Staples 2005 Annual Report Download - page 4

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2. Deliver on our Easy Brand Promise: “We make buying office products easy.”
Our “Easy” brand positioning continues to differentiate Staples, and our customers
appreciate all the things we do to make it easy for them. Our EASY service models in
both Retail and Delivery have increased customer satisfaction, our redesigned websites
make it easy for Delivery customers, and our Easy Mobile Tech program helps small
businesses solve their technology problems. We’ve enjoyed great customer response
to our Easy Rebates program that has processed more than 8 million rebates to date.
We’re making it easy to buy ink with our in-stock guarantee, a great assortment of
Staples brand ink, and strong recycling programs. Our marketing campaigns featuring
the Easy Button have vividly connected Staples with an easy shopping experience,
driving traffic to our stores and delivery businesses.
3. Take Staples’ Brand Development to the Next Level
Staples brand products build loyalty, deliver great value and quality to our customers,
and drive higher margins. Our team made great progress on our goal to develop
Staples’ brand in 2005. Sales of own brand products grew to 18% of our total company
sales, and we continued to improve quality, packaging, sourcing and innovation. We’ve
brought hundreds of new Staples brand products to market. Our Invention Quest
contest that seeks ideas for innovative office products has increased the visibility of the
brand while filling our new product pipeline. Direct sourcing more of our Staples brand
products is the next frontier. We’ve invested in our sourcing office in China to reap the
benefits of buying direct from factories.
4. Drive Overall Supply Chain Improvement
Improving our supply chain has been an important company wide objective since 2002.
We were pleased to see continued improvement in every key metric, including
increasing inventory turns to 5.8 times for the year. Over the past three years, our
“Summit” supply chain program increased inventory turns, drove higher sales through
better in-stock, improved vendor reliability, and reduced distribution expense. These
efforts were primarily focused on our Retail business, so we are now turning our focus
to apply what we’ve learned with Summit to our Delivery business. We’re building the
delivery and systems infrastructure we need to support our aggressive growth plans and
to drive better customer service.
5. Grow Profitable Sales, Improve Margins and Increase Return on Net Assets
Driving superior financial returns remains our primary goal. Return on net assets
improved ahead of plan as we focused on driving profitable sales growth, improving
operating margins, and utilizing our assets more efficiently. We leveraged operating
expense and corporate overhead significantly to drive our 20% earnings growth. With
increasing RONA as our guiding principle, we continue to look for ways to lower costs,
drive organizational effectiveness, develop our talent and share best practices globally.
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