Competitive Differentiation: Competitive Differentiation: Using Technology to Deliver on Using Technology to Deliver on

Staples EASY Brand PromiseStaples EASY Brand Promise

Scott Floeck, Sr. Vice President, Staples, Inc.Scott Floeck, Sr. Vice President, Staples, Inc.

scott.floeck@staples.comscott.floeck@staples.com

Competitive SpectrumMass Targeted

Mega-retailers offer consumers reasonable levels of quality at

very low prices through scale and operating efficiency

Differentiated retail specialists are driving value to the consumer by

delivering a very personalized shopping experience

ProductPrice

Industry competitors must

have highly focused, relevant

value propositions to grow in a world

of extremes

Retail IndustryRetail Industry

Access

Service

Experience

Build-A-Bear

Consumer Relevancy Model:• Product - customers will come to us for our depth and breadth of

Office Supply products (authority), having the right product in the right

place at the right time.

• Experience - provide a differentiated customer experience by making it

easy for our customers to shop and buy.

• Price - value price (at par with competitors).

• Access - continue to improve store format making our stores, catalog,

and online channels easy to shop (at par with competitors).

•Service - continue to provide good service, next day delivery (at par

with competitors)

Retail IndustryRetail Industry

Build such a strong emotional Build such a strong emotional connection with our core customers connection with our core customers that they are willing to drive by the that they are willing to drive by the

competition to shop at Staples’.competition to shop at Staples’.

Staples’Staples’ Long Term GoalLong Term Goal

Staples’ Easy Brand PromiseStaples’ Easy Brand Promise

We are focusing on Easy Brand “proof We are focusing on Easy Brand “proof points” to differentiate Staplespoints” to differentiate Staples

Customer Experience

Associate

Customer

Content Expert Librarian Self-Service Empowerment

Differentiated Differentiated ServiceService Through Customer Through Customer EmpowermentEmpowerment

Focus on Training and Product Knowledge

Focus on Customer Service and Product

Knowledge Tools

Focus on Convenience

“That was Easy”

Focus on Customer Facing Product

Knowledge Tools to Enable Informed

Decisions•Multi Media Training

•Satellite Broadcast

•Web Training

•In-Store Kiosks

•Product Knowledge Tools

Selection•Product Information•Self-Service•Channel Agnostic

Checkout•Self-Checkout•Payment Services

Service•Customer Assistance •Customer Portal

•Product Knowledge Tools, Comparisons, Recommendations

•Shelf Edge (Audio / Video)

•Customers Device

•On-Line Interactive Help

Enterprise Architecture for a More Enterprise Architecture for a More Responsive ISResponsive IS

Service-Oriented

Architecture (SOA)

SOA enables reuse of software leading to

more adaptable applications

Application Characteristics

VisibilityThe ability of the users to see the data

needed to do their jobs

SimplicityThe ability to respond quickly to

changing business needs by consolidating redundancy

FlexibilityThe ability to quickly add new

functionality

Data IntegrityThe ability for users to see relevant

and correct informationInfrastructure Characteristics

SimplicityReduce TCO by reducing the number

of configurations that need to be supported

Flexible ProvisioningThe ability to respond quickly to

changing business needs by quickly adjusting server capacity

Vendor Independence

Flexibility to utilize vendor that best meet business needs

On Demand Infrastructure

An IT infrastructure that dynamically and

automatically optimizes itself to meet the needs of business applications

Responsive IS

Applications And

Infrastructure

Infrastructure: On-Demand Computing Infrastructure: On-Demand Computing with Commodity Componentswith Commodity Components

SOA applications more flexible but more complex requiring more server capacity

Open systems commodity components will “right-size” the infrastructure

investments needed to build out the SOA

Legacy “green screen” applications run on traditional

large high cost servers

Single, high-cost server

Large incremental investments to add server capacity

Monolithic applications

Smaller, less expensive servers

Small incremental investments to add server capacity

Modular applications

Traditional Infrastructure

Open Systems Infrastructure

Application Strategy: Buy for parity, Application Strategy: Buy for parity, Build for Competitive AdvantageBuild for Competitive Advantage

Single Suite ProviderPros

•Ensures parity

•Reduced TCO

•Standardization:

• Data

• Processes

• U/I

Cons

• No differentiation

• Less flexibility, may restrict business processes, responsiveness

• Longer time to value

• Vendor risk

Best of Breed Point SolutionBest of Breed Point SolutionPros

• Shorter time to value

• Less vendor risk

Cons

• Increases vendor management load

• Harder to integrate

• Market consolidation forces frequently mean point solutions eventually become part of a suite

All Custom BuildPros

• Tailored functionality

• Enables business process based differentiation

Cons

• Development costs

• Maintenance costs

• Harder to integrate with packaged applications

Enterprise Architecture Must Integrate Custom Built And Off-the-Shelf Applications

Enterprise Architecture Must Integrate Custom Built And Off-the-Shelf Applications

Best Balance

IS will move from a large number of best of breed

and custom solutions

towards single suite providers

Buy For Parity Build For Comp Advantage

Heavily customized packaged applications will rapidly become custom built applications supported by Staples

IS

Packaged applications should only be extended if the core is not changed and the package upgrade path is

retained

ManageProject Manager / IS Manager

Implications of Strategy on Skillset Implications of Strategy on Skillset RequirementsRequirements

Focus on:Focus on:

Business Process

Requirements

Design

Project Management

Innovation

Focus on:Focus on:

Business Process

Requirements

Design

Project Management

Innovation

Define

Design

Build

Str

ate

gy

Business & Technology

Business Analyst

System Analyst

Technical Architecture

Developer

Quality Assurance

Dep

loySoftware Delivery

Job Scheduler

MO

RE LES

S

Differentiation

How will we develop IT Leaders for the How will we develop IT Leaders for the Future?Future?

Help Help DeskDesk

IT OperationsIT Operations

Security - Security - EngineersEngineers

DevelopersDevelopers

Business Analyst - Business Analyst - ArchitectsArchitects

Project ManagersProject Managers MarketingMarketing

Supply ChainSupply Chain

MerchandisingMerchandising

HRHR

FinanceFinance

OperationsOperations

ITIT BusinessBusiness

CIOCIO