OPI March 2014. European Edition by OPI

The word in office.

magazine

Big Interview Dave Jenkins, MD of Waltons p20 March 2014

United we stand, divided we fall

What can be done to reduce supply chain inefficiencies? Work together together... p30

3D Printing p36

Is 3D printing a real reseller opportunity yet?

GSA ignores NOPA federal contract recommendations p14

Contents March 2014

www.opi.net

News

6 Round-up

Dealer groups end merger talks; strong Q4 from United; RKV expands; ALSO moves for Alpha

Shows 42 Paperworld Review Vendors think beyond traditional OP as exhibitor and visitor numbers fall,and a new association is born

8 Beyond OP

SPR buys jan/san firm; Coca-Cola takes stake in Green Mountain

Category Analysis

10 Analysis

45 Data and Security

Vasanta’s bokz; Paperworld 2015 changes; Novexco grows

The digital world gives rise to new challenges for the data and security category

Features

48 Antimicrobial

New legislation in the US and Europe is keeping vendors and resellers on their toes

20 Changing old habits

Internationally, Waltons is probably the best-known name in the South African OP market, but that doesn’t mean that it didn’t have some serious operational issues that needed addressing

Regulars

30 United we stand...

5 Editor’s comment

With costs in the supply chain far too high, what can be done to reduce them?

52 On the move

36 3D opportunities

Wendy Pike

55 5 minutes with...

Is 3D printing an opportunity yet for OP resellers?

56 What’s on Key dates for your calendar

40 Home advantage

OPI talks to Farook International Stationery about the OP issues in the United Arab Emirates

58 Final word Luke Chapman

“Rather that competitor A working with competitor B, perhaps a more likely scenario is for a major 3PL opportunity to be created, like a super wholesaler, managed by resellers – outsourced warehousing on a collaborative basis”... For the full story, turn to page 30

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

Deputy Editor Alex Wellman +44 (0)20 7841 2942 alex.wellman@opi.net

Editor’s comment

Features Editor Heike Dieckmann +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 Charles Edwards +44 (0)20 7841 2956 charles.edwards@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.

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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.

Office Products International Ltd (OPI), Diamond House, 36-38 Hatton Garden, London EC1N 8EB, UK

We’re multichannel too! As we go to press this month, a couple of interesting stories are developing on both sides of the Atlantic. You won’t be able to read about them in this magazine, but by the time this issue lands on your desk you might already have got all the details from opi.net. Keep an eye on our website, by the way, because we’ve got some big changes coming up. I’d also encourage you to join our LinkedIn group if you haven’t done so already – just type ‘Office Products International networking group’ in your favourite search engine (I’d Keep an eye on our website, avoid simply ‘OPI’ by the way, because we’ve got unless you also have some big changes coming up a penchant for a particular brand of nail varnish!). As I write, there’s an interesting exchange taking place on the subject of Staples’ recent rebranding. March is going to be a busy month for us, with our first OPI Partnership event taking place in Amsterdam as well as our 2014 European Office Products Awards. We’ll also be visiting the Ed Expo educational products show in Dallas, Texas, and will be reporting back on that in the April issue of OPI. Luckily, with all these things going on, reinforcements have arrived at the editorial team in the form of our new Deputy Editor Alex Wellman. Please join me in welcoming Alex to the OP industry and try to be nice to him if you get a call or email from him! Andy Braithwaite , Editor

Tel: +44 (0)20 7841 2950 Fax: +44 (0)20 7841 2951

opi.net/ linkedin

@opinews

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News from opi.net Dealer groups suspend merger talks US dealer groups Independent Stationers (IS) and TriMega have formally suspended negotiations regarding their proposed merger. In a letter to members, Mike Maggio TriMega President Mike Maggio confirmed that the boards of TriMega and IS had been meeting over the past few months to look at unification options, but that discussions have now been suspended. Maggio said informal talks have continued, but no formal meetings are on the agenda. However, the EPIC 2014 convention will go ahead as planned and preliminary discussions have begun regarding a joint event in 2015. For more on this, see this month’s Hot Topic on page 30.

Sweden’s RKV expands membership Swedish independent dealer group RKV has added seven new companies as members and joint owners of the group. The companies are Uterus Kontorsvaror, Data & Kontorsbutiken i Tranås, AB Arvids Bok-och Kontorscenter, LS Kontor, Ramströms Emballage o Papper, Kontorsleverantören i Stockholm and Dillbergska Bokhandeln & Kontorsservice. Previously in close partnership with RKV, the seven new members have combined revenues of €16 million ($22 million) and operate in ten locations around the country. RKV currently boasts sales of €110 million and 45 stores throughout Sweden.

OPI Magazine | March 2014

United Stationers impresses on the bottom line United Stationers’ fourth quarter earnings have come in ahead of market expectations. United reported Q4 adjusted net profit of $34.5 million, or $0.86 per share – a year-on-year increase of 4.9% – with Wall Street consensus estimates looking at earnings per share of $0.81. For the full year, United’s adjusted net profit was $132.4 million, 14.4% up on 2012. Q4 sales of $1.22 billion represented a 1.6% drop versus the same quarter in 2012 and were slightly below analysts’

expectations. However, tight control on operating expenses – which declined almost $8.5 million versus Q4 2012 – resulted in a 3.9% rise in adjusted operating profit to $57.5 million. Full-year sales were virtually flat at $5.08 billion and 2013 adjusted operating profit rose 7.8% to $223.3 million.

Amazon considers Prime price rise

Amazon reported a rise in Q4 and full-year sales and income, but a possible 50% price rise for its Prime delivery service dominated its earnings announcement. In its earnings call, Amazon said it was “considering increasing the price of Prime between $20-$40 in the US” due to increased fuel and transportation costs. The price of Prime has remained at $79 since it was introduced nine years ago. Meanwhile in Q4, Amazon’s net sales rose 20% to $25.59 billion and net income increased to $239 million compared to $97 million in the year-ago quarter. For full-year 2013, net sales increased 22% to $74.45 billion, while net income was $274 million compared with a loss of $39 million a year earlier.

IP and Unisource reach merger agreement International Paper (IP) has reached an agreement to merge its xpedx business with Unisource to create a new publicly-traded packaging, print and facility solutions company. IP and Unisource, which is owned by an affiliate of Bain Capital and by Georgia-Pacific and some of its affiliates, have been in talks since

April last year over a deal. Mary Laschinger, currently xpedx President, will be Chairman and CEO of the new company which will have projected annual revenue of $9–$10 billion and around 9,500 employees across more than 170 distribution centres in North America. Current Unisource Worldwide President and

CEO Allan Dragone will serve as a director of the new company. IP CEO John Faraci said that it is anticipated the new company will generate synergies of about $200 million. IP shareholders will own 51% of the business. The merger is expected to close by the middle of this year.

PBS Holding has continued on the acquisition trail with the purchase of Slovakian contract stationer and wholesaler Lamitec. Headquartered in Bratislava and with a

10,000-SKU product range, Lamitec will be combined with PBS’s Slovakian business called Büroprofi Kanex.

In the last six months, Austria-based PBS has also bought Georg Kugelmann in Germany and the wholesale operations of Biella in Poland.

ALSO to acquire Alpha European distributor ALSO has agreed to acquire Netherlands-based competitor Alpha International. ALSO said it intended to buy 100% of Alpha from its holding company Saphin. It was also revealed that Alpha and ALSO Netherlands would have a joint management team. Further details, including the financial terms of the deal, were not disclosed. The transaction is still subject to regulatory approval. Switzerland-based group ALSO was in talks with Saphin back in December 2012, but the negotiations at the time fell through.

In 2012, Alpha reported annual sales of about €590 million ($806 million) and had 108 employees.

News ■ Round-up

PBS acquires Slovakian business BSA launches new Standards Council

US trade association Business Solutions Association (BSA) has established its first-ever Standards Council. The council will be responsible for overseeing all standards activities and is charged with scheduling all standards, guidelines and best practices. Within the council there will also be committees and subcommittees exploring the possibility of setting new standards or best practices within the industry. For more on the standards issue, see our Hot Topic on page 30.

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News ■ Beyond OP

SPR buys Coca-Cola buys into jan/san firm Green Mountain SP Richards (SPR) has acquired regional jan/san wholesale distributor Garland C Norris (GCN). Based in Apex, North Carolina, GCN is a 100-year-old family-run business that distributes food service disposables and janitorial and cleaning supplies. It boasts a 125,000 sq ft (12,500 sq m) warehouse and 98.5% historic first-time fill rates on more than 3,500 stocked items. The company sells exclusively to resellers and has its own-brand ‘value’ product line called Lighthouse. Announcing the acquisition, Tom Gallagher, CEO of SPR parent company Genuine Parts, said the transaction “serves to further diversify SPR’s product offering into complementary adjacent markets”. In an announcement on its website, GCN said that existing staff and management would continue to run the business from Apex as “a separate and standalone company”. Financial details of the deal were not provided, but SPR is expected to generate an additional $35 million in annual sales.

Soft drinks giant Coca-Cola has bought a 10% stake in Keurig brand owner Green Mountain Coffee Roasters (GMCR) for $1.25 billion. In addition to the investment, Coca-Cola is entering a ten-year partnership that will see the company create single-serve, pod-based cold beverages for use on the Keurig platform. The news, revealed in GMCR’s Q1 2014 financial results which showed it posted sales of $1.4 billion for the quarter, came on the same day the coffee company announced it was planning to launch the Keurig brewer in the UK later on this year. In its earnings report, GMCR

said it was entering the away-from-home market in the UK in the second quarter of 2014. The announcement came just weeks after Marley Coffee revealed its own plans for investment in the UK – in particular in the office coffee services market.

ISSA launches new Dirty truth standard in UK and Ireland about UK US jan/san trade association ISSA is rolling out a new standard for cleaning companies in the UK and Ireland. The association first launched the Cleaning Industry Management Standard (CIMS) in the US and Canada in 2006, but is now taking it outside North America. The standard lays out a framework based on a number of management principles for cleaning organisations, such as quality systems, service delivery and HR. It will be administrated in the UK and Ireland by BICS Business Services and applicants will need to be checked by an independent assessor.

OPI Magazine | March 2014

offices

Introductory workshops for the standard will be held on 4 March and 16 September at the Highgate House Hotel in Creaton, Northampton.

A survey has revealed that around 30% of UK office kitchens have never been cleaned. The survey, conducted by ContractCleaning.co.uk, questioned 207 offices across the country and also revealed that 64% of workers had no idea if there was anyone designated to ensure kitchen safety and hygiene. The office fridge and microwave are the worst two offenders when it comes to lack of hygiene. ContractCleaning.co.uk spokesperson Mark Hall said: “Staff-run kitchen areas are a true horror story and a food poisoning outbreak waiting to happen.”

A free game for smartphones and tablets designed to educate about the value of cleaning in offices, schools and hospitals has been unveiled. Angry Janitors is a 30-level game devised by US jan/san trade association ISSA where players have to eliminate dirt and germs by helping janitors ‘Sweepy’, ‘Squirt’ and ‘Speedster’. The game can be found on the iTunes app store and Google Play or downloaded from www.issa.com/angry

Crystal Rock revises OP strategy

News ■ Beyond OP

Cleaning smartphone game launched

Water and beverage company Crystal Rock has admitted in its annual SEC filing that its previous office supplies strategy did not meet expectations. After buying Connecticut dealer Hartford Stamp & Office Works in 2010, Crystal Rock had invested in an organic growth strategy in the OP category, both in terms of the sales force and the IT infrastructure. However, the firm admitted this strategy had failed to produce the desired results and decided to pursue a more acquisitive strategy, making a $2.3 million move for Universal Business Equipment last year. OP sales increased 57% in 2013 as a result of the deal, but were still up 19% on an organic basis, reaching about $6 million, or 8% of total revenues. Water is still Crystal Rock’s largest category, and this grew 1% in 2013 to $29.2 million. Meanwhile, competitive pressures in the coffee market saw this segment decline 5% to $16 million.

