When it comes to office supplies, companies like Office Depot, OfficeMax and Staples have long owned the majority of mind-share and brand recognition in the market. But, with the recession, the rise of eCommerce and the growing ubiquity of devices like the iPad, business has been in steady decline for many big-box chains, forcing them to make big cuts to brick-and-mortar operations.
Some have been able to turn those household names into online success — according to the WSJ, Staples, for example, has become the second largest online merchant behind Amazon and 40 percent of its sales are now online — but, overall, the bigs have been slow to adapt.
Andrew and Ryan Landau look at the office supplies market and are willing to go a few steps further. They see an industry that has been subject to very little innovation over the last two decades, and, particularly because it’s “not exactly a sexy space,” they think it’s in need of some remodeling — and a web-only approach. (It also helps justify going up against names like Staples when one considers that office supplies is a $30 billion industry.)
With this firmly in mind, the brothers Landau quit their jobs at Google and IBM last year to launch Chalkfly, a web-only eCommerce platform dedicated exclusively to office and school supplies. From the outset, the founders have been focused on developing partnerships that would allow the site to offer enough supply (and a wide enough range of products) to make it an appealing alternative to the big-boxers.
Today, the site offers over 50,000 products, ranging from pens and pencils to classroom decorations and surge protectors. But, to stand out from the big guys, Chalkfly wants to keep things simple, which is apparent when one compares its online storefront to that of, say, Office Depot. Going web-only isn’t enough when Staples is already doing $10 billion in annual revenue online, so the startup wants to offer a better customer experience, too, by keeping its storefront uncluttered and easy-to-navigate.
By focusing on e-tail, Chalkfly doesn’t have to manage the high overhead and huge sales floors that bog down its big chain competitors, allowing it to invest in customer experience. Chalkfly has a 365-day return policy, for example, and offers free overnight shipping for all of its products, along with 24-hour customer service.
The key, Andrew says, is making the whole process easier and faster, removing the friction that many customers experience when shopping for office supplies — something that’s pretty painful by nature.
Beyond investing heavily in improving customer experience online (relative to its competitors), Chalkfly also wants to differentiate itself by creating a brand that is about something bigger than just office supplies. In practice, this means that Chalkfly donates 5 percent of every sale to a school or teacher of the customer’s choosing. Teachers can sign up on Chalkfly to include their names or their schools in its online registry of those that are eligible to receive donations, or customers can add their own.
If a user doesn’t select a recipient, Chalkfly automatically makes a donation to a school or teacher in the customer’s proximity. Because schools are underfunded enough already and teachers often have to pay for school supplies out-of-pocket, the founders tell us, Chalkfly wants to do its part to make those supplies more affordable. What’s more, with the Web having reduced the barriers to entry for vendors, consumers are faced with a surplus of choice when it comes to shopping. Given two vendors offering the same product, the founders believe that most people will be more likely to choose the option that allows them to do some good while shopping for pencils.
And so far, it seems to be working. Just a little more than six months in, Chalkfly has already seen over 1,000 teachers opt in to receive donations, who are in turn helping to spread the word. What’s more, Landau says that the site has attracted “thousands of users and clients” and is on pace to do $2 million in revenue this year.
As a result, investors have started to buy in as well. The Detroit-based company recently raised $750K in seed funding from a handful of investors, including Detroit Venture Partners, Ludlow Ventures, Griffon Ventures, Start Garden and Bizdom. The founders tell us that they will put their new capital to work by doubling their team of five over the next three months, along with investing in technology and resources that can help improve the ordering process, customer service and reduce the friction inherent to the shopping experience.
The goal is to offer the same kind of customer experience that made Zappos so popular, while combining that with the charitable ethos of companies like TOMS. It still has a long way to go, but Chalkfly is already off to a good start.
For more, find the startup at home here.