Navigating a changing a changing landscape

Raj Advani may have stepped down from his role as managing director of Exertis, but he is still very much involved in the business and the sector – and has some forthright views on its future

When Raj Advani moved to Portugal, in 2019, he took the decision to step down as managing director of Exertis Supplies, a position he’d held since 2011 when the company bought out Advent Data, which he had founded back in 1990.

“I thought the division needed an MD that was there more than my new lifestyle would allow so I became the commercial director and passed on the MD reigns to Andrew Beaumont, who knows the business very well,” he says. “I have the best of both worlds; I have a more relaxed lifestyle, but I am still very much involved in the business I love and am very passionate about.”

It is a business that had to deal with an unprecedented year in 2020, but it has come through it strongly. “Speaking for Exertis, it is comforting for our employees, customers and suppliers to know that we are financially secure and have good stock holdings and distribution network,” he says.

CHANGING INDUSTRY

Of course, COVID-19 has changed things for everyone in the sector over the past year. “One of the big shifts we have seen is more people working from home, and a lot more of our deliveries are smaller because they’re going to a homeworker,” says Raj. “So, we are seeing a trend for smaller orders, and a lot more ink cartridges rather than toner cartridges on the EOS side.”

Another big shift has been the type of products customers are purchasing. “We are also seeing a greater demand for branded products - I think because the employee is making the decision about what to buy. They buy the nice, fancy Rexel stapler rather than the cheap, unbranded version because it will go on their home office desk. In the office they are happy to buy the cheap alternative, but at home they want the best.”

Alongside this, data is becoming increasingly important in the industry. “Over the past five years we have spent a lot of time, effort and money improving and developing our data and its accuracy,” says Raj. “It will continue to be a key focus for us.”

I have always believed the customer should be king

Focusing on data will help companies to stay ahead in this changing industry. “I think consolidation will be a big part of the future, as we have seen over the past few years,” Raj says. “There might be someone to come along and challenge Amazon – there are people who want to try – but we see lots of opportunities to evolve our range, and help others do the same.

“The dealer channel is evolving and changing all the time. There is more risk now – especially with the COVID situation – and we don’t know when that will clear. Good, well-run and well-financed businesses will find a way to survive, but some of the smaller ones might find it more difficult.”

Another change is that more dealers, especially bigger ones, are holding more stock than in recent years. “They can’t get an overnight service at the moment, when they are used to getting a delivery at 2-3am, so they have changed their model to hold stock.”

ADVICE TO DEALERS

In these tough times, Raj’s advice to dealers is to spread their risk, and not commit too much of their spend to one wholesaler. “To me, that is inherently risky,” he warns. “We have been saying for a long time there should be more competition in the distribution model. Coming from an EOS background, we have been in a very low margin business with lots of competitors - you have to fight every day for your share. Since we entered the office products arena we’ve seen that it’s a slightly different model where dealers seem to give five-year contracts to one wholesaler guaranteeing 80% of their spend. That makes the wholesaler king, not the customer, and I have always believed the customer should be king.

“It breeds complacency. The wholesaler doesn’t have to work to get your business – they have already got it, so they can do what they want with the price, they can limit the range, they can change it. I would like to see this change; we are seeing some of this since the demise of Spicers, but I would like to see it accelerated.”

BROADEN RANGE

Raj also thinks dealers should look to broaden their range – and not fear moving into selling tech products. “I speak to many dealers who are a bit scared of selling tech products, but it isn’t that difficult,” he says. “There are some things, like servers, where I wouldn’t advocate that any of my dealers try to get involved because they are complicated but, to me, ‘office products’ aren’t just traditional stationery – they are traditional stationery plus other products you use in an office, such as laptops, keyboards, mice, printers, headsets, projectors and even virtual meeting rooms.

“We have 51,000 technology products in our warehouse. We can help dealers to sell the lowertech technology products that don’t need a lot of knowledge and help them move into new channel.”

However, this advice comes with the caveat of COVID-19 – and that nobody knows how long it will continue to impact the country. “The UK is on the front foot with the vaccination programme, so I wouldn’t be surprised if we see a bit of an economic boost in the summer,” he says. Raj reckons that the government will announce new stimulus packages to help businesses get back on their feet and there will be an increase in spending again – but not a great uptick.

“It will be a slow burner,” he says.

You can listen to more of Raj’s views as a podcast at https://open.spotify.com/episode/66OZo2qGZqMWNVwglXSWhs