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Onwards &
UPWARDS
OPI asked four well-known industry personalities for insight on where the business supplies sector is right now in their region and what lies ahead
O
US – BILL CARDONE
www.opi.net
ver the past 30 years or so, the business supplies sector has gone through many changes. Within the past five years alone, over 25% of the top 50 independent dealers in the US have disappeared. Whether that’s because they’ve been purchased by the ODP Corporation, Staples or another reseller, or indeed succumbed to other pressures such as COVID-19, the independent dealer channel (IDC) is not as large or significant as it once was. Smaller independents have also been acquiring each other, and I believe we’ll see more changes over the next 18 months as consolidation continues. How much energy is left in those businesses that haven’t already pivoted because they don’t possess the resources, customer base or the technology? Or, if they have, has COVID-19, work and learn-from-home and the Amazon effect created some permanent shifts?
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MOUNTING PRESSURE It’s not solely about the IDC. The entire industry has been altered on numerous levels, most recently due to COVID. From a manufacturer’s viewpoint, we’ve got to figure out what reseller relationships are going to look like. We still want to be connected to our customers, but clearly need to understand the best way to interact with them without disrupting their business. The sector is also dealing with the Amazon component which has dramatically modified our landscape and will continue to do so for the foreseeable future. There’s only a handful of big OP manufacturers left, and I think the value propositions being brought to the table and the conversations they’re having with resellers are different now because of e-commerce and the secular decline of ‘traditional office products’. The ongoing uncertainty surrounding COVID and the expectations arising from hybrid working is loading further strain on the industry. The longer office staff work from home, the more Amazon wins. If there is a major swing towards a hybrid model, dealers must figure out quickly
how to successfully service customers at home. In the near term, there are external pressures to contend with, the most notable being the supply chain. Currently, it’s a case of securing certain materials to manufacture products. But even if you are able to get materials, it’s impossible to acquire a container. Assume a container can be obtained, you may be unable to hire a trucking company. But if you do succeed with this too, it doesn’t have drivers. Everyone’s in the same boat, so to speak, therefore, we must be patient and do our best under the current circumstances. OUT OF THE COMFORT ZONE Despite the stresses, the prognosis is far from dire. The diversification of the business products sector was already in progress, and the pandemic merely served to propel it forward at an unprecedented pace. This is a good thing – it forced us out of our comfort zones and this needs to continue. Dealers and their sales representatives need to move quickly from the carpet to the contract to become ‘solutions-based’ entities, whatever that might look like. Undoubtedly, the industry has more than proven how resilient it is, especially the IDC. Looking ahead, I have every confidence in dealers with succession plans. Many of these have already been implemented, with some dealerships having been passed on to a second or even third generation. These new leaders are doing a fantastic job pivoting their businesses. That said, many of us should take a step back and rethink certain processes which have been upheld for years. I’m talking about the old catalogue world versus pandemic-induced practices like videoconferencing and hosting virtual sales meetings. Ultimately, the industry needs to move to where the puck is headed, not where it is now.
Bill Cardone is VP of Commercial Sales at US office supplies manufacturer TOPS Products
For more of Bill Cardone’s thoughts on the state of the US business supplies industry, listen to OPI Talk – visit opi.net/podcast
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