Article: R&S to launch working showroom concept
Bosnia and Herzegowi
| 21 July, 2017
How is business at R&S?
Sales have increased every year since 1996 and last year was no exception. We grew by 5% despite the fact that the market has been flat for the last few years. We are gaining market share and growing sales through categories such as IT, furniture and facilities management. Other categories such as printer consumables have become more challenging because the market share for compatibles has been increasing every year.
Are you focusing on any one category in particular?
We have concentrated a lot of effort into increasing sales of furniture because we see opportunities due to the way office space is changing. Companies are moving away from traditional office layouts in response to changing technology and new more mobile ways of working. This means that they are receptive to new office furniture and organisation products to help them achieve a more modern and flexible office space. This makes furniture more dynamic than our other categories. It is also a category that is less price sensitive, even though price is always a major factor in the Bosnian market.
Which new projects are you working on?
One of our biggest projects relates to office furniture and this Autumn we are launching a working showroom for furniture and promotional items, which I believe is the first of its kind in the industry. All of our field staff will use this showroom as a base and with hot desking, so they can choose where to sit. Different rooms are available depending on if they need a quiet space, have a meeting or use the telephone, in order to make it a very flexible workspace. It has been designed by a famous architect to create a unique environment. It gives us the opportunity to show customers firsthand how a modern office can look and demonstrates how we are using the products we sell. It is a very interesting concept to combine a company office with a showroom, so I am very excited and positive about the benefits it will bring. We have often found that it is difficult for our customers to visualise new ways of working, so we hope that it will provoke a re-think away from their more traditional ideas of office space.
Will this act as a showcase for products outside of furniture?
We are looking to showcase as much of our assortment as possible, so customers can see organisational products and everything needed in the modern office in one place. We are always recommending to customers that they need certain items, so they will see that we are practicing what we preach. It will also have a positive impact internally on our staff.
How are you combinging your wholesale and direct sales?
We work as a wholesaler in the smaller towns around the country, while we sell direct to larger businesses in the cities.Both parts of the business are equally important to us.
How are internet sales progressing?
We have invested in increasing our online presence and search engine optimization. This has helped us gain some large orders, so we will continue to grow this area of the business.
Are you looking at entering retail?
This is now very difficult in Bosnia because all the most appropriate locations in the larger towns are prohibitively expensive. The risk of opening in a cheaper location is that footfall is not high enough to generate enough turnover. Bosnia is also seeing the same trends in online sales as the rest of Europe and the pricing model is very aggressive. Therefore, we don’t see retail as an attractive business proposition for the near future.
Are you looking to expand your facilities?
We cover the whole country with delivery under 24 hours through two warehouses. We had anticipated opening a third warehouse, but our calculations showed us that the current model is more cost efficient. Bosnia has seen an increase in the number of delivery companies recently that has led to lower prices and a more reliable service. Therefore, we employ home-based sales representatives in the smaller towns and deliver from Sarajevo and Tuzla.
What market trends are you seeing?
The market is extremely price sensitive with 90% of copy paper we sell being C grade, for example. We are trying to change this over the long-term by promoting the benefits of higher quality, but I can’t see this happening in the near future.
Is MPS still a major trend?
Along with furniture, it is one of the growth areas of the business. We currently have some very large contracts for MPS and we are focusing a lot of our energy in growing this.
What are the main ways you differentiate yourself?
Over the last couple of years we have invested heavily in a lot of new systems. We brought in specialists, including a Dutch consultant, to move to a matrix system to manage our five product assortments. This September we are also introducing a new warehouse management system which will bring a large amount of automisation and help improve efficiency for preparation and delivery of goods. We are able to carry out these projects because we are one of the top 3 leading companies in the market. The market and technology is changing so fast that it is more important than ever to differentiate yourself and keep ahead of changes. This is a message we wish to tell both our employees and customers.
Are you looking to expand through acquisitions in Bosnia or a neighbouring market?
We are definitely open to opportunities in neighbouring countries such as Serbia and Croatia, but it is a time consuming process to find the right targets. The Bosnian market is dominated by a handful of larger businesses like ourselves and also has a lot of small, family-run businesses, which are not very attractive targets. We currently have a lot of interesting internal projects and the business is still growing, so we will look at acquisitions while focusing on maintaining organic growth.