Office Equipment Sales Rise Due to Work-at-Home Combat Stations
Remote working can be a bad omen for office space providers, but for consumer office equipment vendors, it’s a gold mine. Desks, chairs, monitors, computers, printers, lamps, and all kinds of office equipment can hardly be stored quickly enough to meet historical demand. Stuck working from home, remote workers go beyond the booth to create home offices that look more like a battle station than a boardroom, making it even harder to convince employees to return to their basic office space.
Customizing your space is one of the best parts of the office. An empty desk is a blank canvas to fill with your personality: family photos, your favorite team’s pennants, a plant, maybe even beautiful works of art. More technology is added every year; now virtually everyone uses at least two monitors. But improving your office space has its limits. Companies are not willing to shell out so much for technology and offices are not really are yours, upgrades should be able to fit into a banker’s cashbox if things go wrong. Home offices are not limited by any of these factors. As a work and leisure space, teleworkers devote more time and energy to creating the perfect office for them.
The pandemic has been a game-changer for home office supplies and furniture suppliers, reversing a decade of decline. Revenues in the U.S. office supplies market are estimated to be 8% higher than pre-pandemic levels, according to THE NDP Group’s annual forecast. The problem is, these perks have created a new set of winners and losers as the nature of office supply purchases changes.
Digital workplaces have been hurting office supply stores for over a decade. Notebooks, pens, paper, and printers have historically been a significant portion of overall revenue. Digitization has changed all that. Taking notes on an iPad means you don’t need pens to jot things down, you don’t need blanks, you don’t need highlighters, you don’t need staples to keep things together, you don’t need any files or cabinets to put it away. Multi-year contracts with large employers have helped office supply stores stay out of the water by capturing massive supply orders, but remote working fundamentally shattered much of that process.
The rush to work remotely to avoid the looming pandemic means that many companies never had the time to formalize the supply of home office supplies. The workers raided their office, carrying monitors and whatever they could take home. The work didn’t stop, it just changed locations. Workers still need pens, papers, printers, USB drives and other supplies. At home, unable to place orders to pick up at the office, most remote workers began purchasing their own supplies and equipment, overturning supply contracts established by employers with office supply suppliers. Almost 18 months into this remote working experience and online debates still rage on whether employers should help cover the cost of office supplies for home offices and how much it should be.
It is not only remote working that physical office supply retailers lack, but also distance learning. School supplies are another important source of income on which office supply stores depend. The school didn’t stop either, they just changed locations unlike the office workers, so teachers and students had to change the way they got their supplies.
You won’t be surprised to find out which company has benefited from the changes to remote working and the sourcing of learning supplies.
Amazon Business, its B2B marketplace that provides supplies for the workplace, is expected to reach $ 31 billion in annual sales by 2023, according to RBC Capital. Supplies that employees still need are purchased at low rates from Amazon, shipped directly to the home office. Last year, âofficeâ was the second most searched term on Amazon, behind only âface masksâ. Amazon Business is growing faster than Amazon Web Services. In fact, Amazon Business is growing at a faster rate than the business itself. Last year, Amazon Business hit $ 25 billion in annual sales just six years after launching the business line. Clearly, the office supply market is booming, retail stores like Staples and Office Depot are missing out on the opportunity, unable to adapt their business model quickly enough.
âObviously, COVID is not good for us from a structural standpoint,â Gerry Smith, CEO of Office Depot, said during the company’s earnings call earlier in the pandemic. Buyers are averse to physical retail during a pandemic, but they still need to shop. Office Depot and other office stores like Staples have gone to great lengths to strengthen online sales and online in-store pickup (BOPIS). Office Depot has announced plans to separate its consumer business from its B2B business. Thanks to these efforts, things have steadily improved for office supply retailers in 2021, but they are still far behind Amazon as the e-commerce giant is only moving away. Amazon Business revenue has already eclipsed Office Depot and Staples combined.
Remote working has not eliminated desks, office space or the need for office supplies, it is simply changing who will be the winners and losers in the new form of working. Businesses that cater to individual buyers with online sales and drop shipping are booming. Companies that built roads with traditional supply contracts by selling larger corporate furniture suffered. Herman Miller, Steelcase and Knoll struggled as sales at Amazon, Wayfair, Vari and others saw record sales figures. Computer sales broke a 10-year record during the pandemic. Sales of laptops and mobile workstations have climbed nearly 30% year-over-year at the height of the pandemic.
Record sales of office supplies tell us that a lot of work is still in progress. In fact, many studies show that working remotely causes employees to work more, not less, and put in longer hours. Of course, office owners desperately want occupants to come back and that would mean a boost, so to speak, in corporate furniture sales. But if they don’t, that doesn’t mean the office is dead, it just means that instead of the pre-pandemic brigade, many companies can outfit a vast army with individual battle stations.