OMX Officemax Incorporated

In an effort to enhance customers' shopping experience and enrich its e-commerce operations, OfficeMax Inc. (OMX) – a leading distributor of office supplies and paper, print and document services, technology products and solutions – upgraded its e-commerce platform with a new search engine in OfficeMax.com.

With renewed vigor, retailers have shifted their focus on buyers’ needs to generate growth opportunities that will augment sales. This is well evident from the fact that OfficeMax marked a rise in conversion rate and registered an increase of over 60% in average revenue per visit since the new search engine came into force.

Starting from enhancing the supply-chain management to going global, from improving their productivity through operating efficiencies to using technology, the retailers are trying to play all their cards strategically. 

Amid all the strategies, e-commerce has emerged as the most successful tool for retailers to enhance sales as it enables the companies to generate additional revenues and broadens the existing customer base globally. In addition, it aggrandizes the visibility and reputation of the retailer as a global firm offering great fashion and value at the same time.

OfficeMax is also focusing on containing costs, closing underperforming stores and providing innovative products and services, which should all contribute to margin improvement. The company should gain from its recent growth initiatives, which include the ImPress copy and print and Ctrlcenter PC services, janitorial and sanitation supply, category management, and managed print businesses. The company’s digital as well as technology and document solutions are also gaining traction.

OfficeMax’s store-in-a-store initiative, known as New Channels is gaining momentum. The company manages the office supply departments of other retailers (including supermarkets, convenience stores and drug stores), and provides category management services. Such initiatives provide avenues outside its stores, and would help bolster its profit margins and returns on investment.

Currently, OfficeMax, which competes with Office Depot Inc. (ODP) and Staples Inc. (SPLS), holds a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating. However, we maintain our long-term ‘Neutral’ recommendation on the stock.

 
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