Keywords: Wholesalers, SP Richards, United, Stationers, initiatives

Wholesalers

While the market was somewhat more favourable than in recent years, there was still little significant white-collar job growth to boost OP wholesalers in 2011.

Office job vacancy rates continued to peak with little help in the way of inflation, and the stronger growth earlier in the year that caused pulses to race was challenged by soft conditions as the year went on.

Nevertheless, at United Stationers product categories that remained somewhat shielded from the economy such as jan/san, breakroom, food service disposable and safety have continued to perform well. On the other hand, those products that traditionally feel the brunt of negative economic forces – principally furniture – continue to have difficulties although encouragingly not as severely as in previous years.

SP Richards’ Furniture Advantage programme and the strong results in its proprietary Lorell brand have supported challenging furniture sales overall. Again, the cleaning and breakroom category has delivered strong results with mid-teen sales growth supported by an investment in business development managers that have been strategically located around the country. The company has said that traditional office products and technology categories will experience low to mid-single digit sales growth in 2011.

MPS

One area that the wholesalers, and United in particular, have been enthusiastically pushing is, of course, managed print services (MPS). A genuine area of opportunity, United has really focused on helping its dealers take advantage of this area.

To supplement its current HQueue MPS portfolio, United’s MPS division released HQueue Basic during 2011 – a simple print monitoring solution that provides resellers with the ability to directly fulfil imaging supplies and receive automated service alerts they can manage as they desire. In contrast to United’s fully automated MPS solutions – which provide automated toner and service fulfilment on behalf of the reseller – HQueue Basic sends resellers an email to alert them when and where supplies and services are needed for printers, MFPs, and copiers from most major manufacturers. The new solution can support any sized print environment, and comes with reseller support that includes proprietary online reporting and analysis capabilities that provide visibility into the print fleet. In addition, ongoing meter reports, live tech support and real-time device utilisation are all visible through a web-based portal. End-consumer support includes live tech support during set-up, ongoing meter reads, and online reporting.

MPS adoption by United dealers has been strong during 2011. Year-over-year, United has grown its reseller MPS customer base by 50% as MPS drives its way down the SMB chain, largely owing to reseller fears of losing business to copier vendors.

SP Richards has also been very pleased with the strides it has made with its PrintSmart MPS programme and has further developments in this area in store for its dealers in 2012.

Dealers

All in all, the two key US wholesalers have been very pleased with the performance of their dealer customers in 2011 with solid and encouraging results, although there is a word of warning for those independents that are not differentiating themselves or using poor business models.

Jim O’Brien, SVP at SP Richards, says: “This has been a very solid year for our base of independent dealers, which represents 83% of our overall revenue. 
Growth will be in the mid to high single digits for 2011. 

“However, there is a growing divide for many dealers. Those dealers that embrace e-commerce, analytics and place a premium on new customer acquisition have been able to separate themselves. New customer acquisition must become a fanatical way of life for dealers.”

Laura Gale, VP Marketing for United, adds: “One of the things that makes United’s business model strong is the diversity of industry channels we serve and different types of customers we work with. For example, those resellers with a strong business model and growth plan tend to have exceeded the market. E-tailers and traditional resellers with an e-commerce model have benefited from consumers’ growing preference for buying in that manner. We’ve also been fortunate to work closely with resellers and reseller groups that have capitalised on some large public sector opportunities. So having those types of customers certainly helps our own performance. At the same time, some resellers utilising poorly-devised business models are struggling harder against the economic headwinds.”

Last year saw a fairly unprecedented meeting of minds between dealers and wholesalers and a sense of togetherness. One of the causes of this was SPR’s strategic sourcing alliance with dealer group TriMega regarding its Business Source brand of products.

This year that collaboration thrived as the organisations worked together to lower the cost of goods for all independents by leveraging combined volumes.

