New Trends Appearing in Office Supplies Market
Photo by Roman studio / Shutterstock.com
The office supplies market has been hit hard by the pandemic. The French Lyreco Group, a major player in Hungarian and European markets, reorganized its operations in a few weeks and, since last year, has been delivering the equipment needed for work to homes as well as offices.
In line with demand shaped by the pandemic, the product range has also been expanded, and many multinationals now expect to be supplied with masks and disinfectants, alongside the usual office supplies.
According to Péter Kiss, Lyreco Group’s country manager for Hungary, it saw orders fall overnight and it had to sell milk and other food stuffs in addition to classic office supplies.
The Hungarian market is worth between EUR 300 million and EUR 350 mln, according to Kiss, most of which comes from orders from offices and production units, but there is also significant consumer consumption when, for example, parents are buying school supplies at the start of the accedemic year.
Lyreco’s product portfolio is very diverse, it having moved away from limiting itself to traditional office supplies in the last 15 years, a decision that paid off in the current crisis. Kiss says it has strived to meet the needs of its customers with everything from printer paper to ballpoint pens, but also includes office coffee, cleaning products, protective equipment, office furniture and IT equipment among its wares.
One company that approached Lyreco during the summer of 2019 needed 15 barbecue units for a corporate party. Although unsurprisingly not included among its standard catalogue, Kiss says the firm was able to procure the BBQ sets.
Very few companies in the office supplies market aim at meeting every need as Lyreco Group does, Kiss says. Most are more specialized; some supply catering units, others focus on hygiene products, yet more on protective clothing.
Some 17,000 of Lyreco’s products are stored for daily delivery. Kiss believes this is one of the company’s strengths, that almost anything can be ordered, and it will be delivered the next day. There are some exceptions, of course. In the event of a complete office renovation, design, construction, and delivery of furniture can take three or four weeks.
The French company strives to offer a full range of services: the purchase of special products, the provision of individual customer gifts based on an accurate brief, but this also includes the provision of premium coffee, for example. Occupational safety is now a priority in the B2B sector, along with traditionally strong areas of hygiene and catering.
The office supplies market would seem to be potentially vulnerable to digitalization trends. That said, it has been promised for 30 years that printer paper will disappear, but Kiss says the volume has actually increased since then. Even so, it was the threat of the impact that digitalization could have on the sector that led Lyreco to start to diversify its portfolio, although it did not radically reduce traditional categories.
“This includes filing stuff, classic stationery that we might have thought would disappear as a result of digitization, but it didn’t,” he adds.
Although the main focus is different today, about half of its revenue still comes from the core business. Kiss says that while the market has stagnated or grown by only a few percent, Lyreco has seen growth of 12-15% every year, and it has doubled its revenue in Hungary in five years.
While plenty of new office buildings have been handed over in recent years, this had limited impact on the office supplies market sector. Well-performing companies simply traded up, moving from category “B” to category “A” offices, Kiss says.
It is not so much that there are massively many more people working in offices than 10 years ago, rather that there are more people work in category “A” offices.
Kiss says Lyreco is a global, capital-intensive group, whose liquidity has helped it withstand the crisis financially. Indeed, it has not stopped investing.
“The digitization projects we have started are continuing and they have accelerated due to the virus. We are constantly looking at how we can get out of the crisis more strongly than our competitors.”
Initially, of course, there were difficulties when people started to work from home (WFH) en masse, with Kiss describing the drop in volume as noticeable. Lyreco countered that by introducing its home office service: those on WFH order what they need through their employer, and it is delivered to their home the next day. As a result, the number of new web-shop registrations increased by 300%. Quite a few ordered home catering products, which was a surprise initially, but was put down to home delivery dates for retail chains being booked up for weeks ahead. As the Lyreco catalog already included catering products such as milk, biscuits and salty snacks, these could be accessed much faster.
“And we can only be glad to contribute to the productivity of those who work from home,” Kiss adds.
This article was first published in the Budapest Business Journal print issue of January 29, 2021.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.