A Head to Head Comparison

Stunned. If I could sum up my overall reaction to the things I discovered in this head-to-head test, it would be easy. Stunned. I was absolutely amazed at how much advanced functionality these Web sites offer companies to manage their procurement processes. These solutions offer tools I thought existed only in high-end e-procurement systems like Commerce One's BuySite, yet customers need pay nothing beyond the cost of the products they're purchasing to get the functionality. My only disappointment was how hard it was to search online for specific items in the site, but considering the fact that we are still in the early stages of e-commerce, this wasn't unexpected.


But before I get into the gory details of the comparison, let me first introduce our contestants: Office Depot is the No. 1 distributor of office supplies in the world with $10.2 billion in annual sales, according to Hoovers Online. Suzanne Breselor, an IT integration consultant for the firm, says that more than 50 percent of Office Depot's New England orders come through their Web site, which was originally built five years ago with the assistance of MIT. Office Depot has been a pioneer in e-commerce for some time, taking a major role in standards developments such as the OBI (open buying on the Internet) initiative. In October of 2000, Office Depot was named as the top-rated retail company in the annual InformationWeek 500 list of the most innovative users of information technology in the United States.


Office Depot offers e-commerce Web sites in North America, France and Germany. Its Viking Office Products subsidiary is a leading direct-mail marketer. Besides office supplies, the company sells computer equipment, office machines, furniture and art online, as well as a number of services including bookkeeping, payroll and Web site development. We tested Office Depot's private corporate site for this comparison.


Staples is the No. 2 office supply distributor in the world and operates its three online commerce sites through a separate division it plans to take public. We tested StaplesLink.com, the most sophisticated site of the trio of offerings. The other two, Quill.com and Staples.com, are geared toward smaller companies. Staples' online group is reporting growth rates of over 450 percent annually. They showed total sales of $350 million or better for the year 2000 and they have more than 180,000 repeat customers (buyers making at least one purchase during the quarter).


Staples.com also offers more than just supplies on its sites; it lists services that small businesses need including legal services, marketing campaign advice and Dun & Bradstreet reports. Staples has been an active participant in the online marketplace scene, announcing plans to integrate with several solutions providers including Ariba, Commerce One, RightWorks Corporation and TPN Register. Recently Retail Information Systems News ranked the company No. 1 for its fusion of IT solutions with its corporate vision.


Let The Testing Begin


We tested and evaluated the contestants in six areas: basic features, management control features, business model, quality control, security and usability. The categories and weightings were established from the point of view of a typical 200-person company. Basic functionality topped the list because employees won't use a system unless they find it to be generally useful. The second most important category was the control the site offered the company, primarily because each supplier said their customers tend to adopt these systems when they want more control over expenditures. Usability was a significant success factor because, after functionality, making the system work is critical to adoption. Security was a factor, but not a large one, because most small companies don't use credit cards for indirect material purchases, opting instead to be billed on a periodic basis. Pricing was not considered in the model because it is not realistic to obtain quotes in anything but a real RFQ. It is, however, the opinion of the author that the pricing would not have varied significantly between the participants if the situation had been real.


Basic Features (worth 30 points)


The Office Depot and StaplesLink sites sport robust basic features, including search by part number, keyword or description, and express checkout. Each also contains a small engine that helps users identify the right supplies for a particular machine, such as toner cartridges for a copier, including generic and remanufactured alternatives. Most importantly, both enable customers to set up online laundry lists of commonly ordered items that users simply check off to buy, saving them the effort of having to search for them every time they need to order. Customers can set up both company-wide and individual laundry lists. Another common feature is the ability to add  comments to each line item of an order, a particularly useful field when an administrator is placing an order on behalf of several people. For example, one item could have the reminder for Tony while another might specify for Mr. Erran's machine. Both sites give the administrator a wizard for adding new users.


If that weren't enough to wow a prospective customer over, both sites also offer:




  • Electronic billing (EDI or a spreadsheet).


  • The option for customers to use their own internal part number when ordering. 


  • The ability to prepare an order by typing in a list of parts. 


  • Search results organized by category. 


  • Highlighted contract items within the search results.

StaplesLink.com


This Staples site has a number of unique features that users will find appealing. Customers can include only the catalog content they desire in their site with items in it priced to the customer's contract. Stapleslink.com also offers an online returns process from which users can print a return packing slip. This is a   really important feature in our industry, where returns can run three to five percent or higher, explains Anne Marie Keene, Staple's vice president of B2B e-commerce. Our customers were asking us why they could order items online, but then had to call to return them. This feature really helps us keep down our costs because it reduces the amount of items that show up on our dock unexpectedly. The online process notifies us of the return, so even if users forget to put the packing slip in the box, we still know what it is.


