7/19/2013

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The Changing Digital Landscape&

OfficeMax’s Evolution Toward a Customer-Centric, Omni-Channel Company

Today’s Discussion

Who We Are

Cross-Channel, Multi-Channel, Omni-Channel?

Changing Consumer Behavior

Customer-Centric Focus: “Listen to Your Customers”

Cultural Shift Toward an Omni-Channel Organization

Takeaways

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Who We Are

Fortune 500 leader in office products/services, serving thousands of businessesin various markets including healthcare, education and government

Approximately 29,000 associates

Operations and customer base in U.S., Canada, Mexico, Australia and New Zealand

More than 900 retail stores in the U.S. and Mexico

Sales at a glance: $6.9 Billion (FY2012)

*Total company sales are for full-year 2012**Technology includes ink and toner

Retail Segment: $3.31 BillionContract Segment: $3.61 Billion

InternationalInternational

31%31%U.S.U.S.69%69%

SuppliesSupplies& Paper& Paper

57%57%

Technology**Technology**

31%31%

Furniture12%

Total Company* Sales

RetailRetail48%48%ContractContract

52%52%U.S.U.S.91%91%

SuppliesSupplies& Paper& Paper

43%43%TechnologyTechnology****

50%50%

Furniture 7%Mexico 9%

The Digital Business

OfficeMax.comServes consumer, SOHO, SMB

Key value proposition is ease-of-use and competitive pricing

Mobile web and native applications

Reliable.comSOHO SMB site launched in 2011

Known for “gift with purchase,” deals

OfficeMaxSolutions.comCore “ordering tool” for Workplace business

Key feature is strong administrative tools for large & medium businesses

…and the People Behind It

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Not Just a Business Unit …

Supporting multiple customer touch points across the company:

Digital marketing

Centralized email support

Company-wide SEO

Enterprise-wide search engine marketing support (B2C, B2B)

Also a Support Unit

Cross-Channel, Multi-Channel, Omni-Channel?

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Omni-Channel is Today’s New Retail Reality

Traditional Retail Omni-Channel RetailMulti-Channel Retail

OfficeMax’s Digital Journey

Digital/eCommerce business has grown to #11 in Internet Retailer Top 500 by embracing a customer-centric approach to the web and mobile experience

Further change is coming to OfficeMax and to our industry, bringing new challenges and opportunities for future growth

Started the transformation from a multi-channel business model to an omni-channel retailer

Focused on enhancing teams, building best-in-class digital capabilities, addressing key strategic and tactical opportunities, and driving toward a “true north” vision

Driven by changing customer demands, adapted how we organize, how we operate, what we sell, and how we engage customers

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Changing Consumer Behavior …Changing Shopping as We Know It

Our Changing Customer, Yesterday … and Today

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Consumer Shopping Habits

Sources: Forrester, Morgan Stanley, US Census

Online Influence WILL Become The Primary Driver of

Future Store Sales

Total Retail Revenue by Channel of Influence – U.S.

Online to Online

Traditional Channels to Store

Actual: $5.0T

Projected: $6.2T

Online to Store

68%

24%

8%

21%

64%

15%

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Customer-Centric Focus:“Listen to Your Customers”

It’s All About the Customer’s Wants & Needs

Product Management

Product Management is the Intersection Between the Business, UX and IT

Serves as the eyes and ears of the customer; translates their wants into opportunities

Quantifies the opportunity to ensure customer and business value (conversion, CSAT, etc.)

Identifies opportunities by listening to internal and external customers to understand market problems/needs

Identifies requirements and works with User Experience and Development to ensure delivery of a quality experience

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Responding to Customer Feedback is Vital to Success

Old 1

2

3

4

New

Workplace.com Homepage Changes

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11

2

Workplace.com Product Details Page Changes

Old New

Responding to Customer Feedback is Vital to Success

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2

1

Workplace.com Search Improvements 5

24

3

6

3

Workplace.com Search Improvements

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Delivering Consistency and Relevance in Cross-channel Communication is a “Mandatory”

Building Powerful Communities of Customers Creates Loyalty and Differentiation

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Cultural Shift Toward an Omni-Channel Organization

Leadership “Buy In”…But You Must Evangelize at All Levels

CEO ownership – role of CDO

VP eCommerce – Multichannel

Omni-channel steering committee

29,000 associates

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Digital / eCommerce Business as Agent for Change

Education of entire organization:

Executive Team & Top 100

Retail Leadership & Store Associates

Organization at Large

Key Support Functions

Develop Omni-Channel Capabilities That Meet Customer Needs

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Reward Structure to Incent Omni-Channel Execution

All channels get credit

Ensure metrics are designed to drive the right behaviors (CSAT)

Feedback loop to monitor execution

Data & Customer Feedback Are Critical

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How Do We Know We Are Making Progress?

Conversion rate and customer engagement

Digital sales meeting attendance growth

Greater inclusion of Digital associates to enterprise functions

Increase in omni-channel ideas from other areas of the company

Digital is “part of the dialogue” in internal & external communications

Key Omni-Channel Takeaways

Reinforce a customer-centric culture and approach

Insure leadership is “on board” and champions the journey

Your eCommerce team must be “catalyst for change”

Implement rewards and incentives to drive the right behavior

Create “relevant” omni-channel capabilities for your customer’s needs

“You can’t manage what you can’t measure” – data & customer feedback are critical

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Questions?

Trends to Watch

The “Death of the Store” is greatly exaggerated

� Brand-enhancing experiences

� Digitally-oriented, destination-based stores

Leveraging physical assets to drive inventory, fulfillment strategies

� Retailers need to understand the costs of store fulfillment

New services to combat the “Amazon effect”

The evolution of the traditional Point of Sale system

� Smarter mobile shopping experiences for customers & associates

Ubiquity of inventory, order and customer data to personalize the brand experience across channels

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Thank You!