US Office Products Industry Annual Review 2011 | Category reviews Bloomberg reported that the Institute for Supply Management’s manufacturing index fell to 48.5 last month from 50.9 in July. The dividing line between expansion and contraction is 50, a level that the gauge last fell below more than two years ago. This, coupled with the increasing market penetration of Chinese and European exporters, has damaged sales further. Therefore, the fact that furniture manufacturers and wholesalers continue to report positive results in regard to the sector is nothing short of miraculous. As OPI found out, the major manufacturers in the sector have all reported growth this year (see ‘Manufacturing results’ on page 40). Meanwhile, wholesalers such as United Stationers have made a bigger push into the market this year, with varying results. With the furniture market currently valued at $20.5 billion by research firm IBISWorld, it’s no wonder that more companies want a share of it. According to IBISWorld, if the unemployment situation in the US stabilises the market could grow by over 3% annually over the next five years. The future holds plenty of opportunity for companies that can secure a place in this thriving category. Read on to find out which companies are doing just that.
Against all odds, the furniture sector has performed reasonably well this year
Hard times for wholesalers The two major wholesalers in the US have not fared as well as furniture manufacturers in regard to the category. Wholesalers are currently feeling the brunt of the pressure in this area as they struggle to compete with manufacturers, who are increasingly incorporating the wholesale function into their businesses and creating direct links with retailers.
If the unemployment situation in the US stabilises the market could grow by over 3% annually over the next five years Despite reporting overall growth during its third quarter, SP Richards stated that its furniture division was its only main category to witness a decrease in sales. However, the impact of United’s lower sales can be viewed as greater as it made a bigger push in the category. In September, United teamed up with US furniture vendor Bush to offer a new turnkey programme for resellers, one of a number of initiatives by the wholesaler in the category. The wholesaler partnered with Bush’s business furniture unit to offer an
office suites bundle programme that features services such as market-ready advertising materials and delivery. The programme features a collection of Bush business furniture modular office suites that have been pre-configured and are offered as a single-SKU bundle. Each bundle includes either delivery or ‘white glove’ delivery with installation, depending on customer needs. United also added a number of enhancements to its Visual Planner tool, which allows its resellers to plan projects with existing and potential customers. New features included the addition of products that United doesn’t hold in stock and the ability to click a button on the bill of the materials page, which generates a quote that is sent to United’s customer care team. These changes show just how serious the wholesaler is about its furniture offering. However, the recent announcement of United’s poor third quarter results in regard to furniture sales, proves that this is a hard sector to penetrate. The wholesaler’s sales for the category were down 9.8% compared to last year, a much larger decline than it witnessed in both its office products and technology segments. www.opi.net/USAnnualReview2011
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