Staples Canada transforms business model with co-working spaces, cafes and more

TORONTO — Regular customers of certain Staples Canada Inc. locations may not recognize their local stores the next time they visit.

The company is transforming its business model at two locations in Kirkland, Que. and Toronto to include a range of features including co-working spaces, a technology discovery zone and a “stadium-style” area that can be used for community events.

It’s also dabbling in opening journal, pen and audio bars, offering new digital-based services including website design, rolling out a weekly speaker series and serving up coffee at an in-store cafe run by local coffee company Mos Mos.

Staples chief executive officer David Boone said the concept stores are a product of the changing marketplace the retailer has faced as competitors Amazon, Walmart, Muji and Miniso have invaded Staples’ territory, driving down prices and increasing competition.

Boone said Staples is dealing with the reality that its online business is growing faster than its retail footprint.

“If you think about where our customers are going, they are embracing technology, they are embracing different ways of working and education is changing in Canada, so we are…adapting it to where our customers are going,” he said, noting that the company is also eyeing a new e-commerce experience.

To shape the concept stores and features Staples is testing, the retailer consulted with thousands of businesses, educators, parents and students. They told Staples they wanted more inspiration and help, a community feel and a sense that things were “becoming easier” by shopping there, Boone said.

The company settled on a range of features dedicated to the digital-savvy workforce and providing for entrepreneurs and those working in the gig economy.

The journal, pen and audio bars will likely pop up at other Staples across the country, but the company will be more selective about the locations that receive its gathering and co-working spaces, Boone said.

In recent years, co-working space business WeWork has aggressively expanded in Canada alongside similar companies targeted at women or millennials.

Retail expert Brynn Winegard said how Staples’ co-working space will fare is hard to predict because those prone to using co-working spaces are just outside of the company’s core demographic.

“A lot of the millennials, we call them ’digital natives,’ never really wrote with pen and paper. They are more technology driven,” she said. “Some of the stationary components and non-digital products Staples has would attract a different demographic than the people using these working spaces.”

She suspected this is why Staples is testing the offering at a few locations and not rolling it out on a wide scale just yet.

She said the changes Staples is making are in-line with plenty of other big-box retailers that own many large stores and recognize that they can repurpose their spaces for other things to drive more traffic.

“Those big centres have to be very profitable so you can justify keeping them,” she said. “There is the imperative and need for organizations to create a reason beyond shopping to go in the store.”

Starbucks, she said, was among the first to clue into benefits of offering shoppers more than an opportunity to scoop up products. After it launched free WiFi, she said others followed suit. Then Holt Renfrew added a cafeteria, cafe and restaurant. Walmart, she said, has gotten into the action too, dabbling with optical, photo and dry-cleaning services.

“People will say I am here to pick up my glasses prescriptions, I might as well pick up some stuff at the Walmart,” she said.

“Very similarly at Staples, you can see this would be a very intelligent move if people say I am here for a meeting or to collaborate with my peers at this co-working space, so I might as well go pick up some dry erase markers.”

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