OPI June 2014. Issue 240 Type A by OPI

Office Products International ISSUE NO.240

The word in office.

magazine

Big Interview Bud Mundt, Executive Director, AOPD, p18 June 2014

JUNE 2014

Technology â&#x20AC;&#x201C; just another adjacent category. But is it? p26

WWW.OPI.NET

p38 The state

of our industry

p12 Q1 results and more at Depot All wrapped up at Oz dealer NuPrint p32

Contents June 2014

www.opi.net

News

38 Research What’s the state of our industry? Here’s a view from the top...

8 Round-up

OP sales up at ADVEO; FSSI contract extended in US; more consolidation in Europe

41 The art of connection OPI talks to Mark Hampton about R2 and how it can help dealers grow their sales

10 Beyond OP

Staples kicks off merchandising campaign; strong Q1 for SCA; Commercial buys into print firm

Category Analysis

12 Analysis

42 Desktop Accessories

Features

45 Visual Communications

Office Depot closes stores in North America and settles with New York; mixed Q1 bag for Staples

A sector that is doing well again – if you play your cards right

Globalisation and a more fluid workforce are the key drivers that make this category so buoyant

18 Standing firm

Dealer network organisation AOPD is on track to exceed last year’s figure of 56 new contracts and Executive Director Bud Mundt thinks there is more to come

Regulars 7 Editor’s comment

26 The poisoned apple?

50 On the move

Everybody’s using it, but are independents equipped and ready to really sell technology?

51 5 minutes with... Kathy Hoyle

32 All wrapped up

52 What’s on

OPI goes down under to talk to NuPrint Office Choice

Key dates for your calendar

34 Fulfilling promise

The new direction of Supplies Network explained

54 Final word Martin Weedall

“The largest barrier to success for dealers is breaking away from legacy paradigms of the OP business, such as quarterly pricing, print vehicles and next-day service. These are not elements required to be successful in selling technology products”... For the full story, turn to page 26 w w w.opi.net | OPI Magazine

Editorial Editor Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net

Features & Production Editor Heike Dieckmann

Editor’s comment

+44 (0)20 7841 2950 heike.dieckmann@opi.net

Sales and Marketing VP – Continental Europe, Middle East and Africa Ewan Dickson +44 (0)20 7841 2954 ewan.dickson@opi.net

VP – North America and UK Chris Turness +44 (0)20 7841 2953 chris.turness@opi.net

Digital Manager India Pride +44 (0)20 7841 2959 india.pride@opi.net

Sales Executive Fergus Cox +44 (0)20 7841 2952 fergus.cox@opi.net

Events Events Manager Lisa Haywood +44 (0)20 7841 2945 lisa.haywood@opi.net

Production and Finance Operations Manager Nicky Coulson Designer Charlotte Gerhardt +44 (0)20 7841 2943 charlotte.gerhardt@opi.net

Production Assistant Jack Francis +44 (0)20 7841 2950 jack.francis@opi.net

Accountant Dotun Olaniyan +44 (0)20 7841 2956 dotun.olaniyan@opi.net

Publishers CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net

Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net OPI is printed in the UK by The carrier sheet is printed on Satimat Silk paper, which is produced on pulp manufactured wood obtained from recognised responsible forests and at an FSC® certified mill. It is polywrapped in recycleable plastic that will biodegrade within six months.

CBP0009242909111341

No part of this magazine may be reproduced, copied, stored in an electronic retrieval system or transmitted save with written permission or in accordance with provision of the copyright designs and patents act of 1988. Stringent efforts have been made by Office Products International to ensure accuracy. However, due principally to the fact that data cannot always be verified, it is possible that some errors or omissions may occur. Office Products International cannot accept responsibility for such errors or omissions. Office Products International accepts no responsibility for comments made by contributing authors or interviewees that may offend.

Traffic problems We often talk about independent dealers’ ability to be nimble in comparison to their big box rivals, and perhaps nowhere is this better illustrated than by Staples’ efforts to grow its top line. While progressive independents have been able to grow their businesses through a mix of product diversification, acquisitions and pragmatic entrepreneurship, Staples just can’t seem to turn the corner despite a perfectly logical and well-executed reinvention strategy that has been in place for the best part of two years – and which gained momentum with the ‘Make More Happen’ campaign earlier this year. Of course, dealers are generally just B2B operations while about 39% of Staples’ annual sales of $23 billion come from its North The thing that struck me […] was American retail stores that there didn’t appear to be a – a retail network that single customer looks increasingly like a millstone around its neck as the move to online gathers pace. All 1,800 North American outlets will have been remerchandised by the end of June, featuring a broader selection of non-traditional office supplies such as safety products, party supplies and snacks. But will this be enough? Interestingly, one financial analyst recently visited a Staples store and shot some video with a mobile phone. The thing that struck me, apart from the rather unappealing look of the store itself (obviously not one of the new format stores), was that there didn’t appear to be a single customer, and driving traffic to stores is a major headache. The analyst said the merchandising changes were just “delaying the inevitable”. For the industry’s sake, let’s hope he is wrong. Andy Braithwaite , Editor

Office Products International Ltd (OPI), Diamond House, 36-38 Hatton Garden, London EC1N 8EB, UK Tel: +44 (0)20 7841 2950 Fax: +44 (0)20 7841 2951

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@opinews

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News from opi.net Traditional OP up at ADVEO ADVEO bucked the trend in its Q1 results with traditional office supplies compensating for a drop in EOS sales. The European wholesaler reported a 6% year-on-year drop in sales to 1263 million ($362 million) as EOS disappointed due to low product availability. However, this was partially offset by 7% year-on-year growth in traditional OP – a category which will have been helped by the addition of the Buro+ dealer group in France. EOS product margin improvement and a better general product mix drove a good gross margin performance of 20% of sales, while adjusted net profit was up 6% to 15.5 million. EBITDA in France and Germany was flat year on year, while Benelux and Italy showed growth and the restructuring Spanish business reported a dip.

German chains testing same-day delivery Metro Group-owned consumer electronics retailers Media Markt and Saturn have teamed with delivery service provider tiramizoo to pilot same-day delivery in Germany. The chains are trialling 30-minute and three-hour delivery options as well as drop-offs during a two-hour window specified by the customer. Saturn is testing the express delivery service in Berlin and Munich, while Media Markt is piloting it in Düsseldorf, Essen, Mainz, Mannheim and Ludwigshafen. If successful the service is expected to be rolled out in a further 18 large German cities by the end of the year.

OPI Magazine | June 2014

US federal OP contract extended The US government’s $250 million-a-year federal office supplies contract has been extended by up to six months following delays in the award of a new contract. The Federal Strategic Sourcing Initiative (FSSI) contract (known as OS2) was due to expire on 31 May and the award for the new FSSI contract (OS3) should already have been made by the General Services Administration (GSA). However, protests over the new award – in particular regarding whether the GSA complied with the US Small Business Jobs Act – have held up the award of OS3, leading to an extension of the OS2 contract for up to six months, to the end of November. Rod Manson, President at independent dealer Office Advantage and Chair of the Legislative & Regulatory Affairs Committee at US trade association IOPFDA, said the association welcomed the contract extension as it meant there would be no disruption during the traditionally high selling season in the run-up to the end of the federal government’s fiscal year of on 30 September. Office supplies is not the only FSSI contract that is giving the GSA headaches. Protests against a new IT contract have only recently been resolved and contract awards for the MRO and jan/san categories have also been delayed due to protests. The GSA cannot legally award a contract until all protests have been dealt with. Meanwhile, trade association NOPA has been successful in getting a bi-partisan amendment filed before the House Rules Committee which would require the GSA to conduct a small-business impact study on FSSI before issuing a bid request. This is what NOPA has been lobbying for since the beginning of FSSI and, if passed into law, it would be a major victory for the association.

Groups combine events The growing need to reduce costs has led to two announcements about US industry organisations combining events. The Business Solutions Association (BSA) and the Independent Office Products and Furniture Dealers Association (IOPFDA) will co-locate their 2014 annual meetings from 22-26 October in San Diego. Both organisations will have separate programmes, but will share networking and business-building events. SP Richards SVP and BSA President Jim O’Brien said: “We will be bringing together all aspects of the office products and furnishings industry – manufacturers, dealers, wholesalers and manufacturer representatives – to one location over

several days. This is just another example of how our industry responds to its members by seeking ways to cut expenses while still delivering quality programming.” Meanwhile, AOPD, TriMega and the Direct Purchasing Catalog Group (DPCG) have announced plans to hold a joint event in 2016, combining the annual meetings of AOPD and DPCG with TriMega’s One-on-One event for its largest members. Representatives of the three groups will be getting together soon to study the idea more carefully.

Staples has been stealing the limelight with its SKU expansion over the past year or two, but e-tailer Shoplet has announced that it now carries over one million items on its shoplet.com website. “We don’t offer one million items as a gateway to bragging rights. Rather, we perceive this announcement as just another marker of Shoplet’s continual growth and dedication to service,” said founder and CEO Tony Ellison.

Buffetti expands print offering Italian reseller Buffetti has signed a partnership agreement with Xerox in a move that will enable Buffetti’s network of around 700 stores – most of them franchised – to offer a full range of Xerox products to their small business customers. The agreement means Buffetti can now sell Xerox products through retail, direct and B2B channels and enjoy special

Dixons and CPW conﬁrm merger European retailers Dixons and Carphone Warehouse (CPW) have agreed a merger that will create a £12 billion ($20 billion) electronics, mobile phone and connectivity giant. The combined company – called Dixons Carphone – will bring the Currys, Carphone Warehouse and PC World brands under the same

roof and will operate a total of over 2,500 stores. CPW’s Sir Charles Dunstone will chair the new company and Dixons boss Seb James is to be CEO. The merger is expected to produce annual cost reductions of at least £80 million within three years. Dixons will be hoping that its tie-up with CPW is more successful than that of Best Buy. The US electronics chain’s attempt to enter the UK market after creating a joint venture with CPW ended in an expensive flop – although CPW did rather well out of the whole deal.

pricing and promotions from the OEM. Buffetti’s Hardware Marketing Manager Enrico Mastronardi told OPI that the resale of consumables for Xerox machines would be a boost for the group’s retail outlets. “Despite the economic crisis, sales of consumables (original or compatible) are steady and can offer good margins,” he said.

New owners for Renz German binding and laminating products manufacturer Renz has been acquired by a group of private investors. The 100-year-old company that currently has 300 employees will now be headed up by Managing Director Michael Schubert while Georg Saint-Denis takes over as CEO of Renz Group. Former majority shareholder Peter Renz will remain as a consultant and advisory board member. “The investor participation begins a new era for the Renz company and also opens up significant growth opportunities that were unreachable for us to date,” said Renz.

News ■ Round-up

Shoplet hits million mark

News n Beyond OP

Staples launches new store merchandising Staples’ new retail merchandising initiative launched at stores in Dallas, Texas, in May as part of its ‘beyond office supplies’ strategy. The company debuted eight new product categories ahead of a rollout to more than 1,000 stores across the US and about 300 more in Canada. The categories are: • facilities and breakroom supplies (cleaning supplies, bottled water, soda, snacks) • MRO items (safety cones, hard hats, bright safety vests) • medical supplies (scrubs, bandages, anything for medical offices or nursing homes) • retail supplies for small businesses (mobile POS, bags, bows, signage) • storage solutions (containers of all sizes) • gifts and cards for office parties • early education toys and learning aids (items for childcare facilities, including early education toys, stickers and arts and crafts supplies) • organisational accessories from the Poppin brand In addition, there is an expanded mailing and shipping assortment that includes bubble wrap rolls, padded envelopes and boxes of all sizes. The revamp sees a refresh of about 20% of in-store products by adding 1,600 new products that go beyond traditional OP, while about 1,000 items are being removed to create an office supplies ‘essentials’ assortment. Each store will also have an updated Staples.com kiosk. Janney analyst David Strasser called the move “some of the broadest steps we have seen to drive consumers back to the stores” and said it was “a smart use of space”.

Strong Q1 for SCA Sweden-based jan/san supplier SCA reported a sales rise of 9% year on year (excluding divestments) to SKr24.2 billion ($3.7 billion) in the first quarter. Adjusted operating profit rose 18% year on year to SKr2.6 billion. In North America, the global company said that the harsh winter had a negative

impact on demand and earnings for away-from-home tissue. SCA also revealed that its efficiency programmes in the hygiene and forest products operations were continuing according to plan.

Superstat sends members packing UK dealer group Superstat is launching a new packaging products drive to help members take advantage of this fast-growing sector. The total number of parcels and packages fuelled by online purchases is expected to rise to 2.2 billion

OPI Magazine | June 2014

Marley gets Mother Parkers push Canadian coffee company Mother Parkers has made a strategic investment in Marley Coffee, initially buying $2.5 million in Marley Coffee stock with total funding potentially rising to over $8 million. Mother Parkers, the largest independent roaster in North America, makes Marley’s K-Cup-compatible RealCup capsules and is also Marley’s Canadian food service provider. The initial share purchase gives Mother Parkers a 7% stake in Marley Coffee, but this could double if warrants are exercised. As part of the agreement, Mother Parkers will provide Marley Coffee with $2 million of marketing and brand promotion funding over the next two years.

