Connections

The Challenge: Big box retailers have not successfully sold credit card terminals and merchant service accounts, while the membership retailers (CostCo, BJ's and Sam's) were enjoying huge numbers, creating enormously profitable revenue channels.

The Solution: Create a product the fit on their shelves that optimized the real estate per store so as to increase their 30% target margin.

The Result: For 120 days we tested our Merchant Resource Kit in 32 Staples store locations throughout the country with a scalable growth model to be rolled out nationwide in nearly 1,500 locations. Through this market research, we were able to better develop the program for Staples We continue to sell our products and services via Staples.com, while we effect our findings in the stores in 2005.

Background

Staples, Inc. launched the office supplies superstore industry with the opening of its first store in Brighton (Boston), Mass., in May 1986. Its goal: to provide small business owners the same low prices on office supplies previously enjoyed only by large corporations. Staples is now a $13 billion retailer of office supplies, business services, furniture and technology to consumers and businesses from home-based businesses to Fortune 500 companies in North America and throughout Europe. Customers can shop with Staples however they choose, either by walking into one of over 1,200 store locations, calling in or logging on. In recent investor meetings and various corporate functions, Tom Stemberg, Chairman has committed to a refocusing of Staples' efforts back to business. The timing is good.

The Opportunity

1. Retail Stores - In order to distinguish Staples from other office supply stores in their merchant services offer, they wanted to sell credit card terminals off of the shelves to customers, whom would then call an 800# to fill out an application and then program their new terminal. Through this model, the terminal would need to be low in cost to initiate the sale. By making the purchase, the customer would feel a commitment to the processor, rather than just casually taking home a brochure with rates. Before rolling out the program into all 1200 stores, a 120 day pilot must be proved successful within 32 stores. The success matrix is 1 terminal per store, per month.
2. Catalog - The Staples catalog is a perfect marketing tool for merchant services. There are millions of catalogs printed and delivered to new and existing businesses in targeted areas across the United States. This channel would solicit a call and the potential customer would then be sold over the phone with a train sales representative.
3. Online - While many business owners today are too busy to go out to the stores, the website proves to be a very lucrative channel for the Staples market. Credit Card processing services would be added to the site on a strategically designed landing page with a link to an online application. By going online, customers can fill out their own application to begin their account or simply call in to inquire.

Summary of Pilot

1. Point of Purchase displays - POP displays were constructed to sell the terminal from the shelves. The POP displayed a "dummy" terminal and showed the low rates that existing merchants could take advantage of while focusing on the ease of set-up for new merchants.
2. Terminal Box - The terminal was sold off the shelf as part of the "Merchant Resource Kit." The kit contained the following items: Quick Reference Guide, Easy Terminal Setup Guide, Application for Merchant Account and Visa, MasterCard, American Express and Discover signage, MagIC 6000 Credit Card Terminal - Accepts Visa, MasterCard, American Express, Discover, Debit cards, Smart cards, and Checks.
3. Merchant Account - Once the application was sent in, the prospect would receive 24-hour approval (unless they are a high credit risk) and 24/7 support.
4. Brochure - The POP also housed brochures that explained all of the products and services that were offered. This brochure gave the toll-free number to call to get more information and also contained a quick form application that was faxable.