Financial Services
The 1980s was the decade when financial services (FS) made their way into almost every part of life and changed the global economy as we knew it. Before then, people barely knew what wealth management was, let alone a hedge fund.
Fast forward 20 years and the cash flowing around the globe of FS is nothing short of staggering – music to the ears of those providing the moneyed and well-travelled workers of this sector with office products and high-tech mobility equipment. Structured investment vehicles represent a $200 billion market globally; the number of organisations doing offshore outsourcing is expected to increase 13 per cent to 20 per cent over the next two years, according to Gartner Research; and the hedge fund phenomenon worldwide has swelled to mammoth proportions (assets under management in Luxembourg alone by the end of 2005 totalled $90.7 billion, for example).
Baby boomer boost
In the UK, of course, growth was aided by the Big Bang of 1986, when deregulation of the London Stock Exchange led to a boom in private investment and a surge in brokers and independent financial advisors (IFAs) selling the newly-created financial products. And the industry has not slowed down. Last year city bonuses in both London and New York reached epic proportions.
And the FS industry will receive a nice boost when the baby boomers come of age. Over the next 18 years an American will hit the age of 60 every seven seconds. And this group, which amounts to one third of all Americans, is expected to exercise $3 trillion in spending muscle by 2007 as it enters prime time earning years and then retires – all the while throwing cash at insurances, such as long-term health policies, tax advice and accounting, financial and estate planning, legal services for wills, contracts and so on. Europe is not far behind.
Brian Capon at the British Bankers’ Association, claims the UK – and indeed global – FS industry is only at the beginning of a steep growth curve. "The banking and financial services sector remains strong," he told OPI. "Banks are generally recruiting staff at present and on the retail side, there is an increased focus on branches, with several banks having announced plans to open new ones or refurbish existing ones."
OP manufacturers and resellers clocked onto the opportunities available in this fast-growing and cash-rich sector a long while ago. But as banks, investment management firms and hedge funds spread their global might, and more and more of their workers spend more and more time on the road, new opportunities for OP providers are arising.
Phil Jones, sales and marketing director at Brother UK, believes OP manufacturers and resellers need to look carefully at how they position themselves to take advantage of growth opportunities in the FS market. "Banking and finance is doing very well at the moment. Teleworking is massive in the FS sector through IFAs as well as through workers at blue chip companies, and many work external to their business, on multiple sites and at home. As a result, lots of areas in the market are benefiting."
Top of the benefactor list is suppliers of mobility products such as laptops, laptop cases and accessories, PDAs and, more recently, mobile printing solutions. Technology that allows workers to stay connected on the move such as network cards and Bluetooth wireless adaptors is also enjoying a heyday.
Acco is one company at the forefront of the mobility trend. Mobile Organisation (MO), a new range based around boxes that are able to store, file and carry paper, launched on 1 January this year and has already been a big success. And Acco’s European product manager for mobility, Karen Stacey, claims that workers in the finance and banking sector make up the largest part of MO’s market. "We expect a lot of growth from these workers over the next few years," she said. "FS is the fastest growing sector in terms of mobility." Next year already, the company has plans to launch other products geared towards the FS-type worker such as cases that carry laptops as well as files.
Looking further ahead, a gush of innovative new products aimed at the tech-savy, moneyed mobile worker is expected, including solar panels in clothing to charge laptops, phone batteries that last 28 days – and even day-time pyjama suits for the home worker. "There will be billions of euros worth of business available if we step up a grear to cater for these trends with the right products," said Brother’s Jones.
The trend is also good news for technology, B2B services in this area and software providers. An example of a company taking advantage is Charlotte, North Carolina-based Impact Technologies, a Microsoft-certified partner that provides financial software and marketing tools for banks, brokerages and financial advisors. Its Retirement Road Map software, which calculates how much money an individual will have to live on in later years, helps advisors develop relationships with potential clients. And then there is New York-based Walker Financial Corporation, which sells final expense insurance and admin services for trust accounts.
