The unlikely retailer heavily investing in smart technologies

OfficeMax has spent millions of dollars investing in new-to-market retail technologies designed to make the picking and packing of its online orders more efficient.

The company, which once had a network of 14 retail stores across the country, was one of the first retailers to import a multimillion-dollar custom box making and packing machine.

Now, the office, school and workplace supplies retailer is focused on the trial and roll-out of a glove with an inbuilt scanning device in the fingertip for its distribution centre staff to wear for faster scanning and picking of product in its Auckland and Christchurch warehouses.

It completed initial testing this month and is moving into stage two of the trial in August.

Traditionally its workers scan each box as it comes into their zone – an action done about 200,000 times per week.

With this new technology they will instead press a thumb down on the glove to read the barcode, identify the box and transmit details to the picker’s headset about what item needs to be packed.

OfficeMax managing director Kevin Obern said the organisation was looking to deploy 10 gloves in its high-frequency pick zones initially, and then roll out an additional 30 to cover its full conveyor.

Voice picking technology is another tool it is using in its Auckland centre, programmed through its boxing machine, with about 64% of its orders completed through voice pick.

“Technology is constantly changing and rolling out in the business, and a lot in the last year or two has been about data and insights,” said Obern.

“We’ve invested a lot of money in the last three years. It was over the Covid years, and even though there was a huge amount of downside, it did actually enable us and almost force us to improve our technology internally. One to enable people to work from home, but secondly to make those people more efficient. It sped up our adoption of new technologies and software.”

Obern said OfficeMax aimed to be ahead of the curve when it came to streamlining its operations through adopting new technology.

The company has spent over $5 million on new technology and future-proofing its business, including extending its 22,000m² Highbrook distribution centre in Auckland by 7500m².

In 2020, it introduced boxing and packing machines, which produce 24 custom-sized boxes per minute, reducing its landfill waste by 1700kg each year.

The boxing machine has the ability to resize a box and pop a lid on at the desired height based on how much product is in a box, removing the need for bubble wrap or paper.

Obern said the machine had saved the company about $200,000 each year on box filler.

OfficeMax has invested about $50,000 so far in trialling the new glove scanning technology.

Despite facing recessionary pressures, Obern said OfficeMax had been able to sustain growth.

It has about 33,000 regular account customers across education, business and government sectors, and has began ramping up its “direct from supplier shipping” efforts.

The business holds stock of around 35,000 products, but also lists products on its website that it does not stock in its warehouses and has these shipped directly from its suppliers as orders come in.

By the end of the year, OfficeMax forecasts its sales would have grown by another 3% in 2023.

Closing the 14 retail shops in 2020 was the best decision OfficeMax could have made, said Obern.

He said the closure of stores did not affect revenue at all and it had allowed the company to focus solely on digital and automation.

“We’re starting to use AI in some parts of the business already, we’ve got some work going on in our call centre, which will help us in that space, and we’re just doing a refresh of a lot of our data so that we can optimise that to get better customer insights,” said Obern.

The company was also doing more sustainability work within its North Island and South Island distribution centres to improve connectivity with its distributors and better track its carbon footprint.

It has installed 798 solar panels in its distribution centres, generating about 29% of the power used at those sites, retired all gas and petrol fork lifts and is in the process of replacing its fleet of vehicles with EVs and hybrids.

OfficeMax started out as a national stationer and publishing company known as Whitcombe and Tombs. It has since grown to a team of more than 500 and is owned by private investment firm Platinum Equity.