OPI 287 MARCH 2019 A

Office Products International

TECHNOLOGY

Special Issue

SOLUTIONS

TECHNOLOGY Connecting the business products world ISSUE NO.287

Special Issue

BIG INTERVIEW

SOLUTIONS

Mercè Barcons, HP Inc March 2019

VENDOR SPECIAL

Special Issue MARCH 2019

innovation STRATEGIC VENDOR

Special Issue

SPECIAL

In this year’s Vendor Focus, the spotlight is on those manufacturers that have demonstrated innovation and are keeping their eyes firmly on the future

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INSIDE THIS ISSUE l Staples and Essendant partnership focus l Supply pressures in US office paper market l BSA announces Industry Week 2020

l The catch 22 of private label l Sustainable packaging news l Building resilience to data breaches l The benefits of referral selling

Special Issue HEALTH & WELL-BEING

CONTENTS

Special Issue HEALTH & WELL-BEING

38 Feature The importance of building resilience to data breaches

Special Issue HEALTH & WELL-BEING 41 Research Boiling The Frog: Revisited – today’s workforce in focus 42 How to... ...use referral selling to generate future sales

VENDOR SPECIAL

Special Issue 47 Review: City of Hope 2019 fundraising starts at the City of Hope Tour and Hall of Fame Dinner

VENDOR SPECIAL

Special Issue VENDOR SPECIAL

Special Issue

Big Interview: Mercè Barcons, HP Inc HP Inc is one of the best known brands in the world. The company has faced a whole host of challenges since its split in 2015 from what is now Hewlett Packard Enterprise: the relentless speed of digitisation, secular declines in the category and consolidation among industry operators, not to mention increasing environmental pressures and ongoing counterfeiting issues. HP has defied the many obstacles, continues to post growth across both its hardware and supplies segments and is set on a path to reinvent itself HOT TOPIC: BETWEEN A ROCK AND A HARD PLACE There is no doubt that the resellers’ focus on private label has taken some value away from A-brands. It’s been a stated aim of almost all major resellers over the past ten years to increase the share that private label has in their mix. Unfortunately, in many cases that means the reseller is trading down the end user, even when that end user has been quite content buying the premium product.

“There have been some notable efforts over the years by some resellers to differentiate their private label – in terms of packaging, environmental aspects, product specification, etc – but none of these come for free and have to be actively managed and paid for by the reseller. And that adds cost.

16 Big Interview OPI talks to Mercè Barcons about HP Inc’s reinvention journey following the 2015 transformational split 22 Hot Topic Love it or hate it: private label has a role to play in the business supplies sector 26 Vendor Focus OPI zooms in on vendor innovation and excellence 32 Spotlight The packaging industry and its many novel approaches to sustainability 36 Advertorial Bi-silque celebrates and future-proofs its business 44 Review: Paperworld Vendors content at a positive show in Frankfurt

REGULARS 5 Comment 6 News

50 Final Word Marc Bürkle

March 2019

48 5 minutes with...

Bob Taylor

3

COMMENT The OPI team EDITORIAL Editor Heike Dieckmann +44 (0)20 7841 2950 heike.dieckmann@opi.net Deputy Editor Michelle Sturman +44 (0)20 7841 2942 michelle.sturman@opi.net Reporter Lily Elden +44 (0)20 7841 2952 lily.elden@opi.net OPI Special Correspondent Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net Freelance Contributor David Holes david.holes@opi.net

SALES & MARKETING Chief Commercial Officer Chris Exner +44 (0)7973 186801 chris.exner@opi.net Head of Media Sales Chris Turness +44 (0)7872 684746 chris.turness@opi.net Director of Growth Services Jeremy Hughes +44 (0)7807 810617 jeremy.hughes@opi.net Digital Marketing Manager Aurora Enghis +44 (0)20 7841 2959 aurora.enghis@opi.net

EVENTS Events Manager Lisa Haywood +44 (0)20 7841 2941 events@opi.net

PRODUCTION & FINANCE Studio Joel Mitchell +44 (0)20 7841 2943 joel.mitchell@opi.net Operations & Production Amy Byrne +44 (0)20 7841 2950 amy.byrne@opi.net Finance Kelly Hilleard +44 (0)20 7841 2956 kelly.hilleard@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 Executive Assistant Debbie Garrand +44 (0)7718 660249 debbie.garrand@opi.net

S

Partnership – it’s a beautiful thing!

o the deal is done – Staples and Essendant are the new ‘partners in crime’ in the US business products space.