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News n Analysis

Thinking out of the bokz? Industry reaction to Vasanta’s “new and unique” bokz programme for the UK OP channel

group Vasanta – parent company of wholesaler VOW – unveiled a new reseller programme called bokz at the end of January following several weeks of speculation over a “significant announcement”. In keeping with recent programmes in the UK market, bokz is focused on reducing operating costs for smaller dealers, but VOW Managing Director Adrian Butler told OPI that there were four key differences with bokz that sets it apart from other initiatives such as nectere, Pi, Office Power and Cadabra to earn its ‘unique’ billing. These are: 1. Direct access to more than £40 million ($66 million) of stock. 2. The ability to work more directly with existing manufacturers and OEMs on marketing activities. 3. The scale and support of a £400 million+ organisation to allow the investment required to truly make the programme work. 4. The dealer still owns the end-user relationship. Butler expects the initiative to appeal to a range of dealers but mostly in the £0.5-£1 million bracket. He explained: “The programme could quite easily appeal to a small dealer, an acquisitive dealer that sees it as an easy way to manage business integration, or a larger dealer that aspires

OPI Magazine | March 2014

to fundamentally changing its business model.” Industry response to bokz fell into the familiar categories of for, against and ‘wait and see’. Steve Harrop, Managing Director of VOW-aligned dealer group Office Friendly (OFDA), said: “I can see the reasons for introducing initiatives such as this. They are embryonic in both the US and the UK and have in mind reducing the cost to serve along the supply chain, and that can only be good for

“It was described as ‘new and unique’ in the announcement, but I don’t think it’s any of those. We also believe the systems and processes we have are probably better than what Vasanta could offer. It’s early days and we have to take it seriously, but we are happy to get on with developing our business.” Spicers CEO Alan Ball said that it made “complete sense” for Vasanta to have an offering such as this, but added: “I am a little surprised at the market positioning as I think it will definitely alienate segments of the market, and

marketing it,” said the head of one of the UK’s dealer groups. But VOW’s Butler countered: “Economies of scale will mean that we will be able to undertake much more extensive marketing campaigns on a national basis and be able to gather more support from manufacturers.” A quick look over the English Channel to ADVEO’s model in France shows that the dealer group/ wholesaler co-habitation model can thrive – indeed, the Calipage and Plein Ciel groups could now be considered linchpins of ADVEO’s French operations. Time will tell if starting from scratch – as opposed to actually acquiring or establishing a strategic

“Economies of scale will mean that we will be able to undertake much more extensive marketing campaigns on a national basis” participating partners. This whole concept of de-duplication of cost has been at the forefront of OFDA/VOW activity for many years.” (see Hot Topic, page 34). Office2office’s CEO Simon Moate – whose firm has strong links to VOW with its Truline programme – concurred: “I am of the opinion they are steering their business in the right direction and I agree that the big issue our industry has to contend with is the unsustainable layers of cost in the supply chain,” he stated. However, Tim Beech, Managing Director of Euroffice’s Office Power initiative, said he has struggled to find too much fresh about bokz.

conversations [I’ve had] would support that.” One challenge that Vasanta will no doubt face is how to successfully establish a national bokz brand. “I am sure that they will have underestimated the cost of building and

Adrian Butler

alliance with an existing dealer group – is the right choice for Vasanta. This article is an edited version of an Executive Briefing originally published on opi.net. Also see our website for further recent developments in the UK wholesaling channel.

Dedicated hall to be occupied by German associations every two years from 2015

a highly anticipated international press conference at this year’s Paperworld event in Frankfurt, organiser Messe Frankfurt revealed that, beginning in 2015, the show will include a hall dedicated to the members of two German office and stationery trade associations. Messe Frankfurt said that it had reached an agreement with two German trade associations – PBS Industrieverband and Altenaer Kreis – that will see their non-overlapping membership of about 45 companies able to exhibit in a separate hall in 2015. The agreement with PBS Industrieverband and Altenaer Kreis will see this German associations hall concept employed every two years, although Messe Frankfurt stressed its commitment to holding Paperworld every year.

Certainly, the organiser is desperate to attract more German brand manufacturers – formerly ever-present exhibitors at Paperworld – back to the show after something of an exodus, especially this year.

Moving the furniture However, Messe Frankfurt stressed that it was not just about German brand names, but members of the two associations – and these include international brands such as 3M, ACCO, Acme, Avery, BIC, Exaclair, Hamelin, Leitz (Esselte) and Tombow. Their German subsidiaries are members of these associations. Whether that will be enough to attract some of these brands back to Paperworld remains to be seen. Several German manufacturers had already spoken publicly about their intention to exhibit biennially at Paperworld.

From left to right: Rolf Schifferens (Altenaer Kreis), Cordelia von Gymnich (Messe Frankfurt) & Horst-Werner Maier-Hunke (PBS Industrieverband)

It is therefore difficult to see this “new concept” as anything else than simply ‘moving the furniture’ in what some vendors have criticised as a protectionist move to appease some influential members of the German manufacturing community. It certainly appears to go against the international aspect of Paperworld that Messe Frankfurt is so keen to highlight. Those – including OPI – who were hoping to hear details of an initiative addressing the wider challenges of the office sector were left disappointed by Messe Frankfurt’s announcement. We, for a start, had expectations of a programme aimed at attracting a wider range of workplace product vendors and service providers. We can perhaps still hold out some hope for a proposal that addresses these issues for 2016. The agreement with PBS Industrieverband and Altenaer Kreis, remember, is for every two years. That will leave a free

hall in alternating years which Messe Frankfurt will somehow look to fill. The show organiser referred to “a solution” having been discussed for these years, but is so far keeping tight-lipped on what this might be. In addition, Cordelia von Gymnich, the Messe Frankfurt VP who is now responsible for Paperworld, has only been in her post for a few months and is still on something of a learning curve with regards to the office and stationery industry. We would certainly like to see a ‘Workplace Innovation Forum’ or something along those lines.

Balancing act Before we get anywhere near that stage, however, Messe Frankfurt has to address the question of which hall will be used for the German associations in 2015. It seems highly likely that the members of these associations will have their eye on the coveted Hall 3.0, where many of them have traditionally exhibited. That, though, is bound to upset current 3.0 exhibitors that aren’t members of one of these associations, and Messe Frankfurt will have to show strong diplomatic skills if it doesn’t want to drive away a number of international exhibitors. Of course, this could be good news for the membership prospects of PBS Industrieverband and Altenaer Kreis!

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News n Analysis

Paperworld strikes deal with German associations

news n Analysis

Novexco makes contract move Lyreco deal makes Novexco the third-largest contract stationer in Canada

Canadian

At first glance, it seems surprising that a group such as Novexco should make a move like this, which would appear to create competition issues with its own member base – about 120 dealers operating under the BuroPLUS and Club Express banners – and its individual dealer customers for which

in Canada to serve accounts dealer group Novexco has across the emerged as the country’s country and have third-largest contract coast-to-coast Novexco CEO Robert de Montigny stationer after it acquired capabilities,” he facility in Laval, just north the assets of Lyreco’s told OPI. “This transaction of Montreal. Canadian subsidiary in is right in line with The transaction – for January. Lyreco has been that plan.” which financial details in Canada for over 20 He added: “We have were not disclosed – also years and it was one of some cases of our includes a long-term the reseller’s first markets commercial division agreement for Novexco to act as Lyreco’s strategic accounts partner in Canada and therefore to use Lyreco’s private label products. outside France when it it acts as a wholesaler. coming into competition There will now be a began its international However, Novexco with our dealers, but we transitional phase of up to expansion strategy in the CEO Robert de Montigny do manage that – that’s the two years during which time early 1990s. pointed to the company’s price we have to pay to be Novexco can keep operating However, with sales previously stated plans in a B2B mode and at the the acquired business under estimated to be in the to develop a Canada-wide same time to be a dealer the Lyreco name in Canada. region of C$140 million business. Currently, about group.” “We do have a few (US$126 million) and 85% of Novexco’s business Lyreco Canada comes challenges ahead of us declining, Lyreco Canada comes from its home with three distribution such as IT integration,” has been unable to develop province of Quebec. centres– none of them noted de Montigny. “But the growth trajectory “We’ve been telling in Quebec – that will we have given ourselves hoped for by the senior everyone about our complement Novexco’s some room to manoeuvre team back in Marly, France. acquisition strategy new state-of-the-art and we still have a very good relationship with Law evokes “silly season” after Lyreco sale rumours Lyreco. We have enough time to proceed with a soft Lyreco CEO Steve Law firmly denied to OPI that the contract stationer had been in advanced sale talks with Staples recently. transition and keep our Speaking to OPI shortly after the Novexco transaction had been focus on the clients.” announced, Law expressed his surprise to suggestions that Staples had Novexco has certainly recently been on the verge of acquiring Lyreco, saying that we must have developed an interesting entered the “silly season” for market gossip. business model that now Interestingly, but coincidentally, the sale of Lyreco Canada to Novexco comprises wholesaling, could have tied in with a possible Staples/Lyreco combination. Staples is the dedicated dealer groups clear market leader in Canada and would certainly have had little desire or and a contract unit. With Steve Law need to take on the Lyreco business there. wholesalers in other Law said that the decision to sell off Lyreco Canada had come after a routine strategic review that markets facing top and included all of Lyreco’s international divisions. Despite Lyreco having a presence in Canada for more bottom line pressures, than 20 years, Law admitted that it had been the toughest market in which to achieve profitable growth we could perhaps see this and that the subsidiary lacked the scale to compete as he’d have liked with US-owned competitors multichannel operating Staples and Grand & Toy (now part of Office Depot). He believes the business will now be able to model start to (re)appear operate more effectively under the guidance of a Canadian-owned group like Novexco. elsewhere – and you The Lyreco CEO added that the company was not planning to sell off any other international divisions could probably argue such as Australia and in some Asian markets. that, to some extent, we already have.

“We have some cases of our commercial division coming into competition with our dealers, but we do manage that”

OPI Magazine | March 2014

News ■ Analysis

GSA RFP disappoints NOPA US government agency ignores most of NOPA’s recommendations for new contract

the end of January, the US General Services Administration (GSA) finally released its request for proposals (RFP) document for its new $250 million-a-year office supplies contract. The new contract – known as OS3 – will run for a five-year period, with suppliers being awarded places for an initial one-year term followed by the possibility of up to four one-year extensions. The new RFP has been divided into four distinct

March to submit their bids for the new contract. The release of the RFP had originally been due in November, but was delayed following an extended consultation period with small business groups, including NOPA.

NOPA recommendations The trade association had been pushing for the number of awards made to be increased to 50 and for a separate CLIN group devoted to small business consortia, such

25 is that we wanted any current or future consortia model to be legitimate small business consortia and not the pass-throughs NOPA has been fighting against for years. We believe having 25 small businesses as part of your consortia will make it harder to cheat the system

“A pattern is developing here and it is one that is not positive for the small business community in this country” bidding pools (known as CLINs) that cover: 1) general office supplies; 2) paper; 3) ink and toner; 4) ‘On the Go’ – a general supplies pool with the added capability of four-hour same-day delivery in the ten largest metropolitan areas in the US. 21 awards will be made, with 20 of those planned for CLINs 1, 2 and 3 – for which the GSA has said there will be a “strong preference” for small businesses. CLIN 4 is the only pool open to large businesses and may also include a retail component. CLIN 1 includes an award for a small business consortium with a minimum of 25 members, and consortia are also eligible to bid on CLIN 4, although it appears this last CLIN will most likely be a shoot-out between big-box suppliers. The current contract – OS2 – expires in May and suppliers have until 17

OPI Magazine | March 2014

as Independent Stationers through its national accounts programme and TriMega’s Point Nationwide. NOPA’s Director of Government Affairs Paul Miller was disappointed with the final outcome. “NOPA spent a lot of time and resources meeting with and answering GSA’s concerns about our recommended changes to the RFP,” he told OPI. “We provided GSA with real solutions that supported the goals of saving money, but it does not appear they truly heard the message because the RFP does not reflect those [solutions].” A crumb of comfort for NOPA was the RFP requirement that an eligible small business consortium must have at least 25 members. “The number 25 does come from us, so GSA did listen on one count,” said Miller. “The reason for

with other-than small businesses.” However, Miller said NOPA would continue to engage with the GSA to push the consortia model. “NOPA will be talking with GSA again and our hope is they will understand what they are doing to the government buyer

and the office products industry by not utilising our recommendations,” he stated. “We are not alone here,” he continued. “The jan/ san and OASIS [integrated services] RFPs have been protested. A pattern is developing here and it is one that is not positive for the small business community in this country or the government buyer. It will have an immediate impact on our nation’s industrial base which, in turn, will have a negative impact on the Department of Defense to get the goods it needs to provide a strong military defence.”

Requisition RFP imminent As this issue of OPI went to press, the GSA held an industry day to provide information on another federal office supplies contract, known as the ‘requisition channel’, that is estimated to be worth $200 million a year. The supply chain for this requisition channel – which serves critical areas such as the military – has traditionally been handled by the government itself through its own distribution network. However, as part of a federal cost savings and efficiency programme – known as Supply Transformation – the government is now looking for suppliers to take on these supply chain responsibilities within the US. The requisition contract has been divided into three product groups: office supplies, paper and toner. The paper and toner contracts have been given small business preference, but the office supplies category – which is based on a basket of 700 core items – is to be an open award. A similar contract is to be awarded for the jan/san category, with an estimated annual value in excess of $460 million.

