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The ODP Corporation's (ODP) Office Depot Boosts Pickup Services

Delivery durations have evolved into a vital factor in online order fulfillment services. Retailers have been striving to introduce greater efficiency and swiftness in online order deliveries to attract customers. Progressing along such lines, The ODP Corporation’s ODP wholly-owned subsidiary — Office Depot — announced that it has enhanced its in-store and curbside pickup orders to 30 minutes, across Office Depot and OfficeMax stores nationwide.  The strategy is expected to further boost consumers’ shopping experience from Office Depot, which already offers a variety of swift and convenient fulfillment services. Let’s delve deeper.

Prudent Moves to Boost Delivery Services

The latest 30-minutes delivery option can be availed for free, while placing an order on Office Depot’s website or its mobile app. Customers will be required to select the "Store and Curbside Pickup" option during checkout, at least two-hours before store closing time. In case an order is not ready within 30 minutes, the company will provide customers with a $5 discount on their next purchase. This initiative to improve fulfillment time from one hour to 30 minutes reflects Office Depot’s commitment to provide customers with swift services.

Amongst other fulfillment services, Office Depot offers options such as Same-Day Delivery, Same-Day Printing Services, Free Next-Business Day Delivery, Office Depot Automatic as well as Tap & Pay.

Clearly, The ODP Corporation is undertaking every effort to bolster digital capabilities across all its business areas. Markedly, the demand for buy online and pick up in-store services increased about 35% during first-quarter 2021. We note that advancing digital operations is a vital part of the company’s transformation efforts. The company completed the integration of BuyerQuest, while advancing its collaboration with Microsoft. Management had earlier stated that it plans to make investments in the digital transformation endeavors worth $20-$25 million in capital expenditures and $30-$35 million in operating expenses in 2021.

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Other Things to Note

Last month, The ODP Corporation revealed plans to split into two independent publicly-traded companies operations. The separation is likely to be completed in the first half of 2022. Markedly, the company will spin-off its Business Solutions Division contract unit, Grand & Toy, and independent regional office-supply distribution operations. This tax-free spin-off will create the entity — “NewCo”. The ODP Corporation will retain its retail consumer as well as small-business products and services. Management believes that the separation is likely to improve strategic focus and create long-term value for shareholders. Apart from this, the company is on track with the sale proceeds for CompuCom.

Again, we note that Staples has been in pursuit of The ODP Corporation for quite some time. Earlier this month, the company received a proposal from Staples to acquire its consumer business for $1 billion in cash. This includes the company’s Office Depot and OfficeMax retail stores business as well as the direct channel business (officedepot.com). On Jun 5, in response to the buyout proposal, The ODP Corporation stated that its board in assistance with its financial and legal advisors is carefully reviewing the transaction.

These actions along with the aforementioned efforts to boost digital capabilities indicate that the company is undertaking every possible effort to boost business prospects.

Shares of this Zacks Rank #2 (Buy) company have increased 19.2% in the past three months compared with the industry’s rise of 3.7%.

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Target Corporation TGT, sporting a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 13.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tapestry, Inc. TPR has a long-term earnings growth rate of 10% and currently carries a Zacks Rank #2.

Tractor Supply Company TSCO, also a Zacks Rank #2 stock, has a long-term earnings growth rate of 9%.

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