Education Category Analysis: Getting an A grade

As the decline in traditional OP continues unabated, a move into the education sector may seem a good move, but is it? OPI finds out...

Undoubtedly, the education market, which includes the lucrative back-to-school (BTS) shopping frenzy, shines like a beacon of hope for those in the OP world. For many dealers offering traditional stationery products, the education sector nicely overlaps with existing business and the BTS season alone is worth billions.

Even as the consensus points to a market that is emerging from the recession, entering the sector is not as simple as throwing stationery products through the Principal’s door, especially as most contracts are still government-based. Dedicated educational supplies reseller School Specialty knows only too well what is involved.

“Awards are made on the basis of the ability to provide the entire basket of products requested, pricing and quality of service. This solution-based set of products is a key differentiator and schools are looking for one company or a small number of companies to provide the products as it makes procurement easier and cheaper,” says School Specialty Distribution President Pat Collins.

Finding opportunities

Between gaining access to government tenders and the big boxes making it difficult to compete during the BTS season, it may seem as if there isn’t much room to manoeuvre, but there are opportunities.

One of the biggest of those currently in the US, according to Jim McGarry, CEO of trade association EDmarket, is the change in the buying patterns of school districts whereby cooperative agreements such as US Communities are becoming more commonplace.

US dealer group Independent Stationers (IS) was awarded the US Communities Educational Supplies contract late last year, signing a supply agreement with specialist wholesaler Educators’ Resource and a partnership agreement with EDmarket.

However, as IS found out, the education supplies purchasing cycle is long. IS VP of National Accounts Kevin France explains: “By the time we hammered out all the T&Cs and put together our implementation and dealer training plan in Q1 2014, the majority of schools were already finalising their autumn 2014 purchasing decisions, whereas this was just the start of our sales cycle.”

Building relationships

The advantage of such a long purchasing cycle, however, is that it provides the chance to build and secure relationships within the education sector, which is a vital aspect of gaining access to the market. “What is different for this commodity is that it really is about building relationships and going back and forth maybe half a dozen times until trust and recognition is established and the answer becomes ‘yes’. Office products dealers are generally not accustomed to this type of continual sales approach,” says France.

Australian dealer group Office Choice also sees relationships as key to winning government contracts, as getting past the gatekeepers when prospecting for new business and convincing them to change suppliers are huge challenges.

“The Australian education sector is heavily based on relationships. Many of our dealers have become preferred suppliers to the education channel as a result of our strong ability to forge long-term relationships with our customers,” says Cameron Osbourne, National Marketing Manager of Office Choice.

Wholesale support

Meanwhile, in the UK, an effort is underway to establish a specialist educational supplies wholesale offer through sales agency Nick Cash Agencies. The idea materialised as the company realised dealers were unable to compete in the education market as they couldn’t carry the massive amounts of stock required by some wholesalers. Working with education supplies partner Make Learn and Play (MLP), the pair now offers a wholesale and marketing solution for dealers.

MLP Trade Sales Director of Educational Marketing and Wholesale Solutions Nick Cash says that it is critical dealers understand that finding the right person responsible for buying takes detective work and is not the same position in every school. “Resellers must also realise that they need to use their current and local contacts, promote their local service ability compared to a national company, and not use a catalogue as just a mailer,” he advises.

Supplying the education markets in the US and Canada, School Specialty works in close collaboration with its customers throughout the year to understand both the existing and emerging product needs as well as their budgets. “In addition, we routinely work with customers to understand and support any needs they may have for a specific initiative or grant, which may have unique product or logistic requirements,” notes Collins.

A fundamental aspect of a close working relationship is ensuring that the BTS season runs smoothly for educational establishments. “The ability to keep up with supply and demand all year round and be nimble enough to switch procurement and distribution systems on a whim is vital in this industry,” Collins explains.

One way of extending value during the BTS season is to work with schools to provide supplies lists. Australian reseller Officeworks, for example, works directly with schools to upload specific lists online which parents can then access with delivery selected for their own convenience -– pick up in-store, at school or home delivery. Alternatively, parents can send a specific list online or drop it into the store and pick up the order later. “We are proud of our back-to-school list service and the variety of options we offer,” says Officeworks Managing Director Mark Ward.

