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OfficeMax puts customer benefits before ROI in mobile

January 20, 2012

NEW YORK – An OfficeMax keynote at the Mobile FirstLook: Strategy 2012 conference discussed the retailer’s approach to mobile which revolves around giving customers easy access to the brand ahead of delivering ads.

OfficeMax launched its first mobile site in 2009 and has expanded with several apps, an SMS program and other mobile strategies in the couple of years since. The focus throughout has been on serving customers better.

“A lot of people see mobile as an opportunity to access customers and to deliver more ads and offers,” said Jeff Haddon, mobile program manager at OfficeMax, Naperville, IL. “Our primary approach is to give our customers convenient and easy access to us.

“With that in mind, we have put customer benefits before ROI,” he said. “Mobile is being viewed as the cost of doing business – everyone understands the value.

“Given our limited budget, we have focused primarily on apps rather than ads. There is consistency in our approach of not putting our ability to drive ads in advance of their ability to contact us.”

Mobile FirstLook: Strategy 2012 was a presentation of Napean, parent to Mobile Marketer and Mobile Commerce Daily.

Mobile innovation
As the smaller of the three big retailers in the office supply space, OfficeMax has focused on being very innovative and finding ways to use mobile technology with the limited budget it has available.

“If we don’t provide opportunities to serve them better, customers will find ways to innovate with the technology to serve themselves,” Mr. Haddon said.

The office supply retailer launched a mobile site in 2009 after realizing how much traffic was coming to its ecommerce site from mobile devices.

In 2010, it created a mobile-optimized version of the Web site for its MaxPerks loyalty program, introduced an iPhone app and launched an SMS program that includes an opt-in database and the ability to send messages that inform in-store shoppers when a print job is complete, for example.

In 2011, OfficeMax saw significant growth in mobile traffic continue in both the number of visitors and mobile’s percentage of overall traffic to The retailer responded by adding ecommerce to its iPhone app as well as launched a Print Center app and an iPad app.

Along the way, OfficeMax has learned some important lessons about mobile marketing. One of those lessons is the importance of relevancy in the SMS space.

OfficeMax tested sending a message to a sample of its database with a loyalty offer that only MaxPerks members could take advantage of and saw a significant increase in the opt-out rate for the SMS program.

“We have learned that relevancy really is critical,” Mr. Haddon said. “If you are going to let a retailer communicate with you in that personal space it had better be relevant to them.”

Another lesson is that SMS is a strong vehicle for offering coupons, with response rates that are six to eight times higher than for email.

Mobile has also proven to be a good way to acquire new customers.

OfficeMax tested offering consumers a free digital coupon worth $5 off an in-store purchase. In one test, the offer was promoted via email and the OfficeMax Web site, with the first 5,000 people to sign up for the SMS program receiving a coupon.

In that test, 890 customers signed up per hour.

In a second test, OfficeMax offered a free pen to the first 10,000 consumers who signed up. It was promoted on Twitter and Facebook and received 1,111 responses per hour.

In a third test, a $5 coupon card was offered via Facebook and Twitter to the first 20,000 consumers to sign up. In this example, there were 5,555 responses per hour.

The digital coupons had a unique code for each person that was keyed in at the register in the store to redeem the offer.

There was a 20 percent redemption rate on the digital coupon cards and OfficeMax had a 70 percent retention rate six months after the promotions ran.

“Mobile is becoming an acquisition tool for us,” Mr. Haddon said. “We’re not just reaching our existing customer base but are reaching a wider audience.

App happy
OfficeMax has also learned the importance of differentiating apps with relevant services for customers.

For example, the loyalty integration with the iPhone app enables users to check their rewards when they are in the store and to look up recent purchases when they forget what inkjet cartridge they usually buy, for example.

“When we launched an app, we didn’t want to launch a me-too app that would not encourage ongoing usage,” Mr. Haddon said. “We wondered what could we do with an app that would be really helpful to our customers and came up with integrating the MaxPerks program.

“That has been the right choice,” he said. “It has a lot of value to the people we are promoting it to, our most loyal customers.

“We believe it is making the customers life easier and facilitating more transactions in the store and impulse purchases.”

Given the success of the loyalty program integration into the smarpthone app, OfficeMax is also looking to integrate MaxPerks with its iPad app, a move it expects to announce very soon.

This could help drive the number of downloads for the iPad app which is lower than for the smartphone app.

“That’s an indication of the utility of the smartphone app because the tablet app doesn’t have MaxPerks integration,” Mr. Haddon said. “I expect downloads will jump significantly when we have added the functionality in there.

“With tablets, there is a strong desire to transact – that is a feature that we need get in there,” he said.

The Print Center app, which was launched last summer, was inspired by a Holiday Party Bingo app the retailer did that enabled users to upload photos of their office workers who reflected certain office party stereotypes, such as the dancing queen or the appetizer king.

Once uploaded, the user could turn the photos into a calendar that could be printed at an OfficeMax store.

The Print Center app enables users to upload a print order from their phone or via email, select a print center near their location and receive a text when their order is ready.

“It has worked really well,” Mr. Haddon said. “Our trying to provide a higher level of service to really satisfy customers’ needs has been really successful so far.”

What is ahead
Looking forward into 2012, the retailer sees opportunities to continue to expand its SMS program and make improvements to its mobile sites.

“We need to continually refine and enhance as customers expectations in mobile continue to increase Mr. Haddon said.

The retailer is look at ways to integrate SMS with its loyalty program so it can identify loyalty members and send them a segmented message specific to the program benefits available to these customers. It would also like to be able to send messages based on what products customers are interested in.

OfficeMax is also looking to decentralize its mobile program as much as possible in a way that is consistent with it s vision of mobile becoming the central technology around which other technologies revolve.

“We want to make sure as many people in the organization understand what we are doing in mobile so they can start using the technology and be innovative in what they are trying to achieve in their groups,” Mr. Haddon said.



Final Take
Jeff Haddon, mobile program manager, OfficeMax, Naperville, IL

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