Discount Store News

Office Club adds new services

Office Club adds new services

Pete Hisey

Office Club Adds New Services

Superstore Looks for Ways to Increase Consumer Traffic

CONCORD, Calif. — Want to buy a car, cheap? Or find out how quickly your hot new customer pays bills? Or just get your tax refund a little quicker? Office Club is hoping its customers will.

The company, which late last year merged with Office Depot, the industry leader, has opted to add several professional services that it hopes will tie small business and home office shoppers more closely to its stores.

Increased competition, a dull economy, shrinking investment capital and a tense international situation have put a virtual stop to expansion for office superstore operators. The days of 100% or 200% year-to-year sales growth are over, and investors now want to see signs of profitability.

Operators like Office Club are searching for new ways to increase both return visits and average tickets without sacrificing the focused inventory selections, low prices and service that made them a success to begin with.

New services include electronic tax filing, a 900 number that will provide TRW credit reports, a discount long-distance telephone service, and even a car buying service that will deliver a new 1991 car or truck, custom-equipped, for no more than $499 over cost.

These join established services like printing, color copying, fax service, letterhead and business card printing, engraving and, at some locations, blueprint duplication.

According to business services manager Robert Nickerson, the expansion of services is meant to make members think of Office Club as a one-stop shopping source. “These new features . . . are more ways in which we are trying to better serve our customers at the lowest possible price,” he said. More to the point, “these are all higher margin products,” he added.

The electronic tax filing service will allow customers to get their tax refund in as little as three days, as opposed to six to eight weeks in the mail. Users will be able to choose between four options, at different prices. Direct deposit or refund checks will take no more than three weeks, while a Quick Funds program will deliver a check within 10 to 15 days. A refund anticipation loan, which has a higher fee, will take three days.

“Costs for these four refund options vary, but if any other accepted retail electronic tax filing center is crazy enough to offer this particular service for less, Office Club will match their price plus give 50% of the difference as a credit toward their next Office Club service,” Nickerson said.

For the TRW program, Office Club has a toll-free number (1-900-741-CLUB) that will provide credit reports on any of more than 10 million U.S. businesses, including previous credit limits, payment history, liens, bankruptcies and a future payment performance analysis. The cost of each report will be added to the member’s telephone bill. Members will save considerably, Nickerson said.

“The average cost of a report is $65; our members will be charged $25, and they can receive the report by mail, fax, or, if they’re in a real hurry, by modem.

“This number will be invaluable to most businesses,” Nickerson said. “They can use it to determine the credit worthiness of new accounts and to decide whether or not to extend credit. This report will also help our business customers update existing accounts, establish lines of credit and even prequalify some prospective new customers.”

Office Club members can also receive a discount on long-distance telephone service through the club. There are no sign-up costs or monthly fees, and no codes to dial in for access. “Office Club’s usual lowest price guarantee applies with this service as well,” Nickerson said. “If one of the major long distance carriers offers a price lower than ours, we’ll match it and give customers 50% of the difference as a credit toward their next long-distance bill.” Office Club members will also receive a free hour of calls when they sign up. The company is working on providing low-cost 800 number services as well.

The most radical of the new services is the car buying club. Sam’s Club tried this approach several years ago, but abandoned it within a year as not profitable enough. On the other hand, Nickerson said, Price Club has had success with the concept.

According to Nickerson, the Club Auto Buying program bypasses showrooms and sales commissions by dealing directly with major dealerships through a computer network. Southern California stores received the program in February; other locations will have it by the end of March. An early February test, in the form of a small ad in Office Club’s newsletter, generated 20 calls a week, some from out of state.

“This is definitely in the test mode,” he said. “We don’t want to run afoul of our customers, so we have to be very sure that they will get the level of service we normally deliver. We don’t want to add more stress to their lives, because it’ll come back to haunt us.”

Nickerson said that he is looking at several other corollary services, which he refused to list for competitive reasons. “A few of them should be on-line in the next few months,” he said. “But we want to go slow and make sure they’re right for both our company and our customers.” At least two new product categories are close to that approval, he added.

“We look at these services as a marketing wedge, something that will differentiate Office Club, build margins and average ticket, and add value to a membership. But we’re in marketing, not merchandising or operations, and we have to make sure that our programs work at store level.”

Office Club operates 58 stores in eight western states and Hawaii. It is unique in the industry in that it charges a membership fee of between $10 and $25 (for charge account service).

PHOTO : The expansion of business services at Office Club makes members think of it as a one-stop shopping source.

PHOTO : Robert Nickerson Mgr., Business Services

COPYRIGHT 1991 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

COPYRIGHT 2004 Gale Group