Winds of change

The office products industry in the UK has seen see major changes and mergers within the last few months which will have wider implications for both suppliers and customers. The merging of Spicers with Office Team (SPOT) and the merger of Vasanta group with Office2Office (EVO) has blurred the distinct wholesaler/contract stationer/dealer structure that has existed for decades. Both will be looking for synergy in cost reduction, looking at expanding their market channels and will want to take costs out of the supply chain.
   
The industry has also seen an increase in large retailers taking market share both in store and via their online offering.  Amazon is having a major impact on the Industry with many manufacturers/suppliers to the industry now seeing them as one of their top 10 customers.
   
Fewer manufacturers now manufacture in the UK and the market is seen now as a European or pan global market with many products supplied from Europe or Asia, with stocking and distribution only provided in the UK.
   
E-commerce
The emergence of e-retailing and e-commerce has also changed the traditional way of catalogue production and pricing with net core lists and discounts off recommended selling prices now for many customers a thing of the past. With Google, eBay, Amazon and internet access open to both corporate and individuals, the ability to get net pricing at the end of a few clicks is the norm.
   
This is great for those who have time to search out a bargain but for government it is not cost justified. Government and corporate entities need to control their spend on OPI products. They need the monthly consolidated invoices, monthly management information on spend by department, by product by price and they need to ensure that their staff are complying with corporate accepted procedures on sustainability, on quality and on preferred suppliers. Printed and priced catalogues updated annually are being replaced by online digital net priced catalogues with new products added as they come to market.
   
Other factors are changing our buying habits such as the emergence of the millennial generation. The ‘baby boomers’ (born between 1946 and 1964) who wanted branded pens and books and filing products are now coming to retirement age. The Generation ‘X’ (born between 1965 and 1980) saw the rise of laptops and PCs and their buying patterns moved away from traditional products into electronic office supplies and consumables with less spend on paper and traditional stationery products. EOS (Electronic Office Supplies) grew from nil to 53 per cent of spend on office products during the last 20 years.
   
We now have the millennial generation (also known as Generation ‘Y’ born between 1980 and 2000). This is the technological generation brought up with the internet, with cloud technology, smartphones, iPads and the need for instant information. They want multifunctional devices, use the cloud for archive filing, store all their data and pictures electronically and are used to using Google to find answers to all their needs. The Millennial Generation now tend to work from home and the SOHO Market (Small Office Home Office) has created the need to expand the office supplies product range into new and exciting creative products and craft products as well at technology.

BIG DATA
Big data is now a much talked about marketing tool by many large OPI players. Up selling, cross selling, product promotion and pricing can now be driven by end users buying habits. It is staggering the amount of data held on consumer buying patterns and trends and this is helping to increase turnover, improve margin and reduce waste in the supply chain. Most large OPI companies are now using this data to stock and distribute the products customers need and want and to look at new product and services.
   
As the traditional products are reducing (paper, envelopes, filing) so the industry is adopting new products to fill the void. Facilities management supplies (FM or FS) such as health and safety equipment, workwear, confectionery, drinks, hygiene products are now becoming part of the normal contract for office products and supplies. This is largely displacing the traditional ways of buying these products but is adding value to the supply chain and taking cost out of it and giving control back to the customer in being able to identify spend in these categories.
   
Print Managed Service (PMS) is a growing market with printers/copiers now provided on contract with online monitoring of performance, breakdown and supplies taking the daily task away from employees and providing valuable management information on clicks and usage.
   
Environmental issues
Sustainability and environmental issues play a major part in government and corporate buying decisions. Any supplier who does not have a policy on environmentally friendly products from sustainable sources will not be on the tender list. Neither will suppliers who do not have a Corporate Social Responsibility (CSR) policy in place and implemented. In Europe a new federation called SOFEA has been set up to create a single eco label for the European Office Products Industry. This will eventually replace the plethora of eco labels which most companies do not understand. The initial phase planned for 2015 includes paper, filing and writing instruments and over the next five years the intention is to have a single eco label easily understood to cover all current Office products in the EU.
   
So how is BOSS helping our members through this period of change and consolidation? On 14 January at St Brides Foundation London, BOSS is hosting a ‘Future of the Office Products Industry’ event. It will explore the changes to the industry, the consolidations yet to come, collaboration in the supply chain and the shape of the industry in the future. 
   
Government and corporate organisations need to understand this wind of change blowing through the industry. They need to look beyond the current discounting to get the best deal for today. They need to understand that the current model of same day, next day, order by 10.00pm, 99.9 per cent in stock delivery, no premium for small deliveries and negative or small margins for suppliers is no longer viable.
   
The industry is changing and at a faster rate than ever seen before. It will come through stronger and leaner with larger pan European consolidations and structures both in manufacturing and distribution. There will still be small SMEs who have adapted to change in technology and products and services and who have developed niche markets or Omni channel routes to market. These provide a vital function at a regional level. The emergence of e-commerce, internet shopping and an expansion of the range and breadth of products available through Office Products resellers and distributors will be staggering.
   
Whilst many of these changes are technology-led, the relationship between customer and supplier is vital.

Further information
www.bossfederation.com