News ■ Analysis

The EOPA 2014 shortlist The scene is set for the 13th European Office Products Awards

EVERY

year we get that little bit excited when the entries and nominations for the European Office Products Awards (EOPA) come in. But it becomes even more interesting when our judging panel gets stuck in and separates the wheat from the chaff, deliberating, choosing and discarding, and ultimately picking the winners. Below is the final shortlist. This year, the judging process was perhaps more

extensive than ever, since much of the deliberation was done online. This not only allowed more time to study – and often revisit – all entries, it also ensured a more comprehensive selection of judges. The winners will be announced at the highly anticipated EOPA dinner. Here too, the format is slightly different this time. Historically held during the Paperworld show in Frankfurt, this year sees the good and the great of the

Last year’s winners OP industry convening at the beautiful Hotel Okura in Amsterdam. The EOPA 2014 will take place as part of the inaugural OPI Partnership event, to be held from 4-6

March at the Okura. So on the evening of 5 March, enjoy a night where the great achievements in our industry are celebrated. See also www.opi.net/eopa2014

EOPA 2014 SHORTLIST Facilities Management Product of the Year

Reseller of the Year

Fellowes Freudenberg Home and Cleaning Solutions Kimberly-Clark Nestlé Smart Wall Paint tesa

Amazon Bureau Vallée Dacris Impex Kaut-Bullinger Lyreco OTTO Office

AeraMax Air Purifiers Vileda 1-2 Spray Mop Healthy Workplace Project Nestlé Big Biscuit Box Dry Erase Whiteboard Paint Powerbond Ultra Strong

Traditional Product of the Year 3M BIC Esselte Innobind Newell Rubbermaid

Scotch Expressive Tape Dispensers Cristal Stylus Leitz CUBE Innobind Office DYMO LabelManager Wireless PnP

Wholesaler/Distributor of the Year Alpha International Corwell PBS Holding Quantore Europe VOW Westcoast

Technology Product of the Year

Vendor of the Year

ACCO

Bi-Silque CEP Office Solutions Esselte Fellowes Nestlé Samsung SCA

Brother Durable UK Esselte Hewlett-Packard Samsung

Rexel Auto+ 250x Small Office Shredder HL-S7000DN Ultra High-Speed Workgroup Printer BADGY Printer Leitz Complete Privacy Case HP Officejet Pro-x series Galaxy S4

Marketing Initiative 3M France Durable UK Fellowes Fellowes Pilot

Post-it Brand – “IDEAS THAT STICK” 2013 Campaign Dressed for Success Badges Campaign Bankers Box: Built On Boxes Campaign Smart People Shred with Fellowes Pilot’s Pan-European FriXion Clicker Sampling Campaign

Dealer Group of the Year Advantia Business Solutions Integra Office Solutions Nemo Quantore Soennecken Sponsored by

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Comment

The number of jobs European wholesaler ADVEO is targeting to cut over the next two years

With question marks over how relevant Paperworld remains for the office channel – particularly on the B2B side – OPI asked readers for their thoughts on the show and what changes they would like to see. For more on Paperworld see New Analysis on page 11 and our Paperworld Review on pages 42-43. Jonathan Smith, Avery I think it is still relevant, but only for certain vendors and certain resellers. If you’re a new vendor to the OP channel, it is probably still the best show to reach as wide an audience as possible in the shortest possible time. Similarly, if you’re an emerging reseller, you can meet a lot of vendors and see a lot of products in a concentrated few days. However, it was clear from this year’s show that many established brand vendors decided not to exhibit and many major resellers decided not to attend. That trend started several years ago and speaks for itself – the cost/value relationship just doesn’t stack up for those players. I genuinely don’t know how that trend can be reversed, and I cannot see how Paperworld can ever restore its glory days as there are now a multitude of alternative ways to communicate effectively.

968

million

The number of smartphones sold to end users worldwide in 2013

The number of patent infringement lawsuits Canon has filed in New York against a total of 18 companies manufacturing, distributing or selling printer cartridges

News ■ And finally...

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TWEET CHAT follow us on Twitter @OPInews, @andy_opi, @Trevor_Holt WEDDING PLANNING: Planning to propose on Friday? Did you know Holt’s can supply wedding stationery? @ukoffice Planning is a part of office life. In this case, planning your tube journey with paper clips! We love #officelife @Staples Four words you never want to hear at the office: “We’re out of paper.” Also, “I ate your lunch”. #StaplesDeals @CWNewsUK According to research ‘ jambivalence’ - ignoring a printer jam in the work place is one of the most hated phrases #news

SNAP SHOT

Andrew Reid, Egan Reid Paperworld still has a part to play in our calendar. Our main benefit is to meet suppliers that support our catalogue, and it’s always good to catch up with the industry guys. Having said that, the footfall seems to be getting less. I would opt for a show every two years as I am sure this would encourage some of the bigger players to attend again. John Fellowes, Fellowes At the International CES show in Las Vegas this year there was such a broad assortment of products and companies, and some of them only had a small link with technology. CES has done a really good job expanding its profile and bringing in people from adjacent industries. I think something like that is a real opportunity for Paperworld and would be a positive thing for the industry.

opi.net poll results How would you best describe Vasanta’s new bokz programme?

Unique and innovative 16% Makes sense, but not unique 19% Treads on the toes of the dealer groups 20% Much ado about nothing

45%

Someone in Office Depot’s social media department proved they have a sense of humour with this Valentine’s Day tweet: “Just spending the day with our new friend, @OfficeMax. Happy #ValentinesDay to you and yours.” Was it a question of love at first sight or opposites attract?!

Don’t forget to take part in the discussions on the OPI LinkedIn page w w w.opi.net | OPI Magazine

Big Interview | Dave Jenkins

Changing old habits Leading South African reseller Waltons is two years into a three-year turnaround project. OPI catches up with Managing Director Dave Jenkins for a progress report

by Andy Braithwaite andy.braithwaite@opi.net

ANYONE

who is familiar with the South African office supplies and stationery industry will know what a traditional place it is, with many of its business leaders having been around for longer than they’d probably care to remember. So when Dave Jenkins took over from John Farrell at the helm of the country’s number one reseller at the start of 2012, charged with revamping the entire company, it sounded like he had quite a challenge on his hands. By all accounts, Jenkins is on course to complete the transformation in the three-year timeframe and here he tells OPI what has been achieved so far and reveals his growth strategy for Waltons. OPI: You’ve been in charge about two years now. How would you sum up your achievements in that time? Dave Jenkins: The last two years have been, from our perspective, highly successful. The business today versus the business two years ago is a completely different place. When I arrived here it was initially a three-year turnaround project and we’re now two years into that. There is quite a lot still going on, but the business has been radically transformed from what it was two years ago. OPI: Could you quickly sum up that transformation? DJ: Yes, we’ve really moved from a decentralised company – which was essentially five independent businesses that, apart from the name Waltons, had very little in common. They were headed by five different managing directors, each

OPI Magazine | March 2014

with their own board, and they technically did what they wanted to and what they felt was best for their respective business, to the point of even competing with each other. There were no economies of scale, no sharing of best practice and we were just pretty much a disjointed business. It was a bizarre set-up. The divisional boards have been dissolved and we now operate as one company with one managing director and one national board. We’ve got one corporate identity and our delivery vehicles and stores in all the regions will eventually look the same. We now have one central purchasing identity instead of five separate ones, so obviously economies of everything are far better. With IT, we’ve had to manually consolidate five systems; going forward everyone will hang off a central server based in Johannesburg. And we’re busy putting a centralised ERP system in place. OPI: The ‘old’ Waltons sounds a bit like a company which was cobbled together through acquisitions. DJ: Which is exactly what happened. It was originally a Cape business that acquired other companies, and the managing directors of those businesses continued to run them technically as their own units. So it was a national business that wasn’t really a national business. We’ve implemented the Microsoft Dynamics AX2012 ERP system in our Cape region. Like with all ERP systems, they come with their crocodiles that you don’t anticipate until you’ve hit the switch. We’re busy fixing a whole lot of issues – these have definitely impacted on the business – but we’re starting to work through them now and come up with something that’s workable and manageable. We’ll roll the system out into our KZN region from 1 May and then, after that, to

“There were no economies of scale, there was no sharing of best practice and we were just pretty much a disjointed business”

Waltons | Big Interview

the Inland region. These rollouts should be a lot easier and simpler than the first one where we technically cleaned up all the gremlins. So that’s a work in progress and part of the three-year plan. From a premises perspective, we consolidated our KZN operation into a new state-of-the-art office complex and warehouse in Durban and we did the exact same thing in the Inland region here at head office at Pencil Park in Johannesburg. We put four warehouses into one, so a big consolidation with economies and savings: you don’t have four lots of data lines, four lots of security, four lots of water and light and four lots of people doing the same job. OPI: Sounds like some fairly major investments that you’ve had to make? DJ: Yes, they have been. We built an 11,000 sq m (110, 000 sq ft) warehouse racked to 13 m (40ft) with about R300 million ($27.5 million) worth of stock tucked away. It has been a substantial investment; we have just revamped our entire office complex and moved in at beginning of this year. So the offices are revamped, the warehouse is new and it’s a very different place from what it was before. Our marketing is now national marketing with national promotions and national campaigns. What we do in one area, we do in other areas and we’re starting to get this national operation going as opposed to five disjointed regional operations. OPI: I guess the vendors prefer that marketing approach. DJ: They do. They’ve always had to deal with multiple people and now deal with one person and there’s one set of rules, not five. Certainly the indication from suppliers is that they’re far happier with the way things are now. It’s very difficult for suppliers to want to deal with a national company but actually work with five different sets of rules and ways of doing things. We are now making fast accurate decisions. We’ve also embarked on a really concerted effort to get closer to our suppliers, with renegotiated service level agreements on a national basis, for example. OPI: Internally, how much of a challenge was it to change the culture of the organisation? You’ve obviously had to ruffle a few feathers.

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Big Interview | Dave Jenkins DJ: It hasn’t been an easy task. The heads of the various companies were all senior blokes that had been with this business for 15, 25 years or so; stationery guys with a lot of experience in the business. For them to have somebody new come in and topple their castles and start changing the way they’ve been doing everything is not easy. I must say there has been an awesome buy-in from the folks around the country but, to be frank, there never was an option not to. It was a case of the business needed

we haven’t done before. So it’s a learning curve and there are some problems that we have to watch very carefully and action quickly. OPI: Do you double stock for a time as you make the transition? DJ: Technically not double, but there’s definitely an increase in stock. Our stockholding as a result of these new warehouses is quite a bit higher than it should be, but we’ll run those down. What we don’t want to do is run out of stock and disappoint

“There has been an awesome buy-in from the folks around the country but, to be frank, there never was an option not to” to change and I wanted everybody on board and luckily there have been no causalities – they’re all still part of the team and just operate a little differently now, which must have taken a bit of getting used to. OPI: Just a quick look at the business today: you’ve got three regions, haven’t you? DJ: Correct, the Inland region, the Cape region and the KZN region. OPI: And you have an office and distribution facility in all of those? DJ: Yes we do; we also have distribution facilities in Bloemfontein and in Port Elizabeth. So we have five larger distribution centres and, if you remember our model, we have distribution centres and then we have what we call combos, which are front-end retail, back-end distribution, and lastly we have pure retail. These combo outlets are in the outlying areas of the country where they hold stock and also serve as distribution centres. OPI: But you’ve got the main distribution centre now in Johannesburg? DJ: That’s right. We haven’t got to the Cape yet to do the same exercise that we’ve finished in Durban and Johannesburg, and the plan is to bring four warehouses into one new state-of-the-art warehouse, which is a project that’s about to commence as we speak. We’re taking our current Woodstock premises, which are already ideally situated in Cape Town, and are revamping those – exactly what we’ve done in Johannesburg. OPI: How tricky is it making the switchover from four facilities to one? DJ: It is disruptive, of course. At the same time as pulling the warehouses together, we’re implementing warehouse management, which

OPI Magazine | March 2014

our customers, so from our side we’ve upped our stock to make sure that our customers are adequately serviced. OPI: So you take a bit of a working capital hit there just to maintain service levels? DJ: Correct. OPI: How many outlets, as in retail outlets, do you now have? DJ: We’ve got 85 branches across South Africa but that is distribution centres, combo stores and pure retail and we’ve just opened three new retail stores in the last three months. OPI: What can you say in terms of your financial results and performance? DJ: Our six-month results are quite encouraging; we’re up over 8% year on year. There’s quite a lot of exceptional cost that sits in that number and we still managed to grow in excess of 8%. OPI: Full-year sales are around the R2 billion mark? DJ: Yes, slightly over, about R2.2 billion. OPI: So how has the top line been doing in the last 18 months or so? DJ: It’s been pretty decent. Last year, we were up 5% and this year – we run from July to June, by the way – our top line is about 8% up. OPI: Sounds a pretty healthy clip. What’s that due to mainly? DJ: I think it’s driven a lot by share and we are really aggressive in the marketplace. There’s little doubt that we do things a lot better than we used to. I think where we’ve lost customers in the past there’s a turnaround and we’re picking them up again, as well as commercial customers and big corporate accounts. We’ve

Big Interview | Dave Jenkins

“We’ve had one or two competitors trade themselves into bankruptcy and we’ve picked up a lot of that business”

had one or two competitors trade themselves into bankruptcy and we’ve picked up a lot of that business. OPI: What’s the split between retail and commercial? DJ: It’s roughly an 80/20 split, commercial/ retail on top line and about a 70/30 split on profit. OPI: So clearly, commercial is the majority of the business by some margin. How do you organise this side in terms of sales? DJ: We’ve got physical reps on the road, we’ve got audit clerks internally for inbound calls and we’ve got telesales outbound. And then we have the e-commerce channel which is becoming more important for us. So we either physically see people, they order online, or they phone in or we phone them. They are the four methods of securing business. OPI: How is e-commerce developing? DJ: Currently it’s about 12% of our sales, but it’s becoming a lot more important and we’re giving it a lot more focus. We’ve just relaunched our new B2B and B2C trading platforms and we’re looking to grow them quite aggressively. OPI: 12% – that sounds low compared to other markets. DJ: We’re not as advanced as you folks in Europe and North America, and I think we

OPI Magazine | March 2014

always lag you guys by about five or six years. But there’s no doubt that e-commerce is becoming a lot bigger than it has been in the past. We’re well aware of that and we’re taking steps to make sure we are keeping up. We understand that customers wish to trade with us when convenient for them and not just during business hours. OPI: How many staff do you have now in total? DJ: We’ve probably got about 2,250 permanent staff, but that grows to about 3,000 with temporary staff over the back-to-school season. OPI: When you take a step back and take a look at the market overall, how’s that bearing up? DJ: I think the overall picture has to be that the stationery market is in some form of decline. Technology must be driving a decline in pens, paper and pencils and so on. But we’re not seeing it; we’re seeing an increase in our business but I think that is driven by us increasing our share as opposed to anything else. Overall, there will be a decrease in the market going forward.

