AM20083

AMA RESEARCH Market Report : UK Office Furniture Dealers : December 2003

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Introduction and Overview

AMA Research has published the third edition of the "Office Furniture Dealers Market Report & Database- UK 2003". This report incorporates original research, and has been updated and expanded to include a number of brand new tables and charts. It provides an up-to-date, practical review of the office furniture dealer channel, analysing market size, structure, recent and future trends as well as the dealer buying process.

The accompanying "Office Furniture Dealers Database - UK 2003" has also been updated and expanded to include additional options such as contact names, e-mail addresses and dealer activities. This substantial database comprises in excess of 700 leading UK office furniture dealers and this package, of particular interest to office furniture manufacturers, represents excellent value for money.

Key Areas Covered include:

Review of the Dealer Channel

Dealer Buying Process

Sourcing Criteria for Dealers

The Office Furniture Market

Dealer Database - over 700 leading companies

Of particular interest-

Performance of the dealer channel in recent years

Key criteria influencing selection of office furniture suppliers

Key influencers on decision making process in supplier selection

Database of major dealers - additional options include buyer's name, email etc.

The dealer channel represents the major route for the distribution of office furniture, although competition has increased in recent years, both from manufacturers who deal direct with end users and the growth of superstores / mail order companies.

The report is written by marketing professionals with substantial experience of the office furniture market specifically, and furniture products more generally. It answers the need for a comprehensive review of market developments and a listing of key dealers.

Key areas of coverage in the report include:

DEALER CHARACTERISTICS

Review of the office furniture dealer channel - recent performance, size, trends, influencing factors and future prospects.

Profiles of leading office furniture dealers - background, financial information etc.

Analysis of dealers' warehousing and showroom facilities - percentages, trends etc.

Analysis of stock holding among dealers - percentages, trends and dealer characteristics.

Review of dealers' customer bases - major customer groups, percentages, trends etc.

Review of dealers' sales and marketing methods - types, trends, manufacturer support.

DEALER BUYING & SPECIFICATION PROCESS

Analysis of sourcing of office furniture - major channels, supplier mix, number of suppliers, current trends etc.

Review of buying groups - usage, trends and profiles of the leading organisations.

Key influencers on the decision-making process for supplier selection.

Review of information sources used when reviewing suppliers - and the key factors considered when making that decision.

Analysis of supplier review periods among dealers.

In depth review of key influencing factors on supplier selection - such as quality, product range, price, delivery lead times, marketing and technical support etc.

Review of prices and discounts - current situation, trends etc.

OVERALL OFFICE FURNITURE MARKET

Overview of Office Furniture market - analysis of size by value, current situation, historical trends and forecasts to 2006. Factors currently affecting the market and reasons for current growth.

Review of international trade in office furniture - trends, imports and exports by product and by country.

Mix of office furniture, sector by product type - shares accounted for by desking, seating, storage and others including the size of each sector and current trends.

Review of distribution channels for office furniture - structure, distribution mix etc.

Overview of office furniture manufacturers - market position, analysis of activities, financial information etc.

DEALER DATABASE - Standard Version or Optional Extras

BASIC OPTION (Included with report as standard):-

Multi-use database of 700+ major UK office furniture dealers - company names, addresses & telephone no's supplied as standard.

ADDITIONAL OPTIONS (included in Platinum Package)

Buyer / general manager contact names, e-mail addresses,

Number of branches / warehouses / employees.

Indicates level of activity in new / used / stationery / equipment

Supplied on CD-Rom or by e-mail, list purchase not rental, no limitations on usage.

Executive Summary

In 2002, the UK Office Furniture market was estimated to be worth around £765 million at MSP. Following several very difficult years in the early 1990s, the office furniture market has generally experienced a strong recovery due to improving commercial construction trends, continuing through to 1996/97 which proved to be particularly buoyant years.

The 1998 to 2000 period was more volatile being affected by factors such as the strength of sterling, the Asian crisis and higher levels of interest rates, leading to a period of pessimism and low confidence. The year 2000 was more optimistic for the office furniture market as business confidence improved and a backlog of demand emerged from the 2 years of procrastination by many companies.

The outlook was more positive for 2001, but towards the end of the year the market was hit by the events of September 11th. Fears of a global economic slowdown and low business confidence led to a decrease in office construction levels and a worldwide decline in demand for office furniture, which continued throughout 2002. Overall international trade in office furniture also decreased significantly across the board, although imports from low wage countries such as China increased marginally, reflecting companies shifting to low cost manufacturing environments in order to maintain margins.

Although demand failed to pick up in most of 2003, the first signs of a possible recovery have emerged and 2004 and 2005 are predicted to show positive growth, driven by increased construction activity and increasing levels of business confidence, as well as the continued strong performance of the SOHO sector.

This figure has declined slightly in recent years due to growth in the SOHO sector and subsequent growth in superstores and furniture retailers. However, the dealer channel has performed reasonably well during the last few extremely difficult years, partly due to many dealers having expanded their range of products and services on offer in order to attract a wider customer base.