And indeed it’s all about partnership, about synergies, value-adds and about providing a better customer experience for all (see page 6).

The cynics among us might still be concerned as competitive forces are clearly at play – the Federal Trade Commission has imposed firewall conditions for a reason (which, incidentally, Staples readily accepted). In fact, even with those conditions, only 27% of opi.net poll respondents said their fears about the merger were allayed. But then again, consolidation is never easy and we can only hope that any inevitable short-term pain will result in long-term gain.

No R&D and innovation = no industry, it’s as simple as that That’s certainly been the case for one of our featured companies in this year’s Vendor Focus article (see page 26). ACCO Brands took on a difficult task when it acquired Esselte Holdings a couple of years ago, but it has come out the other end with synergies realised, duplicated cost taken out, brands rejuvenated and a positive company culture facing its customer base. HP Inc, in our Vendor Focus as well as this month’s Big Interview (see page 16), also had its work cut out when it first ‘unconsolidated’ in 2015 and since added more complementary companies to its portfolio. It too is reaping the benefits now.

There are many other examples throughout this issue that put the spotlight on the vendor community. The packaging industry, for instance, has been coming under enormous pressure as a result of all the negative press around plastic pollution, but is very much addressing the challenges (see page 32). And while our industry – like most others – cannot escape the reality of private label (see page 22), especially in a price-transparent e-commerce world, this topic too highlights just how crucial brand manufacturers are. No R&D and innovation = no industry, it’s as simple as that.

Going back to my earlier point of partnerships, one topic that we were hoping to bring you more on this month was the pending merger of the three main dealer groups in the US. I clearly spoke too soon, underestimating the enormity of the task in hand and perhaps the sensitivities involved.

More news – rather than speculation – as and when we have it...

HEIKE DIECKMANN, EDITOR Have a great month.

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business products world

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March 2019

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Analysis:

Essendant and Staples: competing partners?

OPI spoke to Sandy Douglas and Harry Dochelli after the closing of the transaction involving Staples and Essendant

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At the end of January, following a protracted review process, the US Federal Trade Commission (FTC) finally approved Staples’ acquisition of Essendant, and the transaction closed shortly afterwards.

Officially, Essendant has been acquired by an affiliate of Staples’ owner, private equity firm Sycamore Partners. That, as Staples Inc CEO Sandy Douglas explained to OPI in February during a joint call with Essendant President Harry Dochelli, was how Sycamore wanted to structure the deal financially. Operationally, it will mean “a very tight and integrated partnership” within the bounds of the firewall conditions required by the FTC’s consent decree (see ‘Following the FTC’s conditions “beyond the letter”’).

Dochelli’s first priority in his new role is finalising the go-forward organisation design at Essendant. He said he was working closely with the Staples leadership team to put that together. “With these [transactions], there will be some consolidation that has to happen,” he admitted. “At the same time, it does present new opportunities for other people as well, and that is what we are currently looking at.”

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CONTROVERSIAL PARTNERSHIP? The use of the word ‘partnership’ is an interesting – and possibly controversial – one, but the concept was something that both Dochelli and Douglas were keen to underline.

“Harry and I are going to work together to ensure [we make available] all the functions at Staples that can support and help Essendant to be more efficient, have better technology and supply chain, and access to a wide range of our own as well as manufacturer-branded products – and that we make it happen in a completely seamless way,” Douglas stated.