Slingsby slashes staff UK workplace supplies reseller Slingsby has axed 20% of its workforce following a “fundamental review” of its business. The company revealed the job cuts after announcing a pre-tax loss for 2013 of £249,000 ($419,000) on sales of £14 million. That compares to a profit before tax of £102,000 and sales of £14.6 million in 2012. As part of its plans to reduce overheads, Slingsby’s manufacturing unit has been closed with all in-house designed products now subcontracted out to trade-only suppliers in the UK. It has also rationalised its Irish operations and consolidated activities in both Northern Ireland and the Republic of Ireland. The company further revealed that sales in the first three months of 2014 were 11% down on those of 2013.

in the UK by 2017, and the Superstat offering will include all the top-selling products in the category such as stretch wraps, boxes and mailroom supplies. Group Marketing Director Karly Haley said: “E-commerce is big business and the potential for our dealers to provide a range of packaging products is huge. This [packaging offering] allows dealers to target online businesses that may have a small traditional office supplies requirement, but a huge need for packaging.”

Leading UK independent dealer Commercial Group has taken a majority 51% stake in the £3 million ($5 million) print company In2Print. The newly merged business will create a comprehensive print services solution provider for firms throughout the UK. In2Print has been active for almost 20 years, employs 35 people and has worked for companies including G4S and Superdry.

Commercial CEO Arthur Hindmarch said: “Here at Commercial, and even more so now that we have officially merged with In2Print, we can continue to provide our clients with a high-quality print offering, reassured that we’ve got one of the best print companies in the UK fulfilling a number of our print orders. Together we are now a leading force in print solutions.”

Medium goes big online German conference and presentation products distributor Medium has launched its new e-shop with a variety of cutting-edge purchasing tools. The new e-commerce site includes e-billing, email alerts, contract ordering and advanced price comparison filters. Medium Managing Director Arno Alberty said: “With the new e-shop we provide our partners with an extremely powerful purchasing environment.”

Arthur Hindmarch (l) and In2Print’s Pete Cassidy

Kärcher powers to Interclean award Kärcher was the winner of the Innovation Award 2014 at the ISSA/ Interclean show in Amsterdam in May. The manufacturer won with its energy-saving B60/10C MopVac that mops and dries floors without the need for batteries or electricity. Awards jury chairwoman Michelle Marshall said: “The sustainability trend is proving it is very much here to stay and we continue to see new products that use less water, energy and chemicals.” This year’s ISSA/Interclean exhibition saw an increase in visitor numbers of 5% compared to the last show in 2012. Visitor numbers rose to 29,325, compared with 28,001 in 2012, while there was a 4% rise in exhibitor numbers to 696. The next ISSA/Interclean Amsterdam takes place from 10-13 May 2016.

News n Beyond OP

Commercial gets into print

News n Analysis

Depot announces store closures At least 400 stores are to close between now and 2016

Office

Depot has said it expects to close at least 400 US stores by the end of 2016 as part of its integration with OfficeMax. Revealing the figure as Depot released its first quarter earnings, CEO Roland Smith said that 150 stores are set to close this year – although not until after the important back-to-school period.

products, work areas for mobile workers to use, for example. Smith added that the total store closures were expected to generate annual run-rate synergies of at least $75 million by the end of 2016, in addition to the more than $600 million previously announced. News of the retail plan, along with better-than-expected first quarter

Just how ‘unique’ will Depot’s new USP really be?

What small business services will Depot’s new store format include? something is done to address the decline in sales. “Management needs to figure out what opportunities look like for the company beyond office products,” said Binder. “Many have tried to figure it out before with little success, so this will be no easy task.” With Staples in the middle of a major retail revamp – including the addition of several new product categories and the downsizing of traditional OP into an ‘essentials’ assortment – based on a 12,000 sq ft (1,200 sq m) store, just how ‘unique’ will Depot’s new USP really be?

“The overlapping retail footprint results (see box ‘Office Depot’s Q1 resulting from the merger provides results at a glance’), were welcomed us with a unique opportunity to by the investment community and consolidate and optimise our store Depot’s share price jumped by over portfolio, while maintaining the 15% as a result. retail presence necessary to serve However, as Jefferies analyst our customers,” said Smith. Dan Binder pointed out, those The 400+ closures represent an $75 million in synergies will be “initial group” of stores identified wiped out in two years’ time unless during a preliminary phase of a three-stage US retail Office Depot’s Q1 results at a glance store optimisation plan. An update on the total number translation and calendar timing shifts into Company of closures is due to be given account. • Sales were $4.35 billion, a pro forma in July. The third stage of the • Contract sales were down in the low single year-on-year decline of 3%. plan will see the development digits while direct channel sales increased • Adjusted net profit stood at $38 million, or of Depot’s ‘store of the future’, slightly. $0.07 per share – well ahead of analyst something which will be • Operating profit of $40 million represented consensus earnings of $0.03 per share. closely aligned to the highly an increase of almost 5% year on year, • Adjusted operating profit of $72 million anticipated ‘unique selling although gross margin declined – partly due was 33% higher than last year’s pro forma proposition’ (USP) that should to a greater mix of lower margin enterprise figure of $54 million. also be revealed soon. accounts. This USP is also the subject North American Retail of a three-step plan and Depot International • Pro forma sales fell 5% to $1.81 billion is currently defining customer • International Q1 sales were $1 billion, down while same-store sales were down 3%. segmentation before it by just 1% year on year on a pro forma • Sales declined in furniture, supplies and finalises the product/service basis. computers, and increased in copy and print. and channel strategy and • European contract and direct sales were • Divisional operating profit was $37 million then pilots the new concept – down, although retail sales increased. versus $31 million last year and operating probably in the third quarter. • Operating income increased by 18% to $20 margin increased 40 basis points to 2%. Both Depot and ‘Max had million. been trialling smaller stores • Depot confirmed that it had agreed to North American Business Solutions before their merger, so it will sell its stake in OfficeMax’s Mexican • Q1 sales were $1.54 billion, a 2% decline be interesting to see which business – which includes 92 stores – to compared with pro forma sales of $1.57 aspects of those concepts will its joint-venture partner in Mexico. This billion in the first quarter last year. CFO be kept – expanded copy and transaction is expected to close in the Steve Hare said the underlying result print areas, small business current quarter. was flat after taking weather, currency services, more technology

OPI Magazine | June 2014

In addition to the store closures announced for the US, Office Depot is to close its OfficeMax Grand & Toy store network in Canada. Depot says it will close all 19 of the OfficeMax Grand & Toy stores and maintain the brand in Canada via its website, call centres and direct sales reps. The 19 retail outlets – located in Ontario, Alberta, British Columbia and Manitoba – will begin closing over the

Only 3% of Grand & Toy’s sales came from walk-in store traffic next few months. Approximately 160 employees, both full-time and part-time, will be impacted by the store closures. “We are concentrating our efforts on ways to better serve our customers in response to their changing business needs,” said Simon Finch, General Manager, OfficeMax Grand & Toy. “Our customers overwhelmingly prefer an online experience because it offers more products, a constantly growing selection and convenient door-to-door delivery.” The company revealed that only 3% of its sales in Canada come from walk-in store trade and that it has seen “tremendous growth” in the online channel over the past several years. OPI estimates total Grand & Toy sales to be about $400 million. Investments had been made in the Grand & Toy retail network over recent few years to transform the stores from a traditional format into ‘business centres’ that had a more consultative approach to customer relationships. This concept could still play a part in Office Depot’s new ‘store of the future’ which is expected to be unveiled later this year.

Depot to pay New York $475,000 Office Depot is to pay the state of New York $475,000 after reaching an agreement on overcharging claims. New York Attorney General Eric Schneiderman announced details of the agreement in a statement issued at the beginning of May. The payment relates to Office Depot’s contract with the state which ran from 2008-2013 and grossed over $11.5 million in sales for the office supplier. New York alleges that Office Depot failed to honour a pricing promise to offer the state and its agencies the same or better pricing Depot was giving to customers it served on a contract with the General Services Administration (GSA). “By failing to honour its contract, Office Depot profited at the expense of New York taxpayers, local governments and state agencies,” said Schneiderman. “At a time when municipalities across the state are struggling to meet tight budgets and fund critical services, my office will do everything in its power to ensure vendors honour their commitment to conduct fair and honest business with our communities.” The state itself will receive about $231,000 while around $244,000 will be split between a host of other state and local government agencies that also used the contract.

Depot has not admitted or denied the allegations, but said it had agreed to resolve the dispute to avoid further protracted litigation. “We are pleased that the State of New York and Office Depot were able to bring this matter to conclusion as Office Depot prides itself on pricing integrity,” Depot New York Attorney General Eric said in a letter which Schneiderman will accompany refund cheques to the agencies concerned. In its quarterly 10Q filing to the SEC, Depot also revealed that is has entered a mediation process to try and settle the State of California/David Sherwin whistleblower lawsuit which was unsealed in October 2012. Non-binding, voluntary mediation is due to take place during the current quarter and a trial is currently scheduled for July 2015. The case was remanded back to the Superior Court of California at the end of January this year.

w w w.opi.net | OPI Magazine

News n Analysis

Grand & Toy stores axed

In May, OPI’s LinkedIn community achieved the milestone of an amazing 10,000 members. Whether it’s for discussions on the latest news stories, social media tips, general business advice, recruitment, product promotions or simply to take part in a bit of friendly banter with peers from around the world, there’s something for everyone. Below is an example of some of the recent activity from the group.

Discussions As an OP dealer, what would be your main key drivers when considering a cloud-based back-office system? Steve Dennis, Prima Software Keep it simple for a start if you are in small business. Telecommunications should be Skype and the email system MS Office 365 – both can be connected which will make this area of the business amazingly cheap. Upgrade to VOIP later if necessary. Both are cloud-based. With Office 365 you can get access to MS Office in the cloud and file all documents in the cloud. For hardware, purchase it all second hand. HP 3-in-1s, for example, are readily available from second-hand dealers. For invoicing (in and out) and point of sale, there are many adaptable products that are available. CRM etc could be done through Infusionsoft, a company based in Arizona. Patrick Tobin, Managing Director, Supplied Pty

Percentage of Groupon transactions that are completed on a mobile device

33%

Percentage of US women that use social media site Pinterest

News ■ And finally...

Comment

54%

TWEET CHAT follow us on Twitter @OPInews, @andy_opi StaplesPromoProducts @staplespromo It’s a great day to throw an office party – with this bottle opener pen!

Governor Rick Snyder @onetoughnerd Touring the @nwlrubbermaid Design Center in Kalamazoo. What a great facility!

8% Percentage of US men that use social media site Pinterest

SNAP SHOT

Promotions Are you STILL using styrofoam cups? It’s time to get rid of the evil that is polystyrene once and for all! This new FSC-certified hot cup goes above and beyond traditional paper cups, and especially beyond foam! Sharon Young, Director of Sustainability, Emerald Brand

Members AF International’s Paul Hardy updated his LinkedIn photo, showing himself posing with England football legend Sir Geoff Hurst (the player who scored a hat-trick for England in the 1966 soccer World Cup). “Tell me you didn’t go up to the great man and say, ‘They think it’s all over’ and expect him to finish the quote!” quipped one fellow group member.

Have you joined the OPI LinkedIn group yet? If not, what are you waiting for?

TV star Camilla Dallerup recreated the iconic American Beauty ‘petal’ image with pink pens to celebrate Pentel UK’s fundraising for leading research charity Breast Cancer Campaign reaching £1 million ($1.6 million). Launched in 2006, Pentel’s partnership with Breast Cancer Campaign has seen almost five million pens from the pink range sold since then.

opi.net poll results Which of these social media platforms are you seeing most success with from a sales and marketing point of view?

Facebook 48%

Twitter 13%

LinkedIn 19% Another social media platform

We don’t use social media

12%

8% w w w.opi.net | OPI Magazine

Big Interview | Bud Mundt

Standing firm AOPD Executive Director Bud Mundt discusses dealer group relationships and big box consolidation… among other things by Andy Braithwaite andy.braithwaite@opi.net

WITH

all the current talk of dealer group mergers, dealer defections and spin-off groups, dealer network organisation AOPD represents something of a pillar of stability in the US independent dealer community. Founded in 1978 to service large national contracts, the underlying aim of the organisation has remained virtually unchanged ever since, although, of course, it has moved with the times as the contract market has evolved. There has also been stability at the head of AOPD, with Executive Director Bud Mundt just a few months away from celebrating ten years in the job, having been dissuaded from retiring in 2004 to join the organisation, first as VP of Sales and Marketing and then as Executive Director from January 2005 (see Big Interview, OPI #186 for more details of Mundt’s career). Mundt’s still not quite ready to retire (he reveals his personal plans at the end of this interview), and OPI caught up with the Dallas-based exec to get his views on the latest goings-on in the US business supplies world. OPI: I can’t believe it’s over five years since OPI’s last Big Interview with you.

OPI Magazine | June 2014

AOPD | Big Interview Bud Mundt: Time flies when you’re having a good time! OPI: That might be a good place to start. Can you reflect quickly back on that time? BM: For me nothing much has changed within AOPD – I’m the face of AOPD, I run the day-to-day operations and I report to our board of directors. We’ve turned the board over probably three or four times since I started ten years ago, and I’ve got to credit the stability of AOPD to the board members and their total commitment to the organisation and its principles. But we do recognise that the industry is changing and that we have to start changing with it, so we’ve done some things differently. We now have 26 business partners. I think when we talked five years ago it might have been 20. One of those new partners is RDA Advantage; it’s a jan/ san company and that’s the big change at the moment. We are not a buying group, but we are encouraging our dealers to start talking to their customers about jan/san and breakroom supplies to help them offset some of the decreases they may be experiencing in the office supply category. OPI: Do you think your dealers are up to speed with their ranges and their ability to supply these products? BM: Yes. In fact, if you look at United Stationers and SP Richards, they’re making these items available to their dealers and they realise that they have to be competitive. And RDA Advantage, our new jan/san business partner, is doing an excellent job in fulfilling some of these needs for our dealers as well. OPI: How many dealers do you have now? BM: We’re up to 75 dealers, including our Canadian members.

