Message from the Association – June

I came across an interesting article in a recent edition of Office Products International. In it the writer, David Holes, made the following statement:

“Conventional wisdom has it that the traditional OP sector is a contracting market. But poke beneath the surface and you’ll find it’s not all doom and gloom.”

It is a concern that some may passively accept that the office supplies sector or categories within the sector are in a slow but terminal decline. The truth is that some suppliers and resellers are still finding ways to make core office product categories work for them. The State of the OP Industry 2018-19 report, recently researched and published by Martin Wilde Associates in association with OPI, indicates that, to paraphrase Mark Twain, reports of the death of this sector have been grossly exaggerated. Research conducted across the US, Canada, Australia and several key European countries showed that while overall demand for traditional OP is steady at best, 67% of respondents reported a rise in overall sales in 2018 and were even more positive about their prospects for the year ahead, with 81% predicting a further increase.

In the US market the value of the core OP market has declined over the past 12 months and yet some within the industry believe that the worst may be over. The US the economy is growing strongly and office channel players are likewise showing sales growth again.

David Hoyles wrote that in the UK, stationery and office supplies High Street chain Ryman is a noticeable core OP success story despite the many challenges in the retail space. Kypros Kyprianou, Group CEO of Ryman’s parent company Theo Paphitis Retail Group, reveals that a focus on manufacturer brands is key to its strategy: “This is where we feel the value-add is. While it’s tempting to build an own-brand range – and it’s appropriate in certain elements of office supplies – you can’t replicate the quality of the best brands in this sector. A few years ago, I was nervous about our industry. I didn’t see the innovation I thought was needed, but that’s changed. Vendors have really put their minds to it and are now introducing new products which keeps our customers interested.”

A Ryman competitor, WH Smith, reported that traditional OP sits right at the heart of its business and represents some positive news for the company. In the six months ended 28 February 2019, comparable stationery sales, for example, grew by 2%, outperforming other product segments. WH Smith describes this product area as its most attractive and highest-growth category, with Group CEO Stephen Clarke saying: “It now generates around half our High Street sales and 60% of store contribution. This market remains robust.” .

Reports from Brazilian traditional OP manufacturer Acrimet show that it is also optimistic: “The election of a new President has brought increased confidence and the economy continues to improve,” reports Export Manager Jaime Nascimento. “Price pressure from fierce competition is intense, but our brand is performing well, helped by a reputation for quality and longevity – criteria people are prepared to pay for. Interestingly, we still see in-store sales leading the market, though we are looking closely at how online shopping and associated digital tools are influencing the way consumers choose their purchases.”

One of the biggest news stories from this category is that French supplier of traditional office products Exacompta Clairefontaine looks likely to acquire Switzerland-based filing manufacturer Biella, a move overwhelmingly supported by its shareholders. Barring any unforeseen issues, the acquisition should close soon.

The UK side of the business, known as ExaClair, has grown by over 6% in the past year, with strong 2019 sales increases in books and pads (27%), fine arts products (12.6%) and filing (3%). Marketing Manager Clement Rouillard attributes this growth to the company’s philosophy of branching out into new markets. “Our new Exacompta Lean Management range is a perfect example,” he says.

“It features products that help businesses minimise waste while increasing productivity. It includes magnetic wall planners, team-assigned ‘to do’ lists, as well complementary display pockets and wall sorters. The range provides project management and forward-planning tools that help streamline processes and communicate progress to all stakeholders.

With global millennial spending power estimated at $2.4 trillion annually, this generation now represents a powerful consumer collective pushing for change. Manufacturers and resellers are naturally targeting this cohort which, research shows, tends to ‘buy less, but buy better’ and is keen to choose products and services that make a difference.

ExaClair sees this audience as a crucial market and is continuing to build its brand among social media communities. It now has over 100,000 followers worldwide. “We’re using trends popular with this age group – such as colour, productivity and the environment – to grab users’ attention and help tell our brand stories,” says Rouillard.

“Key to mitigating the overall decline in core OP sales is knowing what your customers want and ensuring product ranges answer a specific consumer need.”

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