Trends in office supplies distribution tend to mirror trends in office supplies purchasing. Purchasing managers at Fortune 500 companies now are concentrating their efforts in four areas: e-procurement, cost management, national/global agreements and value-added services. So too are office supplies distributors.

• E-procurement. Moving order processing for office supplies online has been one of the most successful transitions to the Internet for many corporate purchasing operations. With its capability to streamline internal processes, e-procurement "brings scaleable benefits to both sides of the equation," says Mark Hoffman, president & CEO, Corporate Express Inc., Broomfield, Colo. "It's a real trend." About one third of the company's orders are placed via the Web; Hoffman expects this figure to grow to 75% in three years.
  

  Staples Inc., Framingham, Mass., likewise reports strong growth (439% in three years) in the online part of its business. Orders placed via StaplesLink.com, a Web site for contract customers, make up more than 60% of the company's total revenue, says Jay Baitler, Senior Vice President of Staples Contract Division, who expects that figure to hit 70% before 2002 is over.
  
  Office supplies distributors note, however, that buyer interest in third-party software integrations (Ariba, Commerce One, Clarus, etc.), which was so prevalent a few years ago, has diminished significantly. Says Hoffman of Corporate Express, "In many cases, we think it's been hard to justify the value for the cost." Still, distributors are very much involved: Staples touts its capability to perform online integration for contract customers in 30 days.

• Reducing/managing costs. Not a trend in the true sense of the word, cost management is an activity in which buyer interest tends to ebb and flow with the economy. In negotiations with purchasing managers, Dave Goudge, senior vice president, marketing, Boise Office Solutions, Itasca, Ill., says some "buyers still try to knock down the price of a pen... One of our more effective tools is explaining the difference between price and cost to our customers. Price differentiation in our industry is almost minimal. Boise's position is that we want to understand our customer's business system and explain how our solutions can drive out cost." He points out that, in many cases, companies report process cost savings over and above their annual office supplies spend. Changes in processes can be as simple as reducing order placement frequency from three or four times to once a week.
  
  Another way corporate purchasing managers are tackling costs is by consolidating their supplier bases. "What we are really talking about here is buying more products from fewer suppliers," says Hoffman of Corporate Express, which sells a broad range of products under the office supplies umbrella.
  

• National/global agreements. While the trend toward global sourcing is growing, there are some inherent challenges to purchasing office supplies on a worldwide basis. For one, many office products differ from country to country. Another: service level expectations vary. A third: currency fluctuations.
  
  Most challenging for Corporate Express is finding customers who truly understand the need to gather information to control and manage their spending on a global basis, says Hoffman, who considers entering into global agreements with customers a pivotal part of the company's strategy. With more than $100 million in global accounts, sales are growing "exponentially", he says. Corporate Express has operations in 22 countries.
  For its part, Staples formalized a strategic alliance with Lyreco, a large contract office product provider in Europe and the Far East.
  

• Value-added services. There's no doubt about it. Office supplies distributors say end users like personalized customer experiences.
  At Staples, a customer advisory board, made up of a mix of new and returning customers, meets 4-5 times annually. The group, says Baitler, provides the company with "some of the best ideas." For one, the sales force of one contract customer uses copy centers in Staples retail outlets, which lets the company track usage better.
  
  Boise Office Solutions conducts regular customer surveys which find that customers "want no hassles and for us to keep the promises we make," says Goudge, who adds that corporate buyers can expect to see increased emphasis on customer relationship management. As a value-added service, he suggests customers take an "amnesty day" so individuals can rid their desks of office supplies they purchased and don't use. A Boise sales rep will organize the effort through which others in the company can come by and pick up what they need. "Maybe the customer can get a week of office product procurement out of the budget," he says.