Office Depot, Inc.

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Office Depot, Inc.

2200 Old Germantown Road
Delray Beach, Florida 33445
USA
Telephone: (561) 438-4800
Web site: www.officedepot.com

WHAT YOU NEED. WHAT YOU NEED TO KNOW. CAMPAIGN

OVERVIEW

In 2001 Office Depot, Inc., prided itself as the world's largest seller of office furniture and second-largest supplier of office supplies after Staples, Inc. In addition to having a stronghold on the office-furniture market, the retailer sold art and engineering supplies, computer hardware and software, and printing and copying services. Except for the fact that it touted its office furniture slightly more than the competition, Office Depot's marketing strategy paralleled the rest of the office-supply industry. Office Depot, Staples, and OfficeMax relied heavily on back-to-school sales. To first attract parents who needed school supplies for their children and later to draw in small businesses, Office Depot released a campaign titled "What You Need. What You Need to Know."

The "What You Need. What You Need to Know" television, radio, and print campaign was created by BBDO New York in 2001. The campaign's budget was undisclosed, but according to the market research firm Nielsen Monitor-Plus, Office Depot spent $25 million on advertisement for the fourth quarter of 2002. The campaign initially aired television commercials suggesting that parents could improve their children's school success with the proper back-to-school supplies. After research showed that 80 percent of Office Depot's customers were purchasing supplies for small businesses, the campaign shifted in September 2003. Four new television spots told the stories of office workers whose work lives improved thanks to Office Depot. Near the end of 2003 the campaign also advertised Office Depot's exclusive line of Christopher Lowell office furniture. The campaign ended in December 2004.

Although some within the advertising community criticized it for not differentiating the Office Depot brand from its competition, the campaign helped Office Depot's sales outperform Staples in 2002, during which it posted $11.4 billion in sales. By 2004 Office Depot had again slipped behind Staples, which had become the world's largest supplier of office supplies. Although other campaigns contributed to the ad agency's success, "What You Need. What You Need to Know" helped BBDO earn "Agency of the Year" in 2002 from Shoot magazine.

HISTORICAL CONTEXT

The first Office Depot opened in Lauderdale Lakes, Florida, in 1986. By the end of 1987 the office-supply store had opened nine more stores. After growing at breakneck speeds, the Florida-based chain had a nationwide presence in the early 1990s. Created by the ad agency Gold Coast Advertising, one of Office Depot's first campaigns was titled "Takin' Care of Business." The tagline was taken from the title of a 1974 song by the rock band Bachman-Turner Overdrive. In 1996 Office Depot awarded its estimated $67 million account to the Chicago office of J. Walter Thompson USA, a unit of the WPP Group. J. Walter Thompson elaborated on the previous campaign's theme with the tagline "This is where I take care of business." The campaign was intended to make Office Depot every business' first choice for office furniture and office supplies.

In 1996 Staples tried to purchase Office Depot for $3.4 billion, but the government stopped the acquisition on antitrust grounds the following year. Undaunted by the decision, Office Depot moved forward with store expansion and a nationwide advertising campaign. The cartoon-strip character Dilbert was used for a $30 million campaign that first aired on Thanksgiving Day in 1997. The following year Office Depot released a campaign targeting parents of schoolchildren and starring Dilbert's canine sidekick, Dogbert. The cartoon dog appeared in two 30-second television spots that aired in August 1998. In the commercials the bespectacled Dogbert touted Office Depot as the best place for school supplies. The $10 million campaign included a sweepstakes in which 40 different people were eligible to win a $5,000 Office Depot shopping spree. The campaign included a Supporting School Values program that provided discounts for PTA members and teachers.

TARGET MARKET

When the campaign broke in 2001, it targeted the parents of children returning to school in the fall. Commercials suggested that if parents truly wanted their children to succeed, they should outfit them with the proper school supplies, which could be found at Office Depot. That same year Staples conducted a survey that two years later would affect how Office Depot defined its target market. Staples discovered that business customers accounted for 90 percent of its profits. Following Staples' example, in 2003 Office Depot shifted the campaign's target from parents to small businesses. During the second half of 2003 Office Depot still held large back-to-school sales, but it spent much of its 2003 budget on four commercials aired in September 2003. The spots featured office workers trying to improve their work environments with Office Depot products. More than 40 percent of Office Depot's sales were also generated by the company's business-services group, which delivered office products to medium and large businesses.

The shift of the campaign's target market led to a two-pronged strategy that involved not only the advertising campaign but also the Office Depot store interiors. Whether shopping as executives or employees, women made up 60 percent of Office Depot's customer base, according to a New York Times interview with Bruce Nelson, Office Depot's CEO. To cater to the female majority, store interiors were decorated in pastel colors, which supposedly resonated more with women than men. In order to shed the warehouse stigma of a typical office-supply store, Office Depot also began selling premium office furniture and displaying products in a way that modeled non-warehouse retailers.

Executives at Office Depot believed that if small businesses and entrepreneurs were more prosperous, Office Depot sales would subsequently improve. Part of the campaign involved a partnership between Office Depot and Florida Atlantic University's Small Business Development Center (SBDC). SBDC business analysts spoke at two-hour seminars at Office Depot stores that could be attended free of charge by Florida's local business leaders. "For years, we provided small businesses with the tools they needed to run their business," Monica Luechtefeld, the executive vice president who headed Office Depot's online business, said to the Palm Beach Post. "Today those tools tend to be information as much as products. A large part of our customer base is small business and the small business entrepreneur. As they become healthy, that obviously creates a healthy customer for us."

DESKS, CHAIRS, AND FILE CABINETS

Between 2001 and 2003 the office-supply company Office Depot ran an advertising campaign titled "What You Need. What You Need to Know." During the campaign Office Depot reigned as the leading retailer of office furniture. Desks, chairs, and file cabinets were Office Depot's best-selling furniture items.

