The Revenge of the Generic

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Just as Costco is pushing its private-label offerings in unexpected, upscale directions, OfficeMax recently launched a new, store brand of pen in an effort to become "the Target of office supplies," says Mike Kitz, vice-president of product development at OfficeMax. The company, which saw $9 billion in 2006 sales, is currently the third largest office-products retailer, behind $16-billion-a-year Staples (SPLS) and $14-billion-a-year Office Depot (ODP).

Reinventing the Pen

OfficeMax followed Target's design-for-all strategy rather than a more Costco-style, anything-goes approach. The company hired Chicago design firm Gravity Tank to develop the new pens that it hoped would boost sales and increase market share in the realm of everyday writing instruments.

"OfficeMax didn't want to reinvent the pen," says Michael Winnick, managing director of Gravity Tank, which has worked with such blue-chip companies as Motorola and Unilever. "The goal was to create a pen with outstanding performance and clean, sophisticated design, a precision, high-end instrument offered at an everyday price." Disposable pens, after all, are an office-supply staple, one that companies and individuals buy in bulk and must replace often. The category seemed a logical place for OfficeMax to launch its private-label effort.

While Office Max already sells an in-house branded pen, a standard black or blue ballpoint with the OfficeMax logo stamped on it in white, the company wanted to develop a separate brand name "to help drive customer familiarity with the new products" and build brand loyalty for the new line, explains Winnick. They christened the brand Tul, which evokes the word "tool," as in instrument, and is spelled in an exotic, faux-European way.

Ethnographic Office Research

The idea is to first offer customers a fresh alternative to other pens in the $1.49 range, including OfficeMax branded pens, which the company still sells alongside Tul pens, and then roll out more Tul products by mid-2007. Emphasizing the "newness" of the Tul line offered the company a safe way to experiment with designing and selling slicker office products, which don't jibe with the existing utilitarian look of the OfficeMax store brand. If the Tul pens didn't sell, the company could simply let the Tul line die quietly.

Gravity Tank conducted ethnographic research observing a variety of external office workers, talking with office managers who bought stationery supplies in bulk, and speaking to store clerks and customers alike.

"We noticed that people had two kinds of pens, one set of inexpensive pens for sharing, and also a personal stash of better writing instruments," says Kitz. "We learned how personal and powerful a pen can be. The 'nicer' pens were an expression of personality." The goal that both Gravity Tank and OfficeMax agreed upon was to bring the personal attachment that people felt toward the higher-end pens to lower-end rollerball pens. In other words, OfficeMax wanted to create the office-supply equivalent of Isaac Mizrahi's $50 "budget" cashmere sweaters for Target.

Bargains Aren't Enough

In the design of the pens, Gravity Tank borrowed elements from high-end writing instruments. "We made the tip cone at the end of each pen either all metal-plated or metallic colored," says Winnick. "We created a thicker profile and weighted each pen so it felt heavier, because our research showed that customers associated more heft with a 'better' pen." The designers used straight lines for a clean, elegant look applied to five initial products launched in 870 Office Max stores, online, and via business-to-business in July, 2006 (after a soft launch in May).

These included four pens (gel, roller-ball, retractable ballpoint, and stick ballpoint) and a set of whiteboard markers, which doesn't feature the metallic colors but carries over design elements such as bold, simple silhouettes. While Kitz won't disclose sales figures, he says that the supply of four-packs of the gel and roller ball pens sold out quickly and were subsequently restocked.

If OfficeMax can successfully apply the Target effect to other product categories, the No. 3 source for office products may have a shot at the No. 2 or No. 1 slot. But the products have to reflect high quality and design values, at prices comparable to those of other nationally recognized and established brand-name items. After all, lower prices aren't enough to guarantee sales. As recent consumer surveys show, shoppers also want top quality and good design.

Jana is the Innovation Dept. editor for BusinessWeek.