Dochelli added: “I now have access to extract the value-add of Staples that is going to enhance our ability to support our customers. Whether that means tapping into its merchandising, technology or supply chain teams, I can do that and figure out where the value is that makes the most sense for my clients. The bottom line is we’re going to make them more competitive in the marketplace so they can win more share. I don’t think I’ve seen our sales teams this excited since I’ve been here.”

Douglas also poured cold water on suggestions that it was not in Staples’ best

interest to help Essendant because the reseller would essentially be competing with itself.

“The reality is we believe Staples can be a much better company [with Essendant] and nothing is being held back on the back end to help Essendant be as strong as it can be in serving its customers,” he said.

The reality is we believe Staples can be a much better company [with Essendant]

Sandy Douglas

The Staples CEO admitted there would be some situations when Staples could be competing with Essendant’s reseller customers, and both he and Dochelli were adamant that each party would “compete vigorously” against the other.

“The flipside is that there are a tremendous number of customers and categories out there that neither of us is serving,” continued Douglas.

“Based on the way in which customers want to have relationships to work and get their products, we are confident that by working together at least one of us will be the best choice.”

MANUFACTURER IMPACT The vendor community is also anxious to know what the next steps will be. A recent City of Hope event enabled informal discussions with a number of suppliers to take place, and once the Essendant/Staples merchandising organisation has been finalised, more formal meetings will be arranged. “We think it will be an opportunity for manufacturers to simplify some of their processes too,” said Dochelli.

The Essendant President confirmed that the wholesaler would continue to offer brands such

NEWS

as Universal and Boardwalk to its customers. “We have heard loud and clear what products our customers want to sell, and purchasing volume synergies can be achieved without necessarily merging brands,” he affirmed.

Dochelli also pointed to other possible synergies on the supply chain side, in particular as regards bringing products from overseas into the US. “The size and scale of Staples will improve our ability to be more efficient on our side,” he said. “When you combine the entities’ volume, there is a huge opportunity for us from an inventory standpoint.”

“I’m looking forward to taking this business to the next level and really growing it,” he concluded.

Douglas said the situation was not unlike what already happens within Staples with its Quill subsidiary. “Ultimately, it’s up to the customer to decide,” he continued. “If you have differentiated propositions, the last thing you need to worry about is cannibalisation, because somebody else will ‘cannibalise’ you if you don’t. Therefore, we need to strategically empower the entire model; there will be times when it might be inelegant, but these will be overwhelmed by the strongest possible array of products and services we’ll be bringing to our customers.”

Forthcoming research is set to confirm this strategy, according to Dochelli. “It is clear there are segments of end users that want to buy from our resellers,” he stated. “These customers have identified a few weaknesses, an important one being technology. Therefore, if we can improve our resellers’ technology through our partnership with Staples, we will help them be more successful in the marketplace.”

Dochelli is now looking for some “quick wins” where Essendant can demonstrate its commitment to delivering “a new and enhanced value proposition” to its customers. He said that cost of goods was top of mind for a lot of resellers, and he also pointed to Staples’ strength in product categories such as pack and ship.

FOLLOWING THE FTC’S CONDITIONS “BEYOND THE LETTER”

Harry Dochelli

March 2019

The FTC’s five-person Commission voted 3-2 in favour of Staples’ acquisition of Essendant, with the vote split down Republican and Democrat party lines. The result may have had more to do with the current state of US politics than anything else, but the Commission’s lack of unanimity, plus the US federal government shutdown that spanned December and January, may have contributed to a decision being made several months later than originally anticipated.

The decision to impose firewall conditions to prevent Staples from accessing commercially sensitive Essendant customer data did not come as a shock. But there was also another condition that had not been mooted before, namely requiring Staples to give the FTC 30 days’ notice of any agreements to acquire a stake of more than 10% in any office products company.

Douglas said neither condition came as a surprise, nor would they be an impediment to what Staples wants to achieve. “Our teams are fully able to comply with the consent decree and at the same time be agile and competitive where we choose to be,” he stated.

Regarding the firewall, Douglas commented that it represented guidelines Staples had already wanted to have in place “to give Essendant customers confidence”. “We will keep strictly separate the functions and commercially sensitive areas that we have said all along we were going to do, and now have a consent decree we fully support and will follow beyond the letter.”