“When you’re in the contract business, you win some, you lose some – that’s just the nature of the beast”

OPI: And what does that represent in terms of end-user sales? BM: In total, about $1.7 billion in total sales. OPI: The same as five years ago. BM: Well, that’s about right, but the main point here to understand is that our overall contracts and contract volume has increased and that is where AOPD supports our dealers. That is what we are all about. OPI: What does that sales number reflect? Dealer top lines under pressure from market conditions?

BM: That’s a large part of it. We’ve also added a few more smaller dealers in the mix than we had before. The primary reason for that is we’re trying to increase our footprint throughout the country – when you write a regional or national contract it doesn’t mean anything if you have to ship it by FedEx or by UPS, even though that’s how the big box guys ship a lot of their contracts into outlying locations. OPI: So, is your footprint where you want it to be? BM: No, I want to go further, say to 80-85 dealers. But they’ve got to be the right dealers; I don’t want to bring somebody in that can’t handle the responsibility of servicing contracts. So I’ve been doing a lot of work on that; in fact, we’ve just confirmed a new member in Florida in an area of the state where we don’t have a dealer. OPI: What happens in places like Texas or New York where you have multiple members who are pretty much neighbours? You must get some friction sometimes? BM: That does happen occasionally and it’s part of my job to smooth things over. AOPD has made the decision that we think some markets are large enough to be able to support two or three dealers. OPI: So how many contracts do you have now? BM: We have 335 active AOPD contracts at this moment, and I can say that we’ve got 24 new contracts so far year-to-date. We had 56 last year and we are on track to exceed that this year. OPI: What’s the net win-to-loss ratio? BM: Well, out of the 56 that we had in total, there were 18 that ended, so that’s a net gain of 38 for last year. When you’re in the contract business, you win some, you lose some – that’s just the nature of the beast. We’ve still never lost a contract because of service, but we’ve lost some because of price. And we’re keeping and growing significantly in our larger AOPD-controlled contracts. The Premier Hospital Group is doing very well and it’s been one of our larger contract victories in the past couple of years. Our cooperative contract with NCPA, the National Cooperative Purchasing Alliance, is also into the second year now and is creating a lot of interest from dealers in other dealer groups. w w w.opi.net | OPI Magazine

Big Interview | Bud Mundt OPI: Which brings us nicely onto these cooperative contracts. That’s something you’ve grown in the past few years – how are they doing? BM: Very well. I think when IS won US Communities, everybody was shocked that an independent dealer organisation could take something away from a big box. IS certainly did that and we needed something ourselves within AOPD, so we looked at a couple of different situations. We had what we call America’s Choice where we worked through Todd Sandoval, our dealer in New Mexico, with his cooperative contract, but we did very well for our dealers in 2012 when the Region 14 Education Center in Abilene, Texas – which was working with NCPA – wanted to know if we were interested in bidding on that. And now we’re the sole supplier on that contract; we just renewed our second year and we’ve got three one-year options left and are on the right track to do at least $12 million in 2014. OPI: How many dealers have you got on that contract? BM: We’ve probably got about 43 dealers that are on that contract and more are signing up every day. A lot of those dealers are going after existing contracts where they’ve got business with either a state, a city or a county that are extremely happy with the service levels and would like to keep working with a

“[Lyreco] came to talk to us, but I don’t think they listened to us”

local business to satisfy their office supply needs at an affordable and consistent price and don’t have to go out to bid. OPI: How do these contracts differ from each other? BM: The dealers we have talked to say there is more flexibility with our NCPA agreement than with the others out there today. OPI: There’s still obviously a fee that has to be paid to NCPA, isn’t there? BM: There’s a fee to NCPA and there’s a fee to AOPD. OPI: How would you characterise the main differences between US Communities and NCPA? BM: Less costly, easier to implement and more flexible. OPI: Obviously Mike Gentile won’t like it when he reads that. BM: No comment regarding that statement. OPI: What about your federal government business? BM: We took a big hit five years ago when we weren’t a winner for FSSI and we’ve made that back with strong commercial and public sector gains. To give you an example, this past month we were up 19% in commercial sales. That’s pretty darn good. Total sales were up 11% in the first quarter – last year we were flat because we were still feeling the effects of losing out on the FSSI business and the economy. OPI: You’ve still got access to FSSI through your member Sita Business Systems, haven’t you? BM: Yes, and we have about 12 members piggybacking on that contract. We’ve also got more than 20 dealers as part of our GSA Schedule 75 agreement that we still hold and they are selling to their federal customers through that.

OPI Magazine | June 2014

AOPD | Big Interview OPI: Have you bid on the new FSSI OS3 contract? BM: Yes, we have bid on OS3 and we feel pretty good about our chances of getting a piece of that. OPI: Have you bid as AOPD or through one of your members? BM: I will just say that we currently have a bid in for the OS3 RFP. OPI: You’ve got this global contracts association with EOSA in Europe. How’s that doing? BM: Actually, that has recently come to an end. EOSA kind of pulled away and they simply told us that they no longer want to be part of a sales and marketing organisation; they’re only a buying group now. So we’re pulling that off our website as we speak. OPI: Did you talk to Lyreco when they were looking for a US partner last year? BM: Oh yes, they came to talk to us, but I don’t think they listened to us. OPI: What did you tell them that they didn’t listen to? BM: I simply told them that in this marketplace AOPD was the proven organisation that could effectively handle the requirements of a large national or international account. And we didn’t believe there was $100 million in business in the US. No question there’s some dollar volume, but we knew going in that they were going to choose WB Mason; we talked to them because we felt like we were obliged to. OPI: What made you so sure they were going to choose WB Mason? BM: Because of their relationship with United and because I think WB Mason is a good organisation. But I’m not so sure that they’ve got a whole lot of national or international contracts. The vendors all speak highly of WB Mason and at the end of the day it was a great piece of PR for both Lyreco and Mason. OPI: Is Mason coming up against you more in national accounts now? BM: Not really. They’re coming after our dealers in their general commercial business, which affects AOPD because if it’s bad for our dealers, it’s bad for us. AOPD isn’t 100% of a dealer’s business; it’s anywhere from maybe 5-10% of the total. So the other 90% they’ve got to take care of themselves, through their buying groups or through their own ingenuity and strength.

OPI: What’s your relationship with IS and TriMega? I guess most of your dealers are members of one or the other. BM: Well, we have a good relationship with DPCG, Office Partners, TriMega, Pinnacle and IS. We have dealers in AOPD from all those groups. If there is any… I don’t know if you’d call it ‘animosity’, but whatever is going on between Pinnacle, TriMega and IS, it doesn’t really affect us. We can all survive in this area and we should be cooperating and actually doing things together – but not fully merging our organisations. I think what IS and TriMega are doing with EPIC makes a lot of sense for the manufacturers because it lessens their expenses. w w w.opi.net | OPI Magazine

Big Interview | Bud Mundt

OPI: You do something similar with DPCG, don’t you? BM: Yes, and we’re going to do it again in 2015. In fact, we’ve just made a joint announcement with TriMega and DPCG to

BM: I think it’s nice to note here that we don’t have the expensive staff of some of the other groups. We are low cost and we make things happen, and I think that is something that our business partners appreciate. And the wholesalers feel that way too. They’re supporting AOPD more than ever before because we’re an extension of their services and programmes. Back to your question, there are just four full-time staff at AOPD: myself; Sharon Stepien, our General Manager of Operations – just a phenomenal person – who’s also in charge of our federal government programme; Angela Sumner, our National Marketing Director, who does a marvellous job; and Shelley Tousignant, who handles accounts payable and receivables and an awful lot of other things within AOPD which just makes her indispensable. Sharon, Angela and Shelley are the real backbone of AOPD. I work out of an office in Dallas, I travel and do a lot of things with the business partners and the dealers, but the real strength is back there in St Charles, Illinois. I’m just a good delegator! Then we have three consultants who do an excellent job supporting our dealers. Tom Buxton is our sales consultant and the best national sales manager in the office products industry; he works with the dealers on developing programmes and helping them with existing accounts. Then we have

“Whatever is going on between Pinnacle, TriMega and IS, it doesn’t really affect us” cooperate on a combined meeting in 2016. We’re simply trying to make things easier for our business partners from a financial standpoint. Just like we’re doing with DPCG, we’re going to try to do that with the TriMega dealers. Not all TriMega dealers, just their larger dealers that attend their annual one-to-one meeting which closely resembles the AOPD annual meeting format.

Mike Matthews, our national accounts pricing manager, who assists dealers on bids – he is tops in the industry. And there’s TJ Crayne, our IT consultant – an icon in the industry who came on board last year.

OPI: Taking cost out of the channel is something we hear and talk about a lot. How important do you think that is? BM: I think it’s critical. You look at the money in the industry and it all comes from the manufacturers. All these meetings they have to attend are extremely costly and they’re saying: ‘Enough is enough!’

OPI: Do you think this need to reduce costs will eventually lead to IS and TriMega merging? BM: Well, I know they tried really hard, but I don’t have the answers. I haven’t seen their balance sheets so I don’t know what the situation was there exactly, but they tried in earnest to do it and I think Mike Gentile would like to continue the conversation. I know Mike Maggio would too, so who knows what’s going to come out of that in the end.

OPI: Tell me something about AOPD’s cost structure.

OPI: But do you think they will merge eventually?

OPI Magazine | June 2014

Big Interview | Bud Mundt BM: I don’t know. I don’t have a crystal ball and the crystal ball that I used back in 2009 about Office Depot and OfficeMax not merging didn’t come out too well, so I guess I’ve gotten wiser in my old age. OPI: Sitting on the fence with that one would probably be a good idea! You predicted in the previous Big Interview that Depot and ‘Max would never merge, but obviously it has now happened. BM: I know. It’s still a mystery to me. OPI: What changes are you seeing and what will it mean for the market going forward? BM: There are definitely some changes in the market. They’re laying off thousands of people – Depot, ‘Max and even Staples – to try and get things right within their own organisations. So I think from a contract standpoint they’re going to be hurting a little bit in terms of some accounts out there being left unprotected – where a guy used to have 100 accounts, maybe he’s got 300 accounts now. Can you cover all those accounts effectively? No. So you’re going to have some losses, but they know that – and they knew that going in. OPI: Depot CEO Roland Smith referred to renegotiating some low-margin OfficeMax contracts in the latest conference call. BM: Yes, and when that happens it’s going to be an opportunity for independent dealers. I think it’s going to free up a lot of market, I really do. OPI: And where’s this all going to lead to? Sorry to ask you to get your crystal ball out again. BM: Yes, and I’ve learned never to do that with you again! All I can tell you, Andy, is that there’s nothing as constant as change and it is going to change. How? I don’t have the answer to that, but I think the Amazon effect is going to become larger, not only for independent dealers but especially for Office Depot and Staples as well. You look at what Costco and Walmart are doing in office supplies; it all adds up and that

OPI Magazine | June 2014

“The real strength [of AOPD] is back there in St Charles, Illinois. I’m just a good delegator!”

affects independent dealers as well as it affects retail. In fact, it affects retail more right now, so Staples is doing everything it can. I think Ron Sargent is doing a great job in trying to deflect that whole charge from Amazon with adding SKUs and new categories – he’s doing what he has to do. OPI: What can dealers learn from that? Do they need to be hanging onto the coat-tails of that strategy from Staples? BM: They need to do the same thing; they need to change. They need to get more involved with e-commerce. E-commerce is where it’s at right now and it’s going to be a huge part of the industry. That’s something we’ve got TJ involved in with AOPD dealers. OPI: And then, just to finish off, what about your own plans? You’ve been at AOPD for almost ten years – that’s not bad for someone who was on the verge of retiring! BM: I submitted a succession plan to the board a year ago and at the time I said I was going to retire on my birthday in January 2016. That’s changed and now I’m thinking I would like to go on until 31 December 2016. That will give me another two and a half years at AOPD; there are some things I still want to see happen. OPI: Such as? BM: The growth of some of our existing contracts like Premier and NCPA, for one. NCPA, as I said, is on a growth rate to do a minimum of $12 million in 2014 so who knows what’s going to happen after that. There are thousands of public sector entities that are part of NCPA and people are now starting to understand what NCPA is all about. It doesn’t have the reputation that US Communities has, but I tell you that, within the next year or two, it will and you’re going to see a tremendous amount of growth there. OPI: Thanks for your time Bud, and all the best for the next two and half years.

Hot Topic | Selling Technology

The poisoned apple? Technology is just another adjacent category that helps resellers counteract the decline of OP. But is it as simple as that? OPI finds out… by Heike Dieckmann heike.dieckmann@opi.net

YOU

hear the stories and see the stats: about tablets having truly entered the mainstream in 2013, so much so that they’re already becoming commoditised; about the growth in 3D printing and the whole new set of consumables it brings with it; about the increase in the mobile workforce and changing working habits. All this potentially means a huge change in the type of products companies need for their offices and staff as legal pads get replaced by tablets, pens by styluses, copy paper by digital storage solutions. (See also our two category analyses on desktop accessories and viscom products on page 45 and page 49 – both influenced by these changes). But are these developments really resulting in a sea change among the OP community; is the technology category right up there, along with jan/san, breakroom and MRO/safety in the quest to offer it all?

