Office Depot B2B e-commerce grows in a tough 2020

Recently , the company said that sales for the fourth quarter and full year 2020 fell 9% year-on-year, but noted that demand in its B2B e-commerce channel increased 15% in the fourth quarter.

But unlike those other companies, ODP also has a new, multi-pronged strategy to build a B2B digital commerce sales business, which delivered some of the company’s best sales results in its most recent fiscal quarter. To lead its B2B e-commerce technology and strategy, ODP recently hired former Amazon business head Prentis Wilson, who oversaw the rapid growth of Amazon’s B2B marketplace into an e-commerce business that reached $10 billion in annual sales in its first few years in the 2010s.

ODP is also looking forward to strengthening its B2B e-commerce capabilities through its recent acquisition of e-procurement software company BuyerQuest and ODP's new cloud technology arrangement with Microsoft. ODP said it will use Microsoft's Azure cloud technology to improve its online operations procurement technology and make it available to new and existing customers using the Microsoft Dynamics 365 Business Center enterprise resource planning system.

Suppliers need B2B-grade e-commerce technology and a flexible supply chain to remain competitive. With partners on Microsoft Azure and Microsoft Dynamics 365 Business Central, ODP and its customers, both buyers and suppliers, can grow and scale quickly and efficiently.

Wilson noted on his LinkedIn page that ODP is looking to expand its technical team by creating more than two dozen positions.

The company's Chief Executive Officer Gerry Smith said today that in the fiscal year ended Dec. 26, the business, which generates more than half of its total sales, reported a 9% year-on-year decline in total sales to $9.71 billion, and a net loss of $319 million compared with earnings of $99 million in the same period a year earlier.

In the fourth quarter, total sales fell 9% to $2.29 billion, and net income fell 67% to $18 million.

ODP is organized into three divisions: Business Solutions, which includes sales through e-commerce and account managers , sales through more than 1,000 Office Depot stores and the Office Depot platform , and the CompuCom Technology Services division.

For the fourth quarter ended December 26, ODP achieved the following results:

● The Business Solutions segment announced fourth-quarter 2020 sales fell 10% year-over-year to $1.1 billion due to lost sales from business offices and schools closed due to the pandemic .

In a statement, ODP said B2B sales grew as demand from the e-commerce channel increased 15%, with sales of certain adjacency products rising, accounting for 45% of total BSD revenue in the quarter. It added that operating income for the quarter was $18 million, down from $69 million.

●In the retail division, which includes small business sales, sales fell 6% year-over-year to $951 million. ODP does not break out e-commerce sales in the retail division but said the company had 1,154 retail stores at the end of the year, down from 1,307 a year ago.

CompuCom division sales fell 13% to $207 million.

Looking ahead, ODP said it will continue to develop its B2B products and services. Smith said today that ODP's collaboration with Microsoft brings together cloud technology, ERP and e-procurement software .

Office Depot

B2B

E-commerce