Earlier this week, Naperville, Illinois based office supply retailer OfficeMax made an announcement at the National Stationery Show at the Javits Center in New York City. The retailer announced its plans to take two of its Private Brands, DiVOGA and TUL, and evolve them into national stand-alone brands. Until now, OfficeMax’s design-based office products brands were only available through OfficeMax and a select handful of retailers who partner with OfficeMax to manage their office supply category.
I had the opportunity to discuss the announcement with Marc Okicich, Director of OfficeMax brands business development.
MPB: What is the strategic importance of this decision to the long-term growth of Office Max?
MO: We are growing our brands. We have done a lot of work with our brands, we have created consumer interest in them, consumer preference for them and now we want to get them into other retailers who may not specialize in office products or school supplies.
We see the value in the work that have we put into our own brands and some retailers see that too, for example the Tul line is a very unique writing instrument that used to only be available at OfficeMax now we are making that available to other retailers.
MPB: Why Tul and DiVOGA? What is special about these brands?
MO: Tul and DiVOGA are the ones that have really resonated the most with consumers; I am prefacing that with the fact that OfficeMax is clearly a strong brand across a number of different categories. Tul and DiVOGA have created a consumer following and have generated the most interest. Where we run our store-within-a -store program the Tul items are often in the top five sku’s of our category.
Our program of selling brands outside of OfficeMax started with our store-within-a -store program. We partnered with retailers who did not specialize in office and school supplies: large grocery retailers, mass merchants, college bookstores and now manage the entire category of office and school supplies for them. As part of our assortment we include Tul, DiVOGA, OfficeMax brand and our InPlace brand. The brands that really resonate in channels outside of the office superstore channel are Tul and DiVOGA. We have seen clear consumer preference in channels outside of office. So we saw the opportunity and said well why not take it to the next level. We can appeal to retailers who may not need us to help them with the overall category management but add value to their offerings with these brands.
MPB: Do you plan on adding any other Brands to this initiative?
MO: Right now we are really putting the focus on Tul and DiVOGA, we don’t want the message to get too fragmented. DiVOGA has done very well in our channel, consumers see it as not only, “Hey I could use this for my office” but also as a giftable items. They like the fashion, they like the colors, they like the products, so we have seen a lot of pickup in people using them for gifting… So where we have them displayed around Valentines Day or Mothers Day… they have done very well.
MPB: What kind of marketing resources will you invest in the growth and development of these Private Brands as National Brands?
MO: We are working towards that with our internal brand team, they are developing programs that not only advertise and market the brands to OfficeMax customers but to the entire consumer base. You will see a stronger online presence with the brands, we are going out to trade shows and announcing the brands to retailers, and getting their interest and feedback, as that builds we will add consumer interaction as well.
MPB: What kind of goals have you set for Tul & DiVOGA? Sales, Market, Share, Awareness, Innovation?
MO: We are in the process of developing share goals by category for each brand. In the channels outside of OfficeMax we are looking to create significant market share for Tul in the writing category. DiVOGA is a little harder to measure because it spans so many categories.
MPB: How does this impact the rest of your Private Brand portfolio and how you are managing the other brands?
MO: We don’t sell much of the other brands in the channels that we are going after. As I mentioned, In Place is much more of an organizational and filing brand, and so that one does not resonate as much as the others. OfficeMax brand has done very well as a “national brand fighter” with a “good value, great product” proposition. It helps customers who say, “Hey they have OfficeMax on the shelf so I am probably getting a good product at a great price.”
MPB: OfficeMax has talked a lot about “Eve” and your target with her is the target for these brands maintained when the brands go outside of OfficeMax or does the target evolve?
MO: Eve is still relevant, we did talk a lot about Eve, and Eve is getting her groceries, sometimes two to three times per week where we can make a lot of impressions with Eve while she is shopping the aisles of her grocery store, so we see some good success there. As expected, you will find our brands in the office and school supplies aisle but, in addition, you’ll find us in the gifting or seasonal area, especially DiVOGA.
MPB: Is there anything you would like to add, that we have not covered?
MO: Going back to “Why would we do this?” and “What’s in it for a retailer?” It really helps create differentiation in a category that the retailer may not have a lot of expertise in. They can leverage the resources that we put towards these brands and reward themselves with the increased sales and strong margins.
MPB: I certainly applaud the move; over the last couple years both Barnes & Noble with the Nook and Amazon with the Kindle have redefined what it means to be a Private Brand. They simply run their businesses as Brands.
MO: Exactly, we were at the National Stationery Show this week, and some people got it and other people didn’t, it is something new, it’s different thinking and we are happy to be at the forefront of that different thinking.