O’Brien explains: “Business Source sales have greatly exceeded our expectations. But, more importantly, there are a very significant number of dealers from all buying groups, and with different wholesale affiliations, taking advantage of the direct buy component made possible by this alliance. We have now moved beyond core office products and expanded the programme to both the technology and fast-growing cleaning and breakroom supplies categories. These offerings will include products from our proprietary Elite Image and Genuine Joe brands as well as name brands such as Angel Soft toilet tissue. The strategic sourcing alliance will continue to expand into other areas where there are supply chain and buying efficiencies.”

Well, that’s how the wholesalers have read the performance of their dealers but what have the dealers thought of the wholesalers this year?

For the most part the end of year report has been positive. Dealers are recognising attempts by wholesalers to help independents capitalise on new areas of potential growth while their catalogues and dealer shows brought a general thumbs up. A special mention went to United’s Vision 2011 conference which instructed dealers that it was ‘Time to Get Loud’ about their achievements and advantages in the marketplace. 

Sid Lerman, from dealer Weeks Lerman, says: “Both wholesalers have devoted more resources to supporting the independents with more competitive prices on their respective private brands, more marketing and more technologies, such as improvements in search capabilities. It would seem that the ‘relatively’ slow start to the national initiatives gives them both more insight into how aggressively priced the power channel is with its private labels and how difficult it has been for the local mid-sized independent dealers to compete. Their vision and intentions are good and many of their efforts have had positive results – so overall we would submit that they have both performed fairly well.”

In terms of the burgeoning public sector business now on offer for hungry independents, United’s Orbit Point tools and resources enabled a growing number of resellers to capture an increasing piece of this pie and large regional account business in 2011. Orbit Point includes systems, logistics, marketing and other support services specifically designed to help the independent reseller compete for, win and serve these larger account opportunities.

Next year’s plans

It certainly seems that the majority of dealers are confident that United and SPR are intimately aware of the challenges that the independents have and the impact the economic downswing has had on consumers. Lerman believes they are “clearly light years ahead of where they were perhaps five years ago” in terms of the array of tools that are available to support dealers in products, marketing and technology.

He adds: “We hope both SPR and United continue to work to drive costs down on the private labels, find creative ways to offset the impact of freight to the national business and continue to invest in marketing and social networking mentoring for the independents.”

Looking ahead to 2012 marketing programmes, the wholesalers will be refreshing their offerings to give dealers the best possible tools for success and indeed address those areas of particular interest for dealers.

United has developed some enhancements to its Marketing Power portfolio including an entire planning guide for public sector marketing to help resellers understand the public sector marketplace, buying influences, marketing approaches and specific tools.

The new-look portfolio includes greatly expanded information about how to employ specific social media tools, including Facebook, Twitter, LinkedIn, YouTube and List Assistant, a tool that helps resellers create and maintain a database of consumer lists.

Meanwhile, SPR has enhanced its Create-A-Flyer programme that will now enable dealers to build custom emails as well as print flyers. It is also introducing Sitelynx, a tool that will allow dealers to take advantage of a series of videos to help educate and entertain current and prospective customers.

The wholesaler believes these initiatives, along with the continued development of buying pattern analytics and improved content and rich media, will deliver more “stickiness” to dealer websites. 

United Stationers 2011 key initiatives 

• Launched a software-as-a-service cloud option, so that MBS Dev solutions can now be deployed on premise or on a hosted basis
• Entered into an agreement as the exclusive sales agent in the US for UK-based software company Evolution
• Developed ‘rich’ content for its top 7,200 jan/san items as part of a new Electronic Content Data Base (ECDB) 2.0 release
• Released several in a series of white papers on its consumer research 
• Launched an office coffee programme, ‘Enriching Breakrooms to Boardrooms’, to help resellers capture a share of the $4 billion market

SP Richards 2011 key initiatives

• Business Source brand expanded to nearly 800 items for 2012
• Furniture Advantage programme brings quick ship solution for over 10,000 furniture items (driving positive sales growth in difficult year)
• MyAnalystPro enhanced to bring world-leading B2B pricing software and the industry’s most comprehensive pricing intelligence to the independent dealer. Dealer adoption is accelerating and driving improved margin performance