The current state of our industry

 

The stationery industry in 2023 operates, as it has done for decades, in a global marketplace, and, as ever, it’s facing a number of different challenges. I offer this blog as an invitation for colleagues around the world to consider that it’s time for another global forum, as we did in 2013, at senior level, with streams for colleagues newer to the industry, to discuss the current state of play and the direction of travel, and whether we can influence, response and even get ahead of that.

 

One aspect of business the industry needs to consider is cost v value, it can’t all be about price; the customer wants a product that works not the cheapest.

 

A decline in the use of core stationery 

In the last ten years, we have seen a fundamental decline in the use of core stationery. It’s not quite the Kodak moment hopefully, but people stopped using filing cabinets and started using iPads and the Cloud for storage and everything else around that filing function. 

 

I remember talking to someone five years ago who told me, “I’ve just taken all my punch pockets to the charity shop.” And that typifies where the industry has gone. Businesses have stopped using the traditional items we’ve known and loved for ever. If you don’t need punch pockets, then the ring binder goes with it. Then the cupboard, because the furniture they needed to store their filing isn’t required. You’re also probably using less ink because you don’t use your pen as much anymore and you may not even be printing as much so you need less paper and fewer ink cartridges. Put all that together, and you can see very quickly why the use of general stationery is in decline – and in serious decline from a user’s perspective.

 

Alongside that change in use, you have the usual disruption that we should always expect in any market, that shakes up the status quo and innovates or even brings with it a revolution. Amazon is probably the most obvious disrupter. Some of us will also remember the disruption WHSmith caused when they bought all the contract stationers years ago. Viking also did it with direct mail and that disrupted the market too.

 

Finally, also inevitably, there are the socio-geographic political upheavals and changes that have an effect. We only have to look to the biggest single global factor of the last three years, the global Covid pandemic, which created a new environment for working from home, further disrupting the office stationery requirement – and this looks like it’s unlikely to change in the near future. 

 

It’s worth looking at this in more detail for a second. Rather than sit in the office using your employer’s stationery, many of us are now sitting at home choosing what to buy pretty much all by ourselves. You’re unlikely to go into town specifically for a stationery item to WHSmith or a Ryman, you’ll order it online from Amazon or wherever, so you get it next day. Purchasing habits have changed. Buying online also creates fewer impulse purchases. If you’re in a retail outlet, you may spontaneously buy other things while getting what you went in for. When you’re online, that tends to happen less. You buy the specific item you need, but you don’t tend to impulse purchase alongside that. Buying online takes away the touchy-feely element; you don’t see other shiny things that catch your eye; you’re more focused on the one or two things you want to buy.

 

In summary then, whichever way you look at it, we are all using less stationery for work, which has inevitably impacted the industry. The very large resellers of office supplies with their considerable overheads have lost, and are losing, a significant section of their business, and the most profitable part, core stationery.

 

Consequently, we’ve lost some key players. The likes of Staples and all their superstores, gone. The big wholesalers Spicers, it went bust three years ago – although it’s back now in another form. Complete, a contract stationer, has just been bought by VOW so they didn’t go out of business. The small dealer is also under pressure. 

 

Fundamental change has and is being driven by a number of the global factors, too. Container prices went sky high during Covid because governments needed to ship their PPE and Covid tests around the world. Prices went up from $2,500 to $17,500 in about four months. All our collective profit was wrapped up in that gap, between the $2,500 and the $17,500 container price.

 

As a business, like many I suspect, we were unable to get price rises through quick enough to compensate. The whole industry is staring down the barrel of a gun over cash flow; many of us ate into our collective cash reserves over the last three years. Fortunately we are still here to tell the tale.

 

Container prices are now going down, but inflation is going up, so that’s another issue. Like many businesses, we went through a lot of cash during the Covid period to give us the ability to trade. Now we’re paying that back, which reduces our ability to invest. In the UK, corporation tax goes up from 19-24% in May 2023. The damage it will do to existing businesses trying to recover is potentially significant.

 

The market has also fragmented further with even more non-specialists now selling stationery, and as working practices change. No one’s working Friday afternoon anymore! That impacts how much office supplies are consumed as well.

 

Opportunities and optimism 

The opportunities are still there. We are now offering more products to the consumer than we ever used to. Our cleaning products, our food and drink offer, workwear, that is all becoming more of the office supplies space, so that’s encouraging. But margins, volumes and usage are not what they were. New products areas are filling a gap, but we’ll never get back to the days of the 1990s and early 2000s which were magnificent for growth.

 

Our trade association BOSS is doing a great job. They are somehow managing to inform the industry, keeping it networked and running awards and so on. They’ve created a Leaders of the Future forum, to encourage young people in the industry to meet regularly. We’re trying to encourage the young to feel they’re part of a vibrant industry rather than anything else.

 

Online sales continue to grow, outside of Amazon. Viking, one of our customers, is doing extremely well online with direct delivery, drop shop they call it – we deliver direct to all their customers. The big contract stationers are recognising the challenges ahead, and if they do it properly, they will succeed. There is light at the end of the tunnel - and online is where all the growth is unless something happens to drastically change that.

 

There are also niche retailers like Smiggle drawing in GenZ to love cute and functional stationery, for nice pens and good notebooks and that sort of thing. Craft is a massive industry that’s come out of that interest, and they stock stationery.

 

But the business end, the B2B end is very different. The wholesalers fulfil a key role now providing resellers with their office supplies. 

 

The big takeaway as well is it’s not about cost, it’s got to be about value. The industry is still very, very focused on cost. Now we need to be more focused on the value of the package that we’re looking at. If it’s just about price, it’s defeated us all. And consumers will pay more if they think something has value. 

 

My call to the industry, in the face of these challenges – and more – is that the time is ripe for a global industry forum, to consider where we are and how we take our industry forward together so that we all don’t just survive, so that the stationery industry continues to grow and to thrive.