Office Depot fuses marketing efforts
Monica Luechtefeld, a 17-year veteran of Office Depot, restructured her marketing teams earlier this year, moving all the office supply company's marketing professionals into one group, no matter their channel specialty. The reorganization meant that while Luechtefeld retains a P&L for direct marketing, her teams that specialize in online marketing now report up through a new “customer marketing” department while retaining a “dotted line” report to her.
The goal, says 61-year-old Luechtefeld, is to better serve the customer by further integrating the online and offline marketing team and their thinking. The customer doesn't care about channels, even if marketers do.
“It was a test for us to say if you put the customer at the center of the organization how would you organize yourself?” she says. “Instead of looking at you as an online shopper, it's an attempt to think of you as the customer of Office Depot. The more we look at you horizontally and look at the multiple ways you engage us and the multiple tools that you use to buy − one day a store, one day online, one day a call center − the better we'll be able to serve you.”
The same approach applies to how the $12 billion multichannel retailer looks at customer data.
“We've always integrated the catalog marketing, online and e-mail, and banners and promotions together and in the same data warehouse,” says Luechtefeld. “The difference was when we went into that data warehouse, we were looking at you in a channel-centric way versus how you interact across the company.”
Office Depot's multichannel approach
The Office Depot Big Book catalog includes more than 16,000 products in 1,000 pages. It cross-promotes shopping channels, pointing customers to the website, 800 number and retail locations. Business customers receive it and it is also available upon request.
Office Depot offers a mobile alert program which enables consumers to opt-in to receive messages from the retailer, including advance sales notices, store openings and events. The company does not yet offer an app or m-commerce site.
In addition to sales calls to action, the site offers various points of interest for visitors, including the webinar series “Webcafe,” and helpful guides such as “Ink Depot.” The site also includes interactive features like “live chat.”
Christine Buscarino, previously senior director of online marketing, now leads the new customer marketing division, which includes national direct mail, the Worklife Rewards program, online marketing, segmentation and catalog. She has worked under Luechtefeld for nearly a decade, but now reports to the SVP of marketing, Jeff Herbert.
“My role is still to support e-commerce from a marketing perspective and a sales perspective, but focusing organizationally around the customer has put me into a centralized marketing organization,” says Buscarino.
“It means all of us have a few more people to collaborate with and a few more dotted lines, but I think in
the long term we should be serving the customers better,” adds Luechtefeld.
It's this ability to identify and act upon the next sea change in her business that has made Luechtefeld so valuable to the organization. She joined Office Depot in 1993 when Office Depot acquired Eastman Company, where she was VP of sales. Since then she has held numerous titles at the company, but it was a 1994 experiment with Massachusetts Institute of Technology (MIT) using a new thing called the Internet that set the course of her success. This was in the early days of the Web when Mosaic dominated, but Luechtefeld recognized the potential.
To hear her tell it, the whole thing was a lucky break.
“In 1994, one of our customers, MIT, thought it was time for the Internet to become a tool for business,” she says. “Of the thousands of people that they presented this idea to at a conference, we were fortunate that it landed on open ears and we decided it was worth being a first mover in the space.”
However, her colleagues, such as SVP of e-commerce Tim Toews, who has known her since they worked together at Eastman, has another version.
“She was key to that project,” he says. “One of the most important things she did for the company was convincing the sales force that customers transacting on the Internet was going to be important. Sales are naturally cautious about shifting revenue, so moving customers from a sales person and call center model to the Internet was not an easy sell. We did have great technology, we did some clever things, but all of that would have been just technically interesting if we didn't get our customers and company behind it.”
Today, Office Depot is the No. 5 online retailer with global annual sales of more than $4 billion. Yet, the now weakened retail sector has affected the company as whole. Overall sales fell 16% last year as Office Depot's core small business customer continued to be impacted.
“They remain very challenged by the economy,” Luechtefeld says. “Because their purchase size may have been challenged and they may have bought a little less … It was important for us to stay focused on retention but also to keep one part on the acquisition of new customers.”
Like many online retailers, Luechtefeld hopes that added personalization on the site, including behaviorally targeted offers to stored product preferences, will help to drive both repeat sales and new customers.
“Personalization is a big priority for us. It means that we recognize you as a customer,” she says. “If you purchase ink every 4 weeks, and you forget, we might remind you in an e-mail; we'd have the same message if you logged onto the site or you called the call center.”
M-commerce is the next frontier for every multichannel retailer, and although she will not confirm it, Luechtefeld, who has a history of staying ahead of the curve, alludes to a coming site.
“I think mobile commerce and the various apps make sense for our core business customer,” she says. “While I think the specific dollars might be small in the next year or two, it's an important device and the long-term impact of how people shop will be an interesting intersection.”