Post-COVID – what does the structure of the OP sector look like?

The pandemic has created a seismic shift, not only in the way we work but also in the way OP businesses within the channel work. Many office product businesses have evolved and started selling new categories and new manufacturers are entering the market. We have seen mergers and acquisitions. Some organisations have gone out of business and there are some new entrants. What will the sector look like in a couple of years?

Richard Coulson, Chief Executive, Complete

I think the reality is that no one really knows what it will actually look like; there is no historical ‘playbook‘ for what has happened, or what happens next. However, the sector at a macroeconomic level has been irreversibly impacted because the COVID crisis has triggered a huge change in the way companies operate. I believe hybrid working will be around for at least 18-24 months after the furlough scheme has ended, so working practices will continue to evolve and adapt which, ultimately, means that the future will be very different to the ‘normal’ we all remember.

The core OP sector will, no doubt, contract further overall so, in order to survive and thrive in the future, companies simply have to diversify. However, that takes time, focus and investment – and not everyone in the traditional dealer market has the appetite for the investment needed, especially at a time when there will be even more investment pressures thrust upon companies to trade sustainably on zero emissions transport to protect the environment.

Mike James, MD, Dundale Associates

I was once told that the people and companies that cope best and quickest with change are those that have no choice. For those that have survived COVID this has been absolutely true. We have had to change and adapt at a pace that exceeds anything we imagined pre-COVID and, as we emerge from the pandemic, I doubt if this rate of change will decline.

So what will the OP sector look like in 2025?

The demise of the independent commercial dealer has been predicted for decades (if not centuries). Many have not only survived Viking, Staples, Amazon, COVID, etc., but have flourished. Product ranges have changed, routes to markets have changed, end-user service levels have increased, but the good dealer continues to grow as they remain close to their customer base.

Large dealer and manufacturer sales forces will decline as great data becomes a key factor in growing sales, especially via Amazon. 

The dealer’s dependence on the wholesaler will decrease as more suppliers look at different routes to the dealer and I anticipate more manufacturers using a 3PL option. The wholesalers will continue to develop their own unique  brands, and offer these to dealer groups who do not have the volumes to source their own label offerings.

During COVID there has been a growth of new suppliers to the dealer channel and this trend will accelerate; the down side is that the High Street ‘stationer’ is, in many parts of the UK, already a thing of the past and, unfortunately, this trend will continue.

The upside is that I believe we will see the continued emergence of ‘niche’ dealers with a strong e-commerce platform, concentrating on being the expert on a limited range – Boards Direct,The Notebook Company, Cult Pens etc are good examples. The end-user still likes experts and, as many of us are now partly home workers, we will demand quality branded products.

The dealer groups will evolve and, in 2025, we will not see the same number, as mergers and acquisitions continue – and do not be surprised to see Paragon, or Endless as potential buyers.

There will be a changing role for the ‘back office’ providers, with Prima leading the way (I have a vested interest) as, whilst they are certainly not a dealer group, they are a group of dealers, and the engagement of all providers with manufacturers, new suppliers, wholesalers and dealer groups will continue.

One final point is that BOSS (and BPGI) together with The Stationers Company will continue to grow in importance for both networking, lobbying and legal advice.

Tim Browning, Director, Blake

Due to the pandemic, there has been a sizeable change in the way that the office products (OP) sector is operating. Some have suggested this may see a drop off for office product businesses; however will this really be the case?

Many OP sector businesses have begun to diversify product categories and ranges to cater for changes in customer behaviour. This is taking the form of creating product packs that are suitable for at-home use as well as office use – although one key challenge that OP businesses will face is that of understanding the true change in consumer behaviour because this will, ultimately, effect the level of demand of each sales channel.

Additionally, one could argue that OP businesses will see an increase in demand, with direct mailings becoming favoured by the consumer compared to digital campaigns. 87% of consumers consider direct mail to be more believable than email. Alongside this businesses implementing direct mail campaigns would see increased conversion as 25% of consumers purchased from a business having received mail in the past 12 months. Due to the increase in consumer preference for receiving physical marketing campaigns, many businesses will look to harness this, enacting direct mail communications over the coming months, increasing demand for OP businesses in need of envelopes and mailing bags.

Another key point is that many businesses will also choose to return to a working environment that matches that of the pre-COVID environment, insofar that staff remain in the office full time – key reasoning for this being that many businesses will feel that, in order to ensure that performance and creativity are continued, staff will need to have the face-to-face contact that enables informal creativity to occur – as opposed to a more regimented and formalised Teams or Zoom call that may not allow for the same relaxed, brainstorming spaces that many modern offices have. In turn, this will have a knock-on effect for OP businesses to continue sales channels with existing customers.

There is no doubt that, post-COVID, there will be some level of change for all businesses within the OP sector and how they are able to operate. Yet, innovation and the ability to diversify, are key to any business success. Here at Blake we thrive on innovation – whether that be new product ranges or tailored services, providing the customer with the solution that works best for them is our goal.

Jeroen Van Den Berge, group CEO, Beaverswood

The warehouse is the new office

Now is the right time to adopt diversification, bring new products to existing customers and use new products to break into new markets.

Not only is the logistics and warehousing sector booming – thanks to the acceleration of online retail – but businesses in general are seeing ever-increasing demand for efficiency and productivity in their warehouse operations, which means greater investment in their warehouse work environment and not just the office. This is definitely the market that the OP industry should be shifting its sights towards.

Same business model – new decision maker

An OP dealer is perfectly suited to supply to warehouses. Using the same business model, it’s about adopting the approach to talk to different decision-makers, such as the facilities manager, the warehouse manager and the health and safety manager.

Selling products that are simple to sell

Marketing and selling a simple range of innovative products – which require little or no technical expertise – is also the future for the OP market. Office product resellers don’t have the resources to become specialists in new sectors – and they don’t have to; with a range of simple, yet innovative, products, dealers can enjoy a new line of revenue – from new products in a new market.

Working in partnership with new suppliers

As the product portfolio expands, so does the supply chain. Resellers will be opting to work smartly with manufacturers and suppliers who can truly support the agile business model of an office products reseller.

Don’t forget to follow us on Twitter like us on Facebook or connect with us on LinkedIn!

Be the first to comment

Leave a Reply