Big Interview | Dave Jenkins Again, I think we lag you guys, so the trends that you are seeing, we see five or six years down the line. It’s interesting, because everyone is talking about technology and how paper sales are dropping and all that stuff, but our paper sales are rocketing and our diary sales are increasing. So we’re seeing a lot of anomalies – we believe there is change, but we’re stealing share. OPI: Have you embarked on a specific strategy to expand beyond what we’d call traditional office supplies? DJ: Yes, we have indeed; the jan/san and breakroom category – what we call catering and hygiene – is our fastest growing category, albeit from a very small base. We’re seeing big growth in our IT hardware side of things and that’s where more of our focus is going. We are aiming the business in that direction because we know that technology is where things are going. OPI: In terms of the overall economy, how is that looking? DJ: My view is that the economy is still pretty depressed; it’s very price sensitive. Stationery is a commodity so people are looking to buy down, which is an issue that we face. Companies are looking at reducing costs and the climate is not good for us. We’ve lots of competitors and, as you know, the barriers to entry in the stationery market are quite low. OPI: How do you position yourselves? I imagine you don’t want to get into a situation where it’s all about price. DJ: We try not to trade on price. There are other substantial benefits to doing business with Waltons which make price a little more palatable – although I guess they never totally negate price. Customer service; being a national business able to deliver anywhere in South Africa; the range that we keep that far surpasses anything that anybody else keeps; the quality of our products; the stability of the business being part of Bidvest; our Level 2 BEE [Black Economic Empowerment] rating, which is particularly good. We probably have eight or nine reasons why we believe customers might pay a little bit more. OPI: You’ve just had your back-to-school season. How important is that for you? DJ: It’s very big for us. There’s no doubt that we dominate the back-to-school market from a sales perspective and every year we try and improve. There’s still a lot that we can do, but we’re pretty efficient at back-to-school.

OPI Magazine | March 2014

The final numbers for this year haven’t quite dropped out yet, but it looks like we’re probably in double-digit growth from a back-to-school perspective. It’s very good. OPI: And I guess back-to-school is heavily reliant on the retail side? DJ: It is heavily reliant on retail, but we are very strong with direct-to-school. We actually run back-to-school in three models: bulk into schools, which they then distribute themselves; pre-packs, which we pack for them, labelled per child and deliver that to the school; and thirdly retail. OPI: Let’s talk about your retail strategy. DJ: Retail is very important for us. We’ve just hired a person called Sean Bell as our Retail Director. He’s coming to us from BIC where he the current Sales Director and will start in mid-March. His goal is to drive our retail strategy and really improve our offering, so you’ll be seeing a new Waltons look and feel in the next year to 18 months. The way that stores were previously established didn’t involve a lot of science, so consequently what happened is we’ve got a lot of stores that are not situated in the right places and a lot of stores are far too big for what we actually need. Now we are using geomapping to select the right geographic area, the right location and the right size. That’s a big focus of ours. Product-wise, what we’ve done from a retail perspective is to take a commercial range of products and slap them into the retail stores. So we’re going to be doing some work on that, bringing in a specific range of retail products that will really attract customers to our

Waltons | Big Interview stores. We’re also looking at getting into the franchise side of things, so we’ll start trialling that in the next couple of months and we hope to have our first franchised store up and running by the end of this calendar year. OPI: Are you targeting existing retailers for that? DJ: We’re looking at a couple of models. The first is with existing stationers that we can rebadge and assist. The second is establishing greenfield franchise operations in smaller towns where we wouldn’t have a fully-fledged Waltons operation. From a concept perspective, it’s smaller stores in the more outlying areas where we wouldn’t put our own retail stores.

OPI: Just a couple of quick questions to finish. When you look at the competitive landscape, who would you say is your number one competitor? DJ: The one main competitor I would say is Walmart, which is Massmart here in South Africa. They’re starting to open accounts and to run distribution. It’s not just on the retail side, but on the commercial side as well. They’re the ones to watch; they’re astute and they will definitely be stiff opposition. We’re finding new competitors in stationery as these retail chains get bigger, so you’re starting to get the clothing stores and big pharmacy chains now holding a range of stationery. From a retail perspective there’s lots of competition on the stationery side.

OPI: What about international expansion? I know you have operations in Namibia and Mozambique. DJ: That’s right, but Namibia is actually a separate business entity in the Bidvest group, although I am on that board as an Executive Director. We trade in Mozambique, we’re going to be entering the Zimbabwe market shortly – we’ve just secured a partner there – and we’re looking at Zambia, so Southern Africa is high on our agenda.

OPI: How do you view dealer groups like Office National? Are they serious competitors to you? DJ: Yes, they are. They are national and they are competitors for us, there’s no doubt. We find them in a lot of the areas that we’re not in, and in places where we’re closing branches we find they’re opening some. They’re definitely a competitor to us and we watch them closely.

OPI: Zimbabwe sounds like a challenging market to enter. DJ: The fact that it’s right on our border makes it reasonably simple to do business there. However, there are new rules and regulations that have been promulgated in the last few months which are complicating trading there. We’ve signed a partner, but now some legislation has been passed which is making it difficult for the partner to actually trade there. There are some issues with Zimbabwe, but we believe within the next couple of years it will be a decent market for us.

OPI: How is your global accounts relationship with Lyreco? DJ: We’re in contact and we work relatively closely with them. We talk about issues, opportunities and strategy so we have a very good working relationship with Lyreco. I think if we did a bit more work from our side we could benefit more.

OPI: And that will be a multichannel strategy for you? DJ: We will run a combo and a retail operation there, similar to our South Africa model. OPI: So commercial and retail sales? DJ: Yes, and in these African countries we’re probably restricted to six or so outlets, strategically placed in locations where there is strong demand. A lot of our customers here have moved into Southern Africa very successfully and have asked us to come along with them and offer them the same solution that we offer them here in South Africa.

“The way that stores were previously established didn’t involve a lot of science”

OPI: Do you have a significant number of contracts with them that you service? DJ: No, not significant. There’s lots of communication between us and them and it’s a nice relationship for us to have, but is it hugely impactful for us? Probably not. OPI: Okay great, thanks Dave. Appreciate your time. w w w.opi.net | OPI Magazine

Hot Topic | Cooperation + Competition = Cooperatition

United we stand, divided we fall With fixed costs proportionate to OP sales seemingly spiralling out of control, more cooperation among and across channel players looks like the way forward. This, however, often requires a whole different mindset as OPI’s Heike Dieckmann finds out

Make

no mistake, the OP industry is hugely sophisticated in many ways: service levels are among the highest of any industry and electronic ordering systems as well as online trading platforms are well established and accepted. The problem lies in the product itself – office supplies, a declining commodity. And with volume falling out of the market, it is becoming increasingly unsustainable for costs in the supply chain to remain as high as they have always been. It’s not a new subject, of course, but it’s one that has hit the headlines more often than most others. Just looking at the ever increasing array of initiatives that enable dealers to get rid of some of their fixed costs (see also page 10 for more details on Vasanta’s recently announced offering), the issues the big boxes are having with their retail stores, and the growing pressures on the manufacturers from all angles, it’s no surprise that the newly coined phrase of ‘cooperatition’ – the combination of cooperation and competition, or even ‘coopetition’ as Luke Chapman prefers to call it in our Final Word on page 58 – is frequently coming up.

At a crossroads It certainly appears as if the industry as a whole has arrived at somewhat of a crossroads, a junction that requires more than expanding into adjacent product categories to make up for the shortfall in OP sales. When OPI talked to a host of OP experts about the challenges the industry is facing, the recurring sentiment was that what is ultimately needed is more and better collaboration among

OPI Magazine | March 2014

Stripping out costs | Hot Topic industry players, all in an effort to take cost out of the supply chain. Says Simon Moate, CEO of office2office (o2o): “This industry cannot sustain operating with the level of costs it currently has. The halcyon days of 35-40% gross margin in the contract market – I can’t speak for the SMEs and online operators as they have different business models – are gone and they’re never coming back. So we have to rethink and collaborate.” The place to start with is warehousing – often a huge chunk of overall and non-variable fixed costs. As Moate adds: “The offer to end consumers is not in a lump of concrete in an industrial estate, it’s at the front end – customer acquisition and retention, and ultimately getting the product through the door and onto their desks.”

Centralised warehousing In Australia, where the OP wholesale channel is almost non-existent with virtually all resellers having their own warehouses, this kind of collaboration is exactly what Office Brands CEO Gavin Ward is working on at present. He says: “We’ve got 158 members in Australia. 24 of them are located in the Sydney basin, each with their own warehouse. We’re currently studying the concept of abandoning these warehouses or the logistics infrastructure around each of them, and creating a centralised facility that can be shared by the members in this area.” Whether members will take that proposition on board is another matter, he adds. “It’s an emotional thing to get rid of your warehouse

Gavin Ward: Signiﬁcant savings possible

Standards: every little helps Data standards have been discussed in the OP industry for years. Most channel partners in fact agree that some of the waste and inefficiency occurring in the supply chain today can be traced back to inconsistent standards that sometimes don’t even transcend the same product categories from different vendors. Efforts have been made to eliminate some of these discrepancies. The Business Solutions Association (BSA) in July 2012 published its first set of proposals for four standards. These have since been approved and are now partially adopted by the OP community, with the two main US wholesalers leaning particularly hard on their manufacturer partners to comply. As with any voluntary process, progress is often painfully slow. It also requires complete buy-in from all involved parties and, importantly, an upfront investment of money, time and effort. To further push the progress that’s being made, the BSA in February this year set up its Standards Council, responsible for overseeing all standards activities and charged with scheduling all standards, guidelines and best practices. Members of the council include personalities from all parts of the OP supply chain as well as the technology providers. Across the Atlantic in Germany, meanwhile, PBS Network is offering the PBSeasy data platform as a way of simplifying complex administrative processes between the various market players. Founded back in 1997, the concept has been well received and appears to be working. Data Quality Efficiency All manufacturers signing up to and Data Usability working with the latest PBSeasy 2.0 platform – there are 150 of them so far – essentially have to comply with certain basic standards in order to be listed on this data Platform IT Security Security repository. The data is then available for resellers (currently 1,400) to incorporate into their individual ERP systems. The whole standards discussion may not have the same impact as a potentially massive saving on fixed warehousing costs, but it’s making the supply chain run more smoothly and efficiently, and no doubt cuts out a considerable amount of duplicated administrative costs. Retailer

and logistics and I certainly don’t think everybody would do it. But I believe there’s a body of people that would be interested and there are some substantial savings to be had in creating such a centralised logistics facility. “A couple of our members did something similar in Western Australia last year, whereby one business folded its warehouse into the other warehouse and they share the costs and facilities. It worked very well for them and in my opinion even more significant savings could be realised in metropolitan areas like Melbourne, Sydney or Brisbane.”

Supplier

Ward points out that the idea is not to create an additional warehouse operated by the dealer group, like Independent Stationers’ (IS) RDC in the US or fellow Australian dealer group Office Choice’s former, now defunct, warehouse that stocked products that were otherwise uneconomical to source for dealers. “Instead of taking cost out of the chain,” he says of the latter, “it actually added cost back in. The model we’re considering would only be open to dealers prepared to relinquish their warehousing and they – not their dealer group – would take an ownership share in a new facility.” w w w.opi.net | OPI Magazine

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Hot Topic | Cooperation + Competition = Cooperatition

Arnold Theuws: Offering the logistics link It’s early days yet, but Ward is convinced that conceptually the idea is a good one. Manufacturers would benefit too, shipping larger quantities to fewer locations, in turn helping dealers with better prices for higher or broader order volumes.

Pooling resources On that note, manufacturers too could pool into joint warehousing facilities, shipping more efficiently and cutting down on resources. That has been done by German manufacturer Novus Dahle which has been working in collaboration with Schneider Schreibgeräte on their joint logistics function for some time. That level of collaboration requires “a special partnership”, however, says Fellowes President John Fellowes. For a number of reasons: “A joint warehousing relationship would need a lot of thorough assessment to find the right connection where strategic variables in business characteristics, standards and aspirations aligned. “Consolidating a strategic capability like a warehouse represents many implications to a business, including key performance metrics, service levels and working capital. Inventory space and overall cost is also very dependent on each business’s capabilities in forecasting, product characteristics like cost per cube, and other factors which may be difficult for two or more businesses to reach an optimised model.” In markets where the wholesaling concept is very strong, meanwhile – much of Europe and the US, for

OPI Magazine | March 2014

example – there are other potential years, we have seen more and more solutions for independent dealers vendors closing down some of their and manufacturers alike. Dealer warehouse capabilities, working group-cum-wholesaler Quantore from smaller facilities and using in the Netherlands has a highly Quantore for their distribution. automated warehouse and its ‘fine With order values getting lower and distribution’, as Managing Director orders less frequent, manufacturers Arnold Theuws calls it – the final mile are not geared up for the kind of to the end consumer on behalf of distribution that’s required today – the dealer – is hugely attractive and Quantore is. cost-efficient to both its members “ACCO, for example, has a and other reseller partners. European distribution centre, but Being able to offer a more they don’t want to ship lots of comprehensive manufacturer range small orders to different resellers is another bonus that benefits both as that’s really inefficient for them. the vendor and the reseller. Theuws So at the moment we are expanding explains: “Ten years ago we had ACCO’s assortment and with that between 10,000-15,000 articles. broader assortment we can serve Today, we have 21,000 SKUs and we our members as well as ACCO’s are taking a long tail of stock from customers – all resellers, not direct our vendors. “That way, Nobody said it would be easy… we can supply From an independent dealer perspective, presenting a united front our members against the ‘enemy’ – be that the big boxes, the mass merchants with their long or even the likes of Amazon – is what really matters. Few would tail, but we can disagree with that sentiment, not even the wholesalers that clearly also distribute have several other irons in the fire, and least of all the cornucopia to resellers that of OP dealer groups around the world. The reality is somewhat are not members different, however, says a somewhat frustrated Dave Guernsey, CEO of ours and tap of US-based dealer Guernsey. into completely He elaborates: “I find it alarming how little the independent dealer different vertical community (IDC) is collaborating. Certainly some conversations have markets.” He adds: “In taken place but, predictably, self-serving agendas and power plays the last 2-3 have derailed any real progress. Some might characterise the two

major dealer groups as simply jockeying for position, but my take is that a few so-called negotiators are more intent on poisoning the outcome than producing a positive end game – a true merger of equals – that benefits the broader IDC.” Harsh words and Guernsey is of course referring to the failed merger talks between US dealer groups Independent Stationers (IS) and TriMega that were formally suspended last month. When OPI asked IS President Mike Gentile about the topic, he simply said: “In order for organisations to merge there has to be a reason to merge, and there has to be a reason to merge that meets the needs and expectations of the shareholders of those companies. You don’t merge for the sake of merging. I’ll leave it at that.” Quite what the sticking points are is unclear and it’s good to hear that the joint EPIC event will continue to be held this year, with negotiations still taking place for next year. But there also appear to be uncertainties surrounding

Stripping out costs | Hot Topic – that are not our members. And it’s all done on a central billing ‘del credere’ basis.” Quantore is also currently in the process of talking to a number of vendors about taking over their entire logistics function.

