Spicers all set for further growth
Alan Ball gives us an update on all things Spicers
"The market is very challenging at the moment," says says Alan Ball, CEO of leading wholesaler Spicers. "I think every dealer that we go to is having a tough time of it, but the resilient ones are finding new ways to eke out business. All you can really do is extend your market or take market share."
So is Spicers taking market share? "
No, but we are holding our own. We've lost a couple and we've won a couple. It's the same every year, you'll always win some and lose some, but broadly it pans itself out.
"In terms of new business coming through, with Shoplet coming on board, that will be growth. We are now getting annualised spend on previous wins that's worth around £8 million.
"Clearly we lost some business when we lost Officeteam, that was a genuine reduction in sales, but it was planned. We knew they wouldn't be renewing the contract in January so it wasnt a shock to us. I'm confident that with Shoplet coming on board and other wins we we've made we will see some growth this year."
When Spicers launched Memoetc, its new, transactional website created exclusively for its Brilliant Partners, in March of this year, there was the usual flurry of angry emails to the Channel Info offices.
So what is Ball's position on end user websites?
"Memoetc's sole objective is to generate leads for our Brilliant Partners. Once you sit down with those dealers who may have had concerns and have that conversation with them, they are satisfied. I don't think we now have any dealers who are objecting to it, they just want to see it in action. The proof of the pudding is in the eating."
He says all business leads generated from the site go to the Brilliant Partner in that area, who can then set up a meeting and establish a trading relationship. Spicers Resellers currently have a negligible part of the online market, but an increasing number of buyers, particularly the next generation, instinctively buy online. With Memoetc, any sales made to the general public are re-invested back into the site.
The creation of the website was an inclusive development process with around 20 dealers involved, with regular meetings and two-way communication throughout the process. Customers have played a critical part in driving it forward.
"It gives the dealer sales force another tool in its armoury," says Ball. "If they are out cold calling and they come across a company that buys 100 per cent online, from Viking say, in the past they would have had to walk away it would have been a dead lead.
"With Memoetc, they can offer them a strong alternative, an immediate, online tool that is price competitive in the market, with immediate commission."
The Brilliant Partner programme was rolled out earlier this year. It is a value-added sales, marketing and business services programme headed up by former Synergy man Simon Wallis. It is these Brilliant Partners that Alan Ball sees as crucial to the future success of the business.
"Spicers' long term strategy is ultimately to see its Brilliant Partners grow their sales. That is objective number one, because if they are successful, then we are successful.
"We have not changed our principles. Fundamentally, we are a wholesaler; we shift boxes competitively in order to service our dealer partners. That's the basic principle that still applies and that hasn't changed.
"What we are doing, is looking at the changing dynamics of the marketplace and trying to assist our dealers to make that transition."
Those changing dynamics also involve potential new entrants to the OP sector. Last month it was Beta and this month Gem distribution. We asked Ball for his perspective.
"We've seen new entrants come and go," he says. "Beta obviously feel that they have an offering to give to the marketplace and that's fine. I think there are two things they will find really challenging - the first is that their minimum order spend will drop and their cost to serve will increase. That's guaranteed.
"The second thing is they've said it will be a 'no frills' offer, without value-added services like catalogues. But if dealers think that they can take a wholesaler's mainline catalogue, take on all the additional marketing services and then just cherry pick lines, they are not going to get the support from their wholesaler.
"Dealers will have to make a choice; if they want a no frills service then that's fine, but it will be 'no frills' on 150 lines, or they go for the full service offer through a wholesaler, you can't do both."
What could make that Spicers' offer even more compelling is parent company Better Capital's recent purchase of logistics operation City Link. Having City Link as part of the Better Capital group of companies is good news and the two companies are already in discussion as to how they can work more closely together, to leverage City Link's expertise. Announcements are expected in the next few weeks.
That logistics expertise will be needed to ship the 50,000 SKUs that Spicers expects to have in place over the next 18 months. These will be a mix of additional products from existing vendors, strengthening existing categories like FM and beverages and adding some totally new categories.
Ball says: "I think OP dealers are probably the most resilient trades people that I've come across in any sector that I've worked in. Whatever happens to general Office Products, dealers will always find a way to make a profit and keep going.
"There is one thing that they have that a lot of trades miss out on and that's the service that they offer; same day delivery and next day delivery. We all say it's a rod for our backs, but what we find when we go into other sectors is that that service is just not available."