Just when we thought it was time to take a breather following the waning of the pandemic and the loosening of some supply chain constraints, Russia invaded Ukraine. Ergo, 2022 witnessed rising energy and food prices, contributing to rampant inflation and increases in interest rates.
In addition, last year saw the revolving door of 10 Downing Street with three prime ministers in as many months, the disastrous ‘Trussonomics’ economic policy, strikes and, some may say, the still unfulfilled promise of Brexit.
The chaos has resulted in a cost of living crisis and a recession expected to last until 2024. Additionally, our sector must deal with the rise of hybrid working and the loss of staff hosted permanently in offices.
So what will 2023 have in store for us? Workplace360 spoke to leaders in the business supplies space, and the following pages contain some of their thoughts on the months to come.
While recent and upcoming economic woes were frequently mentioned, on the other hand, they were equally upbeat about future prospects.The overwhelming belief is that, as the industry demonstrated its fortitude throughout the COVID crisis and recent calamities, it will survive – if not thrive – this year.
Problems and possibilities
Naturally, everyone used the word ‘challenging’ to describe what’s ahead but, in the same breath, talked about the ‘opportunities’.
Office Friendly Managing Director Jeanette Bresitz says: “Bring on 2023! While some may worry or be fearful of the economic outlook, it’s been proven time and again, our industry can weather a storm well. We identify creative ways to maintain and grow our businesses while supporting customers through cost-savings, efficiencies, or new services.”
Langstane Managing Director Colin Campbell concurs, noting that in the past few years, the industry has evolved more rapidly than ever before. He says we will face the upcoming challenges and all be stronger for the experience when better days are reached.
Despite the confidence, Campbell is under no illusions. “In 2022, Langstane celebrated its 75th anniversary, and it may well be 2023 is the toughest year yet. We are in an unprecedented period, with so much instability and uncertainty, making it impossible to provide reliable predictions on what lies ahead.”
With the war in Ukraine still ongoing at the time of writing, the future remains unpredictable. But, as ExaClair Managing Director Mark Daisley points out, the financially strong and innovative businesses have survived because of adaptability and their capacity to raise funding.
On the flip side, he believes that if the offering from the wholesaler and dealer community is not complete and their online presence is not up to scratch, there will be a drop in sales because somebody else will be doing a better job.
Adaptation and diversification
For Integra Business Solutions CEO Aidan McDonough, the key to dealer success in the upcoming months will rely on two critical factors. The first is diversification, whether it be interiors, packaging, workwear, promotional gifts, etc. The second is the ability to strengthen gross margins to help absorb the escalating overheads in an inflationary operating environment and pass-through increases effectively.
Nemo Office Club Group Managing Director Tim Beaumont agrees, saying those dealers that proactively seek to address post-COVID rising costs, supply issues and expensive distribution are the most likely to succeed this year. Although, he warns not just to sell on price but to add value, address environmental concerns and broaden supply sources.
On the latter point, Beaumont states the return of Spicers as another wholesaler option can only be good. He notes that lessons of the past seem to have been learnt, with the wholesalers focusing on shifting boxes and distribution and leaving the marketing support to dealer groups.
In agreement is Advantia Managing Director Steve Carter who says, first and foremost, dealers are an incredibly “resilient bunch” and, over the past three years, have adapted and expanded their offering and done it extremely well. He thinks this will continue beyond 2023 and, like Beaumont, believes all dealer groups can fulfil a significant role as facilitators.
“There will be continuous hurdles put in our way, but out of those will follow opportunities. It’s then a case of identifying them and providing a solution,” adds Carter.
It’s all in the data
Bresitz predicts companies will start reviewing their service providers due to tighter budgets, so the industry needs to be ready for prospecting. She also believes that although our sector continues to introduce extended services and product categories to satisfy broader client demand, we’re still not scratching the surface of what some of these introductions could mean for manufacturer and dealer growth.
She notes: “Quality product data for the back-office and e-commerce is often unsupported and causes much duplication for those who invest the time to try and build this themselves, or it results in a lack of buy-in from the wider community. If we could get this fundamental requirement right and make more available from suppliers, everyone will reap the rewards.”
Prima Software Managing Director Ian Buckley agrees with Bresitz’s assessment. He says suppliers and service providers must continue to assist the independent reseller community in their need to extend ranges, diversify category offerings and deliver low-touch solutions for traditional office supplies.
“Technology, automation and unrestricted, free-flowing product data are critical to this, and as suppliers and providers, we must go above and beyond to help the dealers in these areas.”
ExaClair is just one vendor constantly churning through data to aid customers in understanding why and where the market is changing. “This is helping to figure out what we can do together to fill gaps, switch priorities and adapt with innovative and environmentally friendly solutions that customers are increasingly demanding,” explains Daisley.
Rocada is another manufacturer that acknowledges the power of an industry working in harmony. The company’s UK Managing Director Ken Trenberth reckons there is plenty of scope for suppliers and dealers to pull together to offer a broad range of product options and improved content and service propositions. He feels this is where dealer groups play their part – by enabling quick access to communicate with members and form partnerships to support the flow of marketing information.
A return to health
Several of those Workplace360 talked to expect a significant return to the office this year, although hybrid working has ultimately embedded itself as part of the work setting.
Lyreco WISE Managing Director Michael Milward surmises that the shift to hybrid working will continue to evolve, and the industry must be responsive to this dynamic. As it currently stands, building occupancy rates remain below pre-pandemic levels – especially in Greater London – and new approaches to flexible working, including the four-day week, are being explored and tested.
Despite this, he predicts the increasing cost of homeworking and the fear of tightening economic conditions may see some employees returning to the office on a more regular basis. Either way, health and well-being has become a priority for businesses trying to entice employees back to the traditional workplace environment (for more on this topic, read Making wellness work).
GOJO Industries-Europe Managing Director UK & Ireland Chris Wakefield says it’s clear cleaning and hygiene will remain high on the agenda to safeguard staff health and well-being – whether this is in a hybrid working model or a back-to-the-office mandate à la Elon Musk.
Milward also believes staff will be challenged financially and mentally by the cost of living emergency and supporting them through this period will be very important. “In 2023, organisations will need to double down on their approach to employee well-being.”
Related to health and well-being, several business leaders mentioned sustainability as a hot topic for this year. Wakefield and Milward think our sector will make headway in terms of sustainability as companies actively seek environmentally friendly, effective and competitively priced products.
Integra’s McDonough is of the same opinion that sustainability will take a more front-and-centre positioning regarding work practices and product selection moving forward.
Whatever 2023 manages to throw at us, it’s clear industry leaders are confident that, by working together, the business supplies sector will also weather this particular storm.