Them and us In its combined dealer group/ wholesaler function, this is perhaps an ideal scenario and one that is unlikely to be replicated in, say, the US where the relationship between the wholesalers and the dealer groups is more of a ‘them and us’. Product selection and e-content are particular areas of discontent. Independent Stationers’ CEO Mike Gentile points to the flaws

in the existing arrangements: “The real issue that we have in the independent dealer channel is that we have our e-commerce

dealers to buy. What independents need, however, is what their end user wants to buy. It has to be end-user focused and not be dependent on

“A joint warehousing relationship would need thorough assessment to find the right connection where strategic variables aligned” websites designed and operated by entities that develop them for their own purposes and not the best interests of the independent dealer community (IDC). “Dealers’ websites need to be reflective of the needs of their end users. The wholesalers offer products that they want independent

the groups’ collaboration in the national accounts space following efforts last year to allow members from each group to take part in each other’s national accounts programmes such as Point Nationwide and US Communities. There’s little doubt that many believe a cohesive dealer community in the US starts with the coming together of its two biggest groups and all is not lost, according to new TriMega President Mike Maggio. He told OPI: “I think creating one group out of two has a number of advantages for the channel. It would eliminate some duplication of effort, but most importantly it would provide dealers with a stable platform for the future of our industry. “Efficient e-content initiatives, for example, will only be possible if the combined strength of over 700 independent dealers is brought to bear. The pace of change today is such that all effort should be going into improving dealers’ opportunities to grow and prosper. That cannot occur at the levels needed if resources are being used for competitive purposes or duplication of common programmes and services. Finally it would provide vendors with one single entity to work with, again allowing for resources to be used more effectively and efficiently.” The specific set-ups in and requirements of the various groups and their members around the world might be quite different, but the ultimate question is pretty much the same whatever the geography and circumstance as Gavin Ward of Australian group Office Brands points out: “There is so much compression in the market. The stationery market is mature, manufacturing processes are causing a compression in price, there is intense competitive pressure from the major players and we’re all trying to live out of a smaller basket. That’s only sustainable for so long. There’s no doubt in my mind that the smallest and the weakest will be absorbed by the strongest, and as that happens ultimately there’s going to be change in the market. Whether it’s in one year, two years, five years, I don’t know.

the bigger rebate from a certain manufacturer. Staples has 300,000+ SKUs on their website; we’re lucky to have 50,000 and we only have 50,000 because it’s what SP Richards and United Stationers want their dealers to buy from them.” Strong sentiments and criticism that OPI will be following up with

Mike Gentile and Mike Maggio

“We at Office Brands are moderately stable now, but we’re still in slow decline in terms of our membership. Do I think that ten years from now there will be Office Choice and Office Brands in the market? No, I don’t think so. I believe that, in order to survive, we’ll be one dealer group one day.” And that compression on all fronts is likely to be seen elsewhere before it is seen in Australia. Cue also the number of dealer groups in the UK which, factoring in all the sub groups, easily runs into the double digits. Are they all sustainable? Unlikely, but that doesn’t mean the dealer community in itself is on the cusp of extinction. As Guernsey puts it: “25 years or so ago, Bruce Nelson of Viking/ Office Depot fame said something to the effect that he wasn’t concerned with independents because they could never learn to work together. Dealers have completely outrun that prediction. That said, my fear is that unless we pull this together at the last moment we are about to experience the worst consequences of failing to assemble the obvious. A coordinated independent dealer community that focuses on a big picture end game is possible...”

w w w.opi.net | OPI Magazine

Hot Topic | Cooperation + Competition = Cooperatition

Simon Moate

“It would also result in greater leverage using world-class warehousing and distribution resources which, of course, takes cost out of the supply chain. “In a nutshell, the wholesalers benefit if the IDC is more competitive and as a result wins share. There are redundant programmes the wholesalers are currently providing to the various groups – programmes that could be rolled into one – and the best that can be said about e-content is it’s simply a mess.” It would be wrong to conclude that dealer/wholesaler/manufacturer relationships elsewhere are all cosy. One only has to look at some of the initiatives rolled out by Spicers in the UK over the past couple of years

“Rather that competitor A working with competitor B, perhaps a more likely scenario is for a major 3PL opportunity to be created, managed by resellers – outsourced warehousing on a collaborative basis” said wholesalers. The upshot is that there appears to be an inherent distrust – not to mention a chasm in terms of priorities – between the various parties in the US supply chain. The fact that merger talks between the two main dealer groups were recently suspended (see also ‘Nobody said it would be easy’) further adds to that perception of disunity.

IDC/wholesaler joint venture Dave Guernsey of large Virginia-based dealer Guernsey is sharp in his assessment and suggests a potential solution. “Putting together a consortium that was disciplined in terms of providing full-on support to chosen manufacturers, would likely present some benefits. “Let me be entirely crazy and even suggest – clearly I’m losing my mind here – a joint venture that included the broad IDC and both major wholesalers. It could be a major force behind dealer competitiveness and I suspect that an open book arrangement would end up with stocking dealers more fully embracing use of the wholesaler’s infrastructure.

OPI Magazine | March 2014

to see there are tensions, but there are some examples that restore the faith in the notion of collaboration – whether it makes plain common sense or requires a little thinking outside the box. On the common sense note, UK dealer group Office Friendly enjoys a close relationship with its first call wholesaler VOW. They even share the same building and the cooperation and ‘co-habiting’ is clearly paying off, as Managing Director Steve Harrop points out. “I don’t know anything about VOW’s financial side or any of their administrative aspects – we have a completely different computer system. But we share the physical location and I outsource my HR, my payroll, my company car, our insurances etc to VOW. I pay a fee for that, but I can aggregate certain things like our four or five company cars with their 30 or 50 or 100 company cars and I get their rates. It just makes sense for us and it’s working well.” Office Friendly/ VOW’s relationship

may not solve the supply chain inefficiencies, but it’s perhaps a reminder that collaboration comes in many different guises. Picture this anecdotal scenario from o2o’s Moate, for example: “If you take a pin, stick it in a location where we are as well and draw a five-mile radius around it, within that radius you have at least another five 100,000 sq ft (10,000 sq m) warehouses storing 85% of the same stuff. Each of these warehouses have an enormous amount of cost associated with them.”

Value proposition While that scenario calls for a rethink, it’s far from obvious and even further from being easy. Moate adds: “If you suggest to Office Depot to share a warehouse with a competitor, the first reaction will probably be to laugh it off. What we have to do is to find out where the value is. When you look at purchasing prices, for example, the differences are probably miniscule, so if people feel the competitive advantage sits around the price book for the core products they stock, I think those days are long gone. “Rather that competitor A working with competitor B, perhaps a more likely scenario is for a major 3PL opportunity to be created, like a super wholesaler, managed by resellers – outsourced warehousing on a collaborative basis. Imagine a 1 million sq ft facility in the middle of the country with a hyper-efficient logistics service and satellite outlets collaboratively organised and run. It might not happen in my career, but ultimately it’s where it’s going to go.” From pie-in-the-sky scenarios to feasible solutions, there’s plenty of food for thought in the OP industry which could make a tangible difference to the bottom line.

e | 3D Printing

A whole new 3D printing is something of a buzzword at the moment – but does it represent a truly next-generation opportunity for resellers?

“The big retailers haven’t quite figured out the real value statement for this level of machine yet”

by Bruce Ackland bruce.ackland@opi.net

TAKING

centre stage at a glamorous CES Show in January were 3D offerings such as 3D scanners and 3D printers, allied to a general air that the past year had put these futuristic offerings firmly on the map. Certainly, the 3D industry itself has had a significant 12 months, with personal 3D printing seeing the merger of two of the industry’s largest names, MakerBot and Stratasys. The two US companies had previously occupied opposite ends of the market, with Stratasys focusing mostly on high-end professional applications and MakerBot providing one of the most popular personal 3D printers to hobbyists. For market watchers, these two companies coming together reinforced the idea that personal 3D printing was here to stay and is a true growth area for the future. Prior to this there was a feeling among sections of the market that low-end 3D ch 2014

printers were a gimmick, but the two largest and oldest 3D printing companies have made strategic moves to embrace this segment in recent years, culminating in their merger. 3D printing essentially provides customisable one-off production of any design you have, and seeing it in action really is science fiction, but what opportunity does this area represent for OP resellers?

Testing the 3D waters Certainly, a number of office supplies resellers are – at the very least – testing the 3D waters. Staples and Office Depot are selling 3D Systems’ Cube personal printer, Amazon has a dedicated 3D printing category and Japanese retailer Yamada Denki has also expanded its 3D printer range. Officeworks recently became the first retailer in Australia to start selling 3D printers while France’s Top Office seems to have taken a lead in its home market. Scott Dunham, Research Manager and lead 3D printing analyst at Photizo Group, says: “For the most part, we’re seeing involvement from this channel in two areas. First, some of the bigger names in the office products world have taken to selling the consumer-oriented 3D printers in retail stores, but with a pretty hands-off approach. These big retailers probably haven’t quite figured out the real value statement for this level of machine just yet, but they’re getting there. All the physical retailing of these printers has been relegated to safe bets like the Cube series of printers from 3D Systems. Online sales might offer a little more variety in terms of brands or products, depending on the retailer.” Some office product resellers are also integrating 3D printing into their businesses by providing 3D printing services. This appeals because most businesses aren’t really

3D 3DPrinting Printing | Special Feature interested in owning their own 3D printer just yet, but they can still take advantage of 3D printing technology by outsourcing the printing process to an entity that owns and operates 3D printers. Dunham explains: “This is placing a bet on 3D printed content, rather than 3D printing hardware. There’s nothing stopping office product resellers from offering both services and hardware though, and some global organisations (like Staples) are doing this already in some geographies.” At UK wholesaler VOW, 3D printing has certainly not gone unnoticed and is firmly on the agenda. The company’s Head of Technology Gilly Blackburn says: “3D printing is one of the most exciting developments to emerge in our market in the last five years. The projected growth in 3D printing far exceeds any other product category, with shipments of machines currently increasing by 95% and the market set to be worth billions of dollars by 2017. The application of the product makes it compatible with many business channels and segments. It is a new technology that should not be ignored.”

“It is a new technology that should not be ignored”

So what is the best way forward for OP resellers in terms of 3D printing? One key aspect is understanding how to maximise the usefulness of a 3D printer in the context of different vertical markets. “Sure, a 3D printer makes a great and innovative addition to a product designer or an architect, but what else can the printer offer these businesses besides occasional model printing?” asks Dunham. “One day, there may not need to be any additional value necessary to make a sale of a 3D printer to a business, because they’ll be so affordable it won’t matter. That time isn’t here just yet.” In essence, OP resellers need to figure out ways to help their customers understand how a 3D printer makes sense for them. It’s a case of acting as an educator and knowledge leader rather than simply a commodity seller.

The 3Dealer

Commodity vs high end However, at most dealers, 3D printing is currently residing pretty far down the list of importance right now. Sure, they’re aware of it and big headlining shows like CES are ensuring it’s at least on their agenda for future reference, but clearly we are some way off it being a key category. Aidan McDonough, Managing Director at UK dealer group Integra Office Solutions, explains: “In a similar way to the printer market, there are commodity products which are easily accessible and high-end products which require specialist knowledge and huge investment. The initial set-up costs and the skill required to sell in this sector may prohibit dealers from becoming serious players.” And that is exactly why Integra has joined forces with its member Stanford Marsh, which specialises in 3D printing solutions (see box ‘The 3Dealer’). It has invested heavily in 3D print and Integra is working alongside the company to open up new doors for members within the group in order to help them exploit these new opportunities. Right now, this looks like the ideal scenario, in other words dealers getting a feel for 3D printing and its scope through their dealer group.

Adrian Painter

www.opi.net w w w.opi.net | OPI Magazine

Double A | Sponsored Article

Bringing the brand experience to Europe Paper manufacturer Double A’s European and MENA strategy

THAILAND

-based paper manufacturer Double A raised a few eyebrows with last year’s acquisition of the Alizay paper mill in France, bucking a trend that has seen most paper makers slashing production capacity. OPI speaks to the company’s Senior EVP Thirawit Leetavorn. OPI: It’s been just over a year since the Alizay acquisition. How has everything gone since then? Thirawit Leetavorn: It’s our first production foray outside Thailand and I must say we were pleasantly surprised at how fast we were able to get it back up and running. Four months after the acquisition we started production and then by August we went into full production. The experience has been a very positive one.

