1. The View From The Top: A State Of The Industry Overview Integra National Conference 20th September Martin Wilde: MD, Martin Wilde Associates Ltd

2. Martin Wilde Associates
Established 2006 by Martin Wilde, who has been researching the global OP market since 1993
Specialise in researching the OP and associated industries
Adhoc research:
Market size & structure studies
Market access research
Customer perception/needs research
Due diligence work
Published research reports (in conjunction with OPI)

3. Recent MWA/OPI Published Reports
Swimming With Piranha (2014): survey of UK OP buyers
The Spider Report (2016): survey of UK online OP buyers
The Phoenix Report (2016): survey of UK OP dealers
Piranha Business (2017): survey of US Amazon Business customers
The State Of The OP Industry (2018): survey of global OP company CEOs

4. State Of The Industry Report
Annual in-depth telephone and internet survey of OP industry CEOs
Fifth edition published in March 2018
Aims to summarise the OP market perceptions of ‘the key people that know’ in major manufacturer and distributor organisations in:
Australia
Benelux
Canada
France
Germany UK
USA
66 interviews carried out for 2018 study

5. Key Data
This is data from the UK chapter only

6. Change In UK Core OP Market Value 2015-18
Predicted For
Reported For
Reported For
Reported For
Increase by 6-10% 0%
15%
Increase by 3-5%
10% 8%
Increase by 1-2%
20%
Unchanged 5%
13%
Decrease by 1-2%
19%
Decrease by 3-5%
25%
38%
Decrease by 6-10%
Don't know 6%
TOTAL
100%
Base 20 13 16
All of those who believed that the UK core OP market had declined attributed this to the negative effects of digitisation.
a couple were keen to point out that there were some ameliorating factors, such as inflation and the growth of demand for furniture:
Another pointed out that demand for ink and toner had been negatively affected by growth in MPS:
The minority of respondents who believed that the core OP market had increased attributed this to the above declines being more than offset by to inflation, growth in demand for furniture (and other high-ticket items) and even strong regional growth in the South of England market
“Core OP” = traditional stationery, paper, ink and toner and office furniture

7. Market Value Estimates
The value of the UK core OP market value at end-user prices was estimated by respondents to be £5.1bn on average in 2017.
The most frequently-cited valuation of the UK addressable FM supplies market was £5bn, of which:
Catering/breakroom supplies was estimated to be £1-2bn.
Cleaning/janitorial supplies was estimated to be £1.3-3bn.

8. Change In UK Respondents’ Sales 2016-18
Predicted For 2018
Reported For 2017
Reported For 2016
Increase by more than 20%
10% 0%
Increase by 16-20%
Increase by 11-15%
Increase by 6-10% 5%
15%
Increase by 3-5%
35%
Increase by 1-2%
23%
Unchanged
20% 8%
Decrease by 1-2%
Decrease by 3-5%
Decrease by 6-10%
Decrease by 11-15%
Decrease by 16-20%
Don't know
TOTAL
100%
Base 20 13
The main reason given by the respondents who were expecting an increase in sales in 2018 was market share gains, often accompanied by the development of new product categories
The respondents who predicted a shrinkage in sales in 2018 mainly explained that this was due to losing key accounts, worsened by the continued negative effects of digitisation

9. Change In UK Respondents’ Gross Margins 2016-18
Predicted For 2018
Reported For 2017
Reported For 2016
Increase
55%
30%
33%
Unchanged
36%
Decrease 9%
40%
TOTAL
100%
Base 11 10 6
Distributor Average Gross Margins In The UK 2017 were 26.5%
The respondents who reported that margins had declined blamed this on product mix, winning lower margin accounts, a decline in the value of sterling and general price competition, especially from Amazon:
All of the respondents who claimed that their margins had increased in 2017 claimed that this was partly a result of removing low margin customers from their business
The respondents who believed that margins would increase attributed this to improvements in product mix and/or customer mixes
The one respondent who believed that margins would decrease attributed this to inflation and price competition:

10. Fastest-Growing UK Product Categories 2016-18
Product Category
Predicted For
Reported For
Reported For
Catering/breakroom supplies
65%
75%
69%
Cleaning/janitorial supplies
70%
46%
PPE/workwear/signage products
60%
Ergonomic & wellbeing products
40%
35%
38%
Office furniture
62%
Business gifts/promotional products
20% 8%
Mailroom & packaging supplies
15% 0%

11. Fastest-Declining UK Product Categories 2016-18
Product Category
Predicted For
Reported For
Reported For
Traditional stationery products
79%
75%
62%
Cut office paper
63%
55%
54%
Printer/IT consumables and accessories
47%
50%
PCs and printers
16%
10%
23%
Mailroom & packaging supplies
11% 0%
Tablets/iPads & accessories 5%
Business gifts/promotional products
15% 8%

12. Average Share Of UK Distributor Sales 2017-18
Category
Predicted For
Reported For
Base
Janitorial/cleaning supplies
8.2%
6.8% 5
Breakroom/catering products
7.4%
5.6%
Workwear/PPE/signage products
4.8%
3.4%
Business gifts/promotional products
2.7%
2.2% 6
Wellbeing/ergonomic products
2.6%
2.0%
Managed print services (MPS)
2.5% 4
almost all of these categories are expected to take a larger share of these respondents’ businesses in 2018

13. Fastest-Growing UK Distribution Channels 2016-18
Predicted For
Reported For
Reported For
Amazon/Amazon Business
84%
90%
77%
Large independent OP dealers/resellers
68%
60%
31%
Other internet-only OP resellers
47%
55%
69%
eBay
26%
20%
23%
Facilities supplies specialists
16%
15%
Education sector specialists 5% 8%

14. Estimated UK Share Of Amazon 2017
Indicator
Reported For 2017
Average
16.3%
Maximum
30.0%
Minimum
2.0%
Base 12

15. Fastest-Declining UK Distribution Channels 2016-18
Predicted For
Reported For
Reported For
National contract stationers
58%
60%
85%
Small independent OP dealers/resellers
47%
45%
54%
OP wholesalers
40%
46%
OP (B2B) superstores
26%
30%
38%
Paper merchants
21%
20%
15%
Consumer mass market (B2C) retailers
16% 8%

16. Average Share Of Private Label In UK 2017-18
Indicator
Predicted For
Reported For
Average
12.6%
11.8%
Base 10

17. Acquisition Intentions 2017-18
Predicted For
Predicted For
Yes, definitely
30% 8%
Yes, possibly
38% No
20%
54%
Don’t know 0%
TOTAL
100%
Base 20 13

18. What Will Be Acquired In 2018?
Intention
Predicted For 2018
OP specialists
42%
Furniture specialist
17%
IT/consumables specialist
Breakroom/catering specialist
PPE/safetry products specialist
Other
33%
Don’t know
TOTAL
100%
Base 12

19. Thank You