OPI Magazine | June 2014

Take a look at many resellers’ web shops and bricks-and-mortar stores and what you see from the outset is encouraging, with most having a comprehensive ‘technology’ section. Germany’s largest B2B mail order operator Printus has been offering the whole gamut of tech products – including the coveted Apple range – for years; new kid on the block Mobilegear.com in the US sells all imaginable products linked to the mobile working shift. Staples has finally begun selling Apple iPads (and selectively iPhones) in its US stores as well as online (following on from its Canadian lead), while Office Depot is now one of the largest authorised Apple resellers in Germany (since May), having been successful with the range in France for a number of years.

And the further you go down the chain, the more likely it is that a technology offering – and what you would define as such – is at best nascent, at worst misleading. Even a big operator like Printus says: “In the technology segment, we concentrate on office technology, ie shredders, printers and so on. In terms of media and entertainment electronics, we do offer Apple products, but merely to round off our overall offering; it’s not a focus area for us.” Mobilegear, too, doesn’t actually offer any hardware as, says founder and President/CEO Doug Nash, “being a start-up, trying to compete with major device resellers is tough, so we are going after more of the tech accessories to begin with”.

All about margins And that toughness relates to several areas. One of them – and perhaps the first big stumbling block – is margins, often quoted as notoriously low on technology

“Understanding technology isn’t easy if your focus is coffee” But digging a little deeper, the reality still often looks somewhat different, with less-than-impressive financial results from the category.

products, particularly devices like tablets and laptops that would typically have margins in the low single digits. Accessories paint a

Selling Technology | Hot Topic somewhat rosier picture, averaging perhaps 15%, but that’s still only half of the 30%+ that some more traditional OP products still command. To some extent, it’s a simple question of maths, of course, especially when factoring in higher ticket prices and higher volume. Maths aside, however, Nash points to a number of other factors that

channel of revenue for many players. As Bill Erpelding, Marketing Manager at Supplies Network, a division of Distribution Management, says: “As a wholesale distributor in the print space, we’re in a high-volume, low-margin business. So for us the margins on tech accessories are actually quite high and we are seeing some growth in the category from our resellers. For

“The secret is to find that extra service proposition that singles [dealers] out as the go-to destination” make the category that bit more challenging for OP dealers. He says: “First of all, understanding technology isn’t easy if your focus is coffee (just as an example); secondly, product lifecycles in the technology segment are very fast and work in months rather than years compared to OP or jan/san. Thirdly, technology products are more ‘episodic’, ie the replacement cycle is much longer. Lastly, the competition that focuses only on tech is already out there and it lives off lower margins, higher product turnover and in-depth knowledge of products.” But there is something else, adds Daniel Kelly, General Manager of Stuart and Dunn Office Choice in Australia. He says: “I believe there needs to be a change in mindset in the independent channel when it comes to the viability of tech products and the low margins in the category. With the right strategy in place there is a bigger picture. A sale of a laptop where you might make A$6 (approximately US$6) might sound unfeasible, but the lifetime value of that customer and the other products and services you can provide will put that A$6 into a very different context.” The OP industry has already seen this crossover into a more service-oriented proposition when MPS started becoming an extra

OP dealers, the secret is to find that extra service proposition that singles

them out as the go-to destination.” In a category as broad as technology – from server and computer hardware/ software and printers over toner and ink to networking solutions and cables – getting that service proposition right is no mean feat. And indeed this broadness – on top of the margin issue – is something that is as scary as it is exciting for resellers that don’t sell these products as part of their mainstream range.

Focus on accessories Nash believes OP resellers – like Mobilegear itself – should approach the category from an accessories angle first. “Dealers should have tech accessories represent at least 10% of their sales if they want to truly capture their customers’ purchases of these products. Today, I estimate that these accessories probably represent less than 5% of dealers’ sales and none of them sell

Coming to a store near you… Retail remains a good place to be for the technology segment as customers like to touch and feel the products before they buy (even if they ultimately do so online). The service component is at least as compelling, with immediate and specialist advice a big draw. As part of the whole retail experience, the store-within-a-store has long been a popular concept, especially if the ‘product’ sold is somewhat outside the core remit of the retail host or indeed if it’s operated as a standalone franchise to attract customer traffic (like a McDonald’s in Walmart!). Apple and Windows are arguably the undisputed kings in the technology area as far as their retail exposure is concerned, with the likes of Samsung very much playing catch-up. But the South Korean electronics giant has now gone right to the heart of its customer base. In the spring of 2013, it announced that it was going to launch 1,400 mini Experience Shops in Best Buy and Best Buy Mobile specialty stores in the US. It’s the first time Samsung created a retail offering like this in the US – unlike Apple which even has a store-within-a-store at Walmart. On top these 1,400 US locations, Samsung is also pushing ahead with plans for a greater presence in Canada and in Europe. For Best Buy, this has been an inspired move too and tallies with its “sales floor optimisation” that sees Apple, Windows and Samsung all occupying their own brand areas within many stores, leading some customers to feel as if they’re in a mini exhibition hall. With online being the real growth driver for the company (sales were up 26% in its latest Q4 results and 20% for the full year), but profitability back in the stores, linking the two channels more appears a sensible thing to do. In its results announcement in February, Best Buy revealed that around half of its online customers picked up their goods in store – giving the electronics retailer another incentive to make both experiences as compelling as possible.

w w w.opi.net | OPI Magazine

Hot Topic | Selling Technology the device. Spend more time being focused on becoming the source for tech accessories first and increase your business that way before jumping into selling the device.” That is also broadly in line with what Spicers is seeing in the UK among its dealer customers. CEO Alan Ball talks about a cautious – and slow – approach, and one that doesn’t include the devices. “We are seeing a small number of traditional dealers moving into the technology sales arena,” he says. “However, the consensus with items like tablets and smartphones is that they do not want to get tied down with complicated contracts on phones, and tablets are simply not competitive.”

Box-moving mentality So far, it’s essentially the focus Nash is referring to that is often missing. Hedera’s Philip Becker knows from experience how important it is to embrace the technology category wholeheartedly and refers to dealers’ box-moving mentality and the fact

that, just because you become an authorised reseller (see also box ‘Apple of the eye’, below), for example, it doesn’t mean it’s all plain sailing from there: “People selling office supplies are completely different from people selling Apple products. It’s a different ballgame and you have to hire the

today’s latest model is next month’s redundant one. Getting the ‘package’ right is the key to success, but the OP dealer is in a great place to maximise such potential.” But while he adds that the increase in plug-and-play technology to some extent ‘de-skills’ the sales

“If you stick to just box-moving and the box doesn’t move, it won’t work... margins are too low for that” right people to make it work. If you stick to just box-moving and the box doesn’t move, it won’t work because margins are too low for that. And sooner or later your finance guy will tell you to stop it because it just doesn’t make any money.” Needless to say perhaps, in order to succeed in this area, your supply chain has to be ultra-efficient. Says OfficeTeam’s CEO Jeff Whiteway: “There is not the margin to allow for high levels of stock. Also, the high ticket-priced items are working capital-hungry, especially as

process and also make this category particularly suited to online sales, the very fact that not all technology requires a service aspect works to dealers’ advantage. Gilly Blackburn, Head of Technology Products at Vasanta Group, agrees: “One of the key requirements of selling a product is being able to talk about it in an educated manner and understanding what the customer needs. In that sense FM products are perhaps an easier sell. In the technology segment, it depends on what level

Apple of the eye

Philip Becker

Netherlands-based independent dealer Hedera has been an authorised Apple reseller with its own Apple store since 2011 and sales now account for over 20% of its total revenues. The Apple affiliation has in many ways been the making of the company during some very difficult years. OPI talks to Hedera CEO Philip Becker about what makes the relationship successful – and the challenges it presents.

OPI: Technology products are particularly suited to the online sales channel, that’s what you often hear. What’s your view? Philip Becker: I don’t see that. Yes, you can buy all the tech products we offer – Apple and otherwise – from our web shop as well, but the percentage of this is less than 5%. A lot of people either call or come to the shop because they want to talk to somebody or go to a place they know and trust. OPI: What about price – is there a showrooming issue in your Apple store whereby people come in, browse and then buy elsewhere? PB: No, definitely not. If customers want a new cover for their iPhone and they come in to see how the magnetic system works

OPI Magazine | June 2014

and you charge them F20 ($27),�F30 or F40 for it, they will buy it if they like it. And you don’t have to give any discount on this type of product, because it’s an emotional purchase and people are prepared to pay that bit extra for it. OPI: So who are your store customers – private consumers? PB: No, the vast majority – about 90% – are B2B customers. And Hedera as a company is very much a B2B company and the Apple store is no different. The nice thing about Apple is that they’re really controlling the price. Whether you go to an Apple store in person, online or to a completely different reseller, the price is always broadly the same and it’s just not a deciding factor for the customer. If you’re lucky you sometimes get some accessories thrown in for free, but the hardware price is pretty much fixed. It’s far more about the reliability of the product, about the convenience of buying it and about the after-sales service. If a company wants to buys ten iPhones and they are one of our customers, they don’t have to come to the store with thousands of euros in cash; instead they get an invoice. But they can have a look at the product, ask about features, select specific accessories, etc. OPI: What about margins – often quoted as one reason for not embracing the technology category more? PB: In principle that’s true, but if you look at the absolute margin you gain on the order line. Say you make F0.10 per box on staples and F20 on an iPad. The cost of running this item through your company is the same, so the margin almost becomes irrelevant.

Selling Technology | Hot Topic is the big boxes with their all-round exposure that can do independents a real favour here. He explains: “Convincing the consumer that an office supplies provider knows what they are talking about when it comes to technology isn’t easy. I think the independent channel has a real chance here to piggyback on what the big box players are doing because those big guys are already pushing the statement to the consumer that we can compete.” Specifically referring to the Australian market, Kelly adds: “There is no question that Wesfarmers has done and continues to do well with both brands, ie Officeworks and Harris Technology, as has a big player like Staples. They are helping to bring that perception to consumers that the entire industry is here to talk tech.” Australia aside, where the OP wholesale channel is virtually non-existent, for most independent dealers, selling technology product means a heavy OPI: So what are the barriers to entry? Shelf life presumably is one? PB: Definitely. If you buy paper, you can sell it for ages from your reliance on their warehouse. That’s not possible for a lot of technology products – and wholesale partner, if you don’t have a really good system and relationship in place, you’ll from a product, end up with outdated products very quickly. knowledge, service Essentially, however, the problem is that most resellers are as well as supply box movers. If you want to sell technology products, you have chain efficiency to sell added value. Some of the big boxes offer Apple or other point of view. manufacturers’ technology products, but they don’t sell them and it Whether the takes time to change that mindset. OP wholesalers – sometimes OPI: You’ve been in this Apple relationship now for several years. in partnership Is the current success sustainable? with the more PB: I think so, yes. It’s a case of putting your focus on it, but margins, tech-orientated as you rightly say, are low as a percentage, so you can’t rely on distributors (cue the category too much. Like I said, you have to move towards a Spicers’ deal service offering, installing devices at people’s homes or within with Westcoast, companies, helping for example) with after sales, etc. – always have That considerably the necessary improves margins, expertise, range but you then have and connections to become quite a to provide tech expert and the that heady returns are much combination, is longer term than in a perhaps debatable purely transactional at times. But relationship. what they do offer is a much of technology the reseller starts to look at. What we’re trying to do is encourage our resellers to just focus on simple plug-and-play technology. We’re also trying to help them sell items that are not a million miles away from the things that they’re selling already. Many, for example, already sell EOS, so it’s only one little step further away to sell a printer or a projector. It doesn’t have to be about cloud-based services and solutions – just think about the simple things that are nearer and easier to touch.” That leap in the customer’s mind as to who ‘should’ be selling this category is precisely what Stuart and Dunn’s Kelly struggles with. And ironically, it

needed intermediary voice between the dealer and the manufacturing community. Thomas Apelrath, Managing Director of ADVEO in Germany, comments: “All players are looking for lean and inexpensive ways to market and the wholesale channel plays a vital role as it can take over functions that manufacturers no longer want to provide, especially in service and support.” He adds: “We see ourselves as the interface between manufacturers and dealers. For manufacturers we can comprehensively cover the small and mid-sized dealer market segment and thus give them access to these resellers. The challenge is to find and partner with the dealers that are willing to transform their business and which are capable to develop their organisation.”

Work in progress That transformation often goes hand in hand with the snapping out of preconceived ideas on the part of dealers, as Kelly has already alluded to. And that too is a continuous process, explains United Stationers’ Director of Category Management (Technology) Janelle Rampersad: “The largest barrier to success for dealers is breaking away from legacy paradigms of the OP business, such as quarterly pricing, print vehicles and next-day service. These are not elements required to be successful in selling technology products.” She adds that ‘transactional products’ that do not require a consultative sell are the easiest products to sell for the time being. They also have the most transparent cross-channel pricing. But she points out: “The more dealers can align with specific manufacturers, get involved in vendor channel incentive programmes, and provide a consultative approach to selling, the less pricing pressure they face in the market.” To sum up, Rampersad is keen to emphasise that “dealers have a good likelihood of competing well in technology products, and must recognise that their high-touch service adds value and should be a source of confidence”. w w w.opi.net | OPI Magazine

Dealer Spotlight | NuPrint Office Choice retail environment, but we have very little retail traffic. We get about 40 customers a day through the door. Out of those, some put everything on their account with us and perhaps ten actually come in and pay cash. “We had initial visions of becoming more prominent in retail and venturing further into the Melbourne CBD area, and years ago bought a shop called Price Busters Stationery. But we only kept that for two years – retail really wasn’t our bag.”

