Next Web Rivalry: Office Depot vs. Staples

The Web has seen many great business rivalries develop over the last few years.

There was CDNow vs. N2K, who merged. There was Amazon vs. Barnes & Noble, which continues. The most telling Web rivalry of 1999 may be Office Depot vs. Staples.

The rush to the net by consumers, and the incredible wealth generated by holders of Web site equity, has driven nearly all of what we like to call “meat space” to the Web in 1999. No matter what your niche is, if there is someone dominating that space in real life, chances are you’ll find them online, and just as big, too.

Maybe that’s why office products never saw a lot of true cyber-competition. Whatever the reason, it’s too late now.

The two office supply giants aren’t just competing with Web sites tied directly to their existing delivery trucks. They’re also competing actively in the business-to-business market, where negotiated discounts, executive approvals, and open orders replace swiped credit cards. (These two merchants have also pioneered use of “corporate cards” — credit cards that support negotiated discounts used by office managers.)

The rise of Office Depot and Staples doesn’t just end your dreams for owning the paper delivery space. It also means new competition in the areas of computer hardware and software, since both office supply giants have come online with established business-to-business relationships and the technology to implement them.

In the small to mid-sized business niches that Dell doesn’t yet dominate (too small for their own reps, too big not to earn discounts), Office Depot and Staples can combine the value of buyers’ PC purchases with paper, pens and shredders and deliver a larger discount.

The point is you’re going to have to get used to this kind of competition. The Web’s just gotten too big. And you’re going to have to be ready to beat it if you want to succeed.

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