A Beginner’s Guide to the Stationery and Office Supplies Industry Part One

 

The industry is dominated by some large main players. Major wholesalers in the UK include VOW, who are perhaps the biggest player; Lyreco are a large contract stationer; Office Team another significant wholesaler; Office Depot/Viking (now acquired by Raja) are also major players in the UK and there are some mergers and acquisitions going on at a high level at the moment as well, which may well change the playing field further.

 

Traditionally, the office supplies sector was driven by the customer’s main requirement for reams of A4 paper and off the back of that need came the need for a lever arch file, a filing cabinet, a paper folder and a pen. Filing products, pens, papers, binders, notebooks are all core stationery products. Yet paper is now in terminal decline due to the fact that we’re all using iPads and digital storage at work, home and at school or college. You don’t really need a ring binder unless it’s for schoolwork and even there you use less than you would have done ten years ago. Paper products are declining at about 5-10% every year and the greening of the office is also pushing that. As people retire, for those of us who grew up with pen and paper, that decline will increase. Gen X and Millennials live in a completely different world – and who knows what GenZ will do as they hit the workplace – and what kind of workplace are they even going to find?

 

From our perspective, we’ve always had to be ahead of the demand curve and understand what our client’s customers will want before they even know themselves. We’ve had to find other, commercially attractive products to replace that very large paper sector of the market, a sector that was highly profitable. The decline in paper hits all the peripheries. For example, highlighter pens might have been on the order list at 100 units ten years ago and are now only ordered in units of 60. That’s a significant volume of profit and turnover that have gone from this industry and changed its roadmap forever.

 

This decline in the traditional paper product sector has meant a number of businesses have gone or are going out of business. The large traditional office supplies business doesn’t have its volume anymore and so those that are thriving have had to adapt by replacing that inventory and the value it represented with other kinds of office and facilities management products, branching into things as diverse as toilet rolls and coffee, as well as office furniture, printer cartridges and so on. The challenge remains that while these products are in demand, they don’t deliver the volumes or the value the stationery industry once enjoyed. The industry itself is now calling itself the office supplies industry because stationery has lost its power and attraction for the consumer.

 

For any business in markets that have declining sectors, that challenge is very real: how DO you replace a deficit? Those that have are growing or acquiring competitors; those that haven’t are merging, being acquired or very sadly going into administration. For any new buyer in the industry understanding where the industry you’re in has come from can help you understand where it’s going, or where it could go next – and those who have that kind of vision are those outstanding individuals driving the industry at the moment.

 

With all this happening, you may be forgiven for thinking that this has meant that inventory has reduced as well. There was substantial inventory when paper was king, everything from pencils, rubbers, and staplers to rulers, hole punchers and filing. If you’re using less paper, it stands to reason you will use fewer sundries and the move from paper has impacted every other traditional product line from pens to filing products.

 

There are still things people might want, like a popper wallet to put things in, but if you go on a business flight now, if and when we all start business flying again, instead of needing to have all your travel itinerary neatly printed out for easy access, most business people now have all those details on their phone via their airline’s app. You don’t even need a physical ticket for many flights now.

 

This digital switch, that is making life more streamlined, easier and tidier, has had huge significance for our fantastic industry. It even comes down to the fact that because you’re writing and making notes on your desktop or laptop or other screen, you’re using your pen half as much as you would have done ten years ago, so you won’t need to replace it as quickly because it will last longer. You might even ask, is this the industry’s Kodak moment? The moment when camera film just became obsolete almost overnight?