Fierce competition

In a difficult environment, Australia’s NuPrint Office Choice is facing the challenges head on, often in collaboration with its dealer group by Heike Dieckmann heike.dieckmann@opi.net

THERE

are certain factors that make Australia’s OP industry that little bit different from other well developed markets. One of them is the country’s lack of a noteworthy wholesale sector. That in turn contributes to a strong reliance on dealer groups, an often enforced restraint with regards to geographical expansion, a consequent focus on local customers and – encouragingly – a superlative service proposition. NuPrint Office Choice fits that bill perfectly. Founded in 1977 by Colin Ferns who emigrated from the UK a couple of years earlier, NuPrint started out as a print business – Ferns had trained as an apprentice printer – with office supplies bolted on at a later stage. With his grandfather also initially involved in the business, Jason Ferns – now General Manager and running the company since his parents retired – joined NuPrint straight after school. He worked his way through the ranks, learning about every aspect of the dealership.

OPI Magazine | June 2014

Today, NuPrint is a A$5 million (US$4.7 million) business that has grown organically but also through a number of acquisitions in its local area. About 80% of revenues come from the B2B side, with products going, as Ferns says, “out of the backdoor and delivered to our customers”.

And with competition strong in the form of Officeworks, that is hardly surprising. Says Ferns: “It’s hard to compete against the Officeworks model in terms of their marketing spend. They always seem to be top of mind with customers and everybody knows them. When I go to a dinner party and someone asks, ‘What do you do for work?’ and I say ‘I sell office supplies and work for Office Choice’, the inevitable comment is: ‘Is that like Officeworks?’” That’s not just in retail, of course, and apart from Officeworks, NuPrint’s biggest competition still comes from the large corporates, most notably Staples and OfficeMax. And while Staples seems to have

“Our biggest issue is logistics – trying to service...distances is difficult and a challenge we need to address” There’s a sizeable retail store in Braeside, some 25 km outside Melbourne, but that, adds Ferns, acts more as a warehouse to pick stock from than a full-blown retail outlet. “Our showroom attracts a bit of street trade and to all intents and purposes it looks like a

lost its way a little in the Australian market, the threat remains strong, particularly, as Ferns says, because these players are increasingly moving down the chain into the core realm of the independent community

NuPrint Office Choice | Dealer Spotlight – the SMB segment. He comments: “A typical customer for us is a small business with about 5-20 staff. It’s someone in our local area – 60% Jason Ferns of customers in our database are within a 5-10 km radius of our premises. We do have some larger accounts, deal with some government agencies and also some schools, but the general customer would come from the small and even home office environment.” But just as Staples and ‘Max are keen to move down the chain, so is NuPrint interested in moving up it. “We have some customers in the

following the Australian general election last September. Like most of its competitors, NuPrint has been looking at many non-core product segments to make up for the losses in OP and for the lower overall spend per company. Furniture has been a growth area, as has print and education.

Packaging focus Where the company has really pulled something out of the bag over the past couple of years, however, is in the area of

“We don’t claim to be the cheapest place to buy office products and our customers know that” Melbourne metropolitan area and they tend to be the larger ones – the large law firms, hotels, etc. We haven’t got many of them, but their average spend is much higher and they are definitely worth pursuing. “We also have customers that have their head offices in Melbourne,” he adds, “but may have other branches on the eastern seaboard of Australia. So there’s an opportunity to expand the business. Our biggest issue is logistics – trying to service those distances is difficult and a challenge we need to address. The only way we can do that at the moment is through the extended Office Choice membership.” In line with the rest of the OP world, selling office supplies per se has become a struggle. The economic situation hasn’t helped either, with businesses simply spending less on non-essential items, resulting in an overall steady revenue decline of about 5%, a decrease that has only recently started to slow down a little

Meet Joan… NuPrint has always had close links with Australian dealer group Office Choice, with Jason Ferns’ father Colin being one of its founding members and Ferns himself now a member of the board. What Office Choice does, says Ferns, is help NuPrint – and its other dealer members – with some much needed exposure as well as expertise in areas such as data mining, website creation and maintenance. He adds: “What we do really well at NuPrint is retaining customers, servicing them and keeping them happy. But what we struggle with is to get the exposure to actually acquire the customer in the first place. Office Choice’s business intelligence enables us to attack those categories with growth opportunities and get more wallet share.” As the NuPrint Office Choice full company name suggests, Office Choice dealers already have group-wide branding and as such enjoy widespread brand recognition, but the group last month launched a campaign featuring a fictitious office manager known as Joan and the tagline ‘Consider it sorted’. The campaign follows a year of strategic planning that has included consumer research, brand repositioning and evaluation. Joan has come to life in a multimedia campaign that includes TV, radio, print, digital and social media. Her ‘office hack’ solutions have been produced as a suite of video clips which went live in May via the group’s YouTube channel. Ferns is excited about the potential effect that the campaign will have on the group and NuPrint in particular: “I think the brand relaunch is really going to help with exposure for Office Choice as a group, and that will hopefully filter customers through Office Choice at HQ level down into the dealer network.”

packaging and warehouse supplies, now accounting for about 15% of overall revenues. “We have a lot of manufacturing in our area and within those businesses we are really well known for office products,” explains Ferns. “Historically, they’ve only thought of us in terms of pens, paper, ink and toner. Now we supply them with packaging material for their warehouses: things like shrink films, power caps and corners, etc.” As is the case for any u-turn in a company, however gentle, it’s vital to have your staff on board, particularly in a very sales and customer service-driven environment. At NuPrint, seven of its 20 staff work in a sales capacity. Ferns comments: “We’ve revamped the whole commission structure with our sales team to be more focused on non-core

NuPrint Office Fact Box Founded: 1977 Headquarters: Braeside (Victoria), Australia General Manager: Jason Ferns Sales: A$5 million (US$4.7 million)

Staff: 20 Business model: 80% B2B, 20% retail Geographcial coverage: Melbourne metropolitan area

products. Essentially, all of our sales people sell everything, but we have what we call product category champions within the business, so one person may be particularly skilled in selling office equipment and machines, while another is more suited to selling furniture, print or indeed packaging.” That product expertise combined with a ‘customer is king’ attitude is what has given NuPrint a solid footprint and an enviable staying power in a market that remains challenging and where there have been many casualties over the past few years. Ferns concludes: “We don’t claim to be the cheapest place to buy office products and our customers know that. They come to us because of that level of one-on-one service, attention and the extra mile that we give them. That’s why they keep coming back to us!” w w w.opi.net | OPI Magazine

Sponsored Article DM | Supplies Network

Fulfilling promise Following recent organisational and strategic developments, OPI gets up close and personal with Supplies Network

you’ve heard it once, you’ve heard it a thousand times – the only thing that stays the same is change. Many in the industry know or have heard of Supplies Network, the imaging supplies and equipment-focused wholesale distributor. Many also know there has been much change in the business printing industry over the past few years. What most people might not know is that there are plenty of changes underway for this highly efficient, well-run organisation as it not only adapts, but transforms and thrives in this challenging environment. Well known in office products industry circles, Supplies Network specialises in IT supplies, equipment and data storage media and offers a national distribution footprint with distribution centres in St Louis (MO), Carlyle (PA), Dallas (TX) and Fresno (CA). The company has long demonstrated expertise in the category, pioneered innovation in the channel, and is often recognised as a leader in the industry.

imaging business and the market opportunity, we recognise there is significant consolidation. “We feel we are well poised to continue to grow our Supplies Network business in a relatively flat market, and we are looking at adjacent opportunities in additional markets. We’ve recently restructured our organisation to support future growth and expansion.” The company reports that its new sales division is thriving, currently well ahead of its established year-to-date sales goals. It seems the distributor entered new territory relying on its national distribution footprint and drop-ship expertise, but quickly expanded its capabilities into multichannel fulfilment. It is targeting businesses both within and outside the office products industry with the new division. “DM has built a highly effective and efficient fulfilment and distribution company,” states CEO Sean Fleming. “We intend to leverage the decades of work and evolution in developing highly effective technologies, operations and a national distribution footprint. “DM is positioned to capitalise on and continue to add value to the print and office products industry, but also provide a launchpad to many new ventures. DM, as our front and centre brand moving forward, represents a commitment to the markets we are in today through Supplies Network and DM Fulfillment, while also signalling a commitment to expand into new markets and channels.” Welchans adds: “Today product marketers have many avenues through which they sell their products, but more and more they often begin with a direct-to-consumer, e-commerce sales motion. “That direct-to-consumer model is a perfect fit for our existing infrastructure and the

“That direct-to-consumer model is a perfect fit for our existing infrastructure”

Realignment Earlier this year, it announced an organisational realignment whereby Supplies Network’s parent company Distribution Management (DM) would be formally recognised and marketed broadly. Additionally, a sister company – DM Fulfillment – was established as a value-add fulfilment and distribution services provider to small and medium-sized manufacturers and marketers of products. “The industry is changing, and fortunately we’re lean and agile,” says President Greg Welchans. “While we remain bullish about our

OPI Magazine | June 2014

DM | Supplies Network Sponsored Article value-adds we offer. Next, as the product penetrates the market and sales expand, it may get picked up by a major retailer for its online store and if successful there, the retailer may then bring it into its physical stores. Those marketers need a fulfilment and distribution partner that can cover all aspects and meet the many fulfilment requirements of those major retailers.” Likewise, Supplies Network is thriving and achieving revenue expectations. Like the broader organisation, the company is focused on growth within its core supplies business and product expansion through its current reseller base. It has long marketed its uniqueness as an imaging supplies wholesaler, but in recent years has focused on the managed print services (MPS) space and expansion into hardware and other product lines, leading to many successes.

[Supplies Network] is extending into new categories with products like coffee

Sean Fleming and Greg Welchans

The company indicates that its MPS business is well ahead of revenue forecasts and hardware sales are up significantly. It is also extending into new categories with products like coffee, seeking to diversify its product mix and capitalise on its reseller relationships in the OP space. DM continues to invest heavily in people and technology, to not only increase efficiency, but also to improve the overall customer experience for both its reseller partners and their end-user customers. Recent projects include the development of a new website designed to simplify and improve sourcing for resellers, and changes to its sales organisation with the goal of improving on an already high service level. The company is pleased with the new website and is getting positive feedback from its customers. The next phase, currently underway, includes improving the site’s marketing assets and developing new reseller marketing tools to help resellers grow their sales. Similarly, some of the fine-tuning of the sales structure is also deemed to be successful and is supporting growth into new reseller segments. As mentioned before, DM remains bullish about its core business. Supplies Network continues to be recognised by the industry on many fronts – being named 2014 Distributor of the Year by TriMega’s INTEC Group, receiving the CompTIA Managed Print Trustmark and winning the 2013 Managed Print Services Association award for best infrastructure provider, to name just a few accolades. It remains committed to delivering on its value proposition to drive sales.

Enabling success It is clear, given Supplies Network’s focus, that there are tremendous resources available to fuel reseller success in the imaging category. OPI interviewed David Concors, VP of Sales, and Monte White, VP of Product Marketing, to gain a better understanding of what they are observing in the marketplace and how they’re enabling dealer success. OPI: How’s business? David Concors: Business is good. Overall we’re on track to meet sales goals as well as most of the KPIs we set earlier this year. We feel confident that we’ll have a good year despite a

challenging and competitive marketplace. We’re fortunate to have an experienced sales team with deep product knowledge combined with the most comprehensive imaging supplies offering in the industry. We’re highly focused on delivering value in this competitive climate and our sales results reflect that commitment. OPI: How would you summarise that value? DC: A highly strategic focus on the imaging category and the subject matter expertise we offer to our resellers. We specialise in drop-ship and stocking programmes that drive down costs, secure customer acquisition

and enable customer retention. Our national footprint provides regional and national distribution with a highly predictable and consistent, best-in-class customer experience and the most knowledgeable sales force to assist our partners. OPI: You mentioned it’s a challenging marketplace. What challenges are you experiencing? DC: We’re basically in a mature market – organic growth is more difficult and most industry sources indicate it’s a flat market at best. Furthermore, industry consolidation creates a highly competitive environment. On top of that, HP’s changes limiting the number of ‘authorised’ resellers impact Supplies Network and many in the industry. w w w.opi.net | OPI Magazine

DM | Supplies Network Sponsored Article OPI: How has the HP change impacted Supplies Network specifically? Monte White: Simply put, the biggest change is that we can no longer sell HP to resellers that are not ‘authorised’. While we’re not alone in this transformation, we do feel others have reaped greater benefits. This change has also put some demand on internal resources to manage the process, which of course has some opportunity cost. But, as David said, we remain highly optimistic. We will continue to partner with HP as we always have in support of our mutual customers. For those resellers HP hasn’t

Third and last is MPS expansion. We’ve continued investing in our MPS infrastructure and resources aimed at operating a best-in-class MPS model. Resellers benefit from the ability to source an all-inclusive, no-risk, wholesale CPI page and the option to pick and choose from an à-la-carte menu of services to support an existing programme. MPS is well outpacing our traditional transactional business and we intend to continue scaling at a rapid pace. MW: On the marketing side of the business, we’ve been on a multiyear journey to improve our website. We’ve developed a new

“Strategies are in play to expand within our existing customer channels and well beyond who we do business with today” approved or disqualifies in the future, we will support them every way possible with the balance of our other 70+ product lines. OPI: What current initiatives are you working on? DC: Our efforts are based around numerous initiatives. There are a few I can highlight. The first is channel diversification. We recognise the need to expand our reseller community. Strategies are in play to expand within our existing customer channels and well beyond who we do business with today. Second is product expansion. Breaking out of the wake with new products is proving rewarding and educational. We are expanding SKU count and resources in several categories including printers and parts. Many still view Supplies Network as a supplies-only partner and we are beginning to make significant progress in these new markets.

website from the ground up, focusing on the ease with which resellers can search and cross-reference compatibility for supplies, parts and other related items. Our main goal was to improve the overall user experience. More recently, we’ve improved our marketing resources, allowing dealers to quickly and easily find all rebates, manufacturer information, programmes and promotions. We plan to continue the development of additional resources and tools for our partners which will be housed within our website. OPI: You mentioned your MPS team. Any changes there? DC: We’ve invested heavily in people and technology to build our MPS business and, as a result, our reseller partners are closing more deals and experiencing significant growth. The effort is paying off with MPS revenue up 35% over the prior year. Furthermore, we’ve recently added a team of Printer Solutions

David Concors

Advisors to expand our value beyond MPS supplies and services. When dealers partner with Supplies Network, they benefit from an entire team dedicated to building their MPS practice, including the solutions advisors, contract support specialists and a full team of operations experts to help with every facet of on-boarding and managing a customer environment. OPI: You also referred to added hardware resources. Can you elaborate? MW: Hardware is a growth category for us. We’ve partnered with many major OEMs to be part of their overall programme and enhance our offering to our dealer community. Like MPS, we’re seeing that effort pay off and our sales are up significantly on both the transactional side and within managed environments. With added staffing to bring a higher level of focus and marketing resources developed specifically to support the sales cycle, we expect this growth trend to continue.

