By Nathan Rigby, VP Sales and Marketing at One Click Retail

Last week, it was revealed that Amazon is planning to offer a credit card for small business owners. The retailer has been working with several banks, including JPMorgan Chase, in order to introduce a co-branded credit card for business customers which will offer rewards points for purchases and may also include offerings such as business insurance.

Amazon has been trying to increase its footprint in the workplace to match the success the company has had in the household. Their branded credit card is the latest offer geared toward small businesses, following the October launch of a Prime membership program offering free rapid delivery and a lending program which has already given out more than $3 billion to over 20,000 small businesses.

With estimated 2017 sales just shy of $3 billion and growing at over 30% YoY, the effect of Amazon on the office supplies market has already had a major impact on brick-and-mortar retailers – and has been a major opportunity for Office Product brands. With their latest strategies, designed to pull more business customer traffic away from chains such as Office Depot and Staples, Amazon is positioning itself as the key channel for Office Products manufacturers going forward.

Office Products: The Amazon Effect

 

What’s Big

  • Printers and Ink

It has been said that printer manufacturers aren’t in the business of selling printers, they’re in the business of selling ink. So it may come as some surprise that printers performed very well in 2017. Added together, printers (four separate categories: Single/Multi Function Inkjet/Laser) generated over $300 million in estimated sales last year.

Of course, the success of printers on Amazon helped to drive high growth in Ink, Toner and Paper (74%, 51% and 56% respectively) – businesses and consumers tend to buy the supplies needed for an appliance from the same place they initially purchased the appliance. The performance of Ink and Toner, the two largest Office Products categories, reveals this behavior: the higher growth in sales of Inkjet as compared to Laser Printers (26% and 15% respectively) correlates to higher growth in Ink compared to Toner. HP and Brother are having the most success by marketing to these repeat Amazon customers, causing HP to lead both the Inkjet Printers and Ink categories and Brother to lead in the Laser Printers and Toner categories.

HP and Brother dominate the top items overall, with 5 and 3 of the top 10 bestsellers of 2017 respectively. Outranking both of them however is another office appliance, a scanner from Fujitsu which was last year’s #1 office product (despite the Scanners category ranking only #10 and showing negligible growth). Scanners don’t have the same advantage as printers of being able to generate long-term repeat purchases, but by supplying the top item in a particularly niche, Fujitsu improve their brand visibility and search ranking on Amazon.

Office Products: The Amazon Effect

  • Office Organization

Office Organization is a broad category which includes file folders, binders, labelers and labeling tape among other things. After the overwhelming size of Ink and Toner, each valued at an estimated $390 million in 2017 sales, Office Organize is the next largest category with est. $330M and a steady growth of 24%. This category is spread fairly evenly across numerous subcategories, the largest being Labelers with est. $45M in sales, led by the DYMO LabelWriter 4XL Thermal Label Printer. With no clear leaders, the Office Organization category poses an opportunity for emerging brands to rank higher and increase their visibility.

What’s Growing

  • Bulk Buying of Consumables

Exceeding the high growth rates of Ink and Toner were Casepack Cut Sheet Paper (90% YoY growth) and Glue & Adhesives (76% YoY growth), led by the brands Georgia-Pacific and Elmer’s respectively. These two subcategories specifically show growth in bulk buying of office consumable; rather than going to the store and carrying around large boxes of paper or gallons of glue, consumers, businesses and teachers have found that it’s easier to order on Amazon and have them delivered. Both Georgia-Pacific and Elmer’s also offer Subscribe-and-Save discounts for their top items, encouraging shoppers to sign-up for a regularly-scheduled reorder rather than having to place a new order every time they need to restock.

Though the bestselling Ink and Toner items don’t fall into the bulk trend, they do indicate the popularity of Amazon for general office consumables. Instead of making a trip to the office supply store, when the last pack of paper is opened or the low ink warning light comes on, consumers and businesses increasingly prefer to order their refills online, and with two-day shipping the refill will arrive before the supply runs out.

Office Products: The Amazon Effect

  • AmazonBasics Shredders

Further evidence that Amazon is committed to being a major player in Office Products is their investment in the AmazonBasics brand. AmazonBasics is the retailer’s largest private brand featuring a wide range of products from batteries to backpacks to power bars.

AmazonBasics is the category leader for Shredders, with 8 out of 10 bestsellers, two of them ranking in the top 20 Office Products of 2017. The top competitor, Fellowes, markets high-end Shredders and holds the remaining two top 10 items, both of which sell for over $450 each. By marketing a low-cost alternative (the #1 model sells for $30), AmazonBasics has become easily the largest Shredder brand on its namesake platform and earned more than 40% of the total category sales in 2017.

While leading retail chains struggle to stay afloat, Amazon is seeing strong growth across the board in sales of office appliances like printers, scanners and shredders as well as consumables and office accessories. Amazon’s latest efforts in this area, including their upcoming credit card for small business owners, reveals the company’s commitment to finding the same success as a B2B marketplace as they have as a B2C retailer. With more and more of the Office Product market moving away from brick-and-mortar in favor of Amazon, there’s no better time for brands to embrace it as their primary sales channel.

One Click Retail is the industry’s most accurate source of sales data for the world’s top eCommerce marketplaces. Using a combination of website indexing, machine learning and proprietary software, OCR estimates weekly online sales figures with market leading accuracy in order to deliver the best insights, analytics and strategies to their brand manufacturer clients. To catch a glimpse of how OCR gives brands critical edge on online platforms with our unique data and expertise, subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.

If you are a brand manufacturer who would like to learn more about how you stack up to the competition—or would like to see your market share and category growth insights—email us at info@oneclickretail.com for a free capabilities demo.