On the surface, Staples and H&M have little in common. The former is an office-supply store that is a “longtime favorite of cubicle jockeys and back-to-school shoppers,” and the latter is a fast-fashion, mall staple specializing in selling near-disposable clothes to people that would generally describe as anything but “cubicle jockeys.” Despite the differences, reports indicate both companies are suffering from the same decreasing sales and dwindling in-store foot traffic.
While the exact causes as to why aren't fully clear, Staples is struggling to compete with the convenience of e-commerce retail, whereas H&M has seen sales fall in the wake of a new consumer preference for higher-quality, longer-lasting clothes. This week, announced shifts in strategy seem to indicate that both companies believe the cause is Millennial purchasing behavior.
As a result, Staples and H&M are retooling their offerings to attract precocious twenty-somethings.
Staples goes hip
Staples believes the future of its brick-and-mortar locations lie in the creation of shared workspaces, complete with the essentials of hip, young professionals, including gourmet coffee, funky artwork and whiny, overly emo music (I kid). Their goal is to entice Millennials, many of whom freelance, own their own small business, or telecommute, to work from a Staples location rather than, say, the comforts of their living room or the local coffee shop.
By doing away with large swaths of retail space, Staples is all but admitting that its days as the go-to destination for school and office-supply seekers is pretty much over. Though it’s a difficult pill to swallow, it appears to be the right move for the company’s long-term health. Studies have shown time and time again that while consumers prefer to shop in-store for larger purchases, when it comes to smaller, less expensive items—notebooks, pens, pencils, etc—many would rather the convenience of ordering online.
According to Brian Coupland, Staples vice president of retail merchandising, Workbar attracts the coveted Millennial generation, as well as entrepreneurs, a potential pipeline for new small business customers. According to a report in Bloomberg, he has his eye on Workbar customers like Dmitri Boulanov, a 28-year-old tech consultant who praised the “cool coffee machine” and overall aesthetic: “Nothing really stood out about Staples before, but this does.”
H&M ups the quality
Like we said earlier, Millennials are much more likely to spend money on quality, durable goods rather than the fast fashion H&M prides itself on. So, H&M is giving them just that.
The company is launching a new retail brand called Arket that will be a “modern-day market that will offer essential products for men, women, children and home,” according to the company. As you might have guessed, the products will be decidedly more expensive (reports claim that shirts, for instance, will retail from $42 to $122) —and presumably of a greater quality—than what consumers have come to expect from H&M.
"Starting this project, a little bit over two years ago, we did quite extensive research and what we clearly saw was a broad customer base out there who are looking for classic, quality products in an environment that should be both simple and inspiring, but also putting our own fantastic design together with complementary brands," said Lars Axelsson, Arket’s managing director.
Will it work?
It’s certainly not the first time retailers have pivoted to better appeal to Millennials; remember Kmart? They famously hired 90s basketball superstar and Millennial-childhood-darling Scottie Pippen to help promote the launch of their concierge service, which…well… didn’t do so hot. Said Investor Place of the failure, “At the end of the day, most of the retail industry still doesn’t fully understand how the Millennial mind works. Retailers who have found success have been more lucky than skilled.”
But is that the case? Are they really lucky? Or is luck just what happens when retailers have the data to truly know what their customers want?
Who knows? But at any rate, here’s hoping Staples and H&M get lucky.