He added: “At the heart of it is putting in place the environment that Essendant customers can trust. We view the consent decree as a helpful tool in reassuring them that what we say is what we will do.”

One of the first accomplishments post closing of the deal was firewall training for Essendant and Staples teams. During the OPI interview it was clear that both Dochelli and Douglas were limited in what strategic and commercial topics they could discuss. Dochelli even revealed that Douglas does not have a badge to enter Essendant’s headquarters and must be escorted around the facility. “We live on the trust of our customers and are taking this very seriously,” he stated.

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NEWS

GSA provides e-commerce update

IN BRIEF ECi bundles Ascellerate Office products technology provider ECi is to include a single user licence of Acsellerate CRM software within its distribution-focused software solutions.

Messe Frankfurt launches nextrade Messe Frankfurt has started to build a digital B2B marketplace called nextrade, which retailers will be able to use for taking orders at a trade show, as well as for a selling platform during the rest of the year.

Before it is due to submit a report to Congress on its federal e-commerce marketplace initiative, the US General Services Administration (GSA) gave feedback on comments it received after last December’s Industry Day (see News, OPI February 2019, page 6).

There were concerns following the Industry Day that the GSA was heading down a path that would favour an Amazon Business-type marketplace model and potentially shut out other e-commerce solutions. In an update on the GSA website, Deputy Assistant Commissioner Laura Stanton has at least demonstrated that her agency is listening to these concerns.

She outlined five key themes that had emerged following a request for information issued in early December and from feedback received from the Industry Day. One of these themes was competition, where Stanton wrote that the message received by the GSA was: “GSA should not limit the proof of concept to just the e-marketplace model and should ensure competition across the various models, with both portal providers and suppliers.”

Stanton also revealed that there were “diverging views” between portal providers and suppliers on the question of data protection. The current statutory language prohibits portal providers from using third-party sales and customer data for their own benefit, something that probably won’t sit well with the current commercial practices of some e-commerce marketplaces.

One of the takeaways from the Industry Day was that the GSA wanted to press ahead with a proof of concept which would be relatively straightforward to implement, hence its preference for an existing marketplace platform solution.

Now, after acknowledging the complexities involved in the programme, it will be interesting to see what recommendations the GSA makes in its forthcoming report to Congress, due in mid-March.

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Schultz joins SPR

8

US business products wholesaler SP Richards (SPR) has appointed Steve Schultz as EVP. Based in Atlanta, Georgia, Schultz will assume responsibilities for SPR’s janitorial and safety Steve businesses including Safety Zone, Impact Schultz Products, Garland C Norris, as well as the Facility, Breakroom & Safety division within the company’s core wholesale business.

Schultz is an experienced B2B manufacturing and distribution executive with 25 years’ industry experience. He joins SPR from hygiene solutions vendor GOJO Industries, where he was President and COO of the North American and International businesses.

In addition, Chad Lee has been promoted to EVP at the company. He was most recently SVP, leading both SPR’s operations and acquired businesses – again, Impact Products, Safety Zone and Garland C Norris. In this expanded role, Lee will also assume senior management responsibility for the independent dealer channel and national account sales, as well as marketing across the core SPR businesses.

Depot enhances print and copy Office Depot has invested in its Workonomy platform through a new deal with Xerox. The agreement will see thousands of Xerox units installed in retail stores and regional production facilities nationwide, and include walk-up multifunction printers, high-end production devices, as well as personalisation software.

MacKenzie retires from Pentel Writing instruments manufacturer Pentel Europe has announced the retirement of its Commercial Director Ken MacKenzie. Having worked for the company for 18 years, MacKenzie will retire at the end of March 2019.

Ruhnke joins Epson Germany Epson Germany has appointed Christoph Ruhnke to the position of Business Systems Manager.

In this role, Ruhnke will oversee marketing and sales for the printer manufacturer’s point-of-sale (PoS) solutions in the DACH region.