While resellers may find increased trade for stationery during the BTS season, typical OP dealers often don’t carry the full assortment that is required to outfit an entire classroom or school. Capturing the education market also means competing against a wide range of retailers, including petrol stations and supermarkets.

To offset competition, Officeworks has been focusing on innovation in product, categories and services. “We have a team of education specialists that provides tailored services such as multiple ordering options and preferential pricing. We also find there is a strong take-up by schools and teachers of our in-store services such as the print and copy centre, which is popular for school banners and photo books, for example,” says Ward.

Innovation is key in any category, but perhaps more so in the education sector. Products such as Smart Wall Paint and Wizard Wall are making inroads into this market by understanding the changing requirements of the classroom, many of them due to technological advancements. According to an Economist Intelligence Unit study, 90% of education leaders believe that technology has made them more imaginative and creative at work.

Essex-based Thorpe Hall School in the UK, for example, has created a WoW (Writing is on the Wall) prototype room with all four walls painted with Smart Wall Paint, which transforms any smooth surface into a whiteboard. The room includes projectors with Apple TV and iPad mirroring, moveable modular tables, dimmable track lighting, sound systems and beanbags. The walls have become a writing resource.

Wizard Wall, on the other hand, is a repositionable whiteboard made from cling film. Wizard Wall CEO Mike Fogarty says that an increased interest in these products from teachers is important for business as they not only exert influence over the billions officially spent on education products, but also purchase these items through their own personal income every year. He also points out that while students become more tech savvy and more technology products are being developed for the market, they are still visual learners.

Collins uses the term ‘21st century classroom’ and agrees that while the use of technology is accelerating in classrooms, it is also creating different opportunities. He refers to libraries becoming media or student collaboration centres, which necessitates a change in furniture. 

And while the use of tablets may impact on the sale of books or other paper-based products, it opens up a new market for products ranging from smaller technology accessories to interactive whiteboards. “We’ve certainly observed changing habits, particularly at the more senior end of the education market. We have simply adapted our offer and done a lot of work on our product portfolio in networks and cabling for students studying at home, for example,” says Officeworks’ Ward.

Not all about tech

Traditional school supplies such as notepads, pens and presentation products are still in demand from schools and higher learning facilities. 

ExaClair Marketing Manager Kevin Wharton refers to a recent report, The Pen is Mightier than the Keyboard, written by psychological science researchers from Princeton and the University of California, which found that students retain less information when using laptops to take notes than by hand. The researchers argue that writing notes by hand leads to better memory encoding and the ability to process information more deeply.

This kind of research may eventually lead to educational facilities reducing the amount of gadgets used in the learning environment, but in the meantime, the technological march seems relentless. “Technological developments in the way lessons are taught and the way students learn have diversified what products are sold and, in many cases, reduced sales of traditional learning products, but the educational sector still has many opportunities for traditional OP dealers. Pen and paper will not be defunct anytime soon,” says Wharton.  

This has led vendors such as Zebra Pen to look closely at the education sector to try and find ways to deal with the threat of technology against its core product offering. “The educational market is a new focus for us. As a writing instrument manufacturer, the alignment to current and future users must begin within schools. As such, we are working to identify how our products fit into their world as a necessary tool and how they can complement the technology being used today,” says Ken Newman, Director of Marketing at Zebra Pen.

EDmarket’s McGarry adds that while the digitisation of content has significantly impacted how schools purchase and use tools in lessons, a backlash has begun and there are now requests to partner physical products with digital content. “This is opening up new opportunities for the dealer community to participate in the digital revolution,” he says.

Beyond the standard educational product lines are options to become one-stop shops through supplying jan/san, breakroom and other category products. “A change in procurement is leading to buyers looking for everything from one supplier. This creates opportunities for dealers that adapt through stocking a wider range products, such as tea, coffee and kitchen roll for the staffroom, for example,” concludes Wharton.