The summer relax is over as another September rolls in and an intense period of busy retail weeks and months stretch ahead of us again.
At OPI we pride ourselves on identifying emerging and growing trends, and one sector that continues to appear as the jewel in the crown is the back-to-school market. As manufacturers support the market with supplies that go far beyond the standard-issue erasers, crayons and loose-leaf paper, sales of school and office supplies are growing faster than rumours and stories surrounding Corporate Express!
For example, Crayola, the 104 year-old private company that has impressively developed beyond its traditional range of crayons and pens, had the best back-to-school sales in its history in 2006, and the company is on track for a better 2007.
The big-box retail giants Staples, Office Depot and OfficeMax, have together reported an average 17 percent sales increase in school supplies for 2005 to 2006. And Barnes Reports, which measures the sales of office products in all US outlets (including online and mail order) states that sales of office and school supplies rose from $14.98 billion in 2004 to $16.61 billion in 2006 – a ten percent increase. Sales are projected to reach $18.83 billion in 2008, a leap of another 13 percent.
Elsewhere, to reflect the importance of jan/san in the product mix, OPI has this month produced a special report analysing the state of this dynamic sector, the market opportunities (including the likely success of green products) and the companies operating in this space.
This issue also contains a look at the future of the mail order catalogue, and surprisingly discovers that printed catalogues remain as popular as their electronic counterparts.
Some predicted the advent of online shopping would spell the end of traditional marketing, but it’s evident the future lies in an effective multi-pronged approach, utilising both forms of reaching the end user.
Office Depot currently seems to lurch from one public sector scrape to another. Earlier this summer the Delray Beach-based big box fell foul of an audit in North Carolina and had to pay back overcharges. This month, officials in the State of Georgia have highlighted five performance problems following a review of their supply contract with Depot. The company has been warned the plug may be pulled on its multi-million dollar agreement if it doesn’t make fast improvements.
However, despite the obvious knock-on advantages to the US independent dealer, one line of concern did emerge. In its submissions to the review panel, Depot argued it was being frustrated in its attempts to fulfil its obligations to divert ten percent of orders through local small businesses, after a group of dealers agreed between them not to work with Depot.
This is a dangerous situation as the dealers want to be represented and able to compete on a level playing field. If the playing field is slanted too far in their favour the fall-out and in-fighting will be damaging across the entire industry. It’s a case of be careful what you wish for.
Until next time…
Stuart Qualtrough, Editor