It’s an undisputed fact that sales of core office products have been under significant pressure for several years. Yet, although vendors and resellers aren’t exactly reporting record sales, they are quietly confident that there’s still value to be had in this sector, citing a relatively stable market at present. There’s also growth to be found if you know where to look for it.
Indeed, the recently published The State of the OP Industry 2017-18 report by OPI and Martin Wilde Associates indicates that the rate of decline in core OP demand looks to be slowing down. Research conducted across the US and in six key European countries showed many respondents reporting growth in this category and highlighting that they are now generally more positive about the future of core OP demand than they have been for a while.
“In the current inflationary climate, customers are becoming savvier than ever which is putting pressure on manufacturers, wholesalers, dealers and retailers,” says Clement Rouillard, Marketing Manager at UK stationery vendor ExaClair, part of the Exacompta Clairefontaine Group in France. “However, although the traditional office supplies market is declining in volume, it remains relatively flat in terms of value.”
Some sub-sectors are bucking the negative trend completely and that’s generally because they are answering a specific consumer need, explains Rouillard: “A manila filing brand such as Guildhall, for example, has done just this in the legal and professional sectors which require premium-quality products with long-lasting durability for their archival filing needs. By tapping into this need, the sub-segment has shown a healthy 8% growth in sales over the past year.”
Brazilian traditional OP manufacturer Acrimet is equally bullish: “We’re not seeing falling demand for our core office supplies products,” reports Export Manager Jaime Nascimento. “On the contrary, the burgeoning number of home and remote offices is driving our sales upwards, with our e-commerce business growing especially fast. Our 46-year-old company is going from strength to strength, backed by tremendous loyalty from our long-term customers.”
All sealed up
Germany-based adhesive products manufacturer tesa also saw 2017 sales rise 10.6% by value compared to the previous year, with pre-tax profit up 11.6%. This was on the back of particularly strong performances in Africa, Australia and Asia — the latter helped by the electronics industry returning to its former strength. The company also reported positive development in its US segment, driven by sales of specialised adhesive tapes for the automotive sector.
“Although the traditional tape sector is relatively flat, new technological developments are giving us the ability to aim our products at different target groups, which is opening up new markets,” says Falk Butterwegge, the company’s Head of Office Supply, Food & Digital Sales, International Sales Consumer & Craftsmen. “Offering simple, reliable and easy-to-use solutions is vital. It’s convenience that drives demand in this sector.”
There are several trends that vendors can benefit from to make traditional products more current or give their existing ranges a new lease of life. The increase in people working from home on a regular basis and looking for attractive, smart products in their home offices is behind a burgeoning preference for vibrant colours across the core OP category, for example.
“We’ve recently launched a complete line of office organisational products — document holders, letter trays, clipboards, etc — in a large selection of citric and bold colours,” says Nascimento. “Fundamentally, they are very similar to other items made in the traditional black colour, but it means we can generate more value from them.”
Environmental credibility is another significant selling point. But it’s essential that any eco-friendliness claims are robust, as anything perceived as ‘greenwashing’ is ultimately likely to have a detrimental effect on a product’s — and its company’s — image.
Additionally, as office desk sizes decrease, a growing need is emerging for products with a smaller footprint and space-saving solutions that can help keep workstations tidy and organised. This is leading to demand for products such as Exacompta’s Big Box, where you can effectively create a filing cabinet to suit the space you have available.
“Boutique, premium-quality notebooks and pads have also dramatically risen in popularity over the past few years,” adds Rouillard. “Again, the rise of mobile workers is fuelling this demand as they are regularly client-facing and looking to portray a professional and stylish image. This trend is behind the strong growth of our Clairefontaine Europa range of notebooks, which is already up by just over 8% in 2018 so far.”
As in virtually all product categories, technology is undoubtedly having an impact on the traditional OP market. But we are still a long way off the ‘paperless office’, according to Rouillard: “Particularly in professions involving journalism, the legal system, design and the creative arts, there will always be a need for note-taking, physical filing and storage alongside the digital alternatives. Manufacturers are becoming aware of this and are now embracing technology within crossover products, such as digital storage-friendly notebooks.