OPI: And how much pulp will you be producing at Alizay? TL: About 270,000 tonnes, which fits the requirements of the paper mill. OPI: Most paper manufacturers in Europe are reducing capacity. You’re adding 270,000 tonnes into the market – some might see you as a disruptive force. TL: We don’t mind that ‘disruptive’ tag at all, but it’s too simplistic to view us as just bringing in capacity. You’ve got to really view us as bringing a different way of looking at the paper market and aiming to create value.

Thirawit Leetavorn want to list us because they’ve seen what we’re able to do in the market and how we’re different from the other paper mills. And they know we position Double A as a premium brand, so the power of our marketing, branding and communication effort – by reaching out to consumers – actually makes life a lot easier for the trade.

“You’ve got to really view us as bringing a different way of looking at the paper market and aiming to create value”

OPI: And now you have acquired the pulp mill at Alizay? TL: That’s right. It had become available and it made sense to look at the pulp mill and the co-generation licence which will give us a fully integrated facility. We hope to have the pulp mill operating in the first quarter of 2015. OPI: So you will import your wood chips from Thailand? TL: Yes, Double A will only use pulp originating from our sustainably farmed trees in Thailand.

OPI: So how are you different? TL: It’s all about how we communicate with consumers. If you look at all the catalogues in the European market, the first thing they tell you is the weight of the paper and how white it is. What has that got to do with anything? They should be telling consumers the direct benefits of using that particular paper, such as saving time and money. OPI: And that’s what you do with Double A? TL: It’s something we have been very successful with in Asia and we’re now bringing the message to Europe, North Africa and the Middle East.

OPI: I imagine that the French market was a natural first choice? TL: Yes, it was. We have been running a very successful campaign that has generated a lot of interest from end A humorous French TV campaign highlighted users and the trade. Resellers that not all office paper is the same

OPI: What about other markets? TL: We’re making good progress in Eastern Europe. Our partners are very excited by the fact that we have a production unit in France because it shortens tremendously the lead times of their orders. This year we will really focus on the Middle East and North Africa. Our European presence means that we are now much more competitive, there because we no longer have the import duties we had when we were exporting from Thailand and freight costs are significantly lower as well. We’re also making inroads into the more mature Western European markets. So far, we have appointed channel development managers for the UK, Italy, Spain, Austria and Switzerland. OPI: And what is your message to resellers in these countries? TL: Come and talk to us, see what we are doing, what our strategy is and how we can fit into your portfolio. w w w.opi.net | OPI Magazine

Dealer Spotlight | Farook International Stationery

Home advantage by Heike Dieckmann heike.dieckmann@opi.net

a time when everybody is bemoaning the decline in office products, it’s interesting to see a company that’s still predominantly focused on the traditional stationery space. That’s not to say that Farook International Stationery (FIS), based in the United Arab Emirates (UAE), hasn’t had its challenges. The financial crisis that led to the near-collapse of the Dubai property market in 2009 also had a ferocious impact on the company’s overall performance, and even five years on, President Farook Rahimtulla expects it to take another 2-3 years before revenues are back up to the company’s top performing year of 2008.

Multichannel approach Nevertheless, FIS remains a company that is built firmly around traditional office supplies, stationery and, as part of that, education products. Many of these will be showcased at the fourth Paperworld Middle East show at the beginning of March. In channel terms, the business can be divided into 67% wholesale and 33% retail. Its roots, however, lie in retail. FIS was founded in 1980 by Farook Rahimtulla as a small stationery shop in Deira, in the emirate of Dubai, selling stationery, greeting cards and gift items.

OPI Magazine | March 2014

Life’s not exactly easy for those playing in the OP field in parts of the Middle East region, but with a comprehensive multichannel approach, there are still plenty of opportunities out there

“I am confident that the UAE winning the Expo 2020 in Dubai, combined with the trust in the UAE as a stable growing economy...will generate business in all sectors in the next few years” A year later, the company drew up plans to import office and school stationery for wholesale trading. These plans started to come to fruition in 1982 when it began importing high-quality Japanese and European products through agreements with manufacturers such as Artline and Durable and distributing them in its local markets. Today, FIS is the sole agent in the UAE for 11 well-known office equipment and stationery brands, including tesa, Peach, Apli and Olympia. In the same year – 1982 – a second retail outlet opened in Bur Dubai, eight times the size of the first store. The company now has a total of 13 retail stores – typically 4,000 sq ft (400 sq m) in size – in the United Arab Emirates, with another one in Muscat in neighbouring Oman.

Price competition As is so often the case in emerging markets, FIS took its multichannel approach even further and in 1990 began the manufacturing of office and school stationery products. This venture had its very own set of challenges, says Rahimtulla: “The

first five years were quite difficult and our factory made a loss during that period as a result of stiff competition from imported Chinese and Indonesian products. However, once the FIS brand was established as a quality ‘Made in UAE’ product, the manufacturing side became a successful part of the business.” Indeed, the company added two further factories to its portfolio and now has two in Dubai and one in Sharjah, the third largest emirate in the UAE. Between them, FIS manufactures a broad selection of

Farook International Stationery fact box: Founded: 1980 HQ: Dubai, United Arab Emirates Founder/President: Farook Rahimtulla Employees: 350 Business model: Multichannel (manufacturing, wholesale, retail) SKUs: 18,000 Geographical coverage: UAE and Oman

Farook International Stationery | Dealer Spotlight

2,400 SKUs, split into nine registered brands. These, plus the products from its exclusive distribution agreements with the aforementioned 11 companies – 18,000 SKUs in total – are sold both through its retail network and distributed to its B2B clients.

Big box absence As a fairly general statement, FIS’s customers comprise some of the big wholesalers in the region, stationery stores and bookshops as well as most of the government ministries and departments, and large national and international corporations. The latter in particular, ie government offices and large corporations, would typically attract some of the global resellers to the region, especially in an area as affluent as Dubai, but this hasn’t really happened – and is unlikely to anytime soon. One of the reasons for that is the practice of these distribution agreements – they tend to be exclusive and preclude other players from selling the often highly-valued, top industry brands. Also, says Rahimtulla, any of the large global players wishing to enter the UAE would need a strong and experienced local partner and this might not be that easy to find in a still very traditional and often family-oriented sector. By the same token, he adds, as a free open market, the government makes it relatively easy for international companies to set up branches in Dubai

and that can pose its very own set of challenges: “The free trade status of the UAE has attracted thousands of Indian and Chinese firms to flood the market, dumping their excess inferior-quality stocks and undercutting prices selling mainly to the African continent.” However, he says that “superior and high-quality ‘Made in UAE’ products do enjoy a good reputation and there are many loyal customers who look for quality rather than just price”. Entirely typical of the region, where the private sector is very sparsely staffed with local workers, only 5% of the company’s 350-strong workforce are Emirati, the vast bulk of the remaining 95% coming from several

export its ranges to 94 countries, the main markets being the entire Middle East region and the African continent. With particularly the export market in mind, FIS has expanded from its core focus on office stationery to producing a range of diaries and organisers in several languages, including English, Arabic, French, Russian and Swahili, and these have seen considerable success. Rahimtulla and his team take a continuous look at developments in the region, with a permanent eye out for spotting future opportunities. This month, for example, in line with the growing trend towards online shopping, FIS is launching its Apple and Android app. And the future of the company – and the region as a whole – is bright, says Rahimtulla. “The best year for us was 2008 when we achieved record sales and profits. There have been many challenges since, but I am confident that the UAE winning the Expo 2020 in Dubai, combined with the trust in

“The free trade status of the UAE has attracted thousands of Indian and Chinese firms to flood the market, dumping their excess inferior-quality stocks” African countries, as well as India, Bangladesh, Pakistan, Yemen and the Philippines.

Competitive pricing A multichannel approach, together with an international outlook, make for a good combination. FIS uses high-quality European machinery and processes in its factories, but it also prides itself in producing UAE-made goods and that means it can manufacture its own ranges at prices that are considerably cheaper than equivalent and imported high-quality European products – up to 30-40%. So while it cannot compete with prices offered by Chinese, Indian or Indonesian competitors, it’s competitive compared to Europe due to the zero taxation in the UAE. This price competitiveness also helps, of course, when it comes to exports. As a result of Dubai’s excellent infrastructure, FIS is able to

the UAE as a stable growing economy and a safe and peaceful country in the Middle East, will generate business in all sectors in the next few years. In fact, we anticipate around 7% sales growth in 2014 fuelled by the Expo 2020 business and the mini boom we’re currently witnessing in the UAE.”

Farook Rahimtulla

w w w.opi.net | OPI Magazine

Show Review | Paperworld 2014

The show must go on Numbers were down again at Paperworld 2014, but there was still positive feedback from exhibitors

THE

reaction from a purchasing manager who hadn’t been to Paperworld for a number of years was quite telling. “I’m startled at the reduction in the number of exhibitors and visitors,” he told OPI after the 2014 event at the end of January. Another senior OP executive told us: “There was little point in going – my top ten suppliers weren’t even there.” Certainly, the drop in attendance was quite marked this year, with a 6.4% fall in the number of exhibitors to 1,670 and a 7% decline in visitors to just over 42,000, according to official figures released by Messe Frankfurt. The event organiser is aware of the issues it faces and is taking steps to attract exhibitors back (see News Analysis, page 11), although some

of the recent initiatives such as the Mr Books & Mrs Paper special show are unlikely to appeal to the absent office supplies vendors and buyers. But it would be amiss to sound totally negative about Paperworld – it does still attract thousands of international visitors and retains its status as a melting pot for the industry. Exhibitors that OPI spoke to were largely satisfied with the quality of the visitor traffic, the chance to meet many of their international customers and the opportunities to develop new relationships. And looking at manufacturers’ stands, they are clearly taking steps to either generate interest in existing product groups by, for example,

developing trendier designs or colour schemes, or coming out with new products – some of which have little to do with traditional office supplies. But that’s a positive step because, as we all know, the market for these traditional categories is only going to decline further.

Sustainable association founded in Frankfurt New European trade association SOFEA (Sustainable Office Environmental Association) was officially established in Frankfurt at the end of January following an inaugural meeting which was attended by more than 110 people. SOFEA’s aim is to establish and then run a pan-European environmental evaluation and rating system for office products to be used by all resellers, meaning that manufacturers will only have to evaluate each product once, instead of the current situation where they have to respond to multiple requests from resellers all across Europe. SOFEA has already received the backing of many major resellers in Europe, with representatives from Staples, Office Depot, ADVEO, Vasanta and Bureau Vallée all addressing the audience in Frankfurt to show their support for the project. Vasanta’s Jim Bennett certainly raised a few eyebrows when he said his firm would positively discriminate against vendors that did not participate in SOFEA. On the manufacturer side, Pilot’s Marcel Ringeard has been the driving force behind the creation of SOFEA, which was developed out of a project Ringeard led at French trade association UFIPA where he is the current Chairman. Fellowes’ Johan Brondijk has also been heavily involved, while Stéphane Hamelin spoke of the need for all vendors to support the SOFEA initiative. SOFEA has been set up as an international not-for-profit association under Belgian law and the key now is to develop the membership. Expectations are for 40 companies to initially join and the target is to have about 100 companies

OPI Magazine | March 2013

on board by the end of the year. Importantly, the level of the membership fees will be dependent on the actual number of members, but those that join before 1 Pilot’s Marcel June will be eligible Ringeard for a refund on their initial joining fee – up to €12,000 ($16,000) for companies with annual sales over €100 million. Founding members – those that join before the end of February – will be eligible to nominate a representative to sit on the first board of directors. The board will consist of 18 members – nine vendors and nine resellers – and its first members will be elected during a meeting to take place in Amsterdam at the beginning of March. Clearly, there are still a number of issues and manufacturer concerns that need to be ironed out, but Ringeard said that the priority was to get the association up and running, agree in principle on the major areas and then sort out the details once SOFEA staff members have been appointed and the project can begin in earnest.

Paperworld 2014 | Show Review Vendor snapshots Some examples of 2014 Paperworld exhibitors that are expanding out of traditional office supplies Yves Revenu, CEO of T3L, shows off products under a new brand called Van Moose, a range of tablet and smartphone cases made out of recycled plastic bottles.

US-based vendor Officemate is expanding into the growing facilities management category, as demonstrated by VP of Global Business Development Shire Chafkin.

AF International is targeting mobile phone users with its Tech Rescue packs.

Deflecto has introduced a brand called Fabrication, a range of point-of-sale products aimed at the retail trade.

Autofeed competition hots up Autofeed technology has provided something of a boost to the shredder category Fellowes’ Johan Hereijgers and HSM’s Christof recently (see Bader demonstrate their companies’ respective also Category autofeed shredders at Paperworld Analysis, page 45) and global vendors Fellowes and HSM were both demonstrating their new autofeed products at Paperworld this year. US-based Fellowes has a bit of a head start in terms of product availability as its models are already in 2014 catalogues, and its machines can shred multiple sheets of paper at the same time. HSM, though, believes its more compact design – based on existing shredder models – and versatility will appeal to customers. Rivals ACCO and Elcoman have had their own autofeed shredders in the market for the last couple of years or so, and it will be interesting to see what inroads HSM and Fellowes can make into this niche area.

w w w.opi.net | OPI Magazine

Data and Security | Category Analysis

With high-profile data privacy breaches all over the world in 2013, the security and data protection category has never been more in the spotlight

by Bruce Ackland bruce.ackland@opi.net

THE

technology with which we store and share data is becoming more and more advanced and we are becoming more and more dependent upon it.

protection was firmly put on the map – largely due to the unheralded rash of exposés on shady email monitoring by intelligence services, high-profile privacy law non-compliance and a tidal wave of breaches and fines. The issue is certainly a live one in the mind of the public too, with a UK Information Commissioner’s Office (ICO) study into public attitudes

“The fact that people are now using technology in many differing ways presents a range of additional challenges” And with this comes an ever-increasing concern over data security and protection. In both the US and Europe there have been moves to write data protection into the very fabric of the constitution. In the US, President Obama has been pushing for new privacy protection rights in the Consumer Privacy Bill of Rights that will give everyone in the country the right for their personal data to be accurate, held securely and only used for the purpose it was collected for.

