Officeworks “Every Channel” Retailing Online Retailer Conference March 16/17
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Our History Key Milestones
First ‘big box’ Officeworks store opened in Richmond
Officeworks acquires Viking
Officeworks Online & Viking become Business Direct
Officeworks acquires Harris Technology
Wesfarmers acquires Officeworks
Our History Circa 1993
• Proposal for a chain of low price warehouse style office supplies outlets • Opportunity to rationalise a very unstructured market, and take a substantial
market share • Exploit concept and formula which has proven successful in the US Market • Profitability depends upon economies of scale – no current competitor seems willing to invest required funds • Proposal covers 60 stores over five years
Our History Original Strategy Established as a ‘category killer’ •
‘Big box’ stores o One stop shop
•
Wide range
•
Low prices everyday - guaranteed
•
Primarily focused on B2B customers o ‘Taking Care of Business’
Our History Store network by size 1994 - 2007 9 8 11
8 6
7 3 4
1 4 1
14 1 1994
Total Stores
1
21
1 3
4
10
6
6
33
35
10
10
7
1997 1998 1999 2000 2001 Large 1350m2 - 1800m2 Medium 1000m2 - 1350m2
20
28
26
30
38
2
2 10
18
39
43
43
43
44
43
12
12
12
12
12
12
1 6
24
1
7 3 3 1995 1996 Extra Large > 1800m2
2 1 5
3
35
48
53
2002 2003 2004 2005 2006 2007 Small 600m2 - 1000m2 Extra Small 300m2 - 600m2
60
71
83
92
100
113
Our History Store Layout
1994
2007
Our History Channel Sales Split 2007 Phone/Fax 6%
Online 6%
Stores 87%
Our History Circa 2007 Customer & team trust eroded over time • Pricing Trust – Channel Conflicts • Poor in Stock Position • Lack of ongoing investment • Store look & feel compromised • Event focused trading calendar Changing customer • Online shopping • Technology savvy • Value focused
Our History Circa 2007 Customer & team trust eroded over time • Pricing Trust – Channel Conflicts • Poor in Stock Position • Lack of ongoing investment • Store look & feel compromised • Event focused trading calendar Changing customer • Online shopping • Technology savvy • Value focused
Office Supplies Industry Market Size & Growth • • • • •
Addressable market >$30.3bn2
Technology Advanced Print & Copy services Other business services Commercial furniture Print & Copy services
Total office products market1 $11.8bn
1 2
Core office products market $6.9bn
• Writing instruments • Paper, pads & books • Labels, envelopes & mailroom • Computer consumables & accessories
• • • •
Non-core office products market $4.9bn
• • • •
• Promotional products • Work wear • Packaging supplies
Market Size 2012 (2012 – 2014 Office Products in Australia, Penfold Research) Officeworks estimate.
Kitchen supplies Cleaning & janitorial Office furniture Printing services
Presentation products Business machines General office supplies Filing products
FY08 – FY12 FY12 – FY14F CAGR CAGR (1.9)%
(1.7)%
(2.3)%
(4.5)%
(1.3)%
2.2%
Office Supplies Industry Market, Environment & Officeworks •
Office Supplies Market - flat
•
Addressable market >$30 billion
•
Business lacked uniqueness
•
Fragmented, rapidly changing competitive environment
•
More technology savvy, value conscious consumer
•
Challenging trading conditions during financial crisis
•
Price deflation, a new reality
Officeworks Strategy 2008 Lowest Prices Everyday •
5% price guarantee
Widest Range •
From generalist to specialist
Great Service/s •
Multiple channels to market o ‘Every Channel’ capability o Seamless shopping experience
Officeworks Strategy 2008 Lowest Prices Everyday •
5% price guarantee
Widest Range •
From generalist to specialist
Great Service/s •
Multiple channels to market o ‘Every Channel’ capability o Seamless shopping experience
Every Channel Approach Stores Uniqueness – A Compelling Offer for Customers •
Great Service & Services
•
Kids Club & kids area
•
Immediacy of Purchase
•
Community involvement
•
Convenient locations
•
Meeting rooms
•
Ability to showcase range
•
Free in-store Wifi
•
Easy access & parking
•
Customer Accounts
•
Long trading hours
•
Special Orders
•
Click & collect
•
Assembly
•
Interactivity / “how to” classes
•
Customer focused returns
Every Channel Approach Store Network by size 1994 – 2015 Wesfarmers acquisition 4 11
20 9
4
1
1
1994
3 1995
1
1 3
21
24
6
6
1997
1998
14 7 3 1996
Extra Large > 1800m2
Total Stores
1
4
10
20
28
1 4
2 1 5
2 1 6
2 10
6
3 18
45 43
3 26
44 30
38
39
43
43
43
44
43
43
52
33
35
7
10
10
12
12
12
12
12
12
12
8
10
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
35
48
53
60
71
83
92
100
Small 600m2 - 1000m2
113
44
44
41
41
59
62
66
56
17
21
22
23
22
2011
2012
2013
2014
2015
55
Medium 1000m2 - 1350m2
23
45
53
Large 1350m2 - 1800m2
21
20
11
8
21
1
20
19
8 7
20
2
3
5
4
3
126
128
133
Extra Small 300m2 - 600m2
139
141
150
152
156
Every Channel Approach Store Layout 2007
Every Channel Approach Store Layout 2015
Every Channel Approach Online Uniqueness – Making Digital as Strong as Physical •
24/7 Convenience
•
Extended product range
•
Ease of Navigation & Purchase
•
Detailed product specifications
•
Personalisation
•
Multiple product images
•
Same day / next day delivery
•
Articles and video content
•
