RealTime IT News

Office Depot Partners with Microsoft in Small Business Deal

If you don't have to go it alone, why go it alone online?

At least that's the question that huge offline office products retailer Office Depot, Inc. asked itself when faced with a prospective deal with online giant Microsoft Corp. It accepted the deal, of course.

Today, the Florida-based company said it plans to use Microsoft's technology and brand name to coax small business customers -- unfamiliar with the Internet -- online, using its chain of stores as a point for entry.

Office Depot -- which faces stiff competition from office retailer Staples -- said it would utilize a platform created by Microsoft to target the burgeoning online small business services market.

In the next several weeks, the company will roll-out a pilot program in twenty of its 820 retail stores to stimulate demand and rally small business customers to its services.

In keeping with a strategy of rolling back operations to stay strong in other sectors, the company intends to offer services over an integrated platform where businesses can link up to other commerce partners. The company declined to provide the cost of the service or to discuss other aspects of the financial terms of the deal.

Microsoft's platform will enable small businesses to utilize information across a shared platform with clients and co-workers, including allowing small businesses to register a business domain name, build a Web site and drive traffic to their site with a suite of Web marketing tools.

Monica Luechtefeld, executive vice president of ecommerce of Office Depot, said Microsoft offered to build a platform that the company fundamentally believed its small business customers would use to run their businesses on the Internet.

Luechtefeld also referred to online business studies which project small business will stampede onto the Web in the next two years. However, she conceded that before a transition could be expected an enormous amount of education on the company's part was necessary to convince small business users to use the Web.

Certainly, the company is hoping to capitalize off of the trust quotient that consumers still have for the Redmond, WA company. And its number two e-commerce position, just behind Amazon.com, is a spot it wishes to keep in difficult on and offline retailing times.

In February, Sears disclosed it would close 83 of its tire and hardware stores and four of its mainline department stores. And Montgomery Ward and Bradlees also shut down a number of stores. For its part, Office Depot said it would close 70 stores and cut back on expansion.

Office Depot has operations in 16 countries outside of the United States and Canada, including 23 office supply stores in France and seven in Japan.

Luechtefeld said the company would consider placing customer service personal in stores as a part of a marketing initiative to train small business operators on the Web.