Shoppers can find out whether there is inventory on any particular part by clicking on an icon to check. The response that comes back from an online inquiry is tailored to the customer's preference. For example, some companies want Staples to report only the items that are in stock at a Staples warehouse, whereas others want the option to consider items that can be shipped from a wholesaler. The site offers customers a company bulletin board that users will see when they log onto the site. For example, the administrator may wish to announce that new Staples catalogs are available or that the company picnic is tomorrow. The welcome bulletin can read differently for each ship-to location, a nice feature but probably not something needed for most 200-employee companies.


Two other useful StaplesLink.com features include a summary of the shopping cart contents on every Web page and customizable system messages, so notices are worded in an appropriate style for the company. When businesses are trying to change behavior, the easier they can make it, the better, explains Keene.


Office Depot


Office Depot's site also offers several unique, powerful user features. The most notable one is that inventory levels are specified for all parts right in the summarized description. Users do not have to make any extra clicks to obtain this information, nor do they have to wonder whether the inventory in stock is sufficient to cover the entire order. Another stand-out feature of the site is the neat, detailed description of every part in the catalog, viewable by clicking on the brief description of each product.


Users that query the site for order history are presented with an unexpected bonus: The files contain a complete listing of all orders whether they were called in, faxed in, or entered in the Web site. This data serves as the basis for our reports on the percentage of business done online versus through other modes, commented Bresolor. The site also providers users with good online training.


All in all, each site has excellent functionality. Office Depot and StaplesLink are recognized as some of the strongest B2B e-commerce sites in the world and it shows. Since StaplesLink does offer a greater number of interesting features, I have to give them a slight edge over Office Depot in this category. I am awarding StaplesLink 26 points and Office Depot 24.


Management Control Features (worth 20 points)


Once again, both solutions offer good, basic functionality, including multi-layer approvals. For example, an employee may need to pass all orders by their manager but must also submit orders for furniture to the facilities manager. Each system offers reporting capabilities, generating summaries by department, budget center, manager or category: The program administrator could use the system to determine which departments are ordering the most supplies or on what type of supplies the company is spending the most money, for instance. All the systems can limit orders for individuals based on dollar amounts. For example, the systems can be set to permit up to $100 per week in office supply expenditures for a particular person.


Office Depot and StaplesLink offer control as to where an order can be shipped. On the Staples site, users can only choose from the addresses provided in the pull-down menu populated by the administrator.


Beyond the basic control functionality, StaplesLink.com enables users to download reports into an Excel worksheet so they can play with the results. Another unique, useful feature is the ability for managers to modify an order before they approve it. So rather than reject an entire order of 10 items because one item was unacceptable, the manager can simply delete the unapproved item and then approve the rest. Since order size is a key driver of profitability in the office supplies industry, this feature helps Staples as well as the customer. Otherwise users might be tempted to submit a number of small requisitions instead of one large requisition to ensure that no orders are held back unnecessarily. Office Depot enhances customer control with several customizable fields for reporting, blanket orders with automatic shut-down when the dollars allocated are used up and a standard report on the percentage of contract items versus non-contract items ordered. Office Depot also allows customers to restrict orders for a particular user or group of users by category, such as furniture.


Both StaplesLink and Office Depot offer customers a report on the total dollars spent per part, which is, in my opinion, the most important report a customer needs. It was only with this calculation that I was able to determine that a full third of my office supply dollars were going for a particular type of toner cartridge when I was a purchasing manager. I'm a firm believer in the idea that aggregating volume at the part number level, identifying the items you spend the most on and negotiating the prices on those is the best way to drive down your direct costs.


I have seen other B2B e-commerce sites offer some control functionality that would have been nice at StaplesLink and Office Depot. For example, I've seen a feature where customers can set up a control to require order approval for any item that isn't on the laundry list. If every time a user tries to order unique items the request gets bounced back, users will be more inclined to work within the standard list of products. Another nice, common control feature is to require extra signatures, or issue a notification, if a particular individual or department is requesting purchases that exceed their budget. Also, other sites allow managers to customize how often they are notified of the need to approve a requisition, including every time an order is ready for review, once per day at most or never. Some managers prefer not to be pinged but instead check the system when they have a chance for orders to review.


Each contestant offers good purchase control, but lacked several interesting ones I've observed in my work. Both Office Depot and StaplesLink offer good although somewhat different controls; so I'm awarding them both a 14. As a user, if I used blanket orders, I'd probably favor Office Depot; but I would prefer Staples in order to gain the partial approval capability.


