SOHO calls to drug chains

Drug Store News, July 8, 1996 by Allene Symons

Before the advent of the personal computer, stationery simply meant school supplies, office products and social stationery.

Today, home computing has impacted all three, but the office category, in particular, is being reinvented and targeted to the small office/home office (SOHO) consumer.

An estimated 37 million to 40 million people work out of their homes, according to research by both Rubbermaid and Mead/BIS Strategic Decisions.

That number doesn't include the rise in family computing for home budgets, personal newsletters or school projects, to name only a few activities that require some home office products.

As home computers turn mainstream, many drug chains are offering basic computer supplies. At Thrifty PayLess, buyer Teresa DeMers said she sells computer consumables, which includes labels, laser paper, ink jet cartridges--all products with mass market prices. Although it's early in the life cycle for computer supplies to be mass market, TPI wants to be a forerunner, DeMers observed

Where's the mouse?

The front of the wave is computer consumables and accessories. Even the least aggressive chains can send the message that it's not the same old stationery department by putting a few of these products on display.

A survey of several chains shows that, since last year, many chains like Walgreens, Eckerd, Longs, Thrifty PayLess and others have started testing or have moved ahead into convenience sets of computer-related products.

At K&B, typically computer products are found in a four-foot set.

Walgreens is offering computer-related products such as floppy disks, mouse pads, laser paper and wrist pads, which are "doing all right," according to spokesperson Michael Polzin.

Eckerd's spokesperson Gerry Hoeppner said of computer supplies: "We do see potential there, but we're studying the types of equipment, the types of suppliers and where the industry is going to determine what is feasible for us in increasing our assortment in that section. We're only offering diskettes and paper at this point."

Buyer Mike Deimling of Longs said, "Computer supplies have done well for us when matched to the right area, but not where people don't have computers."

Computerless areas, however, are fast disappearing. Rubbermaid's vice president of sales Terrence Henzey said, "Rubbermaid sees the future fast becoming the present in the trend toward telecommuting and home offices."

And chain drug is joining in. Said Fellowes/C-2's Maureen Moore, "There's not that lag like there used to be. When we come out with a product, it seems we get the placement as quickly in drug stores as in office superstores."

Not a paperless office

A computerized home office isn't a paperless office, however. Filing is here to stay and Mead's new CFO Cambridge Financial Organizer targets this activity.

"We've discovered a need," explained Lew White, Mead's marketing manager for home office. "People who need to file important records usually end up putting it in a drawer or scattering it around the house." The CFO, ($20 to $30) organizes important information like warranties, tax records and insurance papers all in an attractive binder.

Far from eliminating paper, computers tend to increase paper flow and create a market for printer paper and for products to help organize hard copy. The dual printing environment-where two printer technologies coexist in one home type--is also becoming more common.

"We're seeing that more and more small office/home offices are embracing a dual printing environment with side by side laser and ink jet printers," often using ink jet for color presentations and laser for high speed correspondence, noted Jeffrey Miller, director of marketing for Mead Gilbert Paper.

Convenience sizes help drug chains keep price points affordable. Mead's Lew White noted that Cambridge Laser Paper comes in an 80 count package. "Sometimes people want a convenience size," said White, as opposed to the more typical 200 or 500 count packs, which are better for other retail channels.

Avery Dennison's vice president of mass market Chris Binkley said, "We have a rapidly growing business in products for laser and ink-jet printers and labels" and other products, and he noted that drug chains such as CVS, Eckerd and Walgreens are testing computer-related products.

Traditional heads home

Traditional office supplies are also being re-targeted to home office consumers. Last year Sanford created a home office logo to serve as an umbrella for several of its lines, including its Sharpie markers, Faber and Berol pencils and Major Accent highlighters.

For home office and home management, Keith Clark's new Manageables logo is marketed with the tag line "Products to help you manage your home" and offers items like a message center.

Right sizing is also a SOHO issue for the trade. Quantities for the home tend to be right sized for drug chains not superstores. For example, Sanford is using the tag line for its new home office brand: "When one is not enough and one dozen is too much."

For consumers with a home office, drug chains are likely to be a consumer's most convenient (if not always lowest priced) source.