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Staples Midmarket Push Is Small Business to the Rest of Us

Shira Goodman

Shira Goodman

Staples (NASDAQ: SPLS) is introducing a range of business and IT services for midmarket customers, the struggling office retail giant says. But the strange twist: Staples’ view of the “midmarket” opportunity looks and sounds like a small business strategy to the rest of the world.

“Just to be clear, we define the midmarket as business customers with 10 to 200 employees and they are a sweet spot for us,” said Interim CEO Shira Goodman during an August earnings call with Wall Street analysts.

Generally speaking, most IT companies define midmarket as roughly 250 seats to 1,000. Others define it as roughly 1,000 to 5,000. Even as Staples claims to target midmarket businesses, the company seems to be saying: We’re going after small businesses — as long as they’re not micro businesses.

The sales approach, Goodman said, “combines the personal touch of our salesforce with digital selling tools and robust data on customer behavior and preferences…These customers are often large enough that they have sophisticated needs, but too small to have the expertise or resources for all of their needs in-house. Historically, our key differentiators in the mid-market have been deep assortment, very competitive pricing, and fast delivery.”

Whether you call it a midmarket or small business push, the initiatives come at a critical time. The company faces intensifying competition from online retailers — including the fast-growing Amazon Business strategy. Further complicating matters, the U.S. government earlier this year blocked Staples’ attempt to merge with Office Depot — alleging the business combination would be anticompetitive and could hurt business customers.

For its Q2 ended July 30, 2016, Staples’ revenue was $4.8 billion — down 4 percent compared to Q2 2015. Moreover, the company suffered a net loss of $766 million during the quarter.

Although the company offers rudimentary IT support services, the retailer previously owned a more sophisticated MSP — Thrive Networks. But that business languished a bit under Staples’ ownership. MetTel acquired the business unit in 2014.

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2 Comments

Comments

    Greg VanDeWalker:

    One difference, Staples is talking # of employees and most IT companies I speak with think of # of seats. Employee count often does not equal seat count.

      Joe Panettieri:

      So doesn’t that mean Staples’ “midmarket” focus is even smaller than the 10 to 200 employees they mention? Actual seats could be lower in each of those target businesses…
      -jp

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