The office products industry is currently characterised by a number of global trends, which are placing increased pressure on all but the largest players. Much of this pressure can be attributed to market consolidation, but there are other forces at work such as price deflation and commoditisation, the effect of the internet and the rise of the 'power channel'.
the total UK stationery market was worth over £6bn. The market is expected to continue to be characterised by strong price competition, as a result of the changes in the distribution channels used, such as supermarkets diversifying in the stationery sector. Furthermore the increased use of e-commerce in the stationery distribution market is expected to continue to exert a downward pressure on the value development of the market. Moreover, imports from low cost countries, in particular from China, are expected to continue to gain an increased share of the market, restricting a stronger value development.
Increased competition is leading to a number of global giants who dominate the distribution channel via retail outlets, contract delivery, mail order catalogues and the use of key resellers known as 'the power channel'. For evidence of this consolidation, one need only look at the acquisition by Staples Inc of superstore chain Office World from its Swiss parent, or management buyouts (MBOs) at both Kingfield Heath and OyezStraker, plus a string of acquisitions by Dudley Inkwell.
Perhaps most disturbing to independent dealers is the movement among some customers, particularly large offices, regional and national corporations, and government entities, to reduce the number of suppliers. The single-source idea is based on the notion that independents can't match these giants' product and delivery capabilities.
As consolidation takes hold, the office products market is becoming increasingly commoditised. Europe has come under pressure from Asia flooding the market with private label imports, which could account for up to 50% of products sold in the UK by 2015 according to Office Products International. This is driving prices down and loyalty away in the sector and the major players are adapting to this new world, increasingly competing on price in 'e-auctions', and using the power channel to drive mid market sales.
So what is independent dealer's answer to this increasing pressure? Quite simply, they must be more aggressive in going after new business and solidifying existing business. Many mid sized operators are already widening their product offering in an attempt to attract new customers and stop existing ones from straying, but without effective sales management this may create more problems than it solves.
An over view of our industry is we are going though changing times but we are still a £6bn pound industry, ecommerce is changing the way we do business and making way for a new kind of sales person. This sales person or web store is making decisions on pricing and sales strategy based on real time information. My question is how useful would it be to know your competitors pricing and sales strategy just hours after they advertise it. This information can be fed into your system and chang your pricing based on your cost price and business rules?
About Me
- Office2me
- Office2me a young dynamic forward thinking company that is passionate about providing our customers with an unrivalled mix of products, prices and enthusiastic customer service for all your office supplies and office furniture needs. We supply to a wide variety of commercial clients; public sector, large corporations and small to medium size businesses as well as the home user. Everyone of our customers has different demands and needs, which is what keeps our job interesting and rewarding! We work closely with all our clients to ensure we deliver what thay need when you need it.