Opportunities
With all these FS workers on the move, there are also opportunities abound for manufacturers at HQ level. Andy Dunkley, managing director of office furniture manufacturer DBE Products, formerly O’Sullivan UK, told OPI that in sectors such as FS where workers are spending more time on the road, office space is being used in a different way.
"A lot of companies in the FS sector are looking at different types of furniture – they need to provide a base for someone to pop in and then get off," he said. "The barriers are coming down and furniture is becoming more simple, but there is more variety and the designs are more bespoke. FS will continue to grow for us, there’s no doubt."
It is also good news for dealers. Mark Austen, managing director at Office Club, agrees that the jovial FS sector in the UK has impacted demand among his dealers, particularly those situated in financial centres. "I had a recent meeting with one of our Jersey dealers, who is reliant on FS, and he said that the sector is spending money again, taking on new staff and freeing up budgets," he told OPI. "He’s doing very well out of it."
John Thurgood, managing director of UK-based Total Office, explains that while he is not seeing a massive increased demand in the sector, he is witnessing a change in the product mix in orders coming from several London-based institutions. "We are receiving some new accounts as a result of some big companies setting up new ventures here.
"Things in London are fairly good right now and we are seeing growth every year. But because prices for stationery are falling, the trend is going towards toner cartridges and consumables. And there are a lot more mobility products on the market such as filing products that are perfect for taking on the move and laptop accessories."
Stewart Barton-Taylor, purchasing director at Spicers, confirms that the OP wholesaler is also seeing increased demand in mobility products that fit with laptops such as keyboards, mice and other accessories. "These days, particularly in FS, offices can be found as much in cars as they can be in the home," he points out.
But Jones at Brother believes that it is crucial for dealers to prepare to attract new business at a time when things are tight and margins are under pressure. "You must optimise your support services and get the right logistics partner – wholesaler or otherwise – and IT systems because there will be plenty of people out there doing B2C even if you are B2B," he said.
He also expects that dealers will need to get more personal with this breed of workers in order to grab their attention. "I believe we will see a sea change in strategy over the years ahead. At the moment, with the internet, it is all about being ‘low-touch’. But I think dealers will need to be very ‘high-touch’ with these demanding customers, help them problem-solve and be by their side around the clock."
Healthcare
The healthcare market is one of the three hotspot sectors that offer the potential of future double-digit growth.
Jerry Epperson, an investment analyst on the office furniture market, told OPI: "For some reason very few of the office furniture manufacturers go after patient room furnishings. But a number of them do offer products for nurses’ stations, for conference areas, for doctors’ offices and for the reception areas, and these are real primary areas for potential growth.
"In the US, we have a lot of new hospitals being built and that is being driven by the population centres moving. Basically, hospitals are moving out to where the people now live.
"Also, the technologies of the day have changed and that has dramatically affected space requirements and electronics’ needs.Refitting a lot of the old hospitals to remain competitive is too expensive, it’s easier just to build new ones, wire everything correctly, put in the correct flooring and all the other involved processes.
"The old hospitals are subsequently being phased out and are being turned into nursing homes or assisted care facilities. The newer hospitals, meanwhile, are being built with more private rooms, and that creates a massive opportunity for those marketing office furniture.
"We are seeing many companies look at developing very specific applications for the healthcare market. For example, Steelcase has developed a programme in one of its divisions where doctors can communicate remotely by using a white screen technology.
"There are products on the market that can be pre-programmed to reserve rooms from a central location and the rooms can announce who will be using the place at any specific time.
"Herman Miller has even introduced a new technology for audio privacy to take advantage of new regulations in the United States which ensures that all your medical history is kept highly confidential. The company has come up with this new Babble technology which allows people to check into hospital and prevents other people from overhearing your conversation. The technology will mask what you and the admitting officer are saying."
Healthcare professionals are also warning of an imminent outbreak of bird flu and governments globally are bracing themselves to contain the potential pandemic.
