A Head to Head Comparison

The two leading online office supplies purveyors, Office Depot and Staples, agreed to strut their stuff for iSource in a head-to-head comparison of their online stores. We approached the test as if we were a 200-person company that needed to strategically...


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.

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