Easy returns
•
Tailored websites
•
Social media
•
Free delivery
•
No hidden fees
•
Mobile sites
•
Online & in-store stock visibility
And a compelling online offer
2007
2016
And a compelling online offer
2007
2016
2010 Advertising Local area marketing press
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Advertising 2010 ‘We refuse to be beaten on price TV ad’
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Every Channel Approach What we are trying to do? DIY
Student journey
Home work
Home workspace
School office
Medium business
Small micro business office
DIFM
Officeworks Strategy Customer First - Anywhere, Anyhow, Anytime •
Seamless customer experience Apps
•
Store team members
Ongoing investment Stores
o
New stores & formats
o
E-Commerce investments
o o
Traditional media
Online
Call centre optimization New avenues to market e.g. eBay
Social media
B2B sales reps/account managers
Digital media
Phone /fax Internet
Call centre team members
Officeworks Strategy Adding ‘Want’ to ‘Need’ •
Providing inspiration, innovation & differentiation to: o
Products & Ranges
o
Service & Services
•
Shift from functional to inspirational
•
Sourcing best quality at lowest prices
•
Exclusive distribution of new brands
•
Balance of private and national brands
Customer Engagement 2014 ‘Grow up TV Ad’
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Customer Engagement 2015 Embrace your inner artist – April Catalogue
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Our competitive advantage – anywhere, anyhow, anytime Channel Agnostic Customer Engagement
Traditional Media
Apps
Store Team Members
Social Media
Digital Media
B2B Sales Reps / Account Managers
Internet
Call Centre Team Members
Officeworks’ every channel strategy is there are no channels
Officeworks’ every channel strategy is there are no channels
The line between shopping online and in-store is no longer a line at all, it has simply become shopping
From channel driven to customer driven experiences
Customer First Approach - Anywhere, Anyhow, Anytime Apps
• Seamless customer experience – ‘making it easy’
Stores Traditional media
• Innovating as an every-channel retailer
Store team members
Online Social media
Digital media
Phone /fax Internet
• Extending our reach B2B sales reps/account managers
Call centre team members
We make complex things simple by making sure every experience is useful, easy and engaging
PRINTED RECEIPT Useful
EMAIL RECEIPT Easy
MAKES TAX TIME Engaging
We make complex things simple by making sure every experience is useful, easy and engaging
PRINTED RECEIPT Useful
EMAIL RECEIPT Easy
MAKES TAX TIME Engaging
Innovating as an every channel retailer • Expanded offer across categories • International and Private brands • Shift from functional to inspirational ranging Adding “want to need”. • Market leading Print & Copy offer • 3D printing • Products to services eg: Mailman
Extending our reach • New store formats • eBay store • Business Specialists – In store – Over the phone – On the road
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Office Supplies Industry Market Size & Growth • • • • •
Addressable market >$50bn2
Technology Advanced Print & Copy services Other business services Commercial furniture Print & Copy services
Total office products market1 $11.9bn
1 2
Core office products market $6.5bn
• Writing instruments • Paper, pads & books • Labels, envelopes & mailroom • Computer consumables & accessories
• • • •
Non-core office products market $5.4bn
• • • •
• Promotional products • Work wear • Packaging supplies
Penfold Research, Office Products market update Report, 2015 Officeworks estimate.
Kitchen supplies Cleaning & janitorial Office furniture Printing services
Presentation products Business machines General office supplies Filing products
FY08 – FY14 FY14 – FY16F CAGR CAGR (1.3)%
0.4%
(2.6)%
(2.0)%
0.4%
3.3%
Is it working? Revenue
Earnings before interest & tax
$bn
14.5%
$bn
2.0 8.0%
4.6%
1.6%
0.7%
4.4%
8.8%
120.0
10.8%
100.0
1.5
6.5%
8.4%
13.2%
9.0%
80.0
1.0
+9.1% 1.3
1.7
1.6
1.5
1.5
1.5
1.4
40.0
0.5
0.9 FY09-15 CAGR: 4.6%
0.0
74
65
85
80
103
93
118
59
20.0
FY09-15 CAGR: 10.4%
0.0 FY09
FY10
FY11
FY12
FY13
FY14
FY15
1H FY16
Transaction growth %
169bp
14.0
10.0
FY12
FY13
FY14
FY15
1H FY16
111bp 202bp
12.0
130bp
10.0
70bp
103bp
36bp
43bp
58bp
8.0
8.0
6.0
13.2 11.0
4.0 6.3
7.0
6.3
FY13
FY14
2.0
6.7
7.1
8.1
5.7
6.3
FY09
FY10
FY11
FY12
FY13
12.5
9.4
0.0
FY09-15 CAGR: 9.5% 0.0 FY12
11.4
4.0
8.4
2.0 FY11
FY11
14.0
140bp
FY10
FY10
%
(226)bp (472)bp
11.5
FY09
Return on capital
12.0
6.0
+17.9%
60.0
FY15
1H FY16
FY14
FY15
1H FY16
Does the customer care?
Summary Wrapping Up No longer about “Bricks” or “Clicks”… it’s simply about shopping Must deliver a seamless shopping experience •
Anywhere, Anyhow, Anytime
•
Be simple & clear – for customers & your team
•
Inspirational & differentiated products & services
•
Assist customers to achieve their goals
If you can understand & implement a seamless shopping experience across all channels, you will succeed
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Big ideas. Lowest prices.
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