This is a fascinating article from this week Business Week on innovation at OfficeMax. This could be a model for other retailers to follow, innovation in Private Brand has the potential to truly differentiate and create customer loyalty. It has the potential tor reframe branding questions from: “I love National Brand X’ to I love retail Brand X who happens to sell National Brand X.”
How to Kick Off an Innovation Project
To build consumer loyalty, Office Max launched a study of what women look for when they buy office supplies
“Life is beautiful. Work can be, too.” So ends a fantastical commercial for the office supplies company, OfficeMax (OMX), which aired in cinemas earlier this year.
More than just a new marketing campaign, the ad reflects a new direction for a company that had previously based its competitive strategy on price and location. The problem: OfficeMax wasn’t gaining any ground against Staples (SPLS), the leading office supply company. In a bland, undifferentiated market, consumers tended to buy paper and ink at one store or the other based on convenience, rather than any sense of brand loyalty.
OfficeMax needed to innovate, but how? The first step was to understand the problem and the opportunities. A standard customer survey commissioned by the company in 2006 provided a starting point, revealing a split in how men and women thought about office supplies. Knowing too that women had spent $44.5 billion on office supplies the previous year, OfficeMax wondered if a focus on female shoppers might be an opportunity to differentiate itself. Ultimately the new strategy, and the innovations that followed, influenced everything from product development and marketing to store design and hiring.