OPI: What technology is changing or creating demand on the equipment side? MW: We’ve talked for several years about in-office printing volume being flat because of a technology shift, including the internet, the cloud and mobile. From what we’re seeing, those trends are still impacting the industry along with other non-technology-related factors. But, the impact of those trends Monte White seems to be stable. The biggest technology change with equipment is the growth of inkjet technology in office printing – specifically, new page-wide inkjet technology like the HP OfficeJet Pro series of MFPs. This technology offers speed and laser-like quality while significantly reducing the cost-per-page. OPI: Thank you for the overview and best wishes for continued success. w w w.opi.net | OPI Magazine

Research | State of the Industry Report

The view from the top In these turbulent times, senior industry executives need a reliable yardstick against which to assess their own perceptions and strategies. The brand new The State Of The OP Industry 2013-14 report is intended to provide this essential objective viewpoint…

LAST

year was a critical year for the OP industry worldwide: with the developed economies beginning to emerge out of recession, would the OP industry return to growth and profitability – or would negative structural demand forces continue to pull the industry into decline? To address that question – and provide some answers – specialist OP market researchers Martin Wilde Associates (MWA) in collaboration with OPI have just published a new annual OP market research study, based on perceptions of and forecasts for the OP industry among senior OP industry executives worldwide. The State Of The OP Industry 2013-14 is based on 51 in-depth telephone and online interviews, carried out with senior executives (mainly CEOs) from 26 manufacturers and 25 distributors (as shown in Figures 1 and 2). As Figure 3 shows, as many as 22 of these respondents were focused mainly on Europe and 16 on the USA, while eight claimed to be global players. Another five mainly served countries outside the US and Europe.

The findings The outcome of the interviews makes for fascinating reading as well as analysis. Overall, the vast majority (72%) of respondents believed that the OP market had indeed declined further in 2013. While half of them felt that it had declined by less than 5%, some reported that it had shrunk by as much as 6-10%. The reasons given for this decline were varied, but tended to be reiterated across all the regions covered by the survey. For a start, the economic recession had resulted in a reduction in office employment and

OPI Magazine | June 2014

caused a programme Fig 1: Sample by distribution channel of corporate cost-cutting. In 4% addition, digitisation had 4% been a major factor in the decline in demand for 4% ‘traditional’ OP items. There had also 4% not only been some price deflation in 2013, but a further move towards lower 36% value private 12% label products. Nevertheless, virtually all respondents felt that their 16% own companies’ sales had indeed 20% outperformed the overall OP market in 2013, with around half claiming that their sales had increased during the year. OP wholesaler Less than 40% admitted to a decrease. However, just over 40% of distributor OP dealer group respondents claimed that gross margins OP dealer/reseller had declined in 2013 and – while none Multichannel distributor reported making a loss in 2013 – about National contract stationer 40% claimed that their net profits had also OP (B2B) superstore declined in 2013.

Strength in FM The product category that was by far the most widely-reported as growing in 2013 was FM supplies (70% of all respondents). However, virtually none of the traditional paper-based OP categories were reported as seeing

■ ■ ■ ■ ■ ■ Internet-only OP reseller ■ Paper merchant ■ Source: MWA

State of the Industry Report | Research 4%

noteworthy growth in 2013. Indeed, it was these traditional categories that were regarded as being in decline in 2013, particularly filing supplies (50% of all respondents). 8% Overall, 23% the two distribution 8% channels that were by far the 8% most widely quoted to have 19% won market share in 2013 12% were Amazon/ eBay (84% of 15% all respondents) and internet-only OP resellers. However, there were some differences between regions. Fig 2: Sample by manufacturer Meanwhile, product sector the distribution ■ Writing instruments channels that respondents ■ Shredders, binders and laminators said were in decline in 2013 ■ Office and desk accessories were more numerous and less ■ Filing supplies salient. Overall, the national ■ Computer/IT consumables and accessories contract stationers (41% of all ■ Office furniture respondents), OP superstores ■ FM supplies (37%) and OP dealers (37%) ■ Envelopes amongst others were all ■ Mailroom and packaging supplies widely cited as losing share in 2013. Again, there were some Source: MWA variances by region. Other key trends identified by respondents for 2013 include the following: • There has been a general widening of distributor product ranges, due mainly to the desire to increase the number of SKUs in FM supplies, but also – in some cases – to follow Amazon down the ‘limitless aisle’. • Overall, product prices had either been steady in 2013 or had seen a slight increase. However, there was concern that unless prices were increased further, there would be insufficient margin to fund current service levels. • There was a steady (or slightly increasing) share of own label products, although this varied by region. While own label was regarded as an opportunity to offer customers a lower-priced product and improve distributor margins, the decline in sales of traditional OP items (where own label penetration is deeper) and the increase

“It’s not ‘business as usual’: There’s a new ‘normal’ out there” – OP dealer group, USA

in shipments of ‘new technology’ products (where it is not) has made it difficult for own label to have increased its share. • The share of distributor sales in managed print services (MPS) was very small on average in 2013. Indeed, many distributors either did not offer MPS currently, or said that it was insignificant at present. Certainly, its adoption appears to vary significantly by region and by company size.

There’s more… The State of the Industry 2013-2014 report – a tome of 150+ pages – also includes the 2013 financial performance of the key 15 OP distributors in the US and Europe, as well as an analysis of key industry events. Importantly and in addition, it features the predictions of these 51 key CEOs for the OP industry in 2014, including: • Market size • Estimated sales growth and profitability • Growing/declining product sectors • Growing/declining channels • Future trends for other key issues, including product range development, own label share, pricing changes, MPS penetration, use of social media and interest in strategic alliances. This ‘must have’ authoritative annual sourcebook for the OP industry is available now for only US$1,200 (£750). To order your copy, go to www. opi.net/SOTI2014.

Fig 3: Sample by region served ■ ■ ■ ■ ■

USA Global UK Pan-European Australia

■ ■ ■ ■ ■

France Germany Asia South Africa Canada

2% 2% 2%

■ ■ ■ ■ ■

Benelux Hungary Italy Spain Switzerland

2% 2% 2% 2%

31%

4% 4% 12% 16% 14% Source: MWA

w w w.opi.net | OPI Magazine

Resourcing Revenue | Special Feature

The art of

connection R2 is a new solutions firm set up to help independent dealers grow sales affordably. OPI’s Heike Dieckmann spoke to co-founder/CEO Mark Hampton to see what it’s all about OPI: Tell me a bit about R2 Mark – what does it mean? Mark Hampton: R2, our ‘handle’ for Resourcing Revenue, is a new suite of very affordable solutions for independent dealers designed to help them grow revenue. Two of our products focus on connecting category-specific experienced talent with dealers that want to grow legacy categories or expand into new ones, such as cleaning and breakroom, MPS, furniture, etc. Our other two products are business development related and help dealers find and acquire new customers. We’re all about providing Resources to drive new Revenue. Steve Hilleard, CEO of OPI, and I are business partners in this new venture and we’re in the process of launching in the US, Canada, the UK and Ireland, with expansion plans for additional countries later in the year. OPI: How did the idea for the venture come about? MH: Last September Steve and I connected on one of his trips to the US and we discussed industry trends, events and environmental changes on the horizon. Back then the Office Depot/OfficeMax merger was becoming

more and more likely, and the effects of a merger and integration had some pretty far-reaching implications, including a significant reduction in headcount. With the belief that much of that skilled talent could be a huge benefit to independent dealers, we brainstormed how to help make those connections. That spawned our two talent solutions and then the business development solutions emerged almost by accident.

“We’re all about providing Resources to drive new Revenue”

OPI: Can you give us a brief summary of your services? MH: Sure. R2 Match is a database connecting jobseekers with independent dealers. When the enrolment profile attributes on each side match, we make an introduction. Jobseekers should think about it as Match.com for their career. Dealers should view it as the first signal that experienced talent is looking for a new job. Then we have R2 Search. When a dealer wants to get assertive and proactive about finding talent in a given geography with category specific experience – say in jan/san or MPS, for example – we identify that talent and then let the dealer handle what they do best – recruit, screen and hire. Our flat fee is typically 80% less than that charged by a traditional recruiter. R2 Prospect – it’s a little like Search but instead of finding people to hire, we help dealers find specific named decision-makers at targeted

businesses to market to, engage and acquire. Very targeted marketing – it’s like trading in your shotgun for a sniper rifle. Lastly, we have R2 Track – R2 is an exclusive referral partner for netFactor and its web analytics tool called VisitorTrack. Think of it as caller ID for your website. It outputs detailed contact information for key decision-makers at companies visiting a dealer’s website. We believe we’re offering unique solutions and we’re told by many they are quite timely given the power channel consolidation and many dealers’ desire to expand into new adjacent categories and rev up their business development efforts. OPI: You launched a couple of months ago. How has your proposition been received by the dealer community? MH: We’re pretty blown away by the initial response. The US dealer groups all sponsored our initial introduction to their members, and we’ve taken over the follow-on marketing. We have engagements in all four service categories and we can see the momentum gaining each week.

Visit www.resourcingrevenue.com for more information on R2. To contact Steve (UK) or Mark (US), email InfoUK@ ResourcingRevenue.com or InfoUS@ ResourcingRevenue.com respectively.

w w w.opi.net | OPI Magazine

Category Analysis | Desktop Accessories

Making your mark

Personalisation of the workspace is a key driver for growth in the desktop accessories category as sales begin to look rosier in this sector

by David Holes

IT’S

been a tough few years for the OP industry and sales of desktop accessories took a big hit as companies reined in their spending. But things are looking up again and many manufacturers and resellers are reporting strong growth as global economies recover. According to The NPD Group, although US bricks-and-mortar sales of desktop accessories were slightly down in the last financial year, e-commerce sales saw a healthy 13% upsurge (see also chart for dollar figures). The trend is similar in Europe with many companies reporting a pick-up in sales and feeling increasingly optimistic about the future. Germany’s Falk Butterwegge, Head of Office Supply, Stationery & Online and International Sales Consumer & Craftsmen at tesa, says: “Overall sales are steadily improving as markets recover. We’ve seen double-digit growth in our specialised tape products and e-commerce is growing ‘like hell’.” Across the border in France, Bernard Roux de Bézieux, Marketing Director at Maped, reports a similar story with a 13% sales increase worldwide, backed by a particularly strong drive in

OPI Magazine | June 2014

emerging markets. As employment figures pick up across the globe, so will sales, according to Simon McLoughlin, Head of Traditional Office Products at UK wholesaler VOW. He sees it as a simple matter of ‘bums on seats’. “Employment is the biggest driver of product consumption – more people at desks mean more desktop products needed and more consumables taken from the stationery cupboard.”

