All Posts

Office Supply Retailer Goes Endless Aisle for Digital Transformation

When an office supplies chain found that in-store sales were lagging, a series of strategic decisions were made to improve the top and bottom line by shifting emphasis to online sales. These changes would allow the company to close numerous stores, and in those that remained, move to a showroom approach where products would be displayed but inventory for all items would not necessarily be kept in stock. The majority of items, whether purchased online or in-store, would be drop-shipped. Referred to as the “endless aisle,” this approach would allow for a much higher potential sales volume at lower cost.

In addition, the company planned to expand from its focus on office supplies to providing a much broader product assortment in several key small business B2B verticals, including education, healthcare, restaurant and retail stores. The company’s online marketplace strategy was designed to significantly increase Average Order Value (AOV) without additional inventory costs, but also entailed managing a very large number of new products and associated SKUs from multiple new third party vendors.

Inadequate Framework Strains Under Weight of Expansion

Initially, the company more than doubled its 100,000 office supplies to about 250,000 products, and the plan was to go to 2 million within 18 months. When it neared 500K SKUs to introduce “Shop by Industry,” however, problems arose with structuring and managing the product categories. Over 50 major categories were in place, and over half of those had fewer than 50 SKUs. Editorial “drift” away from core office supplies meant that the categories were no longer well defined. And the number and variety of product information attributes had skyrocketed with the dozens of new vendor data feeds introduced for verticals.   

At that point, the company recognized there was no way to support this aggressive growth without redesigning their product taxonomy and requested assistance from Earley Information Science (EIS). The first step was to make decisions about where product categories should be combined, removed, or redefined. The second major issue was how to re-merchandise the new breadth and depth of product assortment so it would make sense to each B2B vertical, without listing many thousands of items multiple times.

  • EIS analyzed the categories and identified many areas of inefficiency, ambiguity and redundancy.
  • After discussions with the company, the number of major categories (“super-categories”) was reduced by about half, and the number of subcategories (“classes”) by about the same amount. These changes improved the shopper experience and allowed faster online access to product pages, while simplifying the process of item onboarding from vendor product data feeds.
  • Shop by Industry digital merchandising categories were then “layered on” to this simplified structure so that shoppers and B2B customers could easily navigate to just the right assortment of products, whether just office supplies or a vertical was self-selected.

The last major challenge was to rationalize the hundreds of conflicting, overlapping product attribute definitions to ensure consistency. This required analysis and redesign of attributes (product features such as brand, color, size, and material) across and within each specific product category. In some cases, SKUs from different vendors within the same subcategory had 150+ variations of product attributes, which made accurate navigation filtering nearly impossible for shoppers. Our attribute redesign reached the goal of reducing attribute complexity while improving data quality, allowing customers to zero in on relevant products from among millions of SKUs in just two or three clicks.

From Lagging Sales to Online Profitability

Product taxonomy redesign has been essential to bringing endless aisle and online marketplace strategy to fruition for this major office supplies chain. In addition to enabling 8X growth in online assortment, the company’s digital merchandising teams now have a blueprint that allows for better curated product assortments and less time maintaining individual item assignments. Fewer clicks to product have meant greater online conversion. And after the modifications made by EIS, specialty Shop by Industry collections have helped make this retailers online marketplace strategy a success, achieving more than $200 million of growth beyond office supplies. Overall, changes have supported double-digit growth in online sales, making the flagship website their most profitable business.

Moving from in-store emphasis to one that is primarily online through endless aisle drop-ship is only one of several legitimate retail strategies, and each approach points toward a different information architecture. For example, another EIS client, a big box home improvement supplier, uses the online experience to encourage in-store visits, which the retailer hopes will drive additional sales based on service differentiators and visibility of related in-store products. In this strategy, digital merchandising and promotional techniques are different from those used when the online approach is primary.

“Unified shoppability” mandates being able to find and research products and services easily and consistently regardless of final purchase point, as consumers today move among social, in-store, kiosk, online and mobile throughout their shopping journey.

WATCH:  Product Information is Key to Winning the Customer Experience Race

Recent Posts

Use Customer and Behavior Data To Create Personalized Experiences

The more quickly customers can find the product they are seeking, the more likely they are to complete a transaction and to return to the site in the future. Personalizing offers and making well- targeted recommendations can bring customers and products together faster, and are effective ways to engage customers by creating a more positive customer experience. In order to do this, companies need to capture and use as much relevant information as possible. The more that is known about the customer, the more effectively the recommendation system works. Customers generate many signals through their online behavior, and those signals can also be used to understand their interests, purchasing patterns, and needs. Reading their digital body language accurately and creating a valid customer model is essential to anticipating and fulfilling those needs.

How to Instrument KPIs Throughout the Customer Journey

You're probably using metrics to determine if your marketing programs are effective. But, have you selected the right metric at each stage of the customer journey?  Which ones connect to your strategic goals? In this session Seth Earley and Allison Brown talk about how each stage of the journey can be instrumented to use feedback from course corrections to further improve the process. You'll learn: Types of operational and user experience metrics and KPI’s How to select and collect the right metric for each stage of the customer journey How KPIs can be used for data-driven decisions How to manage conflicting goals and metrics

First Party Data - Managing and Monetizing the "Data Exhaust" From Your MarTech Stack

Understanding, anticipating and responding to the wants, needs and behaviors of your customer is the competitive battlefield of 2022. However, with new limitations and regulations regarding second and third-party data and tracking cookies, marketers, digital leaders and ecommerce executives have to consider their own methods of collecting and acting upon the data they gather about customers. In this webinar Seth Earley will talk with industry experts about how you need to model, collect, normalize, organize, manage, analyze, and act on customer information. The time to do so is now and we’ll discuss practical ways to move the needle on customer data, customer analytics and orchestration of the customer experience.