“We’re also finding that although consumers are buying fewer traditional OP products, they are generally trading up to better-quality items. It seems that, as we use pen and paper less, the notes that we do take are the ones that matter more. Consequently, although we may only file the most important physical documents, we want to take better care of them.”
Looking at the future, Rouillard is convinced that while private label items are important to wholesalers and contract stationers in order to win volume contracts, branded products will remain crucial in driving value back into this sector of the industry: “It is brands that provide dealers with the larger margins and profits that can then be invested in R&D. This is essential for providing the vital innovation in new materials and manufacturing processes that will lead to improved quality and new products in the traditional OP category,” he concludes.
The Dutch perspective
Rillstab is a traditional office products company situated in Breda in the Netherlands. Probably best-known for its patented display books, it also manufactures flip charts, self-adhesive labels, stationery, envelopes and business cards. OPI speaks to European Sales Manager Jean-Paul Wortman about the company and the challenges that traditional OP businesses face today.
OPI: How has the core OP market performed for Rillstab recently and what do you see as the company’s strengths and unique selling points?
Jean-Paul Wortman: We navigate in a very traditional segment of office products. Display books, flip charts, writing cases and labels are not the sexiest products in ‘office land’, but we’re still seeing a steady market in this sector.
Our sales are undoubtedly being helped by the fact that we have a unique patented mechanism in our display books. Additionally, as a result of having our A4 label-manufacturing business we were asked if we could also produce labels for label printers and writers. This required a significant investment in new machinery, knowledge and people, but we’re now reaping the rewards and have seen significant sales growth in this category over the past two years.
The fact that we can offer our customers a range of ‘Made in Holland’ products that cover both branded and private label markets is also important. A combination of all these factors means that our sales projections are looking very good.
OPI: What is fuelling demand for the range of products you make?
JPW: Successful products need to be attractive and desirable to end users. But they also need to provide good value for money and I believe we achieve this balance. Additionally, customers want to be treated well, with clear product information and next-day delivery. I believe that if we can stay focused on the needs of our customers and constantly innovate, then future opportunities will present themselves.
On a different note, one big trend sweeping the Netherlands currently is a desire for ergonomically-sound products and our range of chair mats, foot rests, desk pads and special floor mats for sit-stand desks meets this need. Maintaining a healthy office is currently a hot topic.
OPI: How has the way you market your products changed over recent years?
JPW: The way millennial customers gather information differs significantly from previous generations. Reaching out to them via social media is completely mandatory nowadays and our marketing campaigns have to be placed wherever they connect.
To understand what our customers expect from our range we run consumer panels — the back-to-school period is a good example where we gather groups of students together and ask them what they like and dislike about our products. It’s also a great way of gaining insight into the likely trends on the horizon.
Having a good website is obviously vital, but the provision of a mobile portal is equally essential these days. It’s estimated that 25 billion people will surf the net from mobile devices by 2025, so if you want to stay relevant having a well-designed app is imperative.
OPI: How important is branding in this category?
JPW: It depends on the product. With everyday items such as paper, toner and labels, branding is no longer particularly important — as long as the quality and price are ok, customers don’t care about the name on the package.
But at the higher-end — a Mont Blanc fountain pen, for example — product perception and tradition play a bigger role and consumers are far more likely to buy a trusted, branded product. As such, they will take the trouble to visit a high street store to get ‘hands-on’ with an item and be pampered by a local dealer. You need to have a mix of branded and private label to entice your customer.
OPI: How do you see the future for the core OP sector? What challenges does it face and how can these be overcome?
JPW: We can no longer deny the decline in traditional OP sales. But, in order to stem this negative flow, I’m a strong believer in the need to collaborate across the industry. In this fast-changing world it’s impossible to go it alone, so why don’t we share our problems, thoughts and ideas among wholesalers, manufacturers, buyers and sellers in a genuine and open discussion? In this way we can guide each other in the right direction.
Of course, diversification is a logical step if you want to maintain or raise margins and profits, but you still need to keep your focus on the things that you’re good at. If you can do this in the rapidly-shifting landscape of traditional office products, you can still come out as a winner in the end.