6 minute read
An industry snapshot during the COVID-19 crisis: successes, losses and diversification
Video conferencing has become the new-normal in the age of social distancing, and the latest Evolution Group and FusionPlus Data meeting was no different. Gathering for an online call, the group discussed how the virus was impacting the industry and how diversification was the key to succeeding in the current climate
SCORES ON THE DOORS It is hard to imagine that there is a single business in the UK that coronavirus hasn’t impacted - whether that be for better or for worse. Businesses have been forced to adapt to a new way of working, with some still in the workplace but adhering to social distancing, and using PPE, and others now operating on a remote basis and working from home. As a result of new working practices being adopted, the office products industry has experienced a definite period of change in terms of sales, product portfolios and strategy.
The virtual meeting discussed at length how different businesses in the industry have been affected. After an introduction from Steve Bilton of FusionPlus Data, Evolution’s Paddy Donnelly gave an overview of their figures. “Overall, we’re over 60% down from our peak in daily store revenue numbers. The peak occurred on the 10th of March, in anticipation of the quarantine, and even though the last week or two was a write-off, we actually had the best March ever in terms of sales’ volumes through the store, peaking at roughly 525,000 a day. We are now down about 66% in total from the high of 525,000 and, on the 9th of April, we recorded our lowest figure of £135,000.
“The good news is there are some shafts of light in the myopia of COVID-19, as things are now starting to pick up. We are now up 11%, on average, from where we were last week - psychologically for the team this is quite encouraging and good news all round; hopefully, we’ll see the trend continue in the next few weeks.”
Another business that had been hit in one area, but was performing well in others, was Futureform. Darren Oliver explained what had been happening to their sales, “Our traditional sales are down 60%, but our actual sales are currently running 145% up, year-on-year, due to PPE and own brand sanitiser selling really well - and loads of activity from our sales guys.”
Jackqui Kielthy, Fieldmaster, agreed that traditional sales had fallen for her too. “There are definitely opportunities out there. Sales have fallen on the traditional lines but working from home is a big aspect now.”
Due to shops closing, those who sell to retail had seen a sharp drop in sales. James Faulkner of EcoEco was one such. “As we sell to retail it has hit us very hard; we’re probably around 80% down at the moment.”
However, it’s not all bad news. Some businesses, such as DAMS, haven’t been impacted either way; they reported that, from a wholesale point of view, they still have just as many orders as they had pre-lockdown. Others have seen an increase in sales, such as Superstat who are are running about 30-40% up on what they would normally expect. Some are even experiencing such an increase in sales that they are struggling to keep up! “We have started to bring people back and our call overflows have just shot through the roof,” Phil Beasley from Bluefish exclaimed, “we haven’t got enough bodies to answer the ‘phone today!”
THE BIG SELLERS The product portfolio is also changing, with certain products now becoming big sellers. Paddy explained that Evolution has now set up a specific team who discuss the change in demand. “We have a team which meets in the morning to come up with ideas on what dealers could sell through the website - what new categories, what new products, where the money is moving towards - which is, obviously, PPE and safety equipment.”
From the conversation it was clear that most of those taking part in the call were experiencing the same demand for certain products. Phil from Bluefish summed it up well, “Every phone call we get involves the three key questions; do you sell anti-bac, face masks and soaps?”
Superstat’s Alex Dunn agreed that those who are selling these products are the ones who are succeeding. “We have some dealers who are struggling, depending on their mix of customers, but we also have some who are really flying - particularly ones that are big into hygiene and PPE.”
However, this demand for PPE and hygiene products has led to supply chain issues, as Helen Wade of VOW explained. “We, initially, struggled with stock issues around PPE towards the beginning of the crisis but I’m pleased to say a lot of the stocking lines we were struggling with then are now coming back into stock.”
COMMUNICATION IS KEY One of the recurring themes of the call was how important communication is during this period of confusion. It isn’t just the products you sell that will impact sales, but also how you communicate to your customer. Simon Wallis, from InControl Marketing, explained how they are ensuring good communication is achieved. “Our mantra is, ‘Stay visible, don’t disappear, keep communicating, take deliberate action!. We’re trialling and testing a new reseller survey because the message at the moment isn’t about selling product; it is about communicating and keeping the dialogue going. So, the question is, ‘How we can help resellers communicate with their customer and learn about how they can help and how they can adapt?’”
Jackqui made the important point that communications need to be sensitive at this time. “Communication is key and, whilst there are opportunities out there, you don’t want to be seen to be exploiting it, but do it in a caring way. So rather than the hard sell, it’s about how you communicate with customers in a different way now.”
DIVERSIFY, DIVERSIFY, DIVERSIFY It has always been the case that those who are quickest to adapt to the ever-changing working landscape have been the most successful - but now, it is more important than ever. The group agreed that those who have been experiencing the highest volume of sales are the ones who have reacted to the situation and modified accordingly the quickest. “It’s amazing how positive the dealers are at the moment,” said Alex from Superstat. “It’s been quite overwhelming how positive, supportive and innovative dealers are becoming, getting back to their entrepreneurial spirit, finding product that people want and selling it.”
Gordon Moore of DAMS explained how they are reenvisioning the office - and how they are adapting their product range as a result. “We’re now looking at screen solutions and how the office environment is going to look coming out of this. We are, maybe, looking at a call centre environment, which includes having banks of six-to-eight people etc. There’s going to be change, for sure but, for now, we are just taking every day as it comes.”
Both Paddy from Evolution and Ben Jarvis from ECI really pushed the fact that the dealers who diversify will be the ones to succeed. Paddy offered some advice. “Think ‘outside the box’, deliver things which are timely, that you wouldn’t deliver under normal circumstances, but which meet the moment we find ourselves in.” Ben echoed this sentiment.“We are really trying to push diversifying the product ranges to customers as, from what we’ve seen, the people with the most diverse range of products are doing better on their websites.”
The whole conversation concerning how COVID-19 is going to continue to impact the industry, and how dealers can thrive in this new environment, is best summed up by Mr Bilton himself. “The guys who are being creative, are the guys who are going to come out of this strongest.”