With limited supplies of vaccine and antiviral medicines, the authorities will urge their populations to return to basic hygiene practices to help stop the spread of germs.
Recommendations will include encouraging good hand hygiene, with employers being urged to provide an ample supply of easily accessible hand hygiene products, such as soap, water and alcohol-based hand sanitisers, as well as tissues.
Jean Andersen of US-based C-Line Products told OPI: "There seems to be a growing concern in the marketplace for antimicrobial and antibacterial products to help protect consumers against bacteria, moulds, viruses, etc.
"C-Line viewed this growing trend as an opportunity to bring something value-added to our existing product selection. We believe the antimicrobial product line enables C-Line to offer its dealers a value-added product line for their customers."
Exposure
Fellowes has come up with a similar range, a spokesperson told OPI: "Over the past three years, Fellowes has worked hard to gain a better understanding of the needs of office workers. Our research indicates that people are developing a higher awareness of health issues within the office environment.
"With an ever-increasing amount of data available to the public, people have become more concerned with the cleanliness of their environment, both at work and at home."
Studies have revealed that 57 percent of office workers have concerns about exposure to microbes and 75 percent of the US population reported using antimicrobial products, which is an increase of 32 percent from 2002 to 2004.
Of the European countries, Spain, Italy, France and Poland show the highest levels of concern regarding bacteria and microbes. The research also found that desktop hygiene is more important for the worker than for buyers.
But sometimes being too clean could actually cause more harm than good, as Horst Bubenzer of Germany-based Durable explains: "Penicillin for example is now useless against many strains of bacteria and yet it was the answer to virtually all infections when invented. There is a view that by being too sterile in our lives we do in fact stop the build-up of our antibodies.
"We recently launched a hand gel for situations where hygiene is important for the healthcare industry. This kills many of the common bacteria including the hospital infection MRSA on the skin. This common bacteria has become resistant to some of the strongest antibiotics and can be fatal once in the bloodstream. 30 percent of us carry these bacteria around quite safely, but this rogue variety – once in the body through open wounds – can kill.
"As time goes on inevitably more bacteria will evolve and new products will be researched and launched to combat them."
And Mark Pelletier of Lagasse, adds "Today, greater consumer concern over health risks from germs has increased the demand for new antibacterial products. Today, there are more than 700 different antibacterial soap products being sold to the consumer."
Office product companies can also look to join schemes which provide the entire design and build function for healthcare facilities.
Organisations such as the Austrian-based International Medical Cluster offer a one-stop turnkey solution to build and kit out hospitals and wellcare centres around the globe. From the financing through the architectural planning to the final kit-out, these organisations offer an appealing and interesting route into a new market.
Hospitality
The evidence is there for all to see – business is on the move. There are more business travellers than ever before, using planes and trains and automobiles to reach conferences and meetings. Here at OPI we are holding more conferences than ever before, in more varied locations across the world. "It reached a peak around 9/11 then, like most markets, the business traveller took a while to come back again," says Tom Otley, editor in chief at Business Traveller magazine. "Now there are more flights than ever before and there is greater frequency on the most popular routes. Out of London, there are more flights than ever to New York and Hong Kong, for example, and as a result there’re more people travelling on them."
Of course, these travelling workers need a bed for the night and facilities to help them work in their new temporary environment. So while the hospitality sector has never had it so good, the growth is filtering through to other industries, including office products. Otley says these guests have specific requirements from the hotel they need and expect to get the job done.
"There are tangibles and intangibles. The intangibles are high-speed internet access, either wired or WiFi, and a phone system preferably with two lines. As for the tangibles, business travellers need a desk, which most rooms have now, and an ergonomic chair. The perception is that, if the hotel has provided a space and internet access for a laptop, then workers are going to be at that desk for longer than an hour, especially if you take into account jet lag. If a room doesn’t have a desk, it better have a very good business centre that’s open 24 hours-a-day – but very few do."
Office style
Conference areas and business centres are equally well populated and need to be well stocked to meet peoples’ expectations.
