Is Office Depot’s Advantage Real?

Feb 24, 2004
George Anderson

By George Anderson

Office Depot is taking the leap into loyalty marketing when it launches its first customer loyalty program, Office Depot Advantage, on February 29.

The retailer is launching the program in the hope it can turnaround its business in North America. Office Depot’s net income was down 27 percent in the last quarter because of
slow retail sales and the cost of terminating some leases.

Kathleen Kennedy, vice president, customer development for the office supplies chain is optimistic about the program because, as she said, “Office Depot Advantage is rooted in
the company’s deep understanding of the office products buyer. We took a look at what our customers really want from an office supply superstore and then leveraged our global
buying power, multi-channel capabilities and marketing expertise to design a program that delivers industry-leading benefits, useful services and real values.”

The program is free and provides consumers with discounts of up to 10 percent on qualified purchases after having spent $200 at the chain.

Office Depot plans to market its Advantage program with television and radio spots, newspaper inserts, direct mail, e-mail, in-store, online promotions and public relations.

Moderator’s Comment: What will Office Depot need to do if it wants its new loyalty program
to provide it with a competitive advantage in the office supplies market?

Based on past personal experience with Office Depot, the chain would have been better off announcing it was cutting prices at least 10 percent across the
board. Let’s hope it does something with the data it receives from this program to prove it really is as customer-centric as the released statements from the company profess.

Anderson – Moderator

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