How the group will adapt
to WFH/hybrid working &
the fast B2C market shift
Switzerland's Office World Holdings' ceo Matthias Baumann recently completed a merger with Offix to form the new €400m Office World Group. We interviewed Baumann about progress and plans for the consolidated group of retailers, wholesale suppliers & MPS providers. Complete
My 10 Q&A's were as follows:
- What is your growth strategy?
In the new Amazon dominated world, we have focused on differentiating our enlarged group (inc Offix ceo Martin Kelterborn, pic right) with personalised helpful service; enhancing the online browse & buy experience; and using our more powerful buying power to compete on price.
- How important is providing productivity services to customers?
Adding personalised (productivity) services that customers want & need that Amazon cannot provide must be our goal. That means listening to dealers and customers and trying to standardise practices and systems to suit. This is easier inside the same organisation, but more challenging when running a disparate group or remote branches where cultures differ. Moreover, we have to shift the mindset from transactional box shifting to tailoring services to match individual needs
- How will you differentiate v Amazon?
Tough. We cannot compete on broadlilne range of business supplies; delivery speed or personalised online experience. Therefore we need to focus on customers' needs and preference for personalised local customer services that save them time, money and space.
We have to modernise our systems to compete online both ECommerce & MCommerce and this will be an urgent building process to match the buy online, 'pick up in store' trend (BOPIS) and offer same day service
- What systems software do you use/provide?
There is no standardised system across the group. The OWGroup has one system, but the dealers have different software both operating and CRM. We centralise our analytics but integrating systems is a dream unlikely to be realised.
- What proportion of sales are via MCommerce?
Tiny. Over 50% of commercial trade is online but MCommerce has not taken off in our group yet. (Ed: Current MCommerce rates are 70% in Amazon; and 60% for furniture seller Wayfair, To be fair US dealers have yet to advance from a 10% level)
- How important is single source business supply?
Crucial as Amazon has proven. In fact many of our stores and members buy from Amazon as a wholesaler. We carry 40,000 sku's in our PEG wholesale operation to serve the stores and dealers (chief Christoph Clarsdetscher, pic right). We have been OP and furniture focused and when Covid hit many dealers and our wholesale operation pivoted to PPE but supplies were scarce
Broadening our portfolio to business supplies will be OWG's priority
- How broad is your business supply range...what are the categories?
Currently OP, furniture, school supplies and a narrow range of hygiene and PPE supplies
- How do you view future of MPS?
MPS seemed like a step forward for the transactional print market to support customer stickiness in corporate markets and cut costs for customers and dealers. In reality, it was a cannibalisation of the market and once Covid hit MPS demand crashed. MPS has crashed across the world with a declining secular market (Ed: down 50% since 2010) accelerated by Covid...a perfect storm)
Wait and see if the market returns in a hybrid working future.
- Do you measure best practices in your group...what are the key metrics?
Yes we do. In retail we measure traffic, average ticket value, sales per sqm; store sale value v online order value etc. Online tends to be 30-50% more at €120. In commercial operations we measure CRM retention rates; order values and spend perb customer trends. Everything we do is based on customer metrics. (Baumann, pic right)
- Beyond Covid... how do view paperless, officeless and touchless trends
The paperless, officeless trends are inexorable. Printed Paper demand is down -50% since 2010. The Officeless trend started pre-Covid and we expect business employees to move towards a hybrid 3 days-in/ 2 days-out of the corporate office. It stresses the importance of moving our marketing efforts towards B2C from B2B as consumer power dissipates central buying. Increasingly the Amazon phenomenon has diluted central purchasing from 80% down to <50% (Ed: leakage from contracts has never been greater)