COMPETITION

In 2001 Staples reigned as the world's largest office-supply store. Starting in the mid-1990s Staples advertised under the slogan "Yeah, we've got that." The campaign ended in 2003, when Staples severed its eight-year relationship with the ad agency Cliff Freeman & Partners and gave its account to Martin/Williams of Minneapolis. Martin/Williams's first campaign for Staples, which was released with an estimated $50-$70 million budget, featured the tagline "That Was Easy" to emphasize the ease of shopping at Staples. The office-supply store also shifted from advertising in Sunday circulars to mailing ads directly to businesses. The first of two TV spots for "That Was Easy" featured two executives trying to lead a business meeting with ridiculously misprinted handouts. The second spot featured an office-supply store calling out printer cartridge numbers as if they were number-letter combinations in Bingo. At the spots' conclusions a voice-over explained how the shopping experience at Staples was less stressful than at the competition. "Our job is getting people to drive by Office Depot and OfficeMax and go to Staples instead," John Karlson, senior vice president for strategic development at Martin/Williams, said to the New York Times. "The way to do that is by making it easier to get through the store, within the format of the large superstore."

In conjunction with the "That Was Easy" campaign's theme of convenience, Staples also began advertising products unique to its stores. Staplers that allowed consumers to staple giant stacks of paper with one finger were featured in direct mailers. Combination locks that used scrambled words instead of numbers were pushed with the "That Was Easy" campaign. "We want our brand to stand for ease and innovation," Ronald L. Sargent, the chief executive of Staples, told the New York Times.

MARKETING STRATEGY

The "What You Need. What You Need to Know" television, radio, and print campaign was created by BBDO in 2001. Over its four-year lifespan, the campaign's strategy morphed as its target market changed. The first TV spots targeted the parents of children returning to school in the fall of 2001. These commercials suggested that if parents wanted their children to succeed, the children should be equipped with the proper school supplies. Several months later, in 2002 Office Depot aired one 30-second spot to announce its sponsorship of the Winter Olympics. In a $2 million Super Bowl spot titled "Don Barcome, Curling Expert," a man watching the Olympic sport of curling on television wondered aloud, "What is that?" No one answered. Then the copy "But, if life was like Office Depot …' appeared. Now, with a life "like Office Depot," the same man asked, "What is that?" The ice curling champion Don Barcome suddenly appeared and explained, "Curling, an ancient Scottish ice sport, played with a 42-pound stone." The same man who had asked, "What is that?" next appeared shopping inside an Office Depot. The spot ended with the Office Depot logo, the Olympics logo, and the tagline "What you need. What you need to know." During the same week a similar spot featured the figure skater Tara Lipinski explaining the lutz ice-skating jump.

The campaign also partnered Office Depot with Florida's SBDC. Executives at the office-supply company believed that if small businesses and entrepreneurs improved their businesses, the success would equate to higher sales for Office Depot. Throughout 2002 speakers from SBDC were hired by Office Depot to speak at stores in Miami and Coral Springs, Florida.

In 2003 the campaign stopped airing commercials related to the Olympics and created spots that targeted small businesses. The change came after an Office Depot survey discovered that 80 percent of the store's customers were buying for their small businesses. Office Depot's largest competitor, Staples, had successfully targeted small businesses earlier. From September until the end of November, four spots suggested that Office Depot products could improve the lives of small-business employees. "The strategy builds on what we did for back-to-school about owning your kids' success," explained BBDO senior creative director Adam Goldstein in Adweek. "This is about owning the success of your small business." The first spot featured a worker who received a raise after Office Depot helped her choose an ink cartridge. The next spot, "JoAnn," lampooned reality television shows with a small-business owner who needed to "update her look" with Office Depot products. The third featured adults running after an Office Depot van as if it were an ice-cream truck. The final spot showed an Office Depot "ringer" helping a business win its corporate softball game.

Near the end of 2003 Office Depot advertised its exclusive Christopher Lowell line of office furniture. Executives at Office Depot hoped that the furniture would differentiate Office Depot more from its competitors. The tagline "What you need. What you need to know" was used until December 2004.

OFFICE DEPOT RETAIL GIANT

In 2003 the office-supply company Office Depot was the world's second-largest online retailer. It was also the sixth-largest furniture retailer in the United States.

OUTCOME

The campaign's first full year helped Office Depot outperform Staples. When Staples posted $10.7 billion in global sales for 2002, Office Depot led the industry with $11.4 billion. The following year, however, Staples became the leader with $11.6 billion in sales. Analysts within the office-supply sector explained that Staples had surpassed Office Depot by placing stores in more preferred locations. Office Depot CEO Bruce Nelson also attributed the change in supremacy to international currency exchange rates. With 16 percent of Office Depot's locations existing outside of North America in 2002, the deflated U.S. dollar sent Office Depot's operational costs skyrocketing.

The "What You Need. What You Need to Know" campaign was one of many campaigns that earned BBDO "Agency of the Year" from Shoot magazine (an ad-industry publication focusing on commercial production) in 2002. In regards to Office Depot's future advertising campaigns, ad critics pointed out that "What You Need. What You Need to Know" successfully defined a preferred target market of small-business owners and entrepreneurs for Office Depot. The retailer's exclusive Christopher Lowell office furniture further promoted Office Depot as an office-furniture leader. With the inside of its stores decorated to appeal to women, Office Depot separated itself even more from the warehouse-style interiors of OfficeMax and Staples. Advertising critics agreed that, after struggling to define its brand throughout the 1990s, Office Depot had finally differentiated itself during the span of "What You Need. What You Need to Know."