Dealer groups are anticipating another year of challenges for the office supplies sector – but say that there are still plenty of opportunities for dealers to be successful
The office supplies sector has had to deal with many challenges over the past couple of years – from the pandemic to supply chain issues caused by the Ever Given container ship getting stuck in the Suez Canal – but has shown the resilience to, in the main, continue to trade.
However, it looks like another turbulent year is in store, according to Graeme Hargreaves, group head of merchandising at Nemo Office Club. “Realistically, I think we can expect more of the same; disruption, fluctuating working patterns and uncertainty,” he says. “I don’t expect the world to be in balance until the end of 2022 at the earliest. For dealers, who are well placed to thrive in such times, this means remaining agile down the supply chain and upwards to their customers.
“For supply, the need to shop around will remain paramount. We are a long way – if we ever get there again – from a dealer being able to rely on a single source of supply for the business consumables that they now themselves offer. In this respect the ‘single source’ description sits firmly, and for the foreseeable future, only with the dealer.
“They will continue to source product from multiple suppliers, and often competitors, in order to provide what their customers require. Maintaining and cultivating multiple wholesale and vendor relationships, and marketing effectively multiple product and service offers, will continue to remain critical.”
Graeme recalls the free-of-charge wholesale CDC/RDC model of distribution. “In a way, it was ahead of its time if you look at what Amazon is doing with its large sheds around the country. For our sector, that model shifted to a single shed placed centrally, and what is now chargeable fulfilment directly to the end user and via the dealer. What this forced the agile and adaptable dealer to do is to shop around – and they are getting used to it, which is not a bad thing in uncertain times. My belief is that we will end up more with a series of specialist suppliers, akin to the old RDC model, but they will be ‘geographical’ by product category rather than necessarily by location, equally alongside several broad range providers.
“There are multiple examples; a catering supplier, a janitorial supplier, an educational supplier, a grounds maintenance supplier, a toner and ink supplier, and so on. The successful ‘broad range’ wholesalers will be those that invest in, and embrace, a number of these product categories thereby commercially encouraging spend to themselves and away from these now establishing alternatives.”
Ongoing challenges
Meanwhile Alex Dunn, managing director of Superstat Ltd, reckons the biggest business challenges for 2022 are likely to be ongoing supply chain issues and constant price increases. “The best response to this is to be proactive in our communication with customers,” he says. “No-one likes delivering bad news but the quicker we raise it, and look at alternative solutions where possible, the more customers appreciate our efforts.
“Supply chain problems and volatile pricing are worldwide problems, and this is set to continue into 2022, so now is a good time to be actively prospecting . We are currently training dealer salespeople on how to get on the front foot and get prospecting.
“Another problem might be recruiting and retaining good people in a job market that favours the employee. Businesses can look at how we can make ourselves attractive to work for. It doesn’t have to be pool tables and latte machines – being flexible, inclusive and creative with working hours where possible can cost nothing, but make life a whole lot easier for people.”
Sales trends
In terms of trends in sales Alex says that, according to dealers, their growth is currently coming from anything other than traditional office products. “Whether that’s promotional gifts, furniture, workwear, hygiene, IT – you name it, and they are doing it,” he says. “Sustainability will also be very much be back at the forefront in 2022, particularly after COP26, and hybrid working habits are beginning to harden-in now and become a permanent way of life.”
Integra Business Solutions’ CEO, Aidan McDonough, agrees that hybrid working will be a key trend in 2022 and beyond. “The opportunities for dealers will be to provide a flexible service catering to the needs of remote workers and offices alike,” he says. “Technology, hygiene and, specifically, sanitising solutions will also continue to be in demand.
“As the education sector stabilises, surplus budgets have seen members picking up additional business, including capital expenditure, and we will continue to provide dedicated catalogues, direct mail and seasonal campaigns to maximise the opportunities. General office supplies will continue to decline, so finding new opportunities will be critical.
“We would encourage members to monitor their key performance indicators more regularly and have a short-term action plan. Set time aside, however, to think ‘outside the box’ to create additional revenue streams and opportunities – get the team together to throw everything in the pot.”
Extended delivery times
Aidan adds that Integra are seeing increasing numbers of members putting the focus back on stocking and that 48-hour delivery will be the norm, going forward. Steve Carter, managing director of Advantia Business Solutions, agrees that next-day deliveries could decline as dealer groups look to save money on fuel and reduce their carbon footprints.
“I have asked dealers, ‘Do you believe your customers still need a next-day delivery?’ Some dealers say ‘Yes’ and if you ask why, they say ‘Because if we don’t offer next-day delivery, someone up the road who sells the same products will.’ I reply, ‘Have you asked your customers that?’ If you have a customer order with 10 lines on it, and nine lines come from your stock, or your wholesaler’s, and another line will come in a day later, to my mind you are better off holding onto it, making sure the customer is aware, and I am convinced the customer will usually say ‘Bring it all together in two days’ time’.
“It isn’t just about the products; it’s about the service as well.”
Communication is paramount
Steve adds that communication with customers is paramount if dealers are to provide the most effective service. “We have to find out what customers’ plans are, such as if they are bringing all their staff back into the office or allowing them to work flexibly.”
This is important is it will impact on how dealers deliver to customers. “We have to cater for employees who are working in the office, at home, or flexibly in both locations. Dealers need to find out how that person wants to receive their supplies that they need; will they be sent to the office or their home, for example? Build your offering around that. “You are never going to know unless you ask the question. We ask dealers to do that and then come back and tell us and we will gear things around that.
“It isn’t all doom and gloom. People may not come back to the workplace but, if they are working from home, they are going to need things at home and the employer is still responsible for their furniture etc so go and find out what they are doing and build things around that accordingly. “There are still opportunities out there.”
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