"Eight years ago the business centre used to be where you get onto the internet, but now people are carrying those devices with them," adds Otley. "So now they’re looking for an office-style environment with printing capabilities. They may be working on a presentation and need a USB stick to carry information from their laptop to the computers in the business centre. Then they can print and get it photocopied."
Major international hotel chains which thrive on this type of guest are keen to provide all that is required of them. Steve Dudley, procurement director for Hilton UK and Ireland, says that keeping up with the fast-changing world of business gadgets can be an expensive and thankless task.
"Technology is the biggest thing that’s changing. Most people expect internet connectivity. We offer connectivity via cable, but we’re fast moving towards offering WiFi in the bedrooms. Something we have noticed is that telephony has reduced in terms of its overall significance. People are hardly using their hotel telephones anymore. We’ve definitely seen a revenue drop in our hotels. We offer faxing and photocopying services in the meeting centres, and for a premium in some hotels we offer fax machines in the rooms. But I see faxing as a dying technology because email is so prevalent.
"Connectivity is the most important issue at the moment. With the advent of Blackberry technology, perhaps hotel connectivity is a short-term solution. The technology is moving very quickly. We put in telephone socket connection cables in all of our conference rooms, but the life of that product is going to be very short so its value is pretty limited. A critical aspect in this area is de-risking the capital spend. There’s no point in spending lots of capital when the product quickly becomes redundant."
To counter this, the hotel chain has recently been running a series of workshops with guests and suppliers to find out what the "room of the future" will contain.
"We’re investing a lot of our own cash to discover what we need to procure next. We need to be on top of the next product. The trick of offering the guest something more than they have at home isn’t only about the luxury side of things it’s also about the functionality of the room as well. We are a very business-orientated hotel chain and therefore that functionality needs to be geared up to cater for that."
Flexibility
Dudley has looked at ways of building rooms that transform from a meeting room in the week to a family room at weekends, to best utilise the space. Other impending changes involve office furniture, with the chain considering introducing high-quality Herman Miller chairs to some of its selected locations, depending on the "guest mix". Hotels choose their furnishings depending on the type of guest they will be serving, and iconic business products can help project the illustrious professional environment they strive to create.
Conference centres are another growing resource for business travellers that have the potential to be filled with office products.
"We currently use screens and projectors and we still provide flip charts," says Dudley. "Some of the rooms have facilities for hanging things on the walls. We also offer an office stationery kit in the rooms with scissors, pens and pads inside, along with headed note paper.
"We have some video-conferencing, but it’s very limited and it’s been slow to pick up because it’s hugely expensive. It’s easy to say that this type of technology is the future, but meeting people is still the most important thing – it’s not just about getting the information."
The company looked at the use of plasma and LCD technology replacing projector screens, and at connecting some information to the rest of the hotel. This included putting meeting agendas on the TV in delegates’ rooms, with notes and instructions about the event – creating an entire package from guest room to business room.
Corporate Express, which is currently contracted to provide Hilton with all of its stationery, says the hotel chain’s recent approach to procurement provided an easier entry to the industry.
"As other client segments, the hospitality business is in the process of professionalizing its procurement strategies," the firm told OPI. "Hilton is a good example, it has recently appointed an SVP of productivity and sourcing, and has identified OP and related products as one of the first commodities to tackle, including moving to eProcurement on a European basis.
"The hospitality sector has, on top of OP, a lot of products that it currently procures in a sub-optimal way – typically decentralised – without any control and any ability to manage demand and cost. Corporate Express’ unique single source approach is ideally suited to enable the hospitality sector to procure OP and these other hospitality-related products via one global source, extending the benefits of an integrated and streamlined procurement solution into these other categories, and driving significant value to the bottom line."
While it shows no sign of slowing, the hospitality industry is one hotspot which the OP industry has the potential to drive forward. Hotels are asking questions about which products will be used in the business environment in the future, and the office supplies industry is in a unique position to offer some valuable answers.
