Yet another struggling retailer is trying to shore up foot traffic with a unique in-store experience. Staples is offering customers cooperative working spaces and is finding some success with the endeavor.
Staples’ new offering, called Workbar, resembles a tech-heavy upstart in the wake of WeWork’s success in office space sharing. Seven-year-old WeWork’s valuation has skyrocketed to an estimated $20 billion recently after it secured some $300 million in investments from SoftBank Group Corp. (See also: Behind WeWork’s Billion Dollar Valuation.)
The Framingham, Mass.-based Staples is banking on a hip vibe at Workbar – with young workers at their laptops sipping gourmet coffee amid funky art – to offset soft demand and revive its brand. At its first co-working space in Boston, where Staples opened its first location in September, there’s a putting green, skylights and happy hours.
“If you go to most people on the street and ask about Staples they’d go, ‘Oh yeah, the office-products superstore,’” Staples’ new CEO Shira Goodman told Bloomberg. “But the reality is that’s very far from where we are today, and even farther from where we want to be.” Goodman said she expects Staples’ online sales to be 80% of the retailer’s overall sales by 2020.
Staples, with $18 billion in annual revenue after years of declines, recently said it plans to close 70 stores in the U.S. and Canada to reduce costs amid declining sales. Fourth-quarter sales fell 7% from the year prior.
The company closed 13 stores during the quarter and ended the year with 1,255 stores in the U.S. and 304 stores in Canada.
The office supply retailer is also planning to launch a new marketing campaign that will underscore its role as a partner to businesses, including with its co-working space. Monthly memberships to Workbar cost $130. More than 200 people have signed on since its debut in September.
Staples stock is down 23.3% the past year, and down 6% year to date. Staples tried to buy Office Depot in 2015, but that proposal was not approved by regulators.
By Rebecca McClay for www.investopedia.com
Despite the well worn office mantra of group work being central to success, businesses often struggle to offer effective collaborative spaces. This is according to Inspiration Office, an Africa-wide office space and furniture consultancy.
Says Richard Andrews, MD of Inspiration Office: “Historically, most collaboration in South Africa has occurred through formal, scheduled meetings having many participants.
“As a result, organisations have had years of experience building conference rooms and other formal meeting spaces. These spaces were designed to facilitate large group work processes, efficient client exchanges of information and decision making.”
Andrews notes that the need for innovation, improved productivity and particularly speedy decision making are the principal drivers behind the charge towards collaborative, less structured workspaces.
“This is especially true when you consider 70% of great, innovative ideas at work come from people collaborating,” he says. “The search for competitive advantage through innovation and effective decision-making has led many organisations to highly value group-oriented work and workspaces.”
Today’s collaborative spaces fall short of expectations, driven by a lack of spaces to support the most valued types of collaboration, and a lack of adaptability of both furnishings and technology within the spaces.
“While the most highly prized collaborations are informal in nature, they need to be supported with the right design characteristics such as convenient location, support for social and small group work interactions, and casual look and feel.”
Most organisations consider the social component of work separate from “work” spaces. To foster social interaction, some copy the obvious characteristics of successful public spaces (the café, bar, market, lounge) mistakenly hoping that the variety of social interactions occurring in the public versions of these spaces will translate to a business setting.
However, organisations have few insights into supporting innovation other than to encourage as much interaction as possible and “wait for the magic to happen”. Organisations know their group spaces are under-performing, but do not know how to respond.
Andrews says that while the trend to establish comfortable, informal collaborative spaces within offices has taken hold in Europe and particularly in the US over the past few years, and to some degree in South Africa, he expects the trend to accelerate here in 2017.
“The economy is sluggish and adding a collaborative space in an unused office area means you can enhance office facilities without taking on extra spaces and bumping up the rent or spending a lot on expensive office reconfiguration.
“Another advantage is because these spaces typically consist of things like screened off areas, perch tables with high stools, booths with comfortable ottomans and chairs, they are easy to move to a new office.”
Andrews says that the types of collaborative spaces offered continue to evolve- the most rapidly growing categories support brainstorming, small unplanned meetings, videoconferencing and project team work.
“In the future, most collaborative spaces will offer features that facilitate connection to technology, sharing of visual information, adaptability to changing work process and amenities such as food, beverages and daylight,” he concludes.
Staples has announced a new way to make better use of its cavernous stores at a time of shrinking shopper traffic: turning some of that square-footage into office space.
The office supplies giant said that it was collaborating with office-sharing startup Workbar to open communal workspace at three of its stores in metro Boston in a pilot. Workbar runs a network of locations with desks and conference rooms that subscribers can use for a monthly fee.
Each of the 2 500 to 3 500 square-foot Workbar facilities will have workspaces, conference rooms, private phone rooms, and wifi access. The average US Staples location is 20 000 square feet in size.
The move is just the latest by big box retailers looking to find new uses for all their store space at a time more shopping is moving online.
For instance, Macy’s has shops run by sports apparel retailer Finish Line and is testing out a similar idea with electronics retailer Best Buy. Sears has rented out parts of stores to everyone from Whole Foods Market to Dick’s Sporting Goods.
Staples is struggling with a declining retail business. It said last month it would close 50 of its 1,607 North American stores this year, after shutting 242 others in the two previous years. Staples is also trying to convince the government to let it buy Office Depot to fend off growing competition in the office supplies area from Amazon.com.
It recently re-named its business services division Staples Business Advantage from Staples Advantage to prop up that part of its business, which in contrast to the retail division, is growing.
Business services now generate 40% of company sales, compared to 35% in 2013. What’s more, Staples’ North American B2B unit is far more profitable and looks set to surpass the retail division in the next year or two.
Many of Staples’ stores have much more space than they need, now that people are buying more and more office items online.
By Phil Wahba for www.fortune.com