Reflect your personality As the feel-good factor returns, a number of key themes run through the revival of this category. The desire to personalise your workspace, either to stand out from the crowd or perhaps to match your home office décor, is one of these. It appears that there is a real urge among workers to turn their desk into a microcosm of their personality. Manufacturers have spotted this opportunity and are keen to meet these needs. From quirky, fun products in colourful designs to sophisticated, coordinated themes that run across entire ranges, there are a host of products out there that allow consumers to stamp their own individuality upon their working environment. Talking of stamps, Austrian manufacturer Colop has teamed up with Viennese agency Spirit Design to produce the brand new Printer, a model with individual design at its core. It aims to appeal directly to consumers through its looks that

shout “high-quality, simplicity and timeless elegance” and the company is confident that modern design will influence the demand for all desktop accessories in a positive way. Colop has also launched its ImageCard Designer software tool that allows customers to personalise its stamps, transforming them from mere functional tools into attractive desktop accessories in their own right. Jaime Nascimento, Export Manager for Brazil-based Acrimet, sees “personification of the workspace as increasingly important”, and the company is in the process of launching a line of matching desktop accessories to tap into this trend. Fiona Mills, Marketing Director of Avery UK, believes that many offices are generally undergoing a style makeover and opting for “trendy product design over more formal styles”. But she also regards the swing away from working in a traditional office environment towards working from home as pivotal. “Workers are now able to

Desktop Accessories | Category Analysis pick and choose desktop accessories to suit their homes, with colourful designs and different materials to match their surroundings,” she says. Adrian Frost, Managing Director Office Products at Rapesco, has also noticed this shift. “Markets have changed. So many more people now work from home and want personal choice about the style and colour of their desktop products. Matching product sets that represent a full ‘desktop solution’ are also very popular. Consumers seek value for money, but want a quality product that lasts. This gives us an opportunity to grow sales in the SOHO market.” Maped’s de Bézieux agrees, saying that “in an ocean of conservatism SOHO items that offer a more personal touch seem to blossom”. The Martha Stewart Home Office with Avery range is a good example of this idea in practice. These desktop accessories come with a design theme, aimed at making them both look good and feel like they’re part of your wider home décor. Crucially, however, it’s not style over substance. Quality, ergonomic design and the need to bring something innovative, unique and fundamentally useful to the market, is paramount. David Conner, SVP of Sales at Amax in the US, backs this call for manufacturers to innovate and produce compelling products, citing

its Bostitch Dynamo stapler as “the first” to include an integrated pencil sharpener as a prime example. But, he adds, it’s vital to let consumers know about these innovations through all available channels, from traditional advertising to in-store and online promotions, and by using as much social media exposure as possible. “We know our products are superior”, he says bullishly, “and we just need one minute to show customers why they’ll love them.” The need to embrace technology is another key theme that manufacturers know is vital if they’re to prosper in the future. Nick Giammarino, Sales Operation Manager at Victor Technology in the US, is a keen exponent here. “Customers want both innovation and style with integrated electronics that offers unique functionality. Our desktop accessory business is growing at 40% per year. This is because we are constantly innovating and launching new products – for example, integrating dock chargers and USB hubs into traditional desk accessories.” Frost has also seen a big technological shift: “70% of our products sold in the US are now power-assisted to provide effortless operation, rather than simply relying on your own Desk accessories US dollar sales muscle-power. We’re also (April 2013-March 2014) embracing technology $139 million in a different way by including QR codes on all our products, which helps Bricks & Mortar ■ with cross-selling into E-commerce ■ other areas.” Commercial ■ Wholesaler VOW meanwhile sees $464 ‘ergonomics on the million desk’ as another trend that is driving $1.7 growth. Welfare at work billion initiatives, coupled with legal requirements, mean companies are investing Source: The NPD Group/ Retail Tracking Service in ergonomically sound

“In an ocean of conservatism... SOHO items seem to blossom”

products. These include items such as monitor risers and mouse mats designed to prevent or alleviate problems caused by poor posture and incorrectly placed desktop furniture.

Brand loyalty Perhaps unsurprisingly, brand and brand loyalty is viewed as all important by the companies OPI spoke to. Sabine Ematinger, Marketing and Events Manager at Colop, says that branded products are threatened by cheap Asian copies and imitations and that having a strong brand is increasingly important. “A brand like ours stands for quality and innovation combined with excellent customer service, acting as a USP that makes us stand out from the competition.” “Our brand is our major asset,” adds Acrimet’s Nascimento. “It gives consumers a sense of confidence. Creating and leveraging a successful brand will drive higher customer loyalty and importantly, higher profit margins for the dealer.” Looking to the future, manufacturers remain confident about the prospects of the category, many seeing advances in technology not as a threat, but as an opportunity. However, Maped’s de Bézieux sounds the alarm, saying: “The digitisation of the office will undoubtedly reshape our needs longer term. Fighting against this is senseless and companies had better shape their strategies accordingly.” VOW’s McLoughlin agrees: “We cannot arrest the trend for digitisation. We simply have to develop products that add value and sell less for more by innovating, offering more consumer-led products and reinforcing our message of quality and service.” w w w.opi.net | OPI Magazine

Visual Communications | Category Analysis

A bold

vision

Sales of visual communications products are booming and companies are bullish about the future of this sector

by David Holes

“Knowledge workers… often operate remotely using their own technology and expect it to link seamlessly with interactive products when they come into the office”

THE

visual communications (viscom) category is in rude health. Sales of interactive display products, panels and boards continue to buck the trend of the wider OP industry, with manufacturers reporting strong demand for their products. But challenges as well as opportunities remain as the workplace dynamic shifts and technological changes accelerate. Nathan Dawes, Technology Product Manager of UK wholesaler VOW, backs this view: “Viscom continues to defy the broader OP industry direction and is up 7-9% year on year,” he says. And there’s huge potential for this sector. “With over 67 million meeting rooms worldwide, the prospects for interactive solutions within the corporate sector are immense. It currently accounts for only 12% of the total market, but by 2017 it’ll boom to 30%. Already, 38% of European firms are also using screens outside of meeting rooms for digital signage purposes and that will only increase.”

Cordula Adamek, Managing Director at Kaut-Bullinger’s office system house, reports similar success in Germany. “We’ve seen some very positive developments in our presentation and media technology division, and registered low double-digit growth rates,” she says. “Over the last couple of years, we’ve incorporated a considerable amount of new products into our overall portfolio. “But we’re also seeing a clear shift, away from classic projectors and screens to large-format, interactive systems. This is particularly the case for customers with a highly representative focus. But this is also where the highest potential is – in the corporate B2B segment, in the areas of manufacturing, trade and services.”

US opportunities Gerhard Ferreira, CEO of South African whiteboard manufacturer Justik, also reports excellent figures, with sales doubling over the last year. He believes that the US market in particular will grow significantly over the next two years. And indeed, across the pond in Austin, Texas, Alan Greenberg, Senior Analyst and Partner at Wainhouse Research, tells a similar story. “Sales of viscom products have bounced w w w.opi.net | OPI Magazine

Category Analysis | Visual Communications Ready to skyrocket OPI talks to Janet Collins, President of Ghent Visual Communication Products, about changes in the way we work and how this is affecting the latest trends in visual communications products.

Janet Collins

OPI: The office environment is undergoing huge technology changes. How do you see this affecting the type of products that companies are demanding? Janet Collins: Despite the complexity and pace of technological change in the office environment, there’s also a demand for simplicity – simple tools that don’t have an instruction manual or need IT resources to get them to work. As others in our category are zigging towards technology, we are zagging towards simplicity and design. We are responding with tools that make it easy to think and work together in a very flexible way. Our Nexus product, for example, combines a mobile easel with a personal tablet, giving users the flexibility to use a personal tablet whiteboard in a small group, private office or outside the traditional meeting space. Then, just hook the tablets onto walls, easels or panel systems wherever the conversation is happening. It’s a simple solution, and this type of flexibility matches the new way of working. OPI: With the continual shift towards more mobile working, how do you see this affecting the use of viscom products? JC: With the acceptance of Go-to-Meeting and other such virtual meeting tools, the use of whiteboards gets a little tricky, although they can still play a role. For example, at the Lyndon B Johnson Space Center in Houston, NASA has figured out how to use a Nexus mobile whiteboard with a webcam pointed at it and another webcam pointed at the meeting or presenter. This enables them to collaborate and share ideas on a whiteboard in virtual meetings across the world. It’s a low-tech/high-tech solution. OPI: What other trends have you noticed? JC: One trend we are seeing is the use of non-traditional dry-erase solutions. It used to be that a whiteboard was a framed rectangle made of porcelain or melamine. Now you are seeing more glass than ever used as a dry-erase surface, as well as other products such as dry-erase paint or even powder-coated metal. These dry-erase surfaces are also becoming design statements – an opportunity to express personal taste with unique frames, colours and graphics. Customisation and creating personal tools for individuals is also growing in importance. Our custom whiteboard business, VividBoard, is increasing dramatically in healthcare, higher education and business settings where custom content and graphics are appreciated. OPI: Are there any downward trends in the category? JC: The one area within visual communications where we do see a continual decline is in tackboards and enclosed message centres. The whiteboard can inspire creativity, but tackboard tools are a one-way method of communication and can easily be replaced with technology solutions. Furthermore, the demand for a multifunction solution will increase the need for magnetic whiteboards, further reducing demand for the tack-only surface.

OPI Magazine | June 2014

back from the recessionary slump and we’re now seeing some growth, with a lot of potential still out there,” he says. But the way we work and the office spaces we work in are changing and the sector needs to keep this in mind as companies bring new products to market. Janet Collins, President of Ghent Visual Communication Products, views equipping offices and schools with viscom tools as more complex today than ever before. “With the latest trends for open offices and collaboration spaces, wall space is at a premium and demand for mobile and flexible design is high,” she says. “Open plan buildings mean the need for mobility products is increasing – mobile easels, room dividers with dry-erase boards and bulletin functionality make them very versatile for many users.” Beth Wright, VP Americas of Bi-silque, thinks along similar lines. “The growth of open plan buildings and more space for collaborative work is fuelling expansion into products such as interactive whiteboards, tables and LCDs.” But she also sees the shift in workforce demographics towards the younger generation as a key factor, citing the rise of the millennials entering the job market as a powerful market driver. VOW’s Dawes is in complete agreement. “The rise in the number of young office workers raised entirely in the digital age is significant,” he remarks. “The under-35 age group behaves very differently and is more likely to work on-screen only, rarely printing out documents and taking meeting notes on a tablet or smartphone.”

Personal taste He adds that the increase of home office workers means style, colour and finish are becoming more important as products are designed to fit with home décor trends. Additionally, he cites environmental concerns as a key trend, reporting that “40% of our customers always specify they want green products, as long as the quality and price are also competitive”. Greenberg also sees the trend for workers bringing in their own tablet or portable device from home as key. “Knowledge workers in the US often operate remotely, using their own technology and expect it to link seamlessly with interactive products when they come into the office. Companies are beginning to invest to ensure that this happens.” Away from the office, the market for equipping schools and other educational establishments is equally important.

Visual Communications | Category Analysis Greenberg estimates that the potential market here is huge, with around 11.5 million higher education classrooms and faculty offices worldwide. 1.6 million of these are in the US, with a further 3.8 million in Europe, the Middle East and Africa. That’s a lot of potential whiteboard sales without even factoring in primary and secondary schools. Despite the high level of penetration that interactive whiteboards have made within schools in some regions, notably the US and UK, other countries still represent fantastic sales opportunities. “In some European countries such as Germany, Austria and Switzerland, the percentage of schools equipped with digital solutions is surprisingly low,” remarks Arno Alberty, Managing Director of Medium in Germany (part of European distribution group ALSO). “However, this is finally starting to change and we can expect excellent growth opportunities in this area.” Kaut-Bullinger’s Adamek is less confident about the German education market. “We

Dry-erase magnetic tile systems from Bi-silque adds that lack of funds and fear of classroom vandalism are hindering sales. But even the more mature education markets, in viscom terms, continue to present growth opportunities as products are replaced. Bi-silque’s Wright says: “Display products that

“Display products that allow interactivity with a student’s own digital device brought in from home represent new areas of growth” haven’t noticed a significant change in this area yet. Lack of government funding remains a problem. And even within those schools that have adopted new technologies, we often find that interactive whiteboards are used solely as projection systems and not in a truly interactive fashion. Teachers are still very reluctant to use the solutions available. “The only way to break those traditional cycles is through a full support service, from initial consultancy through product purchase and implementation within schools to staff training on how to use the equipment. That’s the proposition we go in with.” However, she Arno Alberty

allow interactivity with a student’s own digital device brought in from home represent new areas of growth for us in the US.”

Low-tech options But it’s not all about high-tech electronic solutions. Manufacturers of other products also feel they have a part to play in the viscom future. Naoimi Young, from the PR department at Smart Wall Paint, is convinced that its whiteboard paint complements the technology trends of the day, and sees it increasingly in use alongside resources like interactive projectors in schools, hotels and multinational companies. “The education sector finds our product to be very effective yet low-tech, so take-up rates by both teachers and students are high,” she says. “One school has introduced a dedicated multimedia room for students. It’s equipped with iPads and projectors, but is entirely coated in Smart Wall Paint to act as both a whiteboard and a projector surface. Imagine a whole room as a whiteboard.” The future for the viscom sector looks bright indeed. Provided manufacturers can keep their fingers on the pulse of change and remain nimble enough to react accordingly, then the rewards are there for the taking.

Vendor view “We keep a close eye on the fast-changing market and combine that with our customers’ needs,” says Danielle Bazuin, Managing Director at Legamaster International. “Although we see a clear development in electronic viscom products, we are also seeing that the need for traditional viscom products remains stable. Using both categories together is an upcoming trend.” She continues: “Every customer communicates in its own way: a workshop leader might need more practical demonstration material, while a multinational company may look for a multifunctional wide-format e-screen. We want to continue meeting all these needs. Staying ahead, but always together with our customers.”

w w w.opi.net | OPI Magazine

Your OPI

On the move

OP personnel changes from around the globe We would love to hear from you. Email editorial@opi.net, Tweet us @OPInews or you can write to us at OPI, Diamond House, 36-38 Hatton Garden, London, EC1N 8EB, UK

North America

Former Staples merchandising veteran Petter Knutrud joined rival Office Depot in April as SVP Petter Knutrud of Merchandising. Knutrud has more than 25 years’ experience in all aspects of merchandising, spending the past 19 years with Staples, most recently as SVP Merchandising, Supplies. As a member of Office Depot’s merchandising leadership team, Knutrud will be instrumental in helping to set and refine the reseller’s merchandising strategy and direction. School Specialty named Joe Yorio as its new CEO at the end of April. Jim Henderson, who had been interim CEO following the company’s reorganisation under Chapter 11, remains Chairman. Yorio was most recently CEO of business services and consulting company NYX Global and has 20 years’ experience with major companies in manufacturing, distribution, supply chain and logistics, including a spell at Corporate Express where he was President of the Central Midwest division. Imaging supplies distributor Parts Now has promoted Mike Cox Mike Cox to President and CEO. Cox, who has been at Parts Now since 2000, was previously the company’s VP of Business Development and Partner Management. He replaces interim CEO Matthias Heilmann who has

OPI Magazine | June 2014

returned to the advisory position of Managing Partner of parent company CounterPoint Capital Partners. Breakroom supplies vendor Paradigm Group has promoted Jaclyn Bianculli to the Jaclyn Bianculli role of Director of Brand Development. Bianculli was previously Sourcing Analyst at Paradigm’s Emerald Brand and her new role will include new product development, quality control and third-party certifications. Marley Coffee has appointed Ron Miceli as National Director of Ron Miceli Business Development for its Automated Stores division. A respected industry figure, Miceli was previously Channel Development Manager for Coinstar and Rubi Coffee parent company Outerwall. Miceli will oversee the launch of Marley’s automated kiosks in major metro markets across the US. Marley is targeting the away-from-home coffee market in channels such as colleges, universities, healthcare establishments and offices.

