Gradually emerging from the turmoil of COVID-19, last year was marked by employees either getting back to the office or settling in for long-term work-from-home (WFH). It was also punctuated by significant price increases and supply shortages in many sectors – paper, for instance. All of this distorted value and channel trends.
Indeed, our industry was subject to a dizzying confluence of trends in 2022:
- a rapid fall-off in the sale of products which protected workers from coronavirus, including protection screens and some elements of PPE;
- a deceleration of growth in items driven by WFH, such as ergonomics, computer screens, mice, headsets, etc;
- an increase in demand for products which facilitate the return of workers to the office – catering supplies and office furniture, for example – and those that require ‘normal’ office working, namely presentation and planning supplies or business gifts;
- a continuation in the long-term trend towards digitalisation which has seen diminishing volume demand for traditional OP; and
- a resumption in the prioritisation of environmental and sustainability concerns.
During such periods of industry convulsion, it is vital senior executives have a firm perspective on what is happening in the market. Where is our sector going in terms of products and distribution? What are the underlying trends at work and which new factors are coming into play? Most of all, where are we headed in the future?
Answering these questions and many more besides is what The State of the OP Industry 2022-23: Emerging from Turmoil is all about. In this 300-page sourcebook, OPI and Martin Wilde Associates (MWA) for the tenth time highlight feedback from senior industry executives worldwide – concerning the events of last year but also providing predictions and forecasts going forward. Survey results are based on 56 in-depth interviews focusing on seven geographic regions: Australia, Benelux, Canada, France, Germany, the UK and the US.
While 60% of survey respondents believe that core OP market volumes declined in 2022, a resounding 74% said core OP market value in fact increased last year.
In terms of overall figures, executives were evenly split on whether their sales volumes had increased or decreased in 2022, but as many as 87% reported an increase in their sales values in 2022. The study shows what respondents did to lessen the impact of falling sales volumes in 2022, how they achieved value growth and what they expect for 2023.
Distributors were more likely to state that their margins had increased in 2022: 41% recorded an uptick while only 24% claimed margins had decreased. The full report details the gross margins achieved (and expected) on average by respondents in each geography in 2022 and 2023, and includes an analysis of any changes.
As regards product categories and their growth in value terms, office furniture, cut office paper and cleaning/janitorial supplies came out on top last year. Declining segments, meanwhile – also in value terms – featured traditional stationery, COVID protection screens and printer/IT consumables.
Product preferences also raise the question of who is taking share or losing out – and why. The supply channels most widely reported to be taking share in 2022 were Amazon/Amazon Business, large independent OP resellers and other internet-only OP resellers.
On the flip side, the channels regarded as dropping the most market share last year were smaller independent resellers, wholesalers, national contract stationers and OP superstores.
However, The State of the OP Industry 2022-23 guide further asserts that the steady return to the workplace is shifting some demand back towards ‘conventional’ supply channels, although online players continue to do well. It additionally forecasts the key growth channels for each country in 2023.
Other highlights from the comprehensive study include a predicted growth this year in the average share of distributors’ sales accounted for by janitorial/cleaning supplies, breakroom/catering products and MPS. Conversely, this will not be the case for PPE.
Several of the questions asked by the research team referred to M&A activity and it’s interesting to note that around 60% of respondents said they are looking to acquire another business in 2023.
This year’s industry report also provides answers to a wide range of key topics on the current and future state of the market, such as:
- What was the value of the core OP market in 2022 and how will this shake out in 2023?
- Which product categories were seen as opportunities last year and which ones are respondents planning to develop in 2023?
- What share of the core OP market does Amazon/Amazon Business now have in each country and what actions are resellers taking to combat this operator in 2023?
- Which ‘new’ channels or distributors emerged in the market in 2022 and what kind of impact are they currently having?
- How important are online marketplaces and which are the key players involved at present in each country?
- What has been the impact on businesses in our sector of the war in Ukraine and the change in exchange rates between the US dollar, the euro and the British pound?
Find all the answers you need to run your business from reliable sources in our sector – on industry-specific issues as well as broader macroeconomic and geopolitical topics.
The State of the OP Industry 2022-23: Emerging from Turmoil is now available – visit www.opi.net/SOTI2023 to order your copy