Highlands sent four team members to Phoenix to meet with the leading independent office dealers at AOPD’s 2023 Engage conference. This event brought together both dealers (i.e., distributors) and business partners (i.e., manufacturers) to learn about new products and discover ways to grow together.
One of the business partners praised this year’s event calling it one of the best in the industry due to the dealers’ willingness to engage and their customer knowledge. The one-on-one sessions gave the business partner’s insight on how to grow with each dealer. Often both the dealer and business partner ended the meeting with specific follow-ups on partnership opportunities.
Additionally, the marketing workshops were well received with many dealers calling them their favorite part of this year’s event. The workshops paired a business partner with a small group of dealers for a longer session. The sessions were highly collaborative. They typically included dealers sharing their experience selling each product category creating impromptu peer-sharing sessions.
Many independent dealers are winning through high-quality service, local presence, investments in e-commerce, expanding into new categories, and by embracing the national service model of AOPD. It’s clear this strategy is paying off—AOPD’s largest contract grew by 17% last year.
1. Independent dealers are continuing to focus on building expertise in adjacent categories
While the impact of COVID on the office product industry is waning, the structural changes in remote/hybrid work continue to linger. Most dealers are looking to the Jan/San and Facility Supply categories for growth.
There were three themes that stood out for those who are succeeding in selling adjacent categories. Some dealers are adding product line experts whose sole purpose is to help general line reps sell adjacent categories. Those who aren’t using internal sales resources are proactively using the manufacturer’s sales team to support their reps. Finally, providing reps visibility into active customers who aren’t buying adjacent categories, and quantifying the value of adding this business seems to help incentivize reps to act.
2. E-commerce and search capabilities were hot topics
It’s well documented that buyers are increasingly preferring a high-quality e-commerce experience, and the independent office channel isn’t immune to this shift. Many dealers noted that over 80% of their purchases happen online. The channel is responding by emphasizing the importance of comprehensive content, highlighting the need to get search right, and investing in digital marketing initiatives. Moreover, there are dealers who are embracing eProcurement solutions (e.g., punchout catalogs) that many customers demand from their suppliers.
The importance of search ranking was a reoccurring topic in the one-on-one sessions. Search is the main way customers interface with the dealer’s website, which is why it’s important to get right. Ranking best-selling products for key search terms is beneficial for customers, too. These products are the best sellers for a reason, customers want them. Business partners that work with dealers on search will be advantaged. One dealer said plainly that business partners who influence search will win.
3. This group of dealers is becoming increasingly sophisticated
The group of independent dealers who make up AOPD are becoming increasingly sophisticated. See below for a few of the takeaways that impressed our team:
- New Verticals: Independent office dealers are expanding into new verticals like Healthcare with the recently awarded Vizient contract and the existing Premier contract.
- POS Data: AOPD provides their business partners with POS data, which helps business partners better serve the dealers. The winner of AOPD’s Business Partner of the Year was praised for their use of the POS data.
- Pricing + Profitability: It’s no secret that inflation has challenged distributors’ P&L’s over the past two years. We were impressed with a couple of dealers who reported their gross margins expanded due to investments in data + analytics to make informed pricing actions.
- Marketing Personalization: One dealer we spoke to mentioned their focus on personalizing digital marketing messages based on individual customer characteristics. This level of personalization requires quite a bit of work, but if executed correctly it can generate meaningful value for both the dealer and customer.
- Dylan Huggins, Director, Strategy + Analytics
- Steve Franson, Business Development Manager
- Seth Raley, President
- Deby Bickford, Director, Project Management
Highlands Clients + AOPD Business Partners
- House of Doolittle