The Office Times

Article: Quantore reports record 2017

What kind of year was 2017?
2017 was the best year in the history of Quantore at virtually every level of the business. Turnover was up by 5%, and this was not at the expense of margins, as it was in conjunction with record profits. We also had excellent customer satisfaction levels.

As the market isn’t growing, how did you achieve this success?
It has been predominantly due to gaining market share from the big box resellers. There have been significant numbers of end customers that have reduced their spend on office supplies to under €25,000 - €50,000, which means they fall into the target market of our dealers. We have very cost-effective solutions for these companies, so we have been able to win a lot of new business.

Do you see Office Depot and Staples fighting back in this area?
Both are owned by private equity firms, so I expect that they will continue to focus on profitability,  stopping certain businesses, while selling or merging others. It seems likely that if the unprofitable elements of the businesses are not stopped, they will see price increases. There is also the possibility that parts of Office Depot and Staples could merge with each other. Their focus on the internal aspects of their businesses will provide further opportunities for Quantore.

How much success are you having with large tenders?
Tenders of over €100,000 are above the capacity of our dealers, so we bid under Quantore in partnership with members. This is a new area for us, but we have potential to increase our presence here.

What initiatives have you been running recently?
Last year we ran a wide-ranging initiative to promote Quantore branding for our dealers with store, adding Quantore brand and styling to their name and replacing or combining this with their traditional identities. The campaign included video screens in the shop windows of our members and also took advantage of the Quantore headquarters, which are situated in a highly visible location that can be seen from a major road.  We used giant video screens aside the building to advertise Quantore branding. These screens are also used for the advertisements of our vendors.

What were the results of these initiatives?
They were aimed as much at our members as the end consumers. 2017 saw the number of members that have Quantore branding rise to 160, and many joined because of the increased brand awareness resulting from our marketing campaign. Around 60% of our members that have a physical shop are now part of the initiative and there are another 30-40 dealers that have the profile to benefit from joining.

What has been the feedback from your members?
It is too soon to have concrete figures, but we are carrying out a study to see whether having Quantore branding has helped our members increase turnover.

How can you further grow the business?
We are investing heavily in IT infrastructure and will also expand our facilities to ensure that we maintain our leading position in the market. This involves almost doubling the capacity of our Beuningen site in the Netherlands to stay competitive with the likes of Amazon. Building work will begin this year and should finish mid-2019. We have always been very up-to-date in terms of logistics, but the expansion will result in moving up another notch in terms of capacity and efficiency.

How confident are you on being able to increase sales to justify this investment?
I am very confident that Quantore will continue to benefit from growth opportunities. Both new and existing categories have potential for growth, and I expect to further increase market share at the expense of the big boxes. There is also possibilities for the business in Belgium. We are adusting our assortiment for Belgium  by having all content in French and Dutch. Another important reason for growth in the Belgium market is the trend of end users buying more and more online. We can perfectly support our members in this regard.

Which categories offer the biggest potential?
All categories are doing well, although jan/san and catering offer the most potential. The Dutch economy as a whole is performing strongly, but this does not necessarily translate into sales of traditional office products and paper, which are still going through long-term decline. However, our increased market share has offset the affects of digitalization.

What are your current projects with BPGI?
BPGI is a combination of dealer groups without stock and stock-holding businesses. As we are in the latter category, we are looking to foster closer relationships for the warehousing side. This is quite a complicated process, and as with all international groups, changes take time to implement. We are also exploring how stock-holding businesses can support the dealer groups that don’t hold stock.

What’s your view of the European office supplies market in general?
The major trend is consolidations, both within the reseller community and amongst the vendors - as we have seen with ACCO Brands and Esselte. On the reseller side, as I previously mentioned, I expect changes within Office Depot–Staples to continue with certain parts of these businesses either closing down or being sold off. This consolidation process in the market is inevitable because of continued pressure on turnover and margins. Success in this marketplace relies on having an efficient cost structure, leading IT processes, and strong branding. Companies that are not able to achieve this will find it hard to survive.

What are your aims for 2018?
I expect the positive trends of 2017 to continue with further increases in turnover and customer satisfaction levels. The investments we are making in IT will impact profit levels in the short term but will be fundamental to Quantore’s continued success.