Stationery business goes to the office - discount store sales of stationery and office supplies

Discount Store News, May 22, 1989 by Faye Brookman

Stationery Business Goes to the Office

When he is not on the road, Howard Shatinsky's commute to work consists of seven stair steps. That is all separating Shatinsky from his bedroom and his office in the basement of his home in Mansfield, Mass.

Shatinsky used to purchase file folders, staples, copy paper and tape at BJ's Wholesale Club before discovering a nearby Staples. Now he has noticed a better selection and the multiple packs of items he needs featured at the local discount store. Shatinsky said that might just be where he goes for his next purchases.

Shatinsky is not alone--about 62 million households in America now have dedicated some space to an office in their homes. It's no wonder that discounters such as Target, Wal-Mart, Hills, Ames as well as K mart are creating home office departments in space culled from social stationery--a category that has since fallen by the wayside as Americans shun the custom of writing letters.

"Retailers used to say they could take 16 items, they'd pick and choose," recalled Jim Schmidt II, assistant vice president, marketing for Kansas City, Mo.-based Stuart Hall Company. "Now they come and want full departments of home office products." Added 3M's Frank Sando, consumer group national account manager: "In the stationery department, home stationery is the buzzword...Discounters are really adding to home office departments."

It appears the burgeoning home office departments at discount stores are a reflection of consumer desires. According to one recent study, more customers want to find these items at a mass merchant. In a poll of 1,775 small businesses taken during the fourth quarter of 1988, only 9 percent said they last bought paper at a discount store (including specialty shops such as Staples). But, 14.3 percent indicated they would buy in a discount store in the future.

"That represents the largest growth by any type of outlet," claimed Ray Boggs, director of the small business market strategy service at BIS CAP International, the firm that conducted the study.

Moreover, figures from the National Office Products Association (NOPA) predict a bright future for the home office arena. Manufacturer shipments of office supplies--excluding furniture and office machines--totaled $13.3 billion in 1988 and should grow at an annual rate of 4.4 percent to over $14.5 billion by 1990.

A just released report from New York-based FIND/SVP suggests the home market is growing sharply because of the emergence of affordable electronic technology, demographic trends, corporate initiatives, changing lifestyles and related quality of life considerations.

Despite the impressive statistics, discounters have been quite leery of the home office category. What had to be determined was a profile of the discount home office shopper. The profile that has emerged is a consumer who holds down a full-time job, but also does work or attends to bills in a home office, as opposed to customers who generate most of their revenue at home. According to BIS CAP, at least 12 million households fit this mold. Serving these customers appears to be the discount store's niche.

"My customers are not those who use their home office as their primary place of business," said Hills stationery buyer Pat Ziolkowki. "My customers are two-income families who like to have an office just to be organized or have a place to keep files for paying bills."

Now that discounters have identified the customers they want to court, departments are being enlarged from small 4-foot sections to fullfledged 20-foot runs and more. "Home office is a growing area for us and we are devoting more space to it," said Bill Roberts, public relations manager at Ames. "Our best sellers include copy paper and multiple packs." The home office market is so vital to Ames that it has a separate division of office warehouse stores called Office Shop Warehouse. There are six of these outlets.

But sources at the office superstores and discounters are quick to point out they are not direct competitors. Staples vice president of marketing, Todd Krasnow, said the 24-store specialty chain targets small offices of one to 50 people. "We stay away from mass products and lines. You won't find mauve phone answering machines and you won't see a lot of trends in commodity items," he said. What can be found at Staples are bulk quantities and huge multiple packs.

Multiple packs, however, are also catching on at discount stores, but in reduced sizes from those available at home office warehouse stores.

"Home users would like to buy quantities and save money," said Brian Kest, marketing manager, home and office products for Mead Products. "But in a mass store they are not going to buy something so bulky that they can't carry it out with their other belongings."

Ziolkowski at Hills agrees that although there is a demand for grouped packs, there is a delicate balance to master. Multiple packages of 10 may be too much, but groups of three or five are often just right, she observed.