The red Easy Button has made Staples the runaway leader in office retail.
The five-year branding campaign began in 2001 and has helped make Staples a $16.1 billion business. In 2005, the company’s profit was up 18 percent to $834 million. Second-place Office Depot booked 2005 earnings of just $274 million, an 18 percent slide, and OfficeMax posted a loss of $73.8 million.
Customer research revealed that Staples shoppers placed little importance on price but overwhelmingly requested a simple, straightforward shopping experience.
After taking almost a year to complete major makeovers at its store, the company introduced the tagline “That was easy” in March 2003. By the summer, Staples saw a 5 percent rise in same-store sales.
A string of Easy Button commercials premiered in January 2005 and aired during the Super Bowl a month later.
Online, Staples has created a downloadable Easy Button toolbar, which takes shoppers directly to Staples.com, while billboards reminded commuters that an Easy Button would be helpful in congested traffic.
Customers have begun asking about buying real Easy Buttons. In September 2005, the company began selling 3-inch red plastic buttons that when pushed say: “That was easy.” The buttons cost $5 each. This quarter the company will sell its millionth button.
Staples’ share price has risen 37 percent during the past year to $26.60.
There’s no guarantee that the ad campaign will be able to keep its momentum, but this fall Staples will continue the Easy Button push with a back-to-school TV campaign.
Dunkin’ Donuts dreams bigger expansion plans
Dunkin’ Donuts is launching a plan to expand its geography and its menu offerings.
Dunkin’ Brands Inc. executives said they plan to rely on multiple formats to expand to nearly 15,000 U.S. locations by 2020, ranging from gas stations to carts to Dunkin’ stores inside supermarkets and other retailers.
The stores features a more open design to better showcase new products, such as breakfast pizza, gourmet cookies and brownies. Cookies and brownies are supposed to give a jolt to Dunkin’ Donuts’ afternoon business. About 65 percent of the $3.8 billion in sales of U.S. Dunkin’ stores last year came before noon.
New owners have pushed for multiple formats. Bain Capital and Thomas H. Lee Partners, two of Boston’s largest buyout companies, and the Carlyle Group of Washington, D.C., bought Dunkin’ and sister brands Baskin-Robbins ice cream and Togo’s sandwich shops for $2.43 billion earlier this year.
In April, Dunkin’ introduced a smoothie yogurt drink. It is the biggest product launch since the chain added espresso drinks to its menu in 2003. Another product on the test list is ice tea.
In its bid to go nationwide, Dunkin’ faces fierce competition from java giant Starbucks, as well as McDonald’s, which introduced gourmet coffee in its restaurants last year.
Dunkin’ is heavily concentrated in the Northeast. For example, there are 1,100 Dunkin’ Donuts within a 50-mile radius of Boston.
Dunkin’ expects to open 650 stores in the United States during its next fiscal year, 50 more than during its current fiscal year.
To fuel growth in new markets, the company hopes to recruit entrepreneurs with franchise experience as well as existing Dunkin’ franchisees who have the expertise to operate 10 to 25, or more, stores.
For Dunkin’, the prototype store represents a chance to boost profitability by shrinking store size to 1,850 square feet, instead of the typical 2,250 square feet. Some of the stores could even be smaller, roughly 1,200 square feet.
The prototype also features a fix-your-own coffee station where customers can add milk or sugar themselves. Currently coffee is prepared by Dunkin’ Donut employees.
The store also has a drive-through lane with two windows adding to the speed of filling orders during rush hour.
Wholesale sales saw strong gain in April
Inventories at U.S. wholesalers tightened in April, a sign that the economy is cooling off but not seizing up.
Wholesale sales jumped 1.3 percent, while inventories climbed 0.9 percent, the Commerce Department estimated. The rise in sales is the largest increase since September 2005.
According to a MarketWatch news release, tighter than desired inventories should lead to increased production during coming months. Also, the inventory-to-sales ratio fell from 1.17 in March to 1.16 in April, matching the record-low level in January.
Economists said that the gain in April suggests that inventories will add to second-quarter GDP data.
Sales of nondurable goods surged 2.9 percent, the strongest gain since September. Inventories of nondurable goods rose 0.5 percent. The inventory-to-sales ratio for nondurables fell to a record low 0.83 in April from 0.85 in March.
Sales of durable goods fell 0.3 percent in April, as auto sales slipped 0.1 percent. Inventories of durable goods rose 1.2 percent. The inventory-to-sales ratio for durables rose to 1.51 from 1.49.
The figures are not adjusted for price changes.
Joan Johnson covers retail for the Colorado Springs Business Journal.