Cloud data crackdown In Europe, moves are afoot to tackle improved security for all the data being carried around in the invisible ‘cloud’ that seems to hang over our everyday lives, with crackdowns including the creation of certified cloud software providers. In many ways, 2013 looks like having been the year where data

toward data protection finding that 97% of those surveyed were concerned that organisations would pass or sell on their personal details. The survey also found that more than half (53%) considered details of the products they had bought to be personal information. Yet in spite of this, the ICO says that only 10% of businesses were aware of the legal limitations of how they could use customers’ personal data. Another area of concern is the steep rise in the number of people bringing their own devices into offices. This wasn’t so

bad when it was just a phone, but every phone is now a smartphone and tablets have almost become the necessary accessory too. Indeed, a 2013 YouGov survey revealed that 47% of all UK employees now use their smartphone, tablet or other portable device for work purposes. This ‘bring your own device’ (BYOD) trend has prompted the IOC to bring out a guidance report to outline the issues and remedies. Gilly Blackburn, Head of Technology at VOW, says: “People bringing their own devices into work has to be a huge concern for companies. Multiple devices throw up challenges about security and protection. How does an IT department ensure it covers every possibility? The fact that people are now using technology in many differing ways presents a range of additional challenges.”

Mailroom threats Even in corporate mailrooms there are no chances being taken, as David Hymers, Managing Director of Totalpost Services, can testify. He says: “In terms of office customers, we have seen a gradual increase of interest in enhanced mailroom security. Corporate settings that have busy mailrooms are now installing security w w w.opi.net | OPI Magazine

Category Analysis | Data and Security screening devices to enable the easy scanning of external items entering the mailroom. This enables mailroom staff to Nathan Dawes quickly and easily screen letters, packages and parcels for hidden threats such as white powder, blades, knives, faeces or letter/parcel bombs.” Mailroom screening devices can range from desktop X-ray cabinet screeners where staff can place suspect mail or parcels into the cabinet for screening, to small-scale conveyor X-ray security screening devices which allow the screening of all incoming mail. Hymers says he has seen an increase in interest for these devices from banks and insurance companies in particular. Bigger buildings are also looking for increased security on the front door, with supply walkthrough archways and X-ray security screening especially designed for these purposes proving popular. In high-security environments this equipment is also used to screen people as they leave to protect against the loss of valuable assets such as data disks.

Hymers adds: “Businesses have become a lot more security conscious and are seeking high standards of security from their suppliers.”

Positive impact on sales VOW has also seen the increasing desire from businesses for security and this has been reflected in their sales. Blackburn says: “Business on security protection products has continued to increase as businesses and consumers have become increasingly aware of privacy and data protection issues

“Autofeed shredders now represent around 10% of sales of all shredders” and the rise of fraud. The importance of security and data protection has also been enforced by the need for businesses to comply with legislation.” At Avery, protection and security is a growth category with a 3% rise in sales in the last 12 months, with prevention proving a popular form of combating security risks. Ruth Perrin, Avery UK labels Category Manager, said there’s growing interest in anti-tamper, indoor/outdoor heavy duty labels in general and ‘no peel’, and she expects the business clampdown on security to continue. She explains: “As businesses continue to look to save money and reduce budgets, they will realise that they cannot afford loss or theft within

Data breaches 2013 – the tip of the iceberg October 2013 – Details of all 1,000 prisoners serving at Cardiff prison in the UK are accidentally emailed to three of the inmates’ families. An internal investigation found that the same error had occurred on two other occasions within the previous month. Prisoner details were held on unencrypted floppy disks. Penalty: £140,000 ($233,000) July 2013 – More than 3,000 patient records are found on a second-hand computer bought through an online auction site after NHS Surrey’s failure to check destruction of an old computer. Penalty £200,000 January 2013 – Sony Computer Entertainment Europe receives a monetary penalty following a serious breach of the Data Protection Act after its Sony PlayStation Network Platform was hacked in April 2011, compromising the personal information of millions of customers. An ICO investigation found that the attack could have been prevented if the software had been up to date, while technical developments meant passwords were not secure. Penalty: £250,000

OPI Magazine | March 2014

the business and therefore will look for protection and security measures. Not only that, but more of us will also look to take these measures within our home and daily lives, ensuring that we protect not only our expensive belongings but also our identities.” Of course, the sheer volume of people coming in and out of offices means a headache in itself. Hymers believes the X-ray machines he supplies for mailrooms will be used increasingly for the screening of baggage for corporate environments

where there is a high throughput of visitors. At Totalpost’s South African operation there is increased demand for CCTV and RFID, with important documents being sent with RFID tagging so they can be tracked every step of the way.

The autofeed trend At VOW, that classic mainstay of office security, the shredder, is still showing robustness, especially with the higher security of cross-cut shredders versus their simple straight-cut counterparts. Nathan Dawes, Technology Product Manager at VOW, says: “In terms of sales, the market has seen a definitive move to cross-cut shredders and autofeed shredders. Autofeed shredders now represent around 10% of sales of all shredders.” Autofeed shredders can improve workforce productivity, with less manual time required in the shredding process, but have raised questions about document security. US manufacturer Fellowes has just entered the market with the launch of its AutoMax series which has a ‘load and leave’ feature that means employees don’t have to wait by the machine if confidential documents are being shred. Of course, with fewer documents being printed there will naturally be an expected ongoing shortfall in shredder sales. However, it is expected that the rise in homeworking and ever-growing fears over identity theft will likely give a boost to this area at the same time.

Category Analysis | Antimicrobial

by Bruce Ackland bruce.ackland@opi.net

ANTIMICROBIAL and antibacterial is a category that is swathed in legislation, from justifying product claims to complying with the latest health and safety regulations. That’s nothing new, but the past 12 months have brought about another headache for suppliers, with the US Food and Drug Administration (FDA) issuing a proposed rule to determine the safety and effectiveness of antibacterial soaps. In a statement on 16 December, the FDA said that the rule would require manufacturers of these hand soaps and bodywashes to “demonstrate that their products are

US Food and Drug Administration plans to determine the safety and effectiveness of antibacterial soaps are dominating discussion in the market “Although consumers generally view these products as effective tools to help prevent the spread of germs, there is currently no evidence that they are any more effective at preventing illness than washing with plain soap and water.”

Antibacterial review The action is part of a larger, ongoing review of antibacterial active ingredients by the FDA to ensure these ingredients are proven to be safe and effective. FDA Center for Drug Evaluation and Research (CDER) Director Janet Woodcock says: “Antibacterial soaps and bodywashes are used widely and

“There is not enough scientific evidence today to show that antimicrobial handwashes used in consumer settings have an added benefit” safe for long-term daily use and more effective than plain soap and water in preventing illness and the spread of certain infections”. It went on to say: “If companies do not demonstrate such safety and effectiveness, these products would need to be reformulated or relabelled to remain on the market.

OPI Magazine | March 2013

frequently by consumers in everyday home, work, school and public settings, where the risk of infection is relatively low. Due to consumers’ extensive exposure to the ingredients in antibacterial soaps, we believe there should be a clearly demonstrated benefit from using antibacterial soap to balance any potential risk.”

CDER Office of New Drugs Deputy Director Sandra Kweder adds: “While the FDA continues to collect additional information on antibacterial hand soaps and bodywashes, we encourage consumers to make an educated choice about what products they choose to use.” This all sounds a little, well, federal. But as stated above, it’s an area where the next round of government legislation is never too far away. This time the proposed legislation would mean manufacturers that want to continue marketing antibacterial products would be required to provide the FDA with additional data on the products’ safety and effectiveness, including data from clinical studies to demonstrate that these products are superior to non-antibacterial soaps in preventing human illness or reducing infection. When the proposed rule is finalised, companies will have to supply data to support an antibacterial claim or, failing that, remove antibacterial active ingredients or the antibacterial claim from a product’s labelling in order to continue marketing it. The proposed rule is available for public comment for 180 days, with a concurrent one-year period for

Antimicrobial | Category Analysis companies to submit new data and information, followed by a 60-day rebuttal comment period.

Scientific evidence Jeff Buysse, VP of Sales and Marketing, Channel Development at leading US manufacturer GOJO, notes: “The FDA has indicated that there is not enough scientific evidence today to show that antimicrobial handwashes used in consumer settings have an added benefit over plain non-antimicrobial handwashes. The proposed rule applies to antimicrobial handwashes used by consumers in residential and away-from-home settings. Healthcare and food industry settings are not included. The proposed rule also does not apply to hand sanitisers and sanitising wipes.” The private company – which makes the Purell brand – says that demand for antimicrobial

products remains strong, particularly in markets like healthcare, food processing and foodservice, where hand hygiene obviously plays a critical role. Buysse adds that there are a number of key trends developing in the market: “In the office market, we see a number of trends. For several years we have seen product choices trending toward foam soap dispensers, and we see that continuing into the future. Touch-free dispensers are gaining in popularity because the technology continues to advance, and the systems we sell today are quite different from the ones sold ten years ago. We have made significant progress, enabling us to offer lifetime performance guarantees because the technology is much better. Additionally, we see more offices providing hand sanitisers than ever before.

There’s a real benefit to businesses in reducing the spread of illness to help keep their workforces healthy.” Another legislative issue to be aware of is the United Nations’ Globally Harmonised System on the classification, labelling and packaging of chemicals (or GHS, for short). New rules are set to apply in full in the European Union from June 2015 and in the US six months later as part of a worldwide implementation of GHS.

Packaging rules AF International parent company HK Wentworth has an employee working full time on legislative compliance and has already changed the packaging on its Electrolube industrial products in line with GHS requirements, with AF packaging being updated this year. “These regulations are onerous and require a certain level of expertise,” states Group Managing Director Ron Jakeman. “GHS is certainly an issue

w w w.opi.net | OPI Magazine

Category Analysis | Antimicrobial for private label brand owners, and we are seeing them turning back to established brands in the market because of it.” Colop’s range of stamps that are antibacterial-protected continues to benefit from the recognisable and reputable Microban brand partner. In particular, it has seen increased interest from the areas of healthcare, government, tourism and education. Interestingly, the company says it has enjoyed notable success in the US where its Microban-protected stamps have been very successful in sales through Cosco. Franz Ratzenberger, Colop Sales and Marketing Director, says: “Some markets are more difficult than others, but we are winning market share and for Colop the last year was very successful. We see general positive signs in the office products industry.”

Office channel demand Indeed, Ratzenberger adds that the office channel is driving increased demand for Colop products featuring antibacterial protection. He says: “Health and hygiene plays an increasingly important role in the office. The demand for office and stationery products with antibacterial protection is growing and growing.” At ITW Professional Brands, the feeling is very much the same with Product Manager Cesar Vargas noticing “an increase in awareness from customers and the public on infection control, which consequently will lead to growth in the office supply channel and schools”. In terms of all those regulations (with more to come), Ratzenberger says Colop’s worldwide sales network observes each country’s regulations very closely but adds that “it would be helpful if some other brands in the office product industry would join this exciting path”. For its part, GOJO has a regulatory team that focuses

OPI Magazine | March 2013

The future is bright (and clean) A new industry report on the use of disinfectant and antimicrobial-based products by research group Freedonia has forecast that demand will grow 6% on an annual basis to reach $1.6 billion in 2017. It expects moderate price growth and a move towards lower-cost disinfectants to be offset by strong volume demand growth. Freedonia also believes consumer concerns over foodborne disease, healthcare-associated infection, antibiotic resistance and microbial pathogens will boost the market. In the medical and healthcare arena growing awareness of healthcare-associated infections such as C. difficile, and antibiotic-resistant pathogens such as MRSA, compounded by the mass media’s, at times, rather hysterical reaction to and reporting on diseases and viral outbreaks, will again boost this particular market. In addition, in the US, insurance firms will apply pressure for increased antimicrobial use in the healthcare market. Small wonder then that Staples has added a medical supplies area to its online offering with the usual antimicrobial handwash and disinfectant alongside a full-scale offering of beds and instruments. Consumer confidence is expected to rise through 2017 and, along with it, so will sales of consumer products with antimicrobial properties. Significant growth is also anticipated via the housing rebound, which is forecast to increase the use of antimicrobial products such as water-based architectural paint, floor coverings, home textiles and other construction materials.

on ensuring its products meet the regulatory requirements of the markets they serve, considering both the business segment and the geographic location. This helps to ensure that they meet requirements at a federal, state and local level. Buysse explains: “GOJO has teams that focus exclusively on specific market segments. This market focus allows us to achieve a high level of intimacy with the people making hand hygiene product decisions,

But Baruteaud firmly believes that hygiene products will play an important role in a market that is evolving due to new regulations and changing attitudes from end users, while the workplace demand for greater efficiency will mean more emphasis on creating better working environments. He explains: “The lines between workplace and home are becoming more blurred and companies will invest more on well-being at work to

“The demand for office and stationery products with antibacterial protection is growing” along with any health, safety or hygiene regulations that need to be addressed.” For European manufacturer T3L Group, the last 12 months have seen “significant growth” for its antibacterial products, particularly in the US and the Scandinavian countries, although Group Marketing Manager Benjamin Baruteaud says the market is waiting for the next phase of these products. He explains: “Now that the first step has been made by introducing antibacterial products into the OP market, new developments have to be made.”

make sure that employees are in the best condition to deliver their output. Therefore, it is a great opportunity for antibacterial products as they help to create a healthy workplace.” Clearly, the past 12 months have been dominated by the FDA’s proposed new ruling on the safety and effectiveness of antibacterial soaps. However, while there’s no doubt that these plans have caused a stir in the antibacterial and antimicrobial market, in the long run this is likely to really prove a win-win situation. After all, consumer confidence is all-important in what is becoming an important adjacent category for many OP resellers.