Business Model (worth 15 points)


A major shortcoming of both the Staples and Office Depot business models is that users have a wonderful, responsive system that offers reporting and control ... for a portion of their maintenance, repair and operating spend. The solutions cannot, as currently defined and deployed, be scaled to cover other expenditures (items that aren't ordered from a catalog, in particular) leaving businesses to either settle for automating a portion of their purchases or use a different system for other commodities. For example, a company could use both the Staples and Gateway Web sites for ordering MRO, but the control systems will not be integrated and the customer will have to marry data by hand to produce all-inclusive reports.  The office supply companies could attempt to extend their franchises to cover all the indirect materials and services a company needs, but this is a hard sell when most businesses already have strong loyalties and long-term relationships with their suppliers in other segments.


Pure dot-coms, including online marketplaces, are encroaching on the larger brick and mortars such as our contenders, touting their lack of massive warehouses and delivery fleets, flexibility, and technology prowess as superior to the entrenched distributors. But, in defense of Office Depot and Staples, both have physical assets that greatly enhance their ability to service their customers. Each has their own fleet of delivery vans, which makes desktop delivery instead of dock delivery possible for customers who want it. And both offer users the option to shop in their retail stores while paying the lower of contract or retail price for the items purchased there. Most dot-coms offer neither of these things.


One compromise of late is what solutions provider Ariba calls punch-out technology a system where users creating requisitions in an automated e-commerce system can directly visit a supplier's site to find and select products.    An alternative compromise is to have a custom catalog from your supplier integrated into your internal system for a private marketplace of sorts. These custom catalogs generally contain only your contract items at your contract price and can be maintained by you, your supplier or a third party.


The benefit to both of these options is the ability to use the features and functionality of multiple catalogs and/or sites, while keeping the control function at the top level over all purchasing activity.


My conclusion in the matter is that the jury is still out as to which business model will be more successful, at least in terms of small business needs. It may well turn out that more than models will garner significant support. In the meantime, I will give both Office Depot and StaplesLink a score of 10 out of 15, because using their sites does directly create stand-alone systems. My prediction is that a year from now both will have evolved in some way to address this issue more effectively.


Quality Control (worth 10 points)


I found some impressive programs and policies behind the Web sites of these contenders. StaplesLink.com measures its perfect order rate and uses the resulting data to drive continuous improvement. For Staples, a perfect order means that the correct items were shipped and all paperwork was accurate. Office Depot has stringent internal quality measures such as comparing the weight an order should be to the actual shipping weight. Any order that doesn't match up is usually packed wrong, so Office Depot pulls it back to correct it. I am really impressed with both suppliers in this category and so am awarding both a perfect 10 for their initiatives.


Security (5 points)


Here's one area where the two companies couldn't be more different. Office Depot does a thorough job of protecting customer's information; the company keeps credit card data on its site encrypted so even internal employees can't see the actual numbers. In addition, Office Depot offers a feature to its customers to establish a particular credit card number for users at the time of set-up, so not even the user knows the number. This feature is especially useful for companies that don't want to give temporary employees a company credit card but do want them to be able to order their own supplies.


The StaplesLink approach is poles apart. Due to customer request, the site does not store credit card data, so it is not vulnerable to theft. While this does make it inconvenient for users that buy with credit cards because they have to re-enter the number each time they order, most of our customers prefer to order on account anyway, explains Keene.


I hate to cop out, but I'm not comfortable at this point saying that either the Staples approach or the Office Depot approach is better, so I am awarding them both a 4, since it is apparent that security is a top priority.


Usability (20 Points)


All right already no product comparison would be complete without a real test drive. In order to accomplish this, I drew up a list of four relatively common products and timed how long it took me to find and order these items on each Web site.* The list contained about as much information as I would typically give my administrator when I needed something. It included 100 Pilot extra-fine, felt-tip, Precise pens; 10 1-1/2 binders with a pocket on the spine for a label; a box of 100 assorted 1/3 cut file folders (preferably Globe-Weiss) and four black ink cartridges for my printer. I did the two tests a week apart and made sure not to learn any tricks between sessions.


StaplesLink


First, I tried the StaplesLink site. It didn't take long for me to remember why trying to order from this site without a favorites or laundry list almost brings me to tears (disclosure:  I use Staples.com to order supplies for my small business). It took me 17 minutes to find the right pen. Part of the problem was the general slowness of the site and that I was confronted with terms that I didn't know to narrow my search. Far more troublesome, anytime I made an error and hit back, the site took me all the way back to the home page and I had to drill back down to where I left off again. Eventually I figured out that I could click on a different icon that took me up a category, but even then I was frustrated because I found I could only order singly packaged pens, despite the fact that I needed 100.