Office Power promotes Streeter UK independent dealer platform Office Power has promoted its former Head of Trading, Colin Streeter. In the new role of Group Head of Category, Streeter will help future-proof sourcing, ranging and buying strategies.

In addition, Office Power has launched a new Partner Success department. Former Managing Director of Office Star E-Pro Mark Davis will head the team.

Sequoïa acquisition for Konica Minolta France EOS vendor Konica Minolta Business Solutions France has purchased seven Sequoïa Group subsidiaries in the Grand-Est and Reunion Island regions.

Based in Metz, France, the Sequoïa Group is one of the leading dealers in the Konica Minolta network.

VENDOR SPECIAL

Special Issue Some of the shortfall will be made up by a reduction in exports as the North American producers focus on the more lucrative domestic market. During Domtar’s recent earnings conference call, CEO John Williams said the plan was to bring back some of the export volume currently shipped to Europe and that the company would be able to “squeeze the system” for between 40,000-50,000 tons. He added that GP’s decision had been “a shock” to the customer base and that these customers “have clearly been looking for volume”.

Analysis: Supply squeeze for paper market Georgia-Pacific’s withdrawal from US office paper sector to lead to supply pressures

UNCERTAIN SUPPLY SITUATION What is more, they are likely to include some heavyweight customers. Much of GP’s copy paper business involved private label work for some of the largest retailers and warehouse clubs in the US – one of these contracts has been estimated to represent 200,000 tons in annual volumes, an amount that could not be diverted without upsetting the existing customer base.

Throw the entry of Amazon Business-branded copy paper into the mix and the supply situation becomes even more uncertain. “[We are] making certain we supply those customers that we’ve had over the long term who’ve been loyal to us and to make sure we keep supplying them,” said Williams, adding that it is Domtar’s “number one priority to maintain our supply chain to our current customer base”.

It was a similar message from PCA CEO Mark Kowlzan: “We are fully committed to the customer base we have,” he told analysts at the end of January, although he added: “It does allow us to rationalise some of that customer base as we go forward and move tons accordingly into the best avenue of business we see.”

Much of GP’s copy paper business involved private label work for some of the largest retailers and warehouse clubs in the US IP CEO Mark Sutton confirmed that the company was seeing clients “interested in us becoming their supplier post the GP announcement”, but that it was “a little early to say what we’re going to take and what it’s going to do to our mix”.

The GP move is further adding to the inflationary trend seen in US paper prices at the end of 2018. Both Boise and Portugal-based global brand Navigator have publicly announced office paper price increases of around $60 per ton effective 1 March 2019.

Nevertheless, as one industry source told OPI: “Price is probably not the most important issue at the moment; it’s about having the availability and aligning with the right partners.”

March 2019

The decision in January by Georgia-Pacific (GP) to exit the US office paper market sent shockwaves through the channel. The reasons for this are essentially twofold: its copy paper volumes represented a significant portion of the total US market, and GP only gave 60 days’ notice before the closure of its Port Hudson, Virginia, facility in the middle of this month.

The uncoated freesheet (UFS) capacity being taken out of Port Hudson is 630,000 tons, with copy paper estimated to represent as much as 500,000 tons of that. The US office paper market as a whole is approximately 3.5 million tons, meaning that up to 14% of this volume is set to disappear virtually overnight.

“This will have a mammoth impact,” one industry source told OPI, who was taken by surprise by GP’s decision, especially after the company had cut UFS capacity by 80,000 tons in early 2018 and concentrated production at its world-class facility in Port Hudson. At the time, GP said it remained “committed to being a consistent supplier to [its] communication papers customers on a national basis”.

That position has now changed, leaving North American copy paper production largely in the hands of the three leading players – Domtar, International Paper (IP) and PCA-owned Boise.

However, the problem is that there isn’t 500,000 tons of excess capacity just lying around to fill the gap created by GP’s exit, with only limited ability to up current production levels. The industry is also breathing a collective sigh of relief that IP has put back its plans to remove a further 230,000 tons of UFS from its Selma mill in Alabama (although that is still scheduled to take place in 2020).

