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Some business models in our industry need to change, it’s a fact. One of the reasons is that OP vendors are increasingly taking their products elsewhere – where the customer is. OPI’s Heike Dieckmann finds out more…
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ur industry has been operating in a pressure cooker environment for the past couple of years. The issues are multifold and well documented: shortage of (the right) products, disrupted supply chains and soaring prices are just some of the challenges incurred, many of them ongoing. For the traditional OP channel – vendors, wholesalers and the reseller community made up of independent dealers, contract stationers and some very large operators – these macroeconomic obstacles have been exacerbated by the fact that large swathes of their end customer base disappeared, almost overnight, from their usual place of work – the office. Gone are the days when resellers like WB Mason or Lyreco would drop off a shipment of business supplies worth thousands of dollars (or the equivalent in another currency) at a large office block housing many different customers. Occupancy rates in these destinations vary now, but suffice to say numbers are still significantly down and they will likely never come back to pre-COVID levels. This is forcing all channel operators to reassess their business models. Starting at the beginning of the food chain, so to speak, OPI takes a look at the vendor community and how it has expanded its routes to market in search of those elusive customers, wherever they might be. For many manufacturers, the past couple of years have merely accelerated a journey which started long ago, but perhaps was in need of a jumpstart. Needless to say, Amazon is the first company that springs to mind in terms
of broadening the selling horizon, and all the vendors OPI spoke to for the purpose of this article admitted how important that operator has become. For many, it’s now the single biggest customer. No surprise there. AMAZON: TAKING SHARE What is scary, however, is that the growth vendors are seeing with Amazon and other marketplaces is not incremental (see also ‘Monetising Marketplaces’, page 50). Instead, in a declining market, it’s share taken from someone else and, most likely, this someone has its roots in the traditional OP space. All vendors were quick to add that this channel remains critical to them, with sizeable percentages of business still going through those operators. Figures typically play in the 40-60% ballpark. However, there’s often a big ‘but’ because, only two years ago, those percentages were much higher. A pandemic reality. As Fellowes Brands’ VP Americas Beth Wright asserts: “The traditional OP channel is critical for us, it’s still 50% of our sales, but it cannot be the only sector we’re investing in as we come out of COVID and look for growth.” ACCO Brands President/COO Tom Tedford concurs: “I want to be clear that our core business
