There are many great questions in life. But in today’s OP industry only one matters. What do consumers want?
OK, so it’s an enormous question, but if manufacturers, resellers and dealers can work together and share their knowledge about the end user, the rewards of knowledge transfer promise to be huge.
Knowing the customer is hardly a new concept. It’s been something of a buzz term among marketeers for years. It may sound like a cliché, but really knowing your customer is crucial to success. If you don’t know what it is that consumers want, how can you possibly go about selling it to them?
It is the responsibility of both the manufacturer and the reseller to understand consumer needs. Retailers know end-user customers far better than manufacturers do. Not only are they often far larger companies, with much bigger budgets for consumer research, but they’re also closer to the consumer. Therefore, they are in a great position to help manufacturers produce those goods that consumers want to buy by sharing their information – by engaging in knowledge transfer.
But, of course, it’s a two-way street. Retailers aren’t going to invest heavily in expensive consumer research to then turn round and hand all their prized information to manufacturers on a plate, especially not to manufacturers which could potentially pass that proprietary information on to their competitors. The solution is a level playing field – both parties must share information.
OP giant Staples clearly has the funds to invest in R&D projects and extensive consumer research. Patrick Seghin, president of Staples Europe, tells OPI: "Consumer research is very important to us, but we don’t invest in external research. We do it all in-house. One method we use is to conduct satisfaction surveys with our customers. And we talk to our clients every day, so we carry enormous amounts of research throughout our organisation."
It’s not just the retailer that conducts and collects consumer research. Manufacturers also need to understand the end user and so seek to gather knowledge to effectively market and sell their products.
Seghin adds: "We tap into the knowledge base of the manufacturers. It’s a team approach. We share information to offer the best products to customers."
Esselte is one manufacturer well known for its extensive investment and interest in R&D and consumer research. But it has learnt the value of carefully targeting consumer research the hard way.
In the past, the company used to rely on focus groups as its main method of product testing. Those focus groups, while offering a certain degree of insight, often failed to uncover useful consumer information that could be actively used by the company to improve its products.
Barry McCool, VP of marketing and communications for Esselte Europe, tells OPI: "We realised that in the past we typically developed designs for our products and then set about testing them within small focus groups. But that only gave us a very subjective opinion. We have since realised that by conducting more quantitative research with end users, you increase your chances of success. They either hate it, in which case you go back to the drawing board, or you get some good insights from the consumer that you can implement and adapt or improve your products accordingly."
ACCO is another manufacturer that believes in the importance of consumer research. Greg Pierce, the company’s VP of shared marketing, explains: "ACCO is structured with six different business units and each has its own marketing department. Each of the brands does its own research separately to understand consumer needs.
"The information we collect is one of the most vital parts of our product development process. We do not bring a product to market unless we have done thorough consumer research first."
There are few companies – manufacturers or resellers – that disagree with the importance of consumer research, but most will tell you that the investment is only worth it if the results are used and implemented properly.
Paula Disberry, director of Tesco’s Papershop, says of consumer research: "It’s only worth it if you use it, but it can definitely help to significantly improve sales by driving innovation and reducing risks, especially in the case of testing ranges with consumers before launch."
So what does all this research reveal about the typical OP consumer?
After speaking to a variety of OP players, OPI has uncovered three major consumer trends that seem to affect OP categories across the board – eCommerce, mobility and environmental concern.
The single biggest change in consumer behaviour during the past decade has without a doubt been the soaring popularity of buying online. Consumers are increasingly using the web to research products, which is much easier now than it was even just a few years ago. Customer information sites such as Buyers Lab provide easy side-by-side comparisons as well as test reports and so on.
As a result, we have much better informed and more knowledgeable consumers in the industry than ever before. OP players have to continually invest in their eCommerce platforms to adequately keep up with these more sophisticated consumers.
Online sales now account for approximately 33 percent of Staples’ European catalogue revenues, 75 percent of the company’s delivery business and 90 percent of retail.
Seghin says: "There is a strong acceleration in the transfer towards the internet. We see a shift from fax ordering to the web. We have also observed a stronger reaction to email marketing and newsletters."
He adds: "The ways in which B2B customers shop online are of course very different. The average consumer spend is far lower than the average B2B spend – about a third. The product mix Staples as a whole offers online is also very different for the two categories. Typically, the consumer website will feature many more technology products than its sister B2B site."
Steve Robinson, director of merchandising for XPD, the parent company of UK dealer groups Officepoint and OfficeStar, offers an insight into another facet of eCommerce: "Much of our understanding of our consumers is really driven by our eCommerce platforms. It’s interesting to note that previously the word on the street was that consumers were moving away from catalogues and mailers and that the internet was going to take over the world. But what’s become very clear is that consumers want options. Specifically, they want more options but not at the cost of clarity.
"They don’t want to deal with complexity or clumsiness. They want to use websites that are easy and informative. They want solutions to make life easier. We try to incorporate this into everything we do.
"Our aim is to make it as easy as possible for our dealers to trade with their consumers. All the eCommerce platforms we have are designed to make it easy for dealers to tailor them to their own business needs, and ultimately to make them easy for consumers to work with."
