Office Depot riding Europe's green wave

LONDON — For the past five years, office supply giant Office Depot Inc. has trumpeted green initiatives to environmentally conscious consumers in the United States.

Now the company is increasingly seeking to gain traction with a customer base known as particularly environmentally savvy — Europeans.

"Being more green in the overall European market, and especially in the UK, is both legislative- and customer-driven," said Marcel Jacobs, Office Depot's manager for environmental strategy and marketing in Europe. "The European legislative landscape and customer demands and requirements are more stringent than in the United States."

Executives of the Delray Beach, Fla.-based company say that the aim is to be a more responsible company — but also to make inroads in an increasingly important market.

"It makes good business sense to know your customers and respond to their needs," said Jackie Thompson, Office Depot's environment manager for the United Kingdom and Ireland. "The UK market in general has become extremely focused on the environment, and so Office Depot UK has developed a proactive approach to responding to the increasing needs of our customers here."

In the United States, the retailer opened a green store in Austin, Texas in July, its first eco-friendly location featuring rooftop solar panels, dual-flush toilets, energy-efficient lighting and recycled business products.

The company also has rolled out its Green Book catalog with thousands of environmentally friendly products.

In Britain, Office Depot is testing battery-powered electric vans. It also is offering contract customers free customized reporting of green indicators, such as the carbon footprint created by customer orders.

Elsewhere in Europe, the company next year is introducing private-brand products including biodegradable packaging, remanufactured ink cartridges, and a rechargeable alkaline battery.

Perhaps the most ambitious project is the launch of "green corners" at Office Depot's 17 retail locations in Hungary. These brightly colored areas offer a one-stop shopping experience for environmentally conscious customers.

"Hungary is the pioneer for this model of merchandizing green, and other countries will be watching closely," said Marisa Bluestone, a company spokeswoman.

Many programs are regional, in order to meet the specific needs of the various countries' customer bases. In the Czech Republic, for example, a "trees for life" scheme has the company planting one tree for every 50 packages of Papirius or Niceday paper sold.

The company's environmental efforts have caught the attention of BSI British Standards, the UK's national standards organization, which last month awarded Office Depot its ISO 14001 Innovation Award.

Like its chief rival Staples, Office Depot sees Europe as key to its hopes of expanding.

Office Depot reported a $2 million loss for the second quarter, compared with earnings of $106 million in the same period of 2007. But the international division reported a sales increase of 13 percent in the second quarter to $1.1 billion.

In many ways, Europe has taken the lead in green marketing. For example, a recent European Union initiative focuses on trying to end governments' paper transactions by ordering, supplying, buying, and invoicing electronically. At the same time, the travel sections of British newspapers sometimes publish the carbon footprints created by various vacations.

"We've definitely noticed that the demand for green business products and solutions is increasing," Thompson said. "Businesses need products and services that allow them to fulfill both their corporate visions and their green strategies."

She said that this sentiment was reflected in the company's survey of 2,500 business professionals earlier this year that found half expressing interest in making their offices greener.

Business consultants, too, believe Office Depot is smart to focus more on environmental issues.

"Office Depot is wise to position itself as on top of the issues that concern their European customers," said Allyson Stewart-Allen, who runs International Marketing Partners, a cross-cultural consulting firm in London. "Localizing how you do business in an overseas market is essential, as many other U.S. companies have learned at great cost.

"McDonald's, KFC, and even Best Buy are continuously learning that what plays well in the U.S. doesn't always work outside the country," she said. "Understanding the idiosyncrasies of international consumers is not only good in principle, but it's also the profitable way to do things."

Shelley Emling is a London correspondent for Cox Newspapers.