Tom Stemberg, CEO and Chairman of office-supply superstores Staples, is a retail junkie. Every week the founder of the $5.2-billion chain keeps tabs on the industry by dropping by at least one of his competitors' stores. "I've never visited a store where I didn't learn something," he says. Inc met with Stemberg to learn how he mystery shops.

Inc.: What's your secret for getting the most out of competitor-store visits?

When you visit the competition, you've got to see what they do better than you and learn from them. You must never have the hubris to take your competition for granted, because that can come back and hurt you.

Inc.: What do you look for when you visit a store?

Stemberg: Before I walk into the store, I'm looking for what kind of visibility the store has. If it was hard for me to find, it probably was hard for most other people to find. Then you walk in the way a customer would walk in. The first thing I look for is how long it takes for somebody to come over and ask if they can help me. You look for out-of-stock items, you look for how things are displayed, you look for things the customer can understand, you look for price tickets that are inaccurate. How easy is it to figure out where things are? Do I get an impression the prices are low here or that they are not? Are the prices well communicated? Do people know the answers to your questions? I also want to see how I'm going to be treated as a customer. You try to see exactly what the customer sees. I carry a little pad and I write my notes. Then I E-mail them around to our management team.

Inc.: Are there risks associated with copying competitors?

Stemberg: Absolutely. We've laughed from time to time because when you copy at retail, you copy mistakes as well as things that go right. I will never forget: we tried portraits and picture frames early on, and this did not work for us. But Office World decided they were going to make a real statement in picture frames. Now they have a 40-foot section of picture frames. So they copied some dumb things, too. You have to be careful what you do.

Inc.: What's the downside to focusing on competitors?

Stemberg: We focus on them disproportionately. One of my great fears always is that our people will measure competitors' stores purely by how we do things and try to rationalize why we do things better, smarter, whatever, and stop the learning experience. One of the things you can do when you're focused on your competition is lose sight of the customer. I think that's a mistake, because lots of times I find retailers overly focused on one another and ignoring what the customer wants and therefore losing the market to some new entrant who truly focuses on the customer.

Published on: Aug 1, 1998