When office workers reach for a writing tool, OfficeMax is hoping it will also be a TUL.
A private label brand that OfficeMax rolled out in July 2006, TUL (pronounced “tool”) currently consists of a few basics: several kinds of pens, along with dry-erase markers and erasers. But the Naperville, Ill.-based retailer plans to expand the line, launching new products fairly regularly over the next few years.
The introduction marks the first time OfficeMax has created a line of private label products from the ground up, guiding the process from inception through design and production.
“OfficeMax said, ‘It makes a lot of sense to go into the private label arena, but we don’t want to do it with the cheapest thing,’” says Scott Ternovits, design director for Gravity Tank, a Chicago creative consulting firm that partnered with the retailer to develop the brand. OfficeMax wanted quality, Ternovits says.
And the company wanted a brand that could compete on more than just price. In other words, according to Ternovits, it wanted people to seek and buy the products because they preferred them, not just because they were inexpensive.
For the TUL line of pens, OfficeMax and the design team decided to go for the goal of “everyday premium”—something sleek and elegant-looking that would stand up to daily use and could easily be replaced, if necessary.
In the dress-for-success atmosphere of business, no one wants to go into a meeting with the typical cheap-looking disposable pen, says Ternovits. At the same time, he explains, “people are reluctant to spend $50 to $80. They will lose it or someone will borrow it.”
OfficeMax wanted something that would fill that void and look expensive, but at an affordable price. “This seemed like a really nice opportunity,” Ternovits says.
Attention to detail
Early on, research revealed an interesting insight: People generally have two kinds of pens. The first, they might keep in a jar or caddy on their desk. The second, the ones they really like, are usually stashed out of sight in a desk drawer. The designers and OfficeMax executives decided they wanted the TUL pens to fall into that second category.
The team also looked at the ways people use pens. What they found: there was no need to reinvent the wheel. But by paying more attention to the small details, they could make an everyday pen look, feel, and function more like its expensive counterparts.
On the retractable pens, for instance, the designers added a metal tip to give them balance and weight. Roller ball pens were designed with clear barrels, with printing on the cartridge inside, to impart a clean look. And the gel pens were fitted with a rubber grip near the bottom to give them what Ternovits describes as “three dimensional quality and texture.”
“These are the kinds of things that people notice,” he says.
The ballpoint stick pens, however, presented the team with one of its biggest challenges. Ballpoint pens “are a total commodity,” says Ternovits. “We really needed to find one detail and one technology to carry the day.”
A rubberized silver paint provided the upscale appearance the design team was seeking to make the product look and feel distinctive. And that look and feel turned out to be key: When the designers passed out pen samples to clients and others just before the products hit the market, says Ternovits, “People didn’t believe what price category they were in.”
A 12-pack of the retractable pens, for instance, retails at OfficeMax.com for $13; 12-packs of TUL ballpoint stick pens go for $9; roller ball 12-packs for $25; and 12-packs of gel pens for $14 (prices can vary in stores).
With the dry erasers (about $4 online), the team decided on a small change in shape that could make the product more ergonomic and could set it apart. “We gave it a racetrack form,” says Ternovits. “Because when you look at the shelf, everything else is rectangles.”
They also added a loop so that the eraser could be hung. The marker packages have a similar shape—curved around the top and flat across the bottom. And the markers themselves are magnetic.
And while such details result in a slightly higher price-point, the idea is that such elements fit more readily into business surroundings. “Do you really want something that looks disposable?” Ternovits asks.
TUL packages are also designed to be easier to open, with containers that simply peel back and can be resealed, as well. The aim: prevent customer packaging frustration. The team also wanted something customers could use to store the product. “It sounds simple, but [it is] just a little bit nicer in the user experience,” Ternovits says.
The brand seems to have struck a cord because, according to Ternovits, the line hit the stores in July and sold out in the first two weeks.
Packaging: less is more
That’s a significant achievement. It’s not exactly an uncluttered market. “You’ve got 400 to 500 [competing] SKUs,” Ternovits says. “How do you differentiate?”
The designers took great pains in that. When it comes to affordable pens, a lot of their packaging “shouts” at the consumer. They typically use bright colors and lots of type—calling attention to various features. And many echo both language and flourishes from the auto design industry.
So TUL decided to take the opposite approach.
“There is an old Minute Maid strategy that says if everyone else is screaming, whisper and you’ll get noticed,” Ternovits says.
To present its pens, TUL uses a sleek, clear package with a clean silver label bearing, in large type, the TUL name. It specifies the type of pen and how many are in the package.
The packaging is all the more noticeable for what it doesn’t have: no storyline telling consumers about the product, no superlatives touting the advances in technology. No diagrams or explanations of how this particular product differs from others on the shelves. With TUL’s clear, minimalist packaging, the product is the focus of attention—the “what you see is what you get” approach.
While it seems like a simple idea, it was the result of much thought and research, says Ternovits. It’s part of a strategy to differentiate by invoking more upscale imagery. “If you pick up a Montblanc pen, you’re not going to see five different graphics about that pen,” he explains.
Packages on future products will carry the same philosophy and largely the same color scheme. “Silver and simplicity,” says Ternovits. “We intentionally avoid lots and lots of color.”
Teaque Lenahan, director of marketing and business development for Gravity Tank says products in a category are being displayed to create maximum impact and shelf presence. When the customer looks at the shelf for a product, the TUL line is intended to be “an oasis of calm and sophistication,” he says.
Private labels are big business
Private label brands are big business for major retailers, and office supply chains are no exception.
In supermarkets, drug stores, and mass-market retailers, private labels account for 13 percent of sales in the office supply category (and 15 percent of writing instruments), according to 2006 figures from the Private Label Manufacturers Association and Information Resources Inc.
Office Depot credits consumer demand for its private label brand as the reason for its recent increase in profits (and share values) for the fourth quarter of 2006, according to Reuters. The retailer reported a net income of $135 million, up $29 million from the previous year.
For Staples, store brands comprised 15 percent of the retailer’s $144.4 billion in sales for 2004, according to an article in InformationWeek.
“Most retailers nowadays have to look to their own products to differentiate,” says Brian Sharoff, president of the Private Label Manufacturers Association (PLMA). Because competing strictly by lowering prices on the same items “is eventually a zero-sum game.”
Retailers create private labels primarily for two reasons, says Bill Bishop, of Barrington, Ill.-based retail consulting firm Willard Bishop LLC. First, it is to create an air of exclusivity and have “items and brands only available in the store.” And second, retailers have the potential to make a wider profit margin on their own brands, says Bishop.
An additional plus to a private label for retailers is that you “can very often reduce the number of types of products you carry in a category,” he says. Called category management, it’s “a standard approach.”
And increasingly, retailers are not just competing with other retailers in their own category, but with national big box stores that carry a wide range of products, says the PLMA’s Sharoff. So they are looking to offer a “combination of products, in-store ambiance and service” to define themselves, he says.
But there comes a point in every industry when retailers realize that they offer those things and still have “the same likelihood of going out of business,” he adds. “Developing your own brand changes the dynamic. The one product you can’t carry is your competitor’s private label.”