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MAY 14, 2001
The e.biz 25
Office Depot Inc.
POSITION: Executive Vice-President, E-Commerce
CONTRIBUTION: Made OfficeDepot.com the second-largest e-tailer after Amazon.com.
CHALLENGE: To raise the percentage of Office Depot customers buying online to 50% by yearend from today's 40%.
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Monica Luechtefeld, the executive vice-president who heads Office Depot Inc.'s online business, has little patience for people from other companies who complain to her that they can't get e-commerce off the ground. "Doesn't your chairman grill you daily about online performance?" she recalls asking one such whiner at a recent industry conference. When he answered "no," Luechtefeld scolded, "Shame on you and your company. No wonder you're failing."
Luechtefeld has earned the right to be smug. Under her leadership, the Delray Beach (Fla.)-based company has quietly become the second-largest e-tailer in the world behind Amazon.com (AMZN
). Office Depot (ODP
) booked $850 million in online sales last year--double that of its biggest rival, Staples Inc. (SPLS
) Last year, Internet sales grew 143% from the $350 million in 1999. The outfit has been profitable since it was created in 1996. And this year, online sales are expected to nearly double, to $1.5 billion, representing 20% of the company's overall sales. Now, she aims to push to 50% from 40% the number of Office Depot customers ordering online by yearend. "Our success is measured not by traffic to the site, but by sales," says Luechtefeld. "What differentiates us from others is execution."
Luechtefeld provides a case study in how best to marry bricks with clicks. Not only can the company's corporate and individual customers order 14,000 items online--twice as many as in the stores--but they also can check the inventory at any of the company's 850 U.S. superstores via the Net. If a customer orders something online, a nearby store will package it for pickup at the customer service desk. No more standing in line. And computers at the stores allow walk-in customers to check online to find out such things as what type of cartridge they need for a certain printer and whether it's in stock. The idea is to create a seamless experience for customers where retail and online operations feed off each other.
Still, the online effort is just a toddler in Luechtefeld's eyes. Next, she plans to expand beyond the company's thousands of big corporate customers to serve the 13 million small businesses that shop at Office Depot. To do that, she plans to offer them more than just office supplies. "I want us to serve them both as coach and trusted adviser," she says. To Luechtefeld that means expanding to include online services such as tax preparation and bookkeeping. Office Depot has no expertise in this area, so Luechtefeld is making alliances with those that do, including software giant Microsoft Corp. (MSFT
) Such moves win raves from Charles Martin, chairman of the Net Future Institute, a New Hampshire think tank that studies e-commerce. "Office Depot has used the Net to lock customers into a deeper relationship," he says. "Someday, they'll be able to sell them other things such as airline tickets."
Luechtefeld has deep experience in selling businesses all manner of things. The 52-year-old Los Angeles native left furniture supplier Eastman Inc. in 1993 to join Office Depot. She began her career at the company running its massive operations in Southern California, overseeing distribution, warehousing, and sales. Next, she moved to headquarters to handle marketing. Thanks to her training, when the Internet emerged she understood immediately how it could not only boost sales, but also cut costs. Online sales are half as expensive to process as orders received via fax or phone. And she was convinced corporate purchasing managers would love the Net, too. It would let them control policy and the purse strings from above but push actual buying down into the trenches. Luechtefeld persuaded her superiors to let her try to make Office Depot No. 1 in online sales of office supplies.
Job done. Thanks to Luechtefeld, there's no whining at Office Depot.
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Copyright 2001, Bloomberg L.P.
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