In case you missed last week's late breaking news.

 

OPI reports on the Q&A session with Officeworks’ MD Sarah Hunter at last week’s Wesfarmers strategy event.

 

During the session, Hunter  revealed some interesting numbers from some of Officeworks’ business areas.

 

For example, the reseller has been targeting the B2B channel for some time. This includes micro, small, medium and large businesses, as well as schools, early learning centres and government agencies. These customers now bring in $500 million in annual sales, and Hunter said the goal is to double that figure. There are several ways she is planning to achieve this:

 

1. Increase the share of wallet with micro, small and medium-sized businesses:

While Hunter said Officeworks has “strong and frequent engagement” with these types of customers, the retailer is seen as something of a “top-up shop” rather than the principal supplies partner. Therefore, there are “significant opportunities” to grow, she argued, which sounds like Officeworks will be looking to put more pressure on the independent dealer community.

 

2. Replace its B2B online platform:

Hunter described the current platform as at its “end of life”. A new one is on the way, with the promise of “improving the productivity of supporting processes” and providing a “seamless and engaging experience for business customers”.

 

3. Target the education sector:

This year, Officeworks’ education business will deliver around $50 million in revenue. It is now the primary provider to more than 200 schools with its Classroom Essentials bulk list service and has relationships with over 4000 establishments. This year, it is launching a ‘parent pay’ offer, which will see it become a primary partner to schools that have a system where parents pay for the book list rather than the schools themselves. This, said Hunter, will unlock 80 per cent of a $2 billion addressable market.

 

Other takeaways from the briefing day included:

 

Officeworks has increased its share in the A4 copy paper segment from 20 per cent to 28 per cent over the past three years, going from the number three player in Australia to number one in the process. Hunter said this was because Officeworks “backed [itself] on availability” amid the recent sourcing issues when manufacturer Opal ceased local production.

 

The art and crafts category now generates more than $70 million in annual sales and has tripled over the past four years. This has largely been due to making more products available in stores since COVID as part of a $20 million store ‘reflow’ project.

 

Gaming has been identified as a “significant growth opportunity”. Today, furniture and tech peripherals related to this category are a $200 million-a-year business.

 

Technology now represents more than half of Officeworks’ current addressable market which is estimated at $29 billion. Hunter said the company had been taking share in key tech categories, with 32 per cent of customers now quoting Officeworks as their first choice for technology products.

 

Recent initiatives have included dedicated Microsoft Surface and Apple areas in stores, with tech playing an increasingly important role in store layouts. Officeworks will shortly be trialling new areas that feature connected devices, in partnership with telecoms provider Optus, and it believes that its potential addressable market – including expanded tech categories and services – could be worth $58 billion.

 

Growing private label ranges has been a big priority. This strategy has been bolstered by the capabilities brought by the new import distribution centre near Melbourne. In the stationery, education and art categories, own brand represents more than 40 per cent of sales, and is growing.

 

For more on this story and other global news from OPI go to https://www.opi.net/news/analysis/officeworks-looking-to-double-b2b-busi...