SHOPA continues to grow despite industry consolidation

Discount Store News, Oct 26, 1998 by Mike Troy

Even with retailer and manufacturer consolidation working against it, the School and Home Office Products Association will hold its largest annual trade show Nov. 4 to 7 in Atlanta.

"We will have a dramatic increase in the size of the show floor as a result of school and home office supplies categories becoming more important to retailers," said Steve Jacober, president, SHOPA.

The category's healthy margins and strong consumer demand translate to roughly 600 exhibitors at this year's event, compared to slightly more than 500 last year. In addition to more exhibitors, many of those in attendance have expanded the size of their exhibit space.

Jacober said that because categories represented at SHOPA are becoming more important to retailers, traditional mass channel retailers, in addition to sending buyers, are also more likely to send a general merchandise or divisional merchandise manager.

Buyers representing the commercial, contract stationer and wholesale markets are also expected to be present. Jacober said exhibitors can expect to see buyers from companies such as U.S. Office Products and Boise Cascade at this year's event.

"Unlike some industries, the wholesale segment of our market also is still very strong," Jacober said.

In addition, increased retailer attendance is coming from overseas. "The increase in international attendance is the result of a concerted effort on the part of SHOPA as well as a reflection of the current marketplace," Jacober said. "The world is becoming much smaller, and as people look to expand their markets, everyone is looking to expand all over the place."

To help facilitate communications, SHOPA is sponsoring for the first time a special reception for international visitors and has also arranged to have language translators on hand during show hours. Show attendees who have difficulty communicating with foreign customers will have access to Spanish, German, Italian, French and Asian-languages translators.

It's not hard to understand why retailer and manufacturer interest in SHOPA is on the upswing. In recent years, show organizers have consistently improved the event. But more importantly, the fragmented marketplace is growing, and customers are spending more money.

In the Back-to-School segment, growth of the important group age 10 to 24 is fueling school enrollments. The ranks of companies in the small and home office market is also increasing. By 2000, the number of people working at home will increase to an estimated 50 million people, up from 43 million last year, according to IDC/LINK.

Increasing enrollments and more home office workers also have contributed to sales growth. Research commissioned last year by SHOPA revealed that sales of school and home office supplies increased 7% to $78 billion in 1997. The products are also purchased by two out of three households, with average annual expenditures of $400. In about 15% of homes that report operating a business from home, average annual expenditures can run as high as $850, according to SHOPA's research, conducted by Leo J. Shapiro & Associates.

If equipment is factored into annual home office expenditures, the number really increases. More than 50% of home office users report spending up to $2,000 annually, and 30% spend more than $2,000 on supplies and equipment, according to a separate SHOPA study conducted by Yankelovich Partners. That study also concluded that consumers are spending more-rather than less-on office supplies. Of those surveyed, 44% said their expenditures were greater this year than last year. About 39% said they spent the same; and 17% said they spent less.

With the marketplace expanding, SHOPA show organizers have also expanded a series of focus groups that were popular with attendees last year. This year, the slate of live focus groups will include college students and small business owners in addition to the focus groups involving teachers, elementary, junior high and high school students that were offered last year.

Show attendees who are able to listen in on the daily focus groups will likely hear a familiar story. Consumers have demonstrated a preference for purchasing school and home office supplies at office superstores and discount stores. Those two channels are growing and, respectively, accounted for a 19% and 15% share of the marketplace in 1997. Office product dealers accounted for a 13% share, and commercial office product wholesalers had a 9% share, although their results last year ranged from flat to declining.

Some familiar themes are also sure to emerge if focus group participants get involved in a discussion of why they buy products where they do. SHOPA research indicated that familiar traits, such as price, product quality and selection, are top reasons consumers give when deciding where to shop for school supplies.

Share of Manfuctures' U.S. Shipments, ofSchool, Home Office, and Office
Products: 1997

Office Superstores        19%
Discount Stores           15%
Other                     15%
Office Product Dealers    13%
Commercial Office
Product Wholesalers        9%
Food Stores                6%
Specialty Retailers        6%
Drug Stores                5%
Wholesale Clubs            3%
Wholesalers, Distributors
Service Merchandisers      3%
to Mass Retail
Mail Order                 3%
Office Product Retailers   3%
Institutional School
Supply Wholesalers         1%


Source: SHOPA