DILBERT TO THE RESCUE AT OFFICE DEPOT
Office Depot puts a face on a faceless business--and thrives
Reviewing ad-agency pitches last August, Office Depot Inc. Chief Executive Officer David I. Fuente was looking for a big splash. The company had abandoned national advertising for months, hoping to consummate its merger with rival Staples Inc. But the marriage never happened, and Fuente needed to recreate a solo image. After seeing an initial pitch by Cleveland-based Wyse Advertising Inc., he startled everyone in the conference room when he jokingly picked it up and threw it in the trash. "What else do you have to show us?" he asked Chairman Marc A. Wyse.
Fortunately, Wyse had another idea: a hot business guru whose books topped best-seller lists. Creative director Sharyn Hinman walked in with a six-foot cutout of Dilbert, the cubicle-dwelling cartoon Everyman of business. The proposed tag line: "Business is crazy. Office Depot makes sense." Fuente was hooked. "It was an absolutely perfect fit," he says. "It cranked me up."STANDING OUT. Can it crank up Office Depot, too? Early signs show the Delray Beach (Fla.) company on the rebound from its nonmerger. But Dilbert is more than an ad campaign--he's also the biggest example yet of the efforts by Office Depot and its rivals, Staples and OfficeMax Inc., to bring branding to what has been the fairly faceless business of selling office supplies. By licensing Dilbert and his popular comic-strip cohorts to anchor its $100 million-plus annual marketing budget, Office Depot is counting on "star power" to distinguish itself in a cutthroat market largely driven by price.
Why the need to stand out in the crowd? The problem is, consumers can't distinguish among the three major players, says Howard A. Zoss, executive vice-president of Wyse. When they were all regional chains, that didn't matter. But now, they're going head-to-head nationally. "Differentiation becomes more and more important," says Fuente.
Branding was not Office Depot's first solution to the difficulties of rising competition. In 1996, when its stock slumped in the face of slowing revenues and problems in its corporate-sales unit, it sought a merger with its Boston-based rival. Although smaller, Staples had been rapidly gaining on Office Depot. But the deal was scotched by the Federal Trade Commission last July as anticompetitive. Retail experts predicted that Office Depot would have the toughest time recovering.
Once Fuente realized Office Depot was going to have to fly solo, however, he decided to sign a star--albeit one from the funny pages. To get more customers into its stores, the company is sinking $30 million into a TV campaign featuring Dilbert and the other characters created by former engineer Scott Adams. And the licensing goes much further. Dilbert now graces shopping bags and in-store displays, appears in print and radio ads, and even acts as a virtual guide at the company's newly launched online store (www.office depot.com.). "It's an absolutely uncopyable message," says Fuente.HITTING HOME. Office Depot isn't alone in its branding quest. Staples' recent ad campaign--which includes a back-to-school spot depicting dejected kids shopping for school supplies--has drawn raves. And OfficeMax is spending millions to promote its own icon, a stick figure with attitude dubbed StickMax. OfficeMax CEO Michael Feuer says the ads will build brand recognition at a far lower cost than licensing Dilbert. "If it gets wildly successful, it's going to get wildly expensive," he predicts.
For Fuente's money, Dilbert is doing his job--attracting attention. And observers expect the campaign to succeed at one key goal: appealing to rank-and-file workers, which should continue to revitalize Office Depot's corporate-sales unit. "CEOs in companies don't buy office supplies," says retail consultant R. Fulton Macdonald. "They're bought by office managers and purchasing agents. People like that see Dilbert, and it hits home with them."
Clearly, something is going right. Sales in 1997's fourth quarter--when the Dilbert ads began--rose 12%. And sales at the company's stores and delivery centers open more than a year jumped 8%. In this year's first quarter, thanks in part to Dilbert, operating profit rose 27%, to $97.8 million. Sales rose 12%, to $1.98 billion
Rivals have certainly noticed. OfficeMax has banned Dilbert products from its stores. "We burned him in effigy the day they signed the contract," says Feuer. But Feuer is musing about a new ad for StickMax in which he challenges Dilbert to a fight. May the best icon win.By Gail DeGeorge in Delray Beach, Fla.Return to top