Off to Valhalla

The U.S. incarnation of Viking Office Products is about to enter direct marketing Valhalla, courtesy of parent company Office Depot (see “Viking U.S. sails off into the sunset,” page 7). Viking was certainly one of the great brands of the catalog industry. Former president Irwin Helford transformed the company into an international powerhouse by promising — and delivering — exemplary customer service.

Viking’s emphasis on service won it a famously loyal customer base. But servicing those high-maintenance customers isn’t cheap, as Office Depot has learned. Hence its decision to fold the Viking brand in the U.S. and try to convert the Viking customers into Office Depot customers.

As is the case whenever any revered brand is folded, many doubt the wisdom of Office Depot’s decision. Others sigh that this is another example of lust for lucre taking priority over doing what’s right for the customer.

But while the Viking customer did spend more than the Office Depot customer — in part because Viking doesn’t discount to the extent that Office Depot does — the fact remains that Viking has been “underperforming,” to use Office Depot’s parlance, for some time now. The company referred to this underperformance repeatedly in financial releases and analysts’ calls. So maybe not enough office products buyers place a premium on service to support a Viking nowadays.

David Solomon, managing director of investment bank Goldsmith Agio Helms and head of its New York office, raised a few interesting points when discussing the story with Multichannel Merchant senior writer Mark Del Franco. “It would be meaningful to have two brands only if they were highly differentiated and appealed to different market segments,” Solomon said. “Think of Chevy vs. Cadillac. But instead, the product mix has become very much the same, aiming at the same target market. Therefore, the logic of having two brands was missing.”

Perhaps Office Depot could have done a better job of differentiating the high-service Viking from the low-prices-guaranteed Office Depot. A visit to the Websites of the two brands certainly doesn’t clarify how one is different from the other. In that sense, Office Depot reminds me of Coca-Cola, which earlier this year rolled out Coca-Cola Zero without explaining how it differs from Diet Coke. (And don’t get me started on Diet Pepsi vs. Pepsi One.)

In our August 1999 issue, Irwin Helford wrote a guest column titled “Your catalogs are doomed!” which opened, “Yes, your catalogs are doomed — and so are most of mine. They just won’t work in the future.” For catalogs to survive, he said, they must among other things “identify the unique benefits — proprietary products, exemplary service, speedy delivery — that will earn a customer’s business, even without providing goods at the lowest price.”

From all accounts, Viking offered all those benefits. But either customers no longer sought those specific elements, or Office Depot didn’t do a good enough job in pointing out those benefits to buyers.

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