Integra
“Education Collection”
Mailer
Educational Market Background
March 2013
Contents
1.
2.
3.
4.
Market size / opportunity
Key competitors
SWOT Analysis
Dealer USPs
Market Size
Estimated to be: £4.65 billion**
About 95% in Primary & Secondary schools environment
Broken down as follows:
• Nursery
£26m
• Primary
£2.48bn (est 22,500)
• Secondary £1.98bn (est 5,500)
• Special Needs
£176m
(**Note: England & Wales only. Includes services and utilities)
Market Size / Opportunity
• Significant Opportunity £££s
• Service complacent industry
• Ideal for independent dealers with high service level and
ethos
• Opportunity to really add value to schools
• Supports the ‘localised’ agenda
• Very fragmented landscape
• Increasing student population
• Increasing autonomy of spend
Fragmented Market
• Framework agreements locking schools and local authorities in are
prevalent on large contract areas such as utilities, photocopiers, MPS
etc….but much less so on consumables such as office and classroom
supplies
• Key competitors only represent 15% of market
• No obligation on schools and colleges to buy from them – misconception –
especially on low value orders / contracts below £15k per annum
– Under £75k per annum simply need to obtain 3 quotes
– Over £156k per annum OJEU (Official Journal of the European Union) public
sector procurement rules oblige formal advertising ad tendering of contracts
Fragmented Market
• Public sector consortia such as YPO, ESPO,NEPO, WMS are only able to
supply public sector bodies not privately owned ones or individuals
• LMS (Local management in schools) and growth of private sector funded
academies, free schools and nursery chains
• Many small, specialist suppliers operate in the market supplying schools
and colleges direct
• Hence relatively recent entry into the market by global contract stationers
like Office Depot (Viking), Lyreco, Staples Advantage
Key Competitors
1. Findel Education
2. Local Authority Consortia
a)
b)
c)
d)
Yorkshire Purchasing Organisation (YPO)
Eastern Shires Purchasing Organisation (ESPO)
North East Purchasing Organisation (NEPO)
West Mercia Supplies (WMS)
3. TTS Limited
4. The Consortium
5. Contract Stationers – Depot, Staples, Lyreco
ESPO (Eastern Shires Purchasing Organisation)
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£750m turnover (£200m = energy)
Joint committee of 7 local authorities in Midlands & East Anglia
Not for profit
CDC Leicester
Reputation for highly competitive pricing BUT poor service (twice weekly –
next day outsourced with £5 surcharge)
• Perception that schools MUST use them
• Massive catalogue and range
• Significant spend on service and utility contracts
Findel Education
• £260m turnover
• Multi-brand offer covering not only stationery and classroom but also
science, sports etc… Brands include: NESA, Hope, Galt, SBS, GLS, A-Z, WNW,
Edco, Philip Harris, Davies Sports, Philip & Tacey, LDA
• HO in Manchester, CDC in Nottingham
• 30+ sales force
• Privately owned - New management team
• Recently closed indirect division - shutting accounts with dealers they
previously supplied
• 2-4 day delivery as standard
• Next day cut-off midday
YPO (Yorkshire Purchasing Organisation)
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£400m turnover
Joint committee of 13 local authorities in Yorkshire
Well-known in North & Scotland but supply nationwide
Experienced field sales team
Not for profit bit must cover costs
Reputation for highly competitive pricing BUT poor service
Weekly delivery
NEPO (North East Purchasing Organisation)
• £120m turnover
• Joint committee of 12 local authorities in North East based in
Newcastle
• Perception that schools MUST use them
• Wide range of contracts including services and utilities
• Reputation for patchy service and product quality
West Mercia Supplies
• £70m turnover
• Joint Committee of 4 local authorities in Hereford,
Worcester & Shropshire
• Recently acquired by The Consortium
The Consortium
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Formerly local authority consortium in South West
Now privately owned – for profit
Recently acquired West Mercia Supplies
Just acquired themselves by Smiths News
Based in Trowbridge
Good market share in SW
Good website
Next day service
Price match guarantee
TTS
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£80m turnover
Privately owned – for profit
Based in Oxford – part of RM plc
New-ish kid on the block
Huge growth in recent years
Strong in secondary, technology, nursery and primary
A lot of ex-Findel personnel
Far Eastern import program can cause supply issues
Contract Stationers
• Recent focus on educational sector to grow office products
sales in stagnant market
– Lyreco
– Office Depot
– Staples
• Good service levels and differing degrees of genuine
specialism
• Cannot compete with dealer local service and community
proposition but highly competitive and professional
Notes re competitors
• Public sector consortia such as YPO, ESPO,NEPO, WMS are only able to
supply public sector bodies not privately owned ones or individuals
• Perception exists often locally within schools even that local authorities
have to buy from them. This is not the case.
• Historically service complacent although this may be changing due to new
entrants / high interest from private sector suppliers – dealers and
contract stationers
• Very price aggressive on certain lines – heavily due to price protection on
large brands e.g. Pritt Stick, which is unavailable to us
• Public sector consortia can enjoy preferential pricing on certain products –
beware
Competitors SWOT: Strengths
Strengths
Target / Response/ Opportunity
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Huge Range
Not for Profit
Purchasing Volume
Aggressive pricing
Traditional consortia
• Schools focus / experts
• Product knowledge / quality
• Trusted, gain access to schools
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Too much choice – help customer choose
what they need from focussed range
Best Value / value for money / affordable
Local supplier with national / international
back up (Integra, BPGI)
Local - knowledge of / interest in local
education
Consider CRB checks for drivers and reps
Office products experts (significant part of
spend) with growing knowledge and access
to specialist educational supplies (see
Education Collection mailer)
initiative own brand
Competitors SWOT: Weaknesses
Weakness
Target / Response
• Sales force – low quality or very
corporate
• Staples – no local rep for small
accounts?
• Customer service – not great & distant
• Delivery service – variable:
• ESPO – twice weekly, outsourced next
day with £5 charge
• Consortium / Staples – TNT
• Professional, friendly, non-corporate
and local
• Professional, friendly customer service
team near at hand
• No quibble returns policy
• Next day delivery with late cut-off
• Own vehicles & drivers
• Easy to deal with and part of the local
community
• Sell on service, local agenda, quality –
not price
Competitors SWOT: Threats
Threat
Response
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Office Depot & Lyreco entering market
Educational catalogue 8500 items
Expanding to 12000 in 2012
Traditional channels have preferential
sector pricing in certain product
categories e.g. Berol, Staedtler, Pritt
Locally based and responsive
High level of personal service
Next Day / Same Day
Integra mailer & Inprints
New products and suppliers
Better EOS and hardware offer
Initiative brand
Local telesales and rep contact
Non-price focus
Dealer USPs
• Local, trustworthy
– Close at hand
– Part of the community
– Local employer with interest in the wealth and education of the local
community
– Locally held stock delivered by local drivers
– Locally based field sales and friendly, professional customer service
– Short delivery distance – low carbon footprint
• Personal service
• Responsive and responsible
• Service culture and can do attitude
Dealer USPs
• No minimum order, order when you need it with next day delivery:
– Reduces stocks
– Saves space
– Reduces waste
• Flexible and easy to deal with – e.g.: class room delivery if required
• Order how you want to order: phone, fax, post, online or via friendly,
professional internal or field sales person
• Local focus with national back up from group (£600m turnover network of
local businesses)
• AVOID “best price” type statements as competitors can be very aggressive
on key stationery lines
• Value for money, affordable