Driving Business Opportunities

The ODP Corporation provides supplies, technology solutions, and business services. The ODP Corporation has a diverse customer base that leverages its coast-to-coast supply chain comprised of distribution centers and cross docks to quickly and efficiently supply all businesses regardless of size. Their services architecture includes retail stores, B2B, B2C, contract sales force, direct marketing catalogs, and call centers (MarketLine, 2022). Due to the pandemic, The ODP Corporation saw a 5% decrease in profits due to decreased retail and B2B sales. To increase profitability, The ODP Corporation decreased general and administrative expenses by $103 million by closing low-performing retail stores and restructuring the B2B infrastructure (MarketLine, 2022).

A decline in revenue and profitability shows that they cannot allocate funds for growth prospects, which impacts shareholders’ confidence due to the inability to provide a higher return (MarketLine, 2022). To increase profitability and shareholders’ confidence, The ODP Corporation should leverage its diverse customer base strength and take advantage of its Furniture and Floor Coverings and Online Retail Market opportunities by investing in augmented reality technology such as “View in My Room” for retail and B2C channels. This technology will allow customers to determine if the furniture they want to purchase would be a good fit for their space. The ODP Corporation has ten million small-business customers; 60% are within a three-mile radius of a physical store (Bhattacharyya, 2018). According to Forbes, online channels have seen a 200% increase in sales and increased customer engagement (Galer, 2021). Regardless of purchasing online and having delivered or visited a retail location, providing this offering would increase furniture sales, increase foot traffic, and decrease returns due to improperly sized furniture.

The office furniture market is currently $14.9 billion and is forecasted to be $22.2 billion by 2030 (5.3% CAGR). The online channel will have the highest CAGR of 9.9% over the next eight years (Ltd, n.d.). In 2021, ODP Corporation had $531million in retail furniture sales, which is only 3.56% of the current market share (The ODP Corp. 2022). Leveraging its marketing and sales strengths, ODP could see an increase of 3.9% in market share in the first year by implementing augmented reality for home office furniture.

References:

Bhattacharyya, S. (2018, November 7). In bid for survival, Office Depot focuses on business services and subscriptions. Digiday. https://digiday.com/retail/subscriptions-office-depot-business-services/

Galer, S. (2021, September 28). Augmented Reality Boosts Online Shopping Sales Up To 200%. Forbes. https://www.forbes.com/sites/sap/2021/09/28/augmented-reality-boosts-online-shopping-sales-up-to-200/?sh=3046d107b26c

Ltd, R. A. M. (n.d.). U.S. Office Furniture Market Size, Share & Trends Analysis Report by Product (Seating, Modular Systems, Desks and Tables), by Distribution Channel (Online, Offline), and Segment Forecasts, 2022-2030. Research and Markets Ltd 2022. Retrieved October 29, 2022, from https://www.researchandmarkets.com/reports/4514485/u-s-office-furniture-market-size-share-and?utm_source=BW

MarketLine. (2022, July 20). The ODP Corporation. Retrieved from MarketLine Advantage database.

The ODP Corp. (2022). Form 10-k-2022. The ODP Corp. https://investor.theodpcorp.com/static-files/c1db97c2-7c61-4417-a4c0-4e5ad6dd3d3e