Office Supplies, Stationery and Card Stores 2018 Profiler Brought to you by Media Group Online, Inc. Challenges from the Digital World That Are Difficult to Overcome © 2018 Media Group Online, Inc. All rights reserved.

www.mediagrouponlineinc.com A Shrinking Market According to US Census Bureau data, office supply and stationary store sales were $12.750 billion during 2017, a decrease of 7.02% from 2016’s $13.713 billion. The market is forecasted to increase at a CAGR of 0.4% from 2017 to 2021. During spring 2017, 155.83 million Americans said they shopped for office supplies at an office supply store, an increase of 0.26%, compared to a 2.2% increase for spring 2016. IBISWorld reports that the stationery industry is in decline, as electronic communications, such as texting and email, have replaced the use of paper products. According to its data, the stationery industry is currently an $8-billion market with a growth rate of -1.1%.

Office Supply Insights www.mediagrouponlineinc.com Office Supply Insights The office supply market has consolidated and there are fewer physical store locations, leading to more competition among office supply brands and retailers. Amazon sold $2.9 billion in office supplies in the US during 2017, a 31% YOY increase. Back-to-school accounts for one-third of total industry sales. Small businesses are also a big market; two-thirds of small business and home-office consumers report purchasing office supplies once a month or more. More than half (51%) shop in-store only. Two trends that positively affected office supply sales during 2017 were “slime,” and political protests. Slime drove a 4% increase in glue sales and the Women’s March increased sales of poster boards +33%, paint markers +35% and specialty markers +24%.

Not Fading Without a Fight During March 2018, Amazon announced that it was planning to offer a credit card for small business owners. This would potentially increase Amazon’s sales of office supplies. Sales of printers were robust during 2017, with $300 million in sales. Printer sales drove big increases in ink, +74%; toner, +51%; and paper, +56%. Customers tend to buy their printer supplies from the same source as their printer. Ink and toner is the biggest office supply category, at $390 million each, in 2017 sales. Next is office organization, with $330 million and 24% growth. Consumers are buying consumables, such as paper, in bulk, and increasingly are ordering them online.

Big Box Stores Bleeding www.mediagrouponlineinc.com Big Box Stores Bleeding Revenues for Office Depot/Office Max decreased 7% for fiscal year 2017 YOY to $10.24 billion. Q4 2017 sales decreased 5% YOY. The company expects to generate $10.6 billion in sales for fiscal year 2018, an increase of 3.5%. Sycamore Partners, a private investment company, acquired Staples during September 2017 after Staples’ failed merger attempt with Office Depot. Office supply stores are vulnerable to online competition because they primarily sell commodities. Office Depot is shifting to provide more services to small businesses and offering subscriptions. Staples may convert some of its store space now dedicated to products into Workbar, a co-working space, as it has done in three Boston stores.

Pockets of Strength for Stationery www.mediagrouponlineinc.com Pockets of Strength for Stationery USA Today included stationery product manufacturing in its 2018 list of 24 dying industries. Employment decreased 42.2% from 2007 to 2016, due to less demand for traditional stationery products in the digital age. Global Industry Analysts predicts the global market for stationery products will exceed $234 billion by 2024, with Millennials outnumbering Baby Boomers as buyers. According to NY Now, consumer interest in paper products is increasing. Among the trends are heavy cardstock, hand lettering, laser printing, foil, embossing, prints with flowers and foliage, people in cityscapes, unique journals and letterpress printing.

Advertising Strategies www.mediagrouponlineinc.com Advertising Strategies Target the work-from-home market, as almost 50% of all US workers spend some working from home, either for their regular jobs or as side gigs and they need supplies for home offices. This is a market predicted to increase. Stationery stores can target job seekers and salespeople to buy thank-you notes, highlighting the effectiveness of a hand- written note. Based on The Media Audit data on page 4 of the Profiler, it appears men and women 18+ who influence the purchase of office equipment are most heavily exposed to radio, outdoor, direct mail and the Internet.

www.mediagrouponlineinc.com New Media Strategies Offer customization options for stationery, greeting cards and other products through your Website. For office supplies, offer customers the option to save money through a subscription on consumable products, such as printer paper, through your Website. Send them email reminders before their order ships with additional promotions. Curate content for your Website and/or social media about the value of a hand-written note for salespeople and ask them to upload videos explaining how a hand-written note helped them to make a connection with a prospect who wouldn’t respond to other messages.

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