Data Direct has met the challenges that the economy has thrown at them – particularly Brexit – and helped to turn them into a positive.
Like all businesses, the past few years have been challenging for Data Direct with the twin impacts of COVID and Brexit – among others – but the company has turned around what could have been a negative and made it into a positive, which ensures that Peter Cowan, group chief operations officer, is looking forward with optimism.
“Coming out of COVID, the biggest challenge was availability of components, particularly hardware. Consumables were also a challenge but we’re nearly now back at pre-COVID levels,” says Peter. “But the big gain we have seen is post-Brexit. The fact that Brexit precluded us from dealing easily with a lot of the European markets, it has also precluded a lot of our European competition from easily competing into the UK market. So, as a result, our domestic business has grown exponentially.
“This ‘oven ready’ Brexit deal that we were supposed to have with Europe that effectively was going to mean business as normal, obviously has been proved not to be true. But like any situation you’re faced with, you have to deal with it. So we looked for the benefits of it and shifted accordingly.”
Peter says that about 90% of what Data Direct spent on European business in the past has shifted to securing the company’s UK customer base and growing the range of services and products it brings to the UK Channel.
“We don’t just sell toner, we look at what makes up the service to the dealer and deliver a whole package, including a competitive price, as well as things like direct deliveries, virtual warehousing, ByBox services and blank drop shipping, among others. We have been consolidating our services to dealers to make it easier for them to deal with us and to hit their service levels and reduce their costs. Over the past three years that is what we’ve been doing successfully.”
Another way in which Data Direct has made Brexit work for them is demonstrated in its contract with Olivetti. The Italian company closed its UK agency last year, and rather than try and deliver direct to the UK from Italy – and deal with the increased amount of red tape that now involves – Olivetti has contracted Data Direct to be its exclusive consumables and spares distributors for the UK. Peter adds that other European manufacturers are looking to set up similar agreements due to the problems shipping from Europe to the UK post-Brexit.
Experience in the field
With some European competitors scaling back their UK operations, especially in the field, in recent years, Data Direct has been quick to take advantage of the sudden influx of experienced salespeople into the job market by recruiting them to their operations.
“We’ve got more people out in the field and more support functions now than pre-COVID,” Peter says. “We’re constantly benchmarking what we do and looking to improve on that and bring in new services to stay one step ahead. One way we can do that is by having guys out in the field and some of the guys who go out for us have been in the industry for 30-plus years; they know the people, know the questions to ask and constantly ask ‘what more can we do for you? What else are you looking for? What are your pain points?’ Rather than just shoving a cartridge over the desk and saying ‘here’s the price’; we’re a value-add supplier, rather than just a distributor.
“People still buy from people. There is a percentage of buyers that are purely price orientated, but with many customers you build trust by being in the market for 30 years and employing people who’ve been in the industry for 30 years.”
Sustainability
Peter adds that Data Direct is also leading with its commitment to sustainability. The company has long known that it isn’t just a tick-box – when pitching for contracts sustainability policies can make up to 30% of the weighting these days – and is doing what it can to minimise its carbon footprint, with supplying sustainable products and using sustainable working practices.
“Of course, there are things that we can’t negate,” admits Peter. “We can’t get away from the fact that we have to ship some products from Asia, but we are doing forestation programmes such as EverTreen to offset the carbon it creates. That’s the balance we try to achieve.”
There is also increasing demand for sustainable products from customers, along with an acceptance that it may mean paying a little more for them, according to Peter.
“People are much more conscious about the environment and are willing to pay the price to do the right thing, and to pay a little bit more for it. The big buyers are much more conscious now of the CSR values of what they’re buying. This means that price in some of those conversations is disappearing.”
Peter adds that there are an increasing number of sustainable products the company is selling, such as biodegradable cartridges from brands such as Pelikan. “People want to hear about this stuff and they’re willing to pay a little bit more money to cover the investment in producing it,” Peter says.
“It’s new technology, therefore it’s expensive, but it’s the right thing to do. And as one company brings it to the fore, more companies will jump onto it and it’ll become more the norm. Everybody is trying to avoid single use plastics wherever they can, so this could be a growth area in years to come.”
Hopes for growth
Indeed, Peter is optimistic that sector itself will grow in the coming years. “The markets that we’re in, particularly in the copy market, we bring high quality compatible products that make real savings for dealers, which means that they can trim their cloth, make a margin on it and still make savings for their customers,” he says. “We’re optimistic over the next couple of years that the range and scale of products that we offer will grow. There’ll be more demand for our kind of products and services, such as virtual shipping. People want to cut back on their own warehousing, staff, distribution and all the stuff that goes with it, but we can help customers with that.
“We’re optimistic about where we’re going. We have spent 30 years trying to get it right, and certainly the next 12-18 months we’re optimistic for growth in just becoming better and better in serving our market. Without doubt, print volumes are reducing so what we set our stall out to do is be is better and better at the niche that we’re serving and keep adding on the value and adjusting to what our customers are looking for and expanding our market share.
“Again, that comes back to investing in the field presence, not cutting back on it. Our people are out there talking to the dealers, seeing what they’re doing and we response quickly to changes in the market.”