Europe

Brother UK has announced a new leadership team of non-statutory directors to shape its transition into a services and solutions provider. All promoted from within the company, the changes see Louise Marshall take the role of Director of Infrastructure and Shared Services, Dave Peters named Director of

Europe Thomas Nowak has Thomas Nowak been named SVP of Merchandising for Staples Europe as the reseller looks to develop its online strategy. He will join Staples on 1 August from leading Dutch e-commerce site bol.com where he was most recently SVP of Merchandising. Reporting to President of Staples Europe John Wilson, Nowak brings 15 years of B2B and B2C experience to Staples, and in his time at bol.com introduced six new product categories and expanded the next-day delivery capability to over one million items. Wilson said: “Thomas will play an integral part in our strategy as his background and e-commerce experience will be critical in helping to take us to the next level.”

Development and Strategy, Keith Howe taking on the Director of Supply Chain and Service role and Andy Forsyth named as Sales and Marketing Director. All four will report to Brother UK Managing Director Phil Jones who said: “This new structure signals the four major functions designed to support the business as we expand our offer to include solutions and services across our portfolio.” Former Spicers Regional Operations Director Steve Gorham has joined industry training and performance company Performance 1st (P1) as an Associate Director. Gorham has most recently been a partner at London dealer Almo Office. P1 has also added two new associates to its team. George Martino will work with P1 clients specifically on new business generation skills, training and services, with a focus on creating new business opportunities on the phone, while Dean Lale will provide marketing strategy services and practical support in the Midlands and the north of the UK. Biella confirmed Rolf Sutter as its new Chairman at its annual meeting

Rolf Sutter

recently. The filing products vendor said last December that Sutter would take over as Chairman following the death last year of long-time Chairman Daniel Eicher. Dominik Sauter moves back to the role of Vice Chairman after assuming the Chairman’s responsibilities over the past few months. Sigel Managing Director and long-time Head of Marketing Werner Bögl Werner Bögl left the manufacturer suddenly at the end of April. The Germany-based vendor admitted that Bögl’s departure was due to a disagreement over the firm’s strategic direction, but declined to give any further details. Holding company CEO Joachim Roth has taken on Bögl’s responsibilities. Stora Enso CEO Jouko Karvinen is to leave the company after seven years in charge. In a brief statement, Stora Enso Chairman Gunnar Brock said the board had regrets over Karvinen’s decision, but that the CEO would continue in the role while a successor was sought. Karvinen had told the company internally of his plans at the end of last year, it was revealed.

Your OPI

5 minutes with...

Kathy Hoyle, President/CEO of Hoyle Office Solutions and Secretary of OPWIL

Describe what you do in less than 20 words. Partner with companies in our local community by providing procurement solutions that help them grow profitably. Your first full-time job? At Hoyle Office Solutions. Born and raised in the business, I did a little bit of everything. I started full-time in the bookkeeping department. If you weren’t doing your present job, what job would you like to be doing? Interior design – I love decorating. The best moment in your career? Taking over as President/CEO in 2010 as the only female with three brothers in the business. The worst moment in your career? Telling an older sibling that it’s time to retire. It’s hard to separate those heartstrings from what is actually best for the future of the business. The industry figure you most admire? Why? My 98-year-old father – who still comes into the office. Without his direction, inspiration and confidence I would not be where I am today.

“I’m bossy, but I can’t help that I have better ideas”

Any annoying habits? I’m bossy, but I can’t help that I have better ideas. Your first vehicle/car? 1973 Toyota Celica. Yellow two-door, complete with a brown landau top. Your ideal night out? A nice dinner and a great movie with that special someone. Any pets? Yes, two little Pomeranians, Mollie and Chloe. If you could change one thing about yourself, what would it be? I’d like to have a faster metabolism. The types of TV programme you find most entertaining/irritating? Entertaining is probably reality shows as they are not scripted. Most irritating would be most sports. What sports team do you support and why? The University of North Carolina Tar Heels. In my family it would be considered sacrilegious to support any other.

Your best piece of advice to someone who has just joined the OP industry? Align yourself with an industry coach, mentor or network. I personally wouldn’t be where I am today without K Coaching and support from the Office Products Women in Leadership (OPWIL) organisation. What would you like to be doing in five years’ time? Working three days a week and enjoying more free time. Your greatest strength? My ability to work with people and get things done; I believe in teams and being part of the team. Your favourite office product? The paper clip. In the 1960s we were known as the biggest clip joint in town and today I’m known as the clip girl.

The best concert you have ever been to? Michael Jackson’s Thriller tour.

www.opi.net | OPI Magazine

Your OPI

Calendar Key dates in your industry If we are missing an event please let us know. Contact editorial@opi.net Do you have an event that you would like to promote in the OPI Calendar? Please contact Fergus Cox for further information about having an extended entry and pricing. Email: fergus.cox@opi.net Web: www.opi.net/calendar

JUN 06-08 Office Club Annual Conference Birmingham, UK JUN 11-14 SP Richards Advantage Business Conference 2014 – ‘Right Now’ Nashville (TN), USA JUN 12-13 UFIPA Annual Conference Cannes, France

JUN 13 North American Office Products Awards 2014

Gaylord Opryland Resort Hotel, Nashville, TN, USA Contact: Janet Bell Email: janet.bell@opi.net Web: www.opi.net/ NAOPA2014 The fifth annual awards programme for North American manufacturers and dealers. Encouraging innovation and giving recognition to those working to deliver real value. 52

OPI Magazine | June 2014

JUN 16 BOSS Federation BenGolf Day Bedfordshire, UK JUN 19-20 Synaxon UK National Conference Northamptonshire, UK June 19-20 Superstat Conference Oxford, UK JUN 27-28 Nemo Annual Conference Hexham, UK JUL 09-11 ISOT 2014 Tokyo, Japan JUL 15-16 Bob Parker Memorial Golf Outing Kiawah Island (SC), USA SEPT 05-06 The Australian Office Products Expo Melbourne, Australia SEPT 11 Kids in Need Foundation, Education Celebration Gala Minneapolis (MN), USA SEPT 17-19 EPIC 2014 Joint Independent Stationers/TriMega Convention Hollywood (FL), USA

SEPT 22-24 OPI European Forum 2014

Grand Hotel Huis ter Duin, Noordwijk, the Netherlands

Contact: Janet Bell Tel: +44 20 7841 2941 Email: janet.bell@opi.net Web: www.opi.net/EF2014 An invitation-only forum for CEOs and senior executives from the business supplies and associated sectors.

SEPT 25-27 ISSA/Interclean Istanbul, Turkey OCT 06-08 Pinnacle Annual Meeting and Vendor Forum 2014 Rosemont (IL), USA

NOV 10-12 ECi Connect Conference Las Vegas (NV), USA NOV 11-15 Office Partners’ Grand Ole Gathering 2014 Nashville (TN), USA NOV 20 Integra Annual Conference Nottingham, UK NOV 26-28 Big Buyer 2014 Bologna, Italy

2015 JAN 25-26 Paper Show 2015 Leuven, Belgium JAN 31-FEB 03 Paperworld 2015 Frankfurt, Germany

OCT 07 Advantia 2014 Conference Warwickshire, UK

MAR 02-04 Paperworld Middle East 2015 Dubai, UAE

OCT 08 Howard Wolf Golf Classic Wheaton (IL), USA

MAR 19-21 Education Show 2015 Birmingham, UK

OCT 09 Spirit of Life Gala Chicago (IL), USA OCT 10-12 Office Brands EXPO Sheraton & Westin Denarau Island, Fiji OCT 22 BOSS Awards Birmingham, UK OCT 22-26 BSA & IOPFDA Annual Meetings San Diego (CA), USA NOV 04-07 ISSA/Interclean Orlando (FL), USA

APR 28-29 London Stationery Show 2015

Business Design Centre, London, UK Contact: Chris LeonardMorgan Email: clm@ firstevents.com Tel: +44 20 8462 0721; Web: www.stationeryshow. co.uk The only UK exhibition dedicated to stationery products, writing instruments and accessories for the home, school and office. Organiser of National Stationery Week.

European

The fourth OPI European Forum will be held from the 22-24 September 2014 at the Huis ter Duin Hotel in Noordwijk, near Amsterdam

Donâ&#x20AC;&#x2122;t miss this leading event for senior executives in the OP sector Another high quality programme is taking shape, combining speaker presentations, audience debate and unrivalled networking. Some of the topics to be discussed include: Multi-channel strategy Mobile marketing FM category growth Innovating the category The multi-generational workforce Challenges of the social age

In addition to a full agenda of keynotes, panels and roundtables, this yearâ&#x20AC;&#x2122;s Big Interview will be with Steve Schmidt, President International, Office Depot Places are limited at this unique event. To find out more visit www.opi.net/EF2014 or email janet.bell@opi.net

Organised by Office Products International

Your OPI

Final word Your industry, your opinions Martin Weedall, National Sales Director, VOW

Social manners WHEN

social media comes into a conversation, there is usually one of two responses: ridicule or enthusiasm. But whatever your personal point of view, social networking is getting us talking and there are very few people left claiming it to be a passing fad. Pew Research Centre’s Internet Project Tracking Survey 2012-13 tells us that 71% of adults were on Facebook in 2013, 22% were on LinkedIn, 21% on Pinterest and another 18% on Twitter. In Demand Gen Report’s 2013 B2B Buyer Behaviour Survey, 57% of B2B buyers said that they browsed social media conversations as part of their decision-making process, 22% connected directly with the vendor through social media and another 22% asked other users for their opinions on a B2B buying decision. While we know there are a high number of end users and businesses using these channels, we all need to take a deep breath before we join them. There are too many businesses thinking that a certain platform has become huge – Snapchat, anyone? – jumping in with both feet and then wondering why they’re not getting the engagement. When you look at where it all goes wrong, I think one area is simple to pinpoint: too many businesses just haven’t done their homework, got to know the social media environment they’re in and – even though as a sales professional I hate to say this – probably got too caught up in a ‘sell’ mentality. It’s easy to get carried away before you understand what you need to achieve from using social media. Once it’s out there, it’s out there, so you have to be careful about what you are trying to gain from the social media platform and how you’re going to do it. Marketing common sense comes into play here. Do the research and find out which platforms are used by your audiences; tailor and target your messages and coordinate with your offline marketing; work out why you want to be there and what you want to get out of it. It is generally much better to invest in one or two platforms and do those well rather than spread your valuable resource across too many channels. Once you’ve decided where you’d like to be, getting to know that environment is key. Spend some time on Twitter or LinkedIn and see what the influencers, competition, suppliers and media in your sector are doing. Ask some of your friends what they take from certain social media they read and follow. Take a look at business leaders in vertical sectors who have built up

great followings and get a feel for their approach. It’s more than likely you will see that the best profiles are those of people who’ve mastered the art of engagement. So they talk to and help people, they have original and interesting thoughts and they share fresh, useful content. Be wary of pushing the same content across all your channels. Each community has its own reasons for being there and its own way of talking. Your content has to feel right in that environment and you need to engage with other users on their terms. If your approach doesn’t fit, the most likely scenario is you’ll be left out in the cold or worse, you’ll be ridiculed by other users. On Twitter (@MartinWeedall) I try to behave the same way as I would at an industry event. In other words, I’m there to represent VOW, build relationships, get to know others and ultimately instil an understanding of and trust in VOW as a wholesaler. That doesn’t mean not sharing a joke or giving an opinion, but it does mean being mindful of why I’m there, respecting confidences and generating goodwill. I’m also trying hard to make sure my personality comes across, so you know it comes from me. And finally, a few tips on Twitter I discovered recently: • An image placed directly into a tweet is 94% more likely to get a retweet (did you know the human brain can make sense of a visual in about one tenth of a second as opposed to a page of web text which we only read an average 28% of?). • Tweets with relevant hashtags (#) get twice the engagement, but research also says that any more than 1-2 is overkill. • The engagement rate for brands is 28% higher on Saturdays and Sundays. • The optimum number of tweets is four per day. • Tweets with links in them get an 84% higher engagement rate.

“Once you’ve decided where you’d like to be, getting to know that environment is key”

OPI Magazine | June 2014

Want the final word? Email editorial@opi.net or write to OPI, Diamond House, 36-38 Hatton Garden, London, EC1N 8EB, UK

IN THE NEXT ISSUE • One-to-one with Advantia’s Bob Geens in our Big Interview • All the action from Nashville as we report from SP Richards’ ABC event and the 2014 North American Ofﬁce Products Awards

Office Products International ISSUE NO.240

The word in office.

magazine

Big Interview Bud Mundt, Executive Director, AOPD, p18 June 2014

JUNE 2014

Technology â&#x20AC;&#x201C; just another adjacent category. But is it? p26

WWW.OPI.NET

p38 The state

of our industry

p12 Q1 results and more at Depot All wrapped up at Oz dealer NuPrint p32