An inside look at Office Depot's 'Store of the Future'

Posted on August 28, 2017

Office Depot Inc. may be wooing plenty of parents during the back-to-school season, but its new store model is focused on drawing in more business customers.

The Boca Raton-based retailer (Nasdaq: ODP) aims to have a total of 66 locations of its “Store of the Future” model across the country by the end of the year. Troy Rice, the company’s president of the retail division, gave the South Florida Business Journal a tour of a West Palm Beach store to explain what’s new.

View photos here. 

Office Depot’s new store model has a smaller square footage instead of long isles of office supplies that stretch from the front of the store to the rear. Actually, the supplies section has been reduced dramatically and electronics have the spotlight at the center of the store. The West Palm Beach location had about 200 square feet added to its copy and print service station (other stores will have an ever larger space).

The Boca Raton-based retailer (Nasdaq: ODP) aims to have a total of 66 locations of its “Store of the Future” model across the country by the end of the year. Troy Rice, the company’s president of the retail division, gave the South Florida Business Journal a tour of a West Palm Beach store to explain what’s new.

Office Depot’s new store model has a smaller square footage instead of long isles of office supplies that stretch from the front of the store to the rear. Actually, the supplies section has been reduced dramatically and electronics have the spotlight at the center of the store. The West Palm Beach location had about 200 square feet added to its copy and print service station (other stores will have an ever larger space).

The new model also has a new station for all small business needs, and a separate repair station for phones and computers that previous Office Depot locations didn’t have. Improved displays make it easier for entrepreneurs to understand the differences between the items they’re buying.

“We knew our stores were oversized and we were overassorted,” Rice said, referring to a typical Office Depot’s 25,000 square feet and much larger catalog of items.

So in fall of 2014, Office Depot began gathering focus groups to see what they could improve. It was about this time that the company, having recently merged with OfficeMax, announced it would shutter hundreds of stores.

Office Depot blamed competition from every company selling anything resembling office supply products for its falling sales, including Wal-Mart, Amazon.com and BestBuy. Office Depot will close 75 stores by the end of 2017, with 31 already shuttered as of the end of the second quarter. Office Depot has about 1,400 locations.

A few months after gathering research on how to develop its “Store of the Future,” Office Depot set up a lab at its headquarters where more focus groups of about 25 to 50 people could shop. Following that experiment, the company decided its new store model would have a bigger emphasis on technology, a square footage of about 14,500 to 15,000 square feet and more services for customers, especially ones running their own companies.

The West Palm Beach store was revamped about a year ago and one of its newest features is the virtual reality station. Customers have to sign waivers to try it out.

Surrounding that VR station at the center of the store are pricier desktop computers and commercial grade furniture items geared specifically for customers who need equipment to work rather than play.

Most of the features within the Stores of the Future cater to business owners, including the new Business Pro stations situated within each one. Michael Vernacchio is the Business Pro of the West Palm Beach store at 101 S. State Road 7 and his job is to help local companies within about a 20-mile radius with all of their in-house needs, from ordering paper to servicing equipment.

Vernnachio is the point person for 958 businesses that use the Business Pro service at this West Palm Beach store. He spends about half of his time helping Office Depot’s local existing small business customers and the other half networking at Chamber of Commerce events and other places where new contracts for Office Depot can be found.

Rice said Office Depot has increased its sales on pricier equipment in its stores even though they have a smaller category of items. It’s faster to check out in the Store of the Future, too. The new store model came with a new Office Depot app feature which allows shoppers to scan bar codes on items like desks and chairs and buy them on the spot.

Although Office Depot’s new store model has a smaller footprint and fewer items for sale, its employees per store have grown. The West Palm Beach store expanded its staff by about five people since last year, to a total of 45. The new positions were added to its copy and print services, Business Pro and service stations for phone repair, IT and other services businesses need.

Office Depot will continue to adjust its Store of the Future model as it comes up with new ways to increase its sales, like more LED displays, signage that tells the customer the differences between its paper and printer products and even larger containers of snacks more fit for the office than for home.

“This is a big departure from the past,” Rice said. “We have to modify this experience as fast as it’s changing online.”