10 minute read
STRONGER TOGETHER
Dealer groups have helped their members to negotiate a turbulent 18 months and now they are looking more optimistically to the future - helping dealers to grow once more
A
fter the COVID-19 pandemic brought about one of the toughest years for the UK economy in living memory – with the economy shrinking by 10% - 2021 has signalled more of a return to normal as lockdown and social distancing measures have eased.
Indeed, the UK economy is set to grow sharply this year; the International Monetary Fund (IMF) revised up its growth forecast for the UK in July, saying it expects the economy to grow by 7% - the joint-fastest of the major advanced economies, alongside the US. This prediction was 1.7% higher than the IMF forecast in April and, again, was the biggest upgrade of a major economy.
The IMF believes this growth is set to continue in 2022, with predictions of 4.8% growth – although this is down 0.3% from its April prediction. This optimism is filtering through to the office products sector, with dealer groups now looking forward with optimism, offering their members a range of products and services to help them make the most of the opportunities in the market.
SURVIVING THE PANDEMIC
While the lockdown periods of the pandemic were tough, dealer groups and their members have largely weathered it. “Dealers have done OK, particularly those who have
branched out into other areas such as workwear, PPE, jansan, furniture or print,” says Steve Carter, managing director of Advantia Business Solutions. “Those traditional OP dealers that haven’t branched out have struggled more.
“Most dealers within the group told me that, through the pandemic period, they have been trading about 4050% down on OP, but the majority have said that other areas have kept them buoyant – particularly furniture, probably because a lot of people have been working from home. They need equipment, and their employers are still responsible for that - plus businesses planning to have people back have restructured their office spaces.”
During the periods of lockdown dealer groups moved quickly to help their members, with a focus on community and communication. “Communication has remained the key, with constant contact through emails, telephone calls and regular Zoom meetings to ensure that no dealer has felt alone facing the challenges,” says Tim Beaumont, group managing director of Nemo/Office Club.
“Nemo acquired Office Club two years ago and the two groups have pooled resources to offer an enhanced package for all members,” he adds. “Although nobody could have foreseen the unprecedented times we have just been through, the circumstances have allowed the two groups to integrate resources much more quickly and effectively than initially thought achievable. That sense of survival, and a combined desire to support members in any way possible, brought everyone closer together, streamlined some of our processes and delivered a range of new suppliers in new categories alongside exciting marketing initiatives.”
Similarly, Office Friendly focused heavily on the community aspect, according to Jeanette Bresitz, the group’s managing director. “This became even more important as businesses faced a period of considerable change and potential decline,” she explains. “In anticipation of the impacts of major change, and to ensure no-one felt isolated or without somewhere to turn for help or guidance, we provided our own central updates and introduced collaborative peer group meetings to encourage the sharing of ideas and best practice between members.”
Meanwhile, Integra provided members with a comprehensive support programme while also ensuring the group was in a financially strong position, CEO Aidan McDonough noted.
Alex Dunn, managing director of Superstat Ltd, summed up the situation succinctly. “It’s been tough, but dealers have adapted incredibly well. The team at Superstat have worked hard. We have some new suppliers and there is more potential now than there was before the pandemic hit.”
MARKETING
One of the most important aspects of dealer groups today is the support they provide in areas such as marketing, sales, IT and webstore support. “We can personalise our offering to meet the needs of size operation through our
different marketing divisions,” says Aidan. “We are an extension of a member’s business across all areas, from purchasing to marketing and IT to HR, legal and finance.”
“You have to look at what particular help each dealer needs,” says Steve. “You might think the smaller dealers need more help, but not necessarily.” For instance, Advantia has developed a front-office solution that about 40% of its members use, and a complementary back-office solution is now being trialled by a couple of group members.
Elsewhere, marketing is an important service which dealer groups can provide. “Dealers tell us they don’t always have time to produce email and social media marketing,” says Alex. “Digital marketing tech means we can fulfil that on the dealers’ behalf so they can concentrate on running their business.”
Office Friendly has an in-house marketing and creative agency, KascAid, which offers everything from one-off creative services to fully-managed marketing programmes. “The team works directly with members in the disciplines of graphic design, ecommerce management, web design, SEO, email marketing, direct mail and social media,” says Janette.
Dealer groups can also help with lead generation, as Tim explains. “In the past 12-18 months we have launched a successful ‘Keep It Local’ campaign that is generating leads, winning local business and grabbing high profile attention,” he says. “We also partnered with digital marketing company tmwi to create a new national office supplies website, Office Circle, with local deliveries from members.”
INNOVATION
Innovation is another important part of a dealer group’s offering – bringing in new products and services that smaller groups could not access or develop on their own. For example, Superstat has introduced a range of productspecific digital catalogues to focus in on key product areas such as tech, hygiene and office environment, says Alex. “We have also launched the Superstat Sales Academy - like-minded sales professionals who meet monthly online
to improve their skills, led by a sales training expert.”
Dealer groups can also open new product lines. “This year we partnered with the UK’s largest hardware and power tool distributor, Toolbank, in an exclusive deal to help members further diversify and broaden their product portfolio focusing on a new, but aligned, B2B sector,” says Jeanette.