The vast majority of dealers are small companies and the dealer network is very fragmented, with an estimated 2500 furniture dealers in the UK. However, there are some larger dealers with multi-branch operations, the majority of which operate within their local or regional environment only. Dealers primarily source their furniture from UK?based manufacturers, but also from importers and wholesalers.

Many of the leading manufacturers such as Steelcase, Senator, EFG Matthews and Herman Miller supply through a dealer network and in general, dealers will only trade with manufacturers who do not trade direct with customers, to try to avoid problems of direct competition. Project Office, part of Bullough, is the leading direct supplier of office furniture. Wholesalers are generally used on a top-up supply basis, where appropriate.

A majority of dealers are independent operations, sourcing their products from several manufacturers, which enables them to offer a comprehensive range of products at different price points. As a result, many dealers will select and promote specific ranges from different manufacturers, within their overall market portfolio. However, in some cases dealers will have close links with individual office furniture manufacturers, notably the larger suppliers.

An analysis of dealers' facilities indicates that around 74% have a showroom, although the quality of these facilities can vary substantially between dealers, whereas 86% of dealers have some kind of warehouse facility. 68% of dealers claimed to hold some stock, and this has remained relatively unchanged during the last six years. However, the percentage of turnover supplied from stock has continued to decrease over the last three years, and now only account for 22%, with the rest supplied from the manufacturer for a specific contract.

The majority of dealers' customers are private sector companies, other customer groups include public sector/local authorities and private individuals. Many dealers are attempting to increase the share they sell to the growing SOHO market, although this has proved difficult, as specialised home office ranges are now widely available in superstores, via mail order, and in furniture stores such as MFI and IKEA.

In terms of the buying process, most dealers are small and therefore the choice of supplier rests with the owners of the company, though the larger dealers tend to rely on their sales manager or a buyer to influence and make the decision. More than half of dealers will review their product and supplier portfolios at least once a year, with several indicating that this is an ongoing process.

Quality of product and competitive prices are still key criteria influencing choice, although in recent years delivery lead times, after sales support and additional services offered by the manufacturer have become more important criteria. This is predominantly due to the increasing competitiveness in the market and the fact that end customers are becoming much more sophisticated and demanding and expect more from the dealer.

Sales and marketing support from manufacturers is not usually expected from the dealer and brand exclusivity is not considered an important factor as most dealers are not sourcing from a single supplier and will choose appropriate ranges from different manufacturers. In addition the office furniture market is very competitive and there are a number of suppliers to choose from.

In the medium term, future prospects for the dealer network appear to be relatively optimistic with growth in the overall office furniture market expected to pick up over the next 3 years. Its share may continue to be eroded as the SOHO sector continues to grow and furniture retailers and superstores respond, but the range of services offered by the dealers is continuing to grow and this should ensure that they retain a significant share of the market.

List of Contents

1	INTRODUCTION
2	SUMMARY
3	ECONOMIC ENVIRONMENT
3.1	GDP
3.2	INFLATION & INTEREST RATES
3.3	UNEMPLOYMENT & CONSUMER SPENDING
3.4	HOUSING & CONSTRUCTION
3.5	STERLING
3.6	CONCLUSIONS
4	OFFICE FURNITURE MARKET
4.1	DEFINITION
4.2	MARKET SIZE
4.3	INTERNATIONAL TRADE
4.3.1	Overall Imports and Exports
4.3.2	Imports and Exports by Product
4.3.3	Imports and Exports by Country
4.4	OFFICE FURNITURE SECTORS
4.5	DISTRIBUTION
5	OFFICE FURNITURE DEALERS
5.1	DEALER CHARACTERISTICS AND MARKET SIZE
5.2	MAJOR DEALERS
5.3	BUYING GROUP MEMBERSHIP
5.4	FACILITIES
5.5	PRODUCTS AND SERVICES
5.6	STOCK
6	SOURCING BY DEALERS
6.1	OVERALL VIEW
6.2	TYPES OF SUPPLIERS
6.3	MANUFACTURERS / IMPORTERS
6.3.1	Overview
6.3.2	Profiles of the Leading Office Furniture Suppliers
6.4	WHOLESALERS
6.5	BUYING GROUPS
7	BUYING PROCESS
7.1	SUPPLIER REVIEW PERIODS
7.2	KEY INFLUENCERS
7.3	SOURCES OF INFORMATION
7.4	FACTORS INFLUENCING CHOICE OF SUPPLIER
7.4.1	Product
7.4.2	Price
7.4.3	Service & Support
7.4.4	Logistics
7.4.5	Loyalty & Relationship
7.4.6	Marketing Support
8	CUSTOMERS
8.1	MAJOR CUSTOMER GROUPS
8.2	PRICING & DISCOUNTS
8.3	MARKETING METHODS

Tables and Charts

Text © 2003 AMA Research

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Last updated by Amanda Porteous 2003