There is always a debate among retailers about the extent of the importance of eCommerce. Tesco’s Disberry says that while eCommerce hasn’t had a material impact on consumer buying behaviour as yet, including stationery in www.grocery.com has provided the UK’s biggest retailer with an opportunity to sell more, and grow the market by making the purchase of stationery more convenient.
But Jimmy Finn, CEO of Ireland’s Bizmart, remains sceptical about the prowess of eCommerce. "eCommerce became a big issue in 2001 because so much money was wasted on these platforms. Companies failed to realise the logistics costs of actually getting the products out to the customer.
"eCommerce is certainly growing and we would be fools not to embrace it, and as a company we need to grow our business in this area, but it’s important to remember that eCommerce hasn’t taken hold in the way people thought it would. I hazard a guess that Staples and Wal-Mart won’t be shutting their doors any time soon."
The small office/home office (SoHo) market is also becoming increasingly important to the OP channel because of the way in which it is changing the buying behaviour of the traditional OP customer.
The rising number of people working from home and telecommuting is driving a very big trend in the industry that more and more players are taking notice of. And that trend is heightened demand for products that aid mobility and make commuting easier.
ACCO’s Pierce says: "SoHo is another big trend for ACCO, and you can tie that in with issues of mobility. Many people are now working out of their homes, then going into the office and so forth. They need more flexible products to help them commute."
McCool, meanwhile, shares Esselte’s experience: "The Leitz range we launched last year is lighter and more aerodynamic than ever. It’s easier to carry. It has a curved spine. It’s got a pocket inside and a storage area for other accessories such as calculators or other documents. We actually thought that the product would be a niche opportunity appealing mostly to workers on the move, but what we’re actually seeing is that it has been taken up by 1,200 retail stores, and become an incredible seller, but not in the market that we expected it to.
"It’s being bought not only among SoHo buyers and traditional OP buyers, but by a much younger audience as well – the back-to-school market."
The SoHo market is not only offering new opportunities for the industry in terms of design, but this growing market is also changing consumer behaviour itself. As consumers are becoming ever more used to high-performance technology in the home, they are increasingly demanding the same standards in the office.
Helen Berentzen, head of product marketing at Ricoh UK, says: "A few years ago, we noticed an increased interest in colour printing from office workers. They were so used to having colour at home that they expected it in the office – technology led by home use!"
Users are clearly getting more knowledgeable and demanding about what they want, and expect more from the equipment they have in the office – whether that’s at home or in a work environment. They are not so satisfied waiting for slow colour printing, or with old-fashioned or careless design. They want it all – high-performance, attractive, easy-to-use adjustable products. The OP industry must up its game if it is to satisfy this new breed of consumer.
Environmental concerns are increasingly important all over the world, transcending both geographical and industrial boundaries. And the OP industry is no exception.
Manufacturers and resellers alike are having to rethink their green credentials, in terms of both product offering and the environmental record of their entire organisation. Pierce comments: "Our end users are driving ACCO’s environmental efforts. A lot of that is due to legislation. Our environmental record is also very important for securing government contracts.
"The way that ACCO looks at the environment is not just about providing products that contain recycled materials. We try to look at it more from an environmental sustainability standpoint. This has grown in importance over the last 18 months. In that period we have shifted our focus away from merely producing recycled materials towards looking at the environmental awareness from more of an operational perspective."
Furniture maker Steelcase is also noticing how the green agenda is affecting OP buyers.UK marketing director Karin Gintz says: "We have conducted a number of surveys over the past few years that have confirmed increasing environmental awareness amongst office workers across Europe.
"All of our customers now ask for environmental credentials as part of the pitch process. We produce environmental product declarations for each of our products, which describe in clear and simple terms their environmental performance."
Time and resources
Thanks to manufacturers devoting more time and resources towards developing eco-friendly products, prices are now starting to come down and consumers have a much better product selection to choose from.
XPD’s Robinson reinforces the point: "Consumers being prepared to invest in environmental standards is another big trend that we’re currently seeing. And manufacturers are beginning to offer eco-friendly products at a similar price to standard products. These two things have come together so that there is a much better offering of environmentally-friendly products in the marketplace."
Bizmart’s Finn doesn’t quite agree and adds: "As for the environmental buying trend, I think a lot of it is cosmetic. A lot of people talk about the environment and want to be associated with the green movement, but I think in practical terms it’s not really that important.
It’s all well and good for the top end of the market. "Government departments are obviously going to be big buyers of eco-friendly products, but it’s not the same for everyday consumers. Environmental concerns are there and companies should be aware of them, but they’re not the be-all-and-end-all."
The curious thing about the OP industry is that, while there is clearly innovation, traditional OP products themselves are rarely truly revolutionary.
There are only so many tools that office workers need. And once they’ve been created, there is little need for anything new. That is not to undermine the breadth and depth of innovation that goes on in the industry.
It merely suggests that what is going on is a steady evolution rather than a revolution. And it means that the OP industry needs to work out patterns in consumer behaviour to successfully tap specific markets. Consumer research is crucial to success.