U.S. School and Office Products Market Assessment - 2002

The assessment is based on the perspective of a variety of industry executives, including manufacturers, distributors, retailers, and a wealth of third party and secondary research sources. This report includes fact and opinion-based information and is presented with charts, discussion, and analysis that describes and assesses the raw data.

• The information in this study pertains to the U.S. market for School and Office Products
• The analysis of the market is based on the end-user dollars spent by customers in the industry, or sometimes referred to as the "retail market." However, "retail" is a misnomer in this case, as retail consumers represent only one customer group, in addition to institutional customers, contract customers, and direct customers (customers purchasing directly from manufacturers or manufacturers' reps). Essentially, this represents the total cumulative sales of all retailers, institutional dealers and distributors, contract stationers, office product wholesalers and dealers, mail order houses/catalogs, and Internet web sites with e-commerce. This is in contrast to the market for wholesale shipments, which would represent the sum of manufacturers' sales of the industry's products
• Issues that are addressed in the present regarding the industry's size refer to the calendar year 2001, unless otherwise stated
• This report assesses products used only for school, home office and traditional office uses, and it does not include household products that are used for daily living, decorative, or home improvement purposes (i.e., housewares, kitchen, bath, cooking, garden, etc.)

This market analysis doesn't depict the total of manufacturer sales The SHOPA Strategic Overview and Distribution Trends Report, Volume 7, depicts a market size based on the sum of manufacturer shipments (i.e., wholesale dollars) for school and office products. According to that study, for which the market size data was collected in 1997, the projected market size for 2000 was $132 billion in the U.S. That market size should not be compared as "apples-to-apples" with the market size presented in this report, since this report depicts end-user dollars spent (as noted above), as opposed to manufacturer sales.

In addition to market size determination, the basis for market segmentation by distribution channel is slightly different in this report than the Distribution Trends Report. This report includes E-commerce and Institutional as separate and distinct channels, and it separates Direct Mail/Catalog from the Commercial channel (which were combined in the distribution trends report). As well, the retail channel in this report includes all retail outlets. Therefore, it represents a greater market than the Distribution Trends Report, since some retail channels were groups in the "Other" category in that report. Research methodology Acclaro Growth Partners conducted the research for this study through the use of data from both primary as well as secondary sources.

Acclaro Growth Partners gathered the data and conclusions presented within this document for SHOPA and its members through analysis of primary and secondary research.

The primary survey included interviews with knowledgeable professionals via telephone, email or fax. Primary data such as market information, statistics, articles and relevant documents and opinion on strategic issues was requested from these professionals. The telephone interviews were conducted by engaging the respondents in a conversation rather than through a traditional survey format. This approach allowed the respondents to offer candid opinion regarding the issues and provided more detailed and qualitative insights.

The secondary research was used primarily to obtain an overview of the market, relevant statistics, the different industry segments and players to identify the target professionals for primary research. The secondary sources used in this report include:

• Government data
• Industry association data
• Information published by manufacturers, distributors, retailers, regulators, consultants, research firms, and other industry participants
• Published information and annual reports on company websites
• News and economic data published by independent news agencies and information portals
• Online databases

SHOPA Market Research also provided input into this report by providing various data based on secondary data sources such as the U.S. Department of Education, Small Business Administration, and other consultative services / associations as noted.

Not much information was available through secondary research specific to different segments of the industry; hence the report relies mainly on the primary survey. The challenges faced while gathering information for the report were as follows:

• For the purposes of this study, we defined the market for School and Office Products to include the product categories outlined by the School, Home, and Office Products Association (SHOPA) that are used in school, home-school, home-office, and office environments. However this definition varies across different industry associations and industry players. Hence the information collected from different industry participants was not necessary as per our definition
• During our research on the market size for different product categories, some of the industry participants were not able to give us exact percentage share of the sales going to home products category (home office and home school). Rather they classified the products under two broad categories i.e., office and school. We have used views of industry experts during primary research and published figures on over all growth in the home products segment to arrive at the market size of the home products segment
• During both primary and secondary research, it was difficult to get specific numbers on market size and growth rate of different industry segments. Many industry sources and respondents during the primary research tend to agree on the overall market size of the industry as $300 billion for the financial year 2000. However they tend to vary on their estimates for the size of different segments for 2001 and the growth rate thereafter
• We have relied heavily on primary research to derive the growth rate of different industry segments and the overall market size in terms of end user dollars spent as very little data was available on it through the secondary sources

The research for this report was conducted over a five-week period from April to May 2002.