Eraser? Don`t bet on it!

<...> The retail market of office supplies has undergone qualitative and quantitative changes in recent years; it has been transformed taking into account the economic situation and the needs of the Perm buyers. Today, buyers do not make impulsive purchases; on the contrary, they are carefully prepared before going to the store and prefer cheap goods: many players recorded a decrease in the average receipt. As for the market itself, many new brands have appeared, and, as before, most retail purchases fall on the segment of goods for children.

<...> Following the expansion of the office supply chains, the nature of competition is also changing: the competition is becoming fiercer: Federal networks have a particularly strong impact on the market. "They have wide audiences, various sales channels, well-developed regional structures and effective logistics," said Svetlana Baskakova, Director for Procurement (office supplies and business gifts) at MERLION.

<...> Food hypermarkets that have their own departments of office supplies are also competing with Perm players in this market. According to Svetlana Baskakova, food chains today are not the only threat to the players of the office supply market. "Representatives of related markets are beginning to tap into the segment of office supplies: shops selling equipment, furniture, gadgets or IT. Everyone is looking for options to expand the range of products in order to increase customer traffic and revenues," the expert concluded.

<...> In addition, according to experts, the business related to office supplies will still be profitable. This fact stimulates Perm stores to launch online sales. Websites and online stores can be considered the main trend of this market. According to experts, the share of online stores accounts for less than 10% of total sales, and this segment can even be called unprofitable. However, e-commerce is one of the few ways to increase the turnover.

"It would seem that if we are talking about an online store, everything is quite simple: you do not need retail space, and staff and rent costs are reduced. However, we must not forget that the burden on logistics and the contact center is growing. The customer always wants to get everything 'quickly and at a convenient time,' and such services are not cheap at all," said Svetlana Baskakova. She also added that when buying online, the customer almost always prefers low-cost products and uses the "ascending price" filter on the website. From this point of view, traditional retail points of sale receive an advantage: consultants, merchandising, and trade marketing can influence the buyer's choice. "The emotional component and tactile sensations are very important in this case. All this can persuade the customer to buy certain products," the expert noted.

<...> According to experts, many regional markets are already oversaturated with competitors: at both local and national levels. Therefore, when a company considers the possibility of expansion in small towns or new regions, it must clearly understand the market structure in each town, as well as evaluate future competitors and possible traffic.

Some market players are considering expansion of their networks as a priority for business development, while others believe that it is more important to gain a foothold and stay profitable with the existing shops. In general, chain stores prefer not to disclose their plans because of the fear of increased competition or specific corporate policies. However, they all agree that the plans and speed of business development will depend entirely on the market situation.

<...> According to Svetlana Baskakova, the decline will also be due to the growth of the e-commerce segment, as the number of online stores will continue to increase, as well as the share of sales through online channels. All these factors will have a negative impact on traditional retail trade. "This does not mean that it will disappear completely. There will always be a certain percentage of people who prefer personal communication when making a purchase," the interlocutor concludes.

It is also worth mentioning that despite the projected decline in sales, office supplies prices continue to rise. According to Ms. Baskakova, the annual increase is 10 - 15% depending on the currency exchange rates, expenses related to logistics, renting, and staff, as well as production costs.