Office Depot is moving into a smaller, new-format store in North Buffalo, an approach the chain is adopting around the country in a bid to draw more customers.
The new store opens today on Delaware Avenue just north of Hertel Avenue, in a former Blockbuster Video location. Office Depot relocated from its longtime home on Elmwood Avenue in North Buffalo.
The new store has about 7,000 square feet, about a quarter the size of its previous location. More than 100 of the small-format stores are expected to open within the next year; Buffalo’s is part of the first wave.
Along with a smaller size, the Delaware Avenue store features a new design, with large etched glass windows and colorful accent lighting. The format and appearance are aimed at giving the chain’s existing customers changes they have asked for, as well as attracting new customers, said Tom Shea, district manager for the chain’s New York region.
The store will have nearly the same number of employees – about 20 – as the Elmwood store did and will stock about 4,800 products, compared with 6,700 previously. The store is scaling back on products such as office furniture and some fringe items that were not popular, Shea said.
Electronic devices, such as computers, tablets and smartphones, and accessories are now showcased at the front of the store. Services such as personal-computer troubleshooting, copying and security software installation are set up in the center. There will be “PC Bars” at the entryway, where customers can relax, check their email or charge tablets or smartphones.
Office Depot’s lease at the Elmwood Avenue location was up, and the chain preferred the smaller, high-visibility space at Delaware and Hertel, Shea said. The Elmwood Avenue store was about 15 years old.
Arun Jain, a retail expert at the University at Buffalo School of Management, said he was skeptical Office Depot’s changes would succeed. “They’re in a very difficult spot,” he said. “Everybody is eating at their meals.”
For instance, he said, Walmart, supermarkets and drugstore chains carry many of the “back-to-school” supplies that office-supply stores stock. And retailers such as Best Buy and online businesses compete for sales of electronic devices. Within its own category, Office Depot has tough rivals such as Staples and Office Max.
Moving into a smaller space will make its stores more convenient to shop, Jain said. But, he said, the bigger question is how the chain will attract customers in a crowded field: “What will distinguish them from everybody else?”
“It has to start with the [employees],” Shea said. “It comes down to us to set the tone that we’re going to be the best of the best when it comes to customer service.”
Office Depot’s customer base is a mix of small-business owners, people with home offices and everyday consumers, he said.
Jain said switching to a smaller format comes with a risk: If customers are disappointed with the reduced selection, they might go elsewhere. But Shea said if customers can’t find something they want at the new Buffalo store, Office Depot can draw from its two other area stores or arrange a purchase through the chain’s website.
Not all Office Depot stores are adopting the small-store format; some are shifting to a mid-size format. For instance, Office Depot’s two other Buffalo Niagara stores are expected to be remodeled in 2013, and while their square footage may be reduced, they will not shrink to the size of the new Buffalo store, Shea said.
Florida-based Office Depot reported a $70 million loss in its third quarter, and a 5 percent drop in sales from a year ago, to $2.7 billion. The chain has reviewed all of its North American stores to decide whether to downsize, relocate, remodel or close them.
The company’s stock closed up 5 cents Tuesday, at $3.54.