Finding binders wasn't as bad, now that I had trained myself not to hit the back button, but I still had trouble. Once again, the sub-categories were Greek to me, including terms like elliptical ring and piano hinge binders. It wasn't until I drilled all the way down to the pictures that I could determine whether an option was what I wanted. At last I located a binder that looked right, but then found that it only came in whole inch sizes (1, 2 and 3). I had already spent almost nine minutes on this item, so I gave up.


Unfortunately, finding file folders wasn't much easier. This time, Globe-Weiss worked as a keyword, but it wasn't clear from the descriptions whether anything on the list of the 25 search results was the one I wanted. I drilled down on each item before I concluded that none were what I wanted, then tried a keyword search on the Globe-Weiss part number, also to no avail. Finally I gave up and searched on description, choosing an Ampad substitute.


I tried the keyword search for the printer cartridge but the system didn't recognize my number. I tried the product match-maker function and it worked. Checkout was relatively easy, and the site offered me the ability to save the order as a laundry list template for later on (and now I understand why!). The total elapsed time for the order 43-1/2 minutes.


Office Depot


Frankly, after my experience with StaplesLink, I wasn't looking forward to this test. And when it came to ordering the pens I had similar difficulties, again being presented with terms I was unfamiliar with. This site did have some really nice features, however. It listed the amount of inventory on hand for each item right along with the summarized description. While this was helpful, it did cause some other difficulties the site had to list the same product in different  package sizes separately in order to detail correct inventory numbers. I got a little confused with this feature at first because Office Depot only had a few boxes of 12 pens in stock but a ton of individual pens. It took me a little while to figure out how to get 100 on order.


The binders, however, were easy to order on this site. The descriptions were much more understandable. I saw a listing for elegant binders and found exactly what I wanted, size and all, in short order.


File folders were a little tougher. I searched again on Globe-Weiss and as with Staples, I couldn't tell whether the items the search engine produced were what I wanted. After a bit of drilling down, I gave up and picked a Smead alternative.


My efforts to order my last item, the printer cartridge, illustrated the cool feature that Office Depot had explained before: the quick supplies finder pulled up not only the branded Hewlett Packard cartridge but also a number of lower-priced substitutes, which I ordered. But at checkout an unexplained problem occurred. The site informed me that I could not order the substitute printer cartridge on the same requisition as my other items. Not understanding why, I went back and changed back over to the more expensive Hewlett Packard brand. The total elapsed time for the order was 27 minutes.


The Scores, Please . . .


All in all, I was disappointed with both site's test times. The best time, 27 minutes, is surprising for ordering four simple items. It only took me 10 minutes to find the same products and order them via fax using Staple's regular catalog. I didn't, of course, know whether the items I ordered the old-fashioned way were in stock, and I risked getting the wrong things because I may have transposed an item number. But were these benefits worth the time and hassle of searching the sites? 


Staples later explained to me that they help users avoid problems such as hitting the back key to go up a level with training. They also explained that as a user, I could have included a box of 12 pens in my contract list and catalog if I had wanted. But how many of us receive training to shop at Wal-Mart, or our local grocery store? I understand Staple's point of view and have no doubt that their site compares extremely well to any e-commerce site, but I also believe the Internet will not be the channel of choice for B2B e-commerce until usability, in general, improves. In fact, I suspect that when a StaplesLink user needs an item off-contract, most simply find what they want in the catalog and then quick order by part number. 


Office Depot gets the highest marks for usability, because they took the least amount of time and I found everything I needed. But because it was still difficult, I'm only giving them an 11 out of a possible 20 points. Since I spent so much time at Staples and did not get everything I came for, they get a 5.


And The Winner Is . . .


Office Depot won this competition, but not by much. Except for usability, both companies were either neck in neck or tied in each category. (See the sidebar for a detailed summary of the scores.) Both sites had very strong points, and if I were a company considering automating my office supply purchases, I would certainly consider each very seriously before making my final decision.


One interesting outcome of this comparison is the fact that the highest score Office Depot's tally of 73 points still leaves a large margin for improvement. This is despite the fact that the overall functionality of these sites amazes me. So yes, these sites bring a lot to the table for small businesses, but we can probably expect orders of magnitude in improvement in the future.


*Note: The Staples.com test drive was done at 9 p.m. on a Sunday night, whereas the Office Depot site was tested at noon on a Monday morning. Staples.com's test times may have been negatively impacted due to varying traffic on the Internet at    different times during the week.

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