Transcript Office products Markets over the last 5 years

Barrie Hayes
CEO
Office products Markets over the last 5 years
Challenging
& Changing
Traditional Office products
• The traditional areas of Paper / IT consumables/ Stationery
Last 2 years continue to decline:Paper - 2 to 5% decline
EOS
-3% (switching to MPS)
Stationery - 3 to 7% decline
Paper 15-20% of sales
EOS 20 - 40% of sales
Filing 5-10% of sales
Areas that are commoditised and suffering decline /change of purchase
Market trends – GDP
•
•
•
•
2013 GDP stagnant
2014 across 28 countries = 1.4%
Euro markets € = 1.1%
Fastest growth 3 Baltic countries
4.4%
• German growth 1.7%
• Modest growth in Spain / Italy <1%
• Non Euro markets:– Sweden 2.8%
– UK 2.2%
• Unemployment expected to stay @
12.2% in Eurozone . In Europe as a
whole dip from 11.1% to 11.0%
Consolidation and diversification
The last 5 years has seen major change:• Big box players
– Staples focus on Direct delivery and E Commerce
(not stores), expanding range 1m sku’s
– OD/OMax merge
– Antalis & Xerox
– Lyreco expanding non - traditional products model
– Wholesale - creation of Adveo
– New entrants web players Amazon / Shoplet $100m
online with huge ranges 250,000 sku’s
Consolidation and diversification
•Retail model is challenged within Europe.
•New partnerships being made.
•Manufacturers will continue to consolidate
•Convergence of traditional channels
–(web is a driving force)
Manufacturer > Wholesaler > Reseller > User
Manufacturer
Wholesaler
Reseller
User
Margin pressure
• Margins have dropped with the commoditisation of volume
products and fast web pricing awareness.
• Web entrants have made it more visible and price sensitive
particularly in the SME sector.
• Customers are more aware of the market due to web / smart
phones.
• Key in office supplies in Google – 104m results
• Its been difficult to pass on increases with low inflation.
Change is here and inevitable
Are you selling office supplies ?
Or
Supplies/Services to the office ?
Selling only office supplies will mean a dealer
contraction as the web has commoditised this.
Category development (Adjacencies)
• Trends are moving from office supplies companies to
Business Service Providers & have been happening for
the last 5 years.
• Europe has been slow to react.
Main areas of development:JanSan – Janitorial and disposables
Coffee & Break room – Coffee solutions /catering items
MPS – Managed Print Services – major profit provider
Promotional products – Overprinted /Marketing
Category development (Adjacencies)
Category development (Adjacencies)
Coffee & Break room services
- Office coffee market growing at 15-20%
p.a
- Disposable coffee consumables .
- Full line service/ support offer
- Coffee is a growth market
- Sometimes more important than paper choice
- Other break room products
- Adds value to the AOV
Category development (Adjacencies)
MPS – Manage Print Services
• Being offered in SME
• Complete service machines / toners and paper
• Growth market and good margin generator
• Single software option to branded manufacturer
Connecting with the customer – Success is profiling
Like a Rubiks cube…………………
Age profile
Gen X / Baby boomers
Millenials
Customer type
Large / SME
Data &
mining
Technology
Logistics offering
Your touch point
marketing strategy
Category
offering
Contact type
Web/direct /retail
Office product companies need to evolve
Success is 3 dimensional
Speed of change is crucial
Albert Einstein said: “To keep doing the same thing and
expecting a different result is the definition of madness”
What do we need to ask ourselves ?
• What do you offer ?
–
Products /services
• Who is it for?
–
Target market
• What problem are you solving for them?
• How do you do it distinctively – USP’s
• What is your promise?
–
Understand yours and how you meet their needs
Evolve or go out of business