Home office spending up

Discount Store News, August 4, 1997 by Mike Troy

NASHVILLE -- Retailers that want to increase sales of school and home office products need to be aware of changes in how people use home offices, the attitudes of school age consumers and the growth strategy of office product superstores.

That was the message delivered to approximately 300 retailer and manufacturer attendees at the School and Home Office Products Association's annual Learning Curve conference held in mid-July.

Key information retailers have to ponder includes the following facts:

* Roughly the same number of people reported having home offices today as two years ago, but those same people said they are spending more on supplies, equipment and furniture.

* A significant shift in how people use their home offices helps explain increased spending. Thirty-eight percent of those with a home office use it to run their own business whereas two years ago that figure was 28%. Conversely, those who used the home office to earn supplemental income declined to 11% in 1997 from 18% in 1995, according to Yankelovich Partners.

* As students progress through school, discount stores gradually lose favor as a shopping venue. In grades K-8, 64% of households shop for school supplies at discount stores. In high school, it drops to 52%; in college, a lowly 28%, according to Leo J. Shapiro and Associates.

* The superstores, Office Depot, Staples and OfficeMax, despite their rapid rollout and sales growth, have numerous weakness. Research and speaker comments indicate that consumers don't find shopping office superstores enjoyable, merchandising is lackluster and out-of-stocks are common.

* Shopping for office supplies is viewed as a boring necessity. That helps explain why people do it so infrequently.

* Special sales and discounts don't seem to matter to office supply customers since they expect to find everyday low prices at discount and office supplies superstores. Convenience is the most important attribute in determining where to shop.

* The decentralization of work and the increased use of computers at schools are the category's two biggest sales opportunities. People are working more at home because they have more to do, and those who are self-employed report their growing businesses demand longer hours. Schools are also using computers more, and even kids in grade school use computers for homework.

While many of the findings presented at the conference point to increased product demand, growing sales in the mass channel essentially means improving performance against the three office superstore chains. Marketing consultant and author Roger Blackwell contends success requires focusing on shopper psychographics such as activities, interests and opinions. Blackwell suggests there are no more mass markets, only segments.

Retailers have to look at birth rates and understand that the entire U.S. market is not expanding--only segments of it are. He specifically mentioned Asian-Americans and their higher than average income as a target market for school products.

Targeting specific groups will be essential as will individual customers since the nation's expanding store base is chasing a stagnant population. He foresees a time when today's retail barometer of comp store sales is replaced by a more meaningful indicator he dubs "comp customer sales."