Flexing to support diversification –inside Nectere

Although Steve Harrop has been in the industry for decades, his role as head of commercial at Nectere is relatively new - and one that hasn’t come without its challenges. “Last year was a difficult year, but a rewarding one. It was the first year for me working for Nectere and in a relatively new type of role which dealt with creating supply chain management and looking at product categorisation.”

As well as being a testing year for Steve as he adapted to a new role in a new company, 2022 was also a problematic year for the industry as a whole. A war in Ukraine and a cost-of-living crisis at home, plus unprecedented political turmoil, all made for a business climate that was volatile, unpredictable and unstable. Despite this, Nectere managed to succeed where others struggled, and it progressed in its systems whilst others were forced to backwards.

As a keen football fan, Steve uses a familiar football analogy to summarise how 2022 was for the company as a whole. “Last year was a game of two halves, with the first half of the year being dominated by the paper shortage. Whilst everyone else was struggling, our supply was very stable for the first eight months - I even had competitors asking me if they could have containers of our ownbranded paper!”

Nectere focused on staying price-competitive, and although this was challenging, Steve cites the great support he had both from the mill side and Antalis as fundamental factors which enabled him to ensure stability. At a time when everyone was looking for paper, Nectere suffered only one or two days when it was completely out of stock.

“In the second half of the year we managed to develop our own unique version of EvoX, which is the industry leader webstore; we’ve now got 60-plus partners who are using that solution. It’s a super product. It’s very well adapted to the changes that the industry needs and it’s got lots of ability to do things that those other systems - and even the same type of system - aren’t able to do. I’m sure lots of people will catch-up but, for now, we think we’re just ahead of the game on that one.”

Of course, COVID continued to impact the industry last year, and Nectere was not immune to its effects – as Steve puts it, “When a huge player sneezes, we all catch a cold.” One of the most significant influences was on staffing, as some workers took the opportunity to retire early, or left the company for other reasons. “As a consequence, we’ve had to renew the team. It’s a lot younger now, and we needed to upskill them, especially in industry, products and category, and that takes time. You can’t just do that overnight.”

Looking Forward To The Year Ahead

As with most businesses, Nectere is focusing strongly on stability, profitability and diversity in 2023 but is also keen to forge new partnerships to strengthen its position for the future. The firm has completed the long mooted MBO and a change of ownership is now in place, which brings with it exciting times and some changes to the business model too, but Steve believes that traditional products will remain at the heart of what they do. “Our goals are to have a stable platform, to increase the profitability of our partners and to acquire, as well as retain, our existing ones.”

Serving the needs of the dealer is crucial to a company like Nectere, and that comes with its own challenges too. Accommodating dealers of different shapes and sizes and often very diverse business needs isn’t easy, but Steve is in a good position to take on this challenge with enthusiasm. “I’ve been actively involved in the dealer SME community for 40 years and, whilst a lot of things have changed and refocused, the fundamental basics won’t go away. It’s important to focus on simple things that provide a good return on their investment.”

The deal with Spicers will see Nectere growing its wholesale division which, backed by the significant investment made in its IT infrastructure, will support dealers looking to diversify their businesses. Steve is already aware of the presence in his network of dealers specialising in workwear, medical supplies and other niche areas - many of these began life as traditional office product dealers. Steve is certain that supporting those transitions to new markets is key to Nectere.

“Diversification is not an evolution for Nectere; it’s just a reality, and it’s been part of the business model since the inception. There’s a willingness of resellers who want to engage…many of them have a ‘jack of all trade’s’ solution, and it’s part of the reseller’s nimble ability to really engage well with their customers. So, we provide a financial platform and a range of services that underpin that need to diversify.”

Advice To The Industry

While 2023 promises to be a pivotal year for Nectere, some of the challenges that were with us in 2022 remain clouds on the horizon. Steve identified some key issues for dealers that will require thoughtful planning in the months ahead. “Managing inflation is a key factor because the costs in the business, and cost of product, are both going to increase, we know that. There’s only two ways in which you can make more money - you sell more stuff, or it’s less expensive to do it - so the cost-to-serve is crucial.”

Nectere is ready to support dealers through tough times, despite the changes it’s currently going through. Steve is committed to being there to support dealers, and is challenging them to demand more from Nectere. “At this moment we’re going through a period of flux and change and there are some challenges that we believe we’ll be overcoming very shortly. Demand more from your supporting suppliers. Demand more from us. We will come through on that.”

The importance of developing a close working relationship and, in particular, maintaining great communications with the dealer community are front and centre for Steve. “I think good communication is key. By listening to our dealers we can resolve most issues - or at least see a clearer path through. We’ve got a few small hurdles to overcome, but once we knock them out of the way, I think we’ll be in a very strong position to support dealers because the business service model we offer is unique in the UK.”

In terms of focus products, Steve doesn’t pretend to dictate to dealers what they should or shouldn’t be selling. His take is all about being there to serve the needs of the community, no matter how diverse or niche they want to go. “We should be able to supply any business needs - indoor, outdoor, outreaching, outlying, anywherewe should be able to do it. If you take a building, you give it a shake, you turn it upside down and everything drops out, we should be able to supply that. It’s something I’ve always believed that dealers should adopt as a strategy.”

In addition, on the strategic side, Steve stresses the importance of being intelligent in the way dealers are approaching their business decisions. While diversifying, and embarking on new products and projects is a good move for some, it should always be driven by data. “Keep tech at the fore, have analytics, build your business relationships through the chain – but, if you’re not driven to succeed, look elsewhere.

“That might be a bit of a harsh message, but if you don’t see the future in what you do, in terms of our industry, then look elsewhere. The reality is that the world now is the most vulnerable and open it’s ever been.

“There are no super exciting strategies; there’s just selling more stuff to more people, for more profits.”

We have a very large customer in the area who has decided to put their stationery contract out to tender. We had an initial meeting with them this morning, brought them in KitKats and soup because we had heard they love that and we’ve agreed on a number of points which are very important to the customer.

Like being at their beck and call 24 hours a day, allowing them to shout at us, and beat us with a stick if need be, and allowing them to take our children hostage if their paper delivery is late.

The other problem is that we won’t be able to make anything on non-contracted items, as absolutely everything is on their contract list. I can’t help wondering what contract stationer gave in to them in the first place and allowed them this much leeway.

Independents like ourselves have no chance of making anything out of it, but we still fight tooth and nail to win it - and I don’t know why. It’s not like we can boast about having the contract to our other customers, because they’ll get annoyed that we aren’t paying enough attention to them, nor is it that we can brag about it down the pub because everyone in there has warned us not to talk about office supplies or we’ll be barred.

So, what’s the point? Why don’t I just tell them we aren’t taking part in the tender because I don’t like them?

It’s because we are eaten up with the possibility that one of our competitors will win it and, even though they won’t make anything out of it, they’ll still have it and we won’t. It would rankle in my brain for the whole three years - or whatever amount of time they have it - and I’d try everything I could to discredit them. I’d send in broken things saying that it came from them, or spend the wholetime plotting revenge, even though I know they aren’t making anything out of the contract...

I think I might need to see a therapist. Surely there should be an office supplies therapist to cover things like paper stocks, non-deliveries and constant price rises? I reckon they’d make a fortune, and the queue would be a mile long.