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Published 15 January 2013 05:49, Updated 28 January 2013 10:44
The experience of stationery buying group Office Brands shows how independents can combine forces to take on larger competitors, even if one of it’s architects laughingly says he never wants to repeat the experience.
Stationery and online commerce are made for each other but getting pen-and-paper traders to embrace the digital age was not an easy task when Ritesh Patel set about it five years ago.
Patel is the chief information officer of Office Brands, a Sydney-based buying group for independent stationery businesses, whose members have a collective turnover of $445 million.It is the country’s third-largest stationery player after Officeworks and Corporate Express.
The market for low-value, high-volume goods lend itself to e-commerce, Patel says.
“You’re buying pens, pencils,” he says. “It does tend to be more commerce-driven than something like furniture.”
However, getting his organisation’s 160 members – more used to customers ringing and faxing in orders – up to speed in the face of growing online competition from the likes of US giant Staples.com, took some persuading.
“When we started five years ago, none of our members said they would show prices on their website,” Patel recalls.“They were fiercely guarded. They said ‘You will only get prices when you log in’. You laugh at that, but that was the frame of mind five years ago.”
The industry had no choice, however. With the explosion of online purchasing, the trade had to do the same and over the past 12 months it has done so, Patel says. “Now they’re showing prices, customers can check out with credit cards. In the past, it used to be ‘You’ve got to have an account with us’. That’s been a fundamental shift.”
Office Brands had to take its members through a severe change management process. It proposed a system that would give each member business its own website – hosted by Office Brands – integrated into its accounting software to make the back-end processes seamless.
“The initial reception was quite tough,” he says. “There were questions whether we should do this now. ‘Can we wait a couple more years? Do we need this now?’ That was a really overriding comment at that time.”
For a trade that serviced its customers with printed fliers, this was a big change that came with a big price tag close to $1.5 million.
However, since the new system’s introduction, Patel says members have invaluable data on what’s popular and have been able to creep into retail sales, too – they now account for 15 per cent of Office Brands members’ sales.