offered in the Business Solutions Center – live for just over a year – including advice on legal, office operation, technology, human resources and marketing issues, like developing a new payroll system and the how-tos of implementing 401(k) plans.
There is also an online B-to-B marketplace where companies can receive competitive quotes on a broad range of products and services from more than 20,000 vendors. If it all seems too overwhelming, live experts are on hand to help small businesses make informed purchases. Or, if customers prefer, an online community allows them to talk to peers.
But just in case customers start to get caught up in content and forget to order the ream of copy paper they logged on for, Staples has also added personalized services for their supply customers, notes Hohler. These include opt-in “sticky tools” like saved shopping lists, past purchase history, e-mail purchasing reminders (customized for delivery date and frequency), and group profiles that enable up to 100 users at one location to make purchases with built-in controls designating the office manager for approval.
So is the content-laden, value-added site “sticky” enough to keep customers returning while attracting new ones? “Seventy-percent of Staples.com customers are new to Staples,” says Hohler. “And we’re seeing customers who shop multiple Staples channels: Staples retail, catalog business and Staples.com.”
Kelly Mahoney, chief marketing officer of Staples.com, notes that customers with higher spending levels are enrolled in Dividends, which offers rewards for customers who spend over $250. Members get access to additional shopping tools, such as personalized shopping lists and e-mail reminders, as well as rebates.
“Customers with higher spending levels get access to unique partner offers and promotions as well. They also receive tailored communications based on their shopping activity and spend level,” Mahoney says.
“Staples.com tracks purchase behavior across products and services, as well as the channel preference of the customer [whether they shop through catalogs, in the retail stores or online],” adds Mahoney. “This enables Staples.com to better anticipate customer needs and understand interests and buying preferences/behavior. It also enables Staples to ensure a better overall customer experience, because the nature of the customer interactions are more tailored and relevant to each individual customer.”
To further encourage cross-channel customers and bridge the gap between the offline and online world, Staples rolled out kiosks in 20 retail stores last October. In addition to their role as virtual sales assistants, the kiosks provide another level of customer service to retail customers by making them aware of the services available online.
“If a customer comes into a store wanting to try out a chair and they decide to order five for their office, they can order them on Staples.com and the chairs will be delivered free of charge the next day,” says Hohler. “Or perhaps they need 200 three-ring binders for an upcoming seminar. If we don’t have them in the store, they can order them on Staples.com. Kiosks look at how the online and offline world can complement each other to provide excellent customer service.”
Staples.com focuses primarily on servicing companies with up to 150 employees. It is the e-commerce business unit of Framingham, MA-based Staples Inc., a $9 billion retailer of office supplies, which includes Staples.com, StaplesLink.com and Quill.com, as well as two Canadian sites, Staples.ca for English-speaking customers, and www.Bureauengros.ca for French-speaking customers.
The three national operations segment their customers based on the number of employees and their needs. StaplesLink.com services corporate customers with over 150 employees up through Fortune 500s. “It’s a different customer with different needs,” says Hohler. “We can measure how frequently customers shop and their purchase history, and can target them accordingly.”
At StaplesLink.com, offerings are on a contract basis and those customers who purchase in quantity on a frequent basis negotiate pricing. And although there are no business services offered at StaplesLink.com at this time, Hohler says that may change in the future. Quill.com sells office supplies to medium-sized businesses known for marketing to vertical industries, such as legal, medical and education.
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