They can also help to drive best practice, as Aidan explains. “We have just concluded a detailed CSR and environmental review of our Initiative own brand to ensure we drive best practice and mitigate our environmental impact,” he says. “We have also taken steps, where possible, to reduce the impact of pricing fluctuations by providing pricing support on Initiative.”
SAFETY IN NUMBERS
While dealers have generally survived the pandemic it has caused many - especially smaller players - to re-evaluate their business models and, as a result, some are looking to join dealer groups. Aidan believes that the three biggest impacts on the office supplies industry are M&A activity, ‘working from home’ driven by the pandemic, and the emergence of hybrid working practices. “With regard to sales, the single biggest challenge we have in the supply chain is that we don’t have a blueprint or roadmap for what post-pandemic sales performance look like, he adds. “What businesses hate most is uncertainty and, unfortunately, none of us have a got a crystal ball.”
With this in mind, Aidan believes that more dealers will look to join a group. “It’s a struggle to be heard when you are a smaller player in the industry,” he says. “Integra gives members a voice and our ethos of ‘Strength through Unity’
still stands today, 27 years on. It’s more relevant now than ever, in my opinion, and it’s not just small businesses this applies to, it’s dealers of all sizes.”
Tim agrees. “We believe there is a renewed trend towards retailers and B2B resellers looking to dealer group support as they themselves face challenging times with reduced staffing levels. We are an extension of their sales and marketing teams.”
Steve has a similar story to tell. “There is a trend from the dealers I am speaking to. For example, one dealer said, ‘I’m fed up of firefighting and want someone to do all this stuff I am getting drawn into on a daily basis to let me do what I am good at and go out and talk to customers’. That about sums it up for me as that’s what we do in the background for dealers.
“There will always be some who try and stay on their own, especially the long-established ones if they have the infrastructure to do that - but there are other dealers that think it is time to look at dealer groups and see what’s available. The dealer has the choice to join a group or stay independent and, if they want to join a group, they can join the one that best suits their needs.”
Jeanette knows that some dealers are already looking to join groups. “Our business development team have been in dialogue with dealers from the very large to those with a smaller turnover who are looking for a dealer group that can provide added value to their businesses. Many are looking at the bespoke services we offer and/or are wanting to be part of a like-minded community of dealers - to have a group who is the collective voice on behalf of its members.”
Alex adds that Superstat has seen more enquiries from dealers of all sizes in the last 18 months than ever before. “There is always strength in numbers, especially so in uncertain times, and that applies to large as well as smaller dealers,” he says.
He adds that there may be more M&A activity in the short- to medium-term. “Although we haven’t yet seen predicted levels of dealer consolidation, the pandemic has made a lot of people re-evaluate, so I expect there will be more conversations.”
FUTURE
There may also be M&A activity among dealer groups, according to Aidan. “We are not ruling out potential mergers with other groups and, as I’ve always said, it feels like the next logical evolution for the business.” Otherwise, he says that Integra will be helping dealers to continue to diversify their product and service ranges, as more position themselves as business solutions providers. “We will continue, therefore, to look at diversification areas and opening up as many new opportunities to members as physically possible,” he says.
Office Friendly will also be working to offer a greater product range. “We’re researching and working on more product-based solutions like the Toolbank project where we can continue to extend the product portfolio for our members plus looking at other services they can offer to secure longer-term client commitment,” says Jeanette.
Now there is more optimism in the sector and, as Alex notes, there will be increasing focus on helping members to not just survive the next 18 months but to maximise the new opportunities which are constantly emerging.
“We’re looking at new trends in working - hybrid, the tech that goes along with it, wellbeing; the list goes on,” he says.
Turn over for an at-a-glance look at each dealer group
Vital statistics
Dealer group Advantia Nemo/Office Club Office Friendly Integra Superstat Members of group
Combined sales 34 318 140 180 212
circa £500 million Approaching £500 million £300 million £500 million
Year established 1989 1987 1994 1997 1994
Does the group have a holding company? Membership fees for members?
Owned by members
Nemo 1991 Ltd (Nemo & Office Club) No No, co-op owned by members Superstat Ltd
Three options From £25 per month £175 per month Depends on member profile Various packages
Website address www.advantia. co.uk
Postal address 64 Albion Court, Attleborough Road, Nuneaton, CV11 4JJ 125b Long Street, Atherstone, CV91AB The Hart Shaw Building, Europa Link, Sheffield Business Park, Sheffield, S9 1XU Merlin House, No 1 Langstone Business Park, Newport, NP18 2HJ Unit 3 Rawdon Park, Green Lane, Leeds, LS19 7BA
Best contact Steve Carter M: 024 7637 3738 E: steve.carter@ advantia.co.uk Tim Beaumont T: 01827 721100 E: timb@ nemogroup.co.uk Alex Stone T: 0114 256 6300 E: hello@ officefriendly. co.uk Aidan McDonough T: 01633 653000 E: aidan@integrabusiness.co.uk Alex Dunn 07774 466938 alex@superstat. co.uk
www.officeclub. co.uk www. nemogroup.co.uk www. officefriendly. co.uk www.integrabusiness.co.uk www.superstat. co.uk
Staff employed? 5 15 14 20 11
Is a group catalogue produced? If so, how many pages? Coming in 2022 Yes, 550 pages Yes, 436 pages Yes, 448 pages Yes, 464 pages