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

USA

School Specialty has appointed two new senior executives with experience of the Rick Smith OP industry. Former United Stationers executive Rick Smith has joined the school and educational supplies reseller as Director of Distribution Centre Operations. Smith is joined at the company by one-time OfficeMax employee Daniel Kohler who has been made EVP of Operations. School Specialty CEO Jim Henderson said: “Both Daniel and Rick understand the importance of a fully integrated sales and operations planning model and are process-driven, an important factor as we improve processes across key function areas within our business.” Canon Canada has named 31-year company veteran Ted Egawa as its new President and CEO. Egawa, who was most recently with Canon USA’s Imaging Technologies and Communications Group, replaces Kevin Ogawa who has moved to an executive position with Canon China and Canon Asia Group.

Europe

XPD Head of Dealer Development Kim Gladstone is leaving the dealer group to take on a newly-created role at VOW parent company Vasanta. Gladstone’s replacement at XPD will be in place at the start of April. The company remains tight-lipped about his/her identity and would only say the individual would “surprise a few people” and “has operated in our industry at a very senior level for many years”. Experienced OP executive Peter Achterberg has been named new Sales Manager for the German and Austrian markets at vendor T3L Group. Peter Achterberg The former Leitz and Fellowes man was previously Business Development Manager at T3L. Achterberg replaces Dominique Fanta who has left for a new position at Lediberg. France-based vendor CEP Office Solutions saw the handover to a new Managing Director at the beginning of this month.

Europe Kleinmann Managing Director Gunnar Kleinmann left the firm in February after more than 15 years with the company. His departure means that Volker Kunz – Gunnar Kleinmann’s brother-in-law – is the last remaining family member at the business. Gunnar Kleinmann took on the Managing Director role in 2006, shortly after the company was acquired by US industrial giant ITW. The business was set up by his late father Gerhard in 1979. Taking over responsibility for the day-to-day

OPI Magazine | March 2014

USA Joe Doody has been charged with leading Staples’ strategic reinvention after being made Vice Chairman of the company in early February. Doody, previously President of Staples North American Commercial (NAC) division, is now responsible for strategic planning and business development at the company. Having first joined Staples in 1998, Doody has retained his current responsibilities for the company’s operations in Australia, New Zealand and “high-growth” markets. Taking over from Doody at NAC is long-serving company executive Shira Goodman who joined the reseller in 1992 and helped develop its business delivery model. Both Doody and Goodman continue to report to CEO Ron Sargent. Joe Doody Long-time Managing Director Etienne Béchet de Balan stepped down at the beginning of March after 21 years at the helm. He has been succeeded by the firm’s Sales Director Cédrik Longin who has been with CEP for 14 years. Longin has been instrumental in developing the company’s export sales – which now account for 40% of total sales. ACCO Europe appointed two new VPs following the restructuring of its global marketing function. Liz Moseley Former SVP Sales and Marketing for Europe, Middle East and Africa Liz Moseley left the company after ACCO announced it was splitting her role into two. Mark Wilkinson was named VP Sales while Mike Stranders has been named VP Marketing in Europe.

running of the company is Per Dige Pedersen, General Manager of ITW’s European Hygiene division which comprises Kleinmann, Systemcare, Novadan, Quimsa and Norden Olje. Pedersen confirmed that Kleinmann had left the firm of his own accord and that a two-month transition period had been agreed “to hand over the responsibilities in a controlled manner”.

Gunnar Kleinmann

School and office vendor Acme named Patrick Romboy to the newly created position of Sales Director for Europe. Romboy has a wealth of experience in the European retail market and previously worked with Dixons and Lidl. Portuguese paper manufacturer Portucel has a new CEO after José Alfredo de Almeida Honório resigned for personal reasons. He had been with the company since 2004 and remained as CEO until 28 February, at which point Luís Alberto Caldeira Deslandes took on the role on an interim basis. Kaut-Bullinger retail division Managing Director Jürgen Diebold is to leave the company. Diebold’s resignation was due to differing views on strategic development, the German reseller said. He succeeded Heinz Rückerl in October 2011 and will continue in his role until a successor is found.

International

Australian Paper CEO Jim Henneberry resigned from the company after deciding he wanted to pursue opportunities outside the business. He stepped down in mid-February after joining the paper manufacturer back in 2006. Hirofumi Fujimori, Representative Director of Australian Paper’s holding company Nippon Paper, has been appointed acting CEO.

Your OPI

5 minutes with... Wendy Pike, President, Twist Office Products

“I’m all about office supplies”

Describe what you do in about 20 words. I help people succeed – customers in their businesses, buyers to be effective and my employees to be their best.

What is your favourite event? The SP Richards ABC convention is always a highlight in my year.

What was you first full-time job? Working in the stationery department of Dayton’s department store in Minnesota. It was destiny.

What is the biggest single factor affecting the OP industry? In the independent channel it’s keeping up with technology such as e-commerce and back-end operations.

What was your worst job? Working food service in college – but I did get to save on groceries. Best moment in your career? Retiring at 37 was pretty awesome, but I believe the best is yet to come. Worst moment in your career? I refuse to dwell on them. You can’t have success without a failure here or there. Which industry figure do you admire? Sharon Avent, President and CEO of Smead. She and her mother Ebba Hoffman forged a way for women in an industry that was male dominated. Your favourite office product? Neon post-it notes – although the Zenergy chair is a close second.

Which two famous people would you invite to dinner? Facebook’s Sheryl Sandburg – who is a great inspiration as a woman leader – and TV host Ellen DeGeneres. I don’t agree with DeGeneres on everything, but I admire how she has not conformed and been successful. Plus, she makes me laugh and we could dance. If you had to sing karaoke next weekend, which song would you choose? Stuck like glue by Sugarland. I’m all about office supplies. Your favourite TV Show? Shark Tank. I love seeing the entrepreneurs and their ideas. My favourite is when they do an update and you can see where they have taken their businesses.

What do you like best about the OP industry? The people. We have made such great friends throughout the industry from dealers to wholesalers, manufacturers and more – not just across the US but also overseas. What advice would you give to someone who has joined the OP industry? The industry is like the Eagles song Hotel California – “you can check out anytime you like, but you can never leave”. On a serious note – don’t be afraid to take chances and think outside the box. What is your scariest travel experience? My husband Chip blew out an eardrum scuba diving in the Virgin Islands. They thought he had the bends and almost put him in the decompression chamber. Luckily, there was a dive master at the hospital who diagnosed the ear right before they put him in.

What were your childhood ambitions? I wanted to be a high school French teacher. 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

MAR 11-14 CeBIT 2014 Deutsche Messe, Hanover, Germany MAR 27 Integra Expo MK Dons Stadium, Milton Keynes, UK

APR 01-02 London Stationery Show 2014

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.

APR 09-13 Istanbul Stationery Office 2014 CNR Expo, Istanbul, Turkey 56

OPI Magazine | March 2014

APR 29 The Society of Old Friends – Members Dinner and AGM RAF Club, London, UK APR 29 BOSS Young Managers’ Conference Aston Conference Centre, Birmingham, UK MAY 06-09 ISSA/Interclean Amsterdam RAI Convention Centre, Amsterdam, the Netherlands MAY 21-23 Corwell Expo Corwell HQ, Budapest, Hungary MAY 29-30 RT Imaging Summit South Point Casino and Hotel Las Vegas (NV), USA JUN 06-08 Office Club Annual Conference The Belfry Hotel, Birmingham, UK JUN 11-15 SP Richards Advantage Business Conference 2014 – ‘Right Now’ Gaylord Opryland Resort Hotel, Nashville (TN), USA JUN 12-13 UFIPA Annual Conference JW Marriott, 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.

JUN 16 BOSS Federation BenGolf Day Wyboston Lakes Golf Centre, Bedfordshire, UK JUN 19-20 Synaxon UK National Conference Hellidon Lakes Golf & Spa Hotel, Northamptonshire, UK JUN 27-28 Nemo Annual Conference Slaley Hall, Hexham, UK JUL 09-11 ISOT 2014 Tokyo Big Sight, Tokyo, Japan JUL 15-16 Bob Parker Memorial Golf Outing Kiawah Island Resort, Ocean Course, Kiawah Island (SC), USA SEPT 17-19 EPIC 2014 Joint Independent Stationers/TriMega Convention Westin Diplomat, Hollywood (FL), USA

OCT 05-07 Pinnacle Annual Meeting and Vendor Forum 2014 TBA OCT 07 Advantia 2014 Conference Chesford Grange Hotel, Warwickshire, UK OCT 08 Howard Wolf Golf Classic Cantigny Golf Club, Wheaton (IL), USA OCT 09 Spirit of Life Gala Navy Pier, Chicago (IL), USA OCT 10-12 The 15th Annual Office Brands EXPO Sheraton & Westin Denarau Island, Fiji NOV 20 Integra Annual Conference East Midlands Conference Centre & Orchard Hotel, Nottingham, UK

SEPT 23-25 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.

European 23-25 September 2014 Grand Hotel Huis ter Duin, Noordwijk, the Netherlands

An invitation-only forum for CEOs and senior executives from the business supplies and associated sectors. The European Forum offers a unique opportunity to hear from expert speakers, explore future trends, engage in frank discussion, share ideas and network with fellow industry leaders in a confidential environment.

Invitations

If you would like to be considered for an invitation please email steve.hilleard@opi.net or visit www.opi.net/ef2014 for more information.

Organised by Office Products International

Your OPI

Final word Your industry, your opinions

Luke Chapman, Managing Director, The Business Performance Group

Curb the competitive spirit Business thrives on competition, but now is the time for cooperation

we are to boil down the ideal future for the industry to a single idea, then the final word is ‘coopetition’ (or ‘cooperatition’ as some would say - see also our Hot Topic on page 30 where the subject is explored in more detail). OK, it may not be a real word, but it describes perfectly where our industry needs to be. There is no doubt that we live in challenging and dynamic times. The need to be lean and mean is more apparent now than ever before and if you listen to any of the predictions this is a trend that is only going to accelerate. Long gone are the days when the market could afford to fund so many varying elements within the supply chain that either do not demonstrate value, or have fixed costs that are too great for such a variable outcome. Manufacturers are competing for dealer engagement and are fighting harder than ever to gain both ‘air time’ with the end user and with consumers. What we need to do is consider our sales and marketing costs and determine which elements we can outsource to others or find partners to help execute them. In this way we can move fixed costs to variable ones, which are 100% linked to an outcome and a key performance ratio. I don’t know anyone who wouldn’t pay more money for better outcomes, but as an industry we are still paying significant sums for less and this is going to have to change. What we need to be able to do is to directly communicate with and influence the consumer. If we can speak to the ultimate user and gain brand loyalty, we can then work on changing behaviour and buying patterns, leading ultimately to all elements of the channel being able to see a return from our activity and investments. In addition to this, we also need to look for ways in which we as an industry can come together to collaborate more effectively and more efficiently. By working more collaboratively, we will be able to drive greater dealer engagement, end-user activity and consumer ‘air time’. We have seen some elements of the industry trying to affect change and develop new initiatives to support this argument; we need to embrace these changes and go with them as otherwise the world will change around us. Far too often there are too many ‘voices’, all fighting for space and speaking at the same time with a different

message. The dealer hears them all but fails to fully take any of them on board and this then leads to a confused message being delivered to the consumer, resulting in an undesired outcome. There are many ways we can achieve a ‘coopetition’ position. Brands can work in partnership to drive a message to the consumer around a business need, or an issue such as hygiene or breakroom. These brands do not necessarily have to compete with each other but could easily be complementary. Currently however, manufacturers and brand owners are all fighting for space individually, leading to low air time with consumers, confused end users and ineffective dealers. Think about how effective a joint sales and marketing campaign would be if manufacturers cooperated in a structured, process-driven way, rather than fight for limited space and restricted return. Think about the consumers’ position and the customer life cycle. Do we as a market speak to them in the right way today, with the right message at the right time? We have to be honest and accept that in most cases the answer is ‘no’. If we can collaborate and create a joined-up approach then we will make all of our messages more powerful and more succinct – speaking the right language at the right stage of that cycle. There are two rules I have always lived by: if you aren’t driving the change, it’s being driven at you, and if you can’t beat them join them. Our landscape is changing and so are the consumers; what they buy and how they buy it is moving faster than ever before. What we accept as normal today and the way we are used to doing things will only continually evolve to meet these needs – will you?

“Think about how effective a joint sales and marketing campaign would be if manufacturers cooperated”

OPI Magazine | March 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 Spicers’ Alan Ball • Breakroom special – opportunities and challenges • The European Ofﬁce Products Awards Winners of 2014