What does the future dealer look like?
Last Thursday marked the last in a series of webinars aimed at supporting dealers through what’s likely to be remembered as one of this century’s most unprecedented crises.
Having previously discussed predictions, preparations, product trends and the macroeconomic forecast, EO Group CEO Simon Drakeford and CFO Nick Wilson looked to determine what the post-Covid office supplies dealer might look like.
They drew on the detailed findings from our recent research project, featuring insights from more than 100 UK office supplies dealers, with an average turnover of £1 million.
In case you missed it, we’ve highlighted some snippets of the most interesting topics which came up below.
To get access to the full webinar, please log into the online Office Power Dealer Community portal. If you don’t have access to this yet, be sure to email firstname.lastname@example.org for your login details.
“The office is the dominant area we’re selling into, now that’s being fragmented out”
According to our survey, 88% of dealers believe that working from home will continue to be important post-Covid, with Nick Wilson calling it “a key area dealers will be looking to sell in.” In the webinar, he went on to highlight the questions dealers should be asking themselves to figure out how they can better find and serve those customers in the future.
Simon Drakeford gave dealers some insights into the actions EO Group and our dealer partners have taken in response to the sharp increase in consumer traffic.
“There will be significant dealer failures or M&A”
In the survey, all dealers predicted some degree of knock-on effect from changes in the wholesale channel. These ranged from significant impact on the distribution and delivery services which we are already seeing, to cost price inflation.
But what stood out the most is that 68% of dealers felt that the wholesaler changes will have significant impact on credit limits and payment terms. With concentration of wholesaler’s credit risk and dealer customers going out of business, this is likely to be a significant challenge. Simon and Nick discussed what solutions dealers could look at to help overcome these challenges.
“How can dealers still compete with online giants?”
Amazon has grown a staggering 27% over the past 3 months, and we found that 82% of dealers are extremely concerned about online competition becoming a bigger threat post lockdown. It was pointed out that dealers who have an e-commerce platform integrated with effective CRM tools and sales strategy, in combination with strong relationships that dealers have with their customers will be successful at competing against Amazon. Dealers who trade customers, not orders, will win every time.
“To survive, fear of not changing needs to be greater than fear of change”
A staggering 75% of dealers who took part in the survey expect their post-Covid revenue to only return to 70% or less of their pre-Covid figures. Simon shared an example of an average £1M dealer P&L and looked at how it would be impacted at different levels of revenue. He found that a drop of this size would equal a loss of nearly £50,000 in net profit if no changes are made. This is concerning, and any dealers who aren’t considering changes should rethink their strategy, consider possible solutions and act quickly to secure their future. In Simon’s own words “the dealers who survive this will be the ones who cut deep, cut fast and don’t wait.”
Join the conversation
This crisis has reminded us all of the importance of pulling together as a community, staying positive and drawing on our experiences to have the most effective strategy for the future. Join the conversation and access valuable webinars, interviews, insights and dealer business support resources through our online Office Power Dealer Community portal. It’s free to join and open to all dealers, please contact Chris Armstrong on email@example.com or call 07789 004 158.