The future’s bright? Highlights from our webinar discussing life in the industry post Covid-19
Last Thursday, our CEO and BOSS Chairman Simon Drakeford hosted a live webinar to talk about what the office supplies industry may look like after Covid-19.
Over 80 dealers joined, and the topics included the changes in the wholesaler channel, what adjustments dealers will need to make for the future, where the market is going and whether the future looks bright for our industry.
The questions from dealers ranged from the possibility of new players in the wholesaler channel to what products we’re likely to see in demand long-term.
Here are the key takeaways from the webinar, which we hope will help you to future-proof your business.
WHAT DO THE RECENT CHANGES IN THE WHOLESALER STRUCTURE MEAN FOR DEALERS?
It’s no secret that seminal changes have been taking place in the wholesaler channel recently.
The historical duopoly once held by the two key players is at great risk. The impact of this will be far reaching and will mean less bargaining power for everyone, especially independent dealers.
In the webinar, there was a lot of speculation about SPOT Group and what the future is likely to look like for them.
With fewer players to source from, it would be more difficult for dealers to get credit. The less suppliers there are, the less credit lines are available for dealers.
Though there is talk of significant growth in some of the emerging wholesale players, it’s likely that this will take time.
Right now dealers should focus on how they’ll survive this never-before-seen wholesaler dynamic and strategise about their plan B and the changes they need to make, should the situation escalate.
WHERE IS THE MARKET GOING, AND HOW IS OUR CUSTOMER CHANGING?
It’s highly likely that of the 75% of staff who went home to work, only 50% will come back permanently.
We’ve detailed more about this in our other recent blogs, but this is a key indicator of the direction in which our market is moving.
It once seemed far-fetched, but we’ve proven that we’re now able to build relationships and work productively through a screen, and with this comes the tide of change in our working lives.
Head offices are likely to become ‘more hubby’ with team members and staff dropping in throughout the day, flexible & home working is likely to now become the norm, we’ll need to be able to deliver everywhere and Health & Safety regulations will be more important than ever.
The ability to make virtual sales – not just online sales – is something we all need to think about. Simon spoke about how large mobile phone sales companies are already developing strategies for how sales assistants can make sales personally but virtually through integrating with video and other technologies.
It’s clear that going forward, the ability to deliver nationwide to multiple locations will be vital for survival. But deliveries and SLAs won’t be able to stay the way they were.
Whereas before the pandemic, there were multiple delivery drivers coming in and out of buildings to deliver goods each day, often to the desk or different parts of the building, it is probably in the future that there will need to be vetted & authorised persons only doing this.
Companies will be taking the strictest precautions to reduce the risk of infection and transmission of the virus, and dealers need to start thinking now about how their delivery models and SLAs will be able to adhere to this.
In order to survive this, and see the future out, dealers will need to think about how they’ll make changes such as these in their own businesses.
WHAT WILL THE FUTURE DEALER LOOK LIKE?
We’re learning every day about how the future in office supplies won’t be the same as before. To survive this, we’ll need to embrace necessary change in all aspects of our businesses – from technology to product range and how we contact customers.
The shift in product demand is very likely to swing towards Health & Safety products which decrease the risk of infection in offices and comply with new government regulations.
Then there’s essential signage & print for workspaces, divider screens for public & private sector use. In the words of Diego Vicamini, Euroffice Italia Managing Director; ‘facemasks, gloves and PPE products are gone in a flash’ in Italy.
In just a few weeks, we’ll also be seeing this drastic increase in business demand for products which enable safety in the workplace and comply with new regulations. Alongside this, we’ll still need to cater for the 25% still working from home.
So, the verdict is that the future dealer will need to be – above all – flexible. They’ll need to appeal to the ‘any age’ customer, ensuring they have the platform, resources and technology to get ‘anything’ to them ‘anytime, anywhere’.
While Amazon may be booming, we strongly believe that they’ll always lack that local, personal touch which dealers can capitalise on. However far buying habits evolve, there’ll always be a requirement for this.
Simon spoke about how 20 years ago sales were made by visits, then by telephone, then internet and now we have video. Amazon is in transactional sector, and they’ll likely never focus on customer relationship in the way dealers can.
THE FUTURE’S BRIGHT?
No one can say for certain what the future will bring.
Collectively, if we see an 80% return of LTM turnover then this will be a good result. But fixed costs will still need to be reduced to accommodate an unwinding of furlough.
We’re going through what can be best described as a ‘supply & demand reset’. For years, we’ve seen a chronic demand decline, whilst the supply chain has been ‘propping each other up’ using credit.
For a long time, dealers have had to cut sell prices to appeal to customers with such high levels of supply but with fewer players in the market, the customer may be able to be less demanding.
Though it’s a scary prospect, the number one priority on independent dealers’ minds should be how they can come out the other end of this crisis with a viable business model.
Office Power dealer partner Reece Humphries had a more positive view on things calling the situation ‘a blessing in disguise’. He went on to suggest ‘by us being collectively together with Office Power, when we do come through it, I think there will be much more business to us to get, I’m actually feeling optimistic about the situation.’
Dealer partner Alister from Go2 Office Supplies also explained how he’s already jumping ahead of Amazon, using the technological features on his platform to appeal to customer needs in a way that Amazon can’t, ‘without bragging, we’ve just seen our best month ever’. This is what all dealers will need to be doing to survive.
But for every dealer who’s confident that they’re supported by their platform, technology, product offering and contact strategy, there’s an independent dealer who’s concerned about being part of the fallout when we come out the other side.
There is hope for everyone in our industry, but the need to adapt and evolve to survive has never been more valid than now.
GET IN TOUCH
We hope this article is helpful in providing you with useful information during this uncertain time.
The team at Office Power are experienced and connected both in our channel and in wider business.
If you’d like to talk about your specific challenges or would like help with the analysis for your business, then please do give me a call or drop me an email – we are here to support the dealer channel.
Mobile 07789 004 158