NEWS

VENDOR SPECIAL

Special Issue

9

NEWS

BSA announces Industry Week 2020 US trade association, the Business Solutions Association (BSA), has confirmed its plans for an Industry Week in the autumn of 2020.

The event aims to bring together leaders within the office supplies industry for a week of insights, trends, best practices and collaboration. It will roll nine current industry events into one single meeting point.

BSA, the Industry Week ‘point team’ and other industry stakeholders have worked to review and evaluate the current industry event schedule and develop a new, innovative approach. The group was tasked with creating value propositions for all BSA industry partners, with an emphasis on what BSA President Barry Lane calls the CEO approach: Cost reduction, Eliminating redundancies, and Optimising resources.

Industry Week was discussed at the BSA Annual Forum last September, when the assigned ‘point team’ for the event was introduced. The following people have been appointed by this ‘point team’ to plan the event: • Travis Kaste (3M) – Finance Chair • Paula Kreuzburg (BSA) – Location Chair • Tim Burgett (Essendant) – Marketing Chair • Marlin Wendland (GOJO Industries) – Membership Co-Chair • Brian Bruecks (Kimberly-Clark) – Membership Co-Chair • Sam Richardson (Fellowes Brands) – Programme Chair • Nick Aronis (Vanguard Group) – Education Chair • Paul Gatens (SP Richards) – Expo Chair Exact dates and location are scheduled to be announced following the conclusion of the BSA board of directors meeting at the end of March.

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Staples Solutions accelerates decentralisation

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European reseller Staples Solutions is making significant job cuts at its head office in Amsterdam as its decentralisation programme gathers pace. In a letter to key vendor partners, seen by OPI, Staples Solutions COO Jappe Blaauw confirmed that the company had recently announced a plan to “move most of [its] central functions” to the European countries where it operates.

“This decentralisation is an important part of becoming a leaner, more efficient company that’s fit for the future. Importantly, it supports our efforts to make quick decisions and serve customers better,” wrote Blaauw.

The letter continued to say: “We will continue to manage our partnerships with selected vendors at a central level and will focus on strengthening our sourcing capabilities. We expect little short-term change for those we work with. In the long term, it paves the way for a greater focus on strengthening our partnership.

“Our commitment to customers remains paramount and we will continue to focus on helping them accomplish more in their workspaces, today and tomorrow.

Our vendors, like you, are key in helping us in this mission and we look forward to continuing to build our vendor relationships in our new set-up.”

Speaking to OPI, CEO Dolph Westerbos confirmed that between 60-70 staff members would remain in Amsterdam,

BIRD FEED

@cityofhope

Congratulations to City of Hope’s James Lin, MD, on being selected by the @AmerGastroAssn as a Future Leader (Class of 2020).

@Nestle

Nestlé is accelerating our journey towards full supply chain transparency by further disclosing lists of commodity suppliers.

Soya, meat, hazelnuts and vanilla recently joined palm oil and pulp and paper – with more to follow #ResponsibleSourcing.

@StaplesCareers

Dolph Westerbos

meaning that approximately 130 employees are being made redundant.

Functions such as marketing and HR will now be handled by individual countries, but Westerbos said he had analysed “all areas” of the company as he looks to cut costs and drive efficiencies. In addition to the central vendor relationship management functions, e-commerce, IT and some pricing roles will stay in Amsterdam in the current premises.

Even though the building itself is now too large, there are now co-tenants sharing the office space.

Meanwhile, Ingo Dewitz, former Managing Director of German dealer group Büroring, joined Staples Solutions on 1 February. In his new role, based in Hamburg, Dewitz will head up the B2B services offering of Staples Solutions Germany.

Our employees are more than co-workers, they’re friends. Learn how we create an #inclusive environment: #StaplesLife.

@jamescropper

It’s great to see two sides of James Cropper come together to create a simple, effective and most importantly sustainable packaging for @LushLtd Atmosphere product. Made from our #COLOURFORM 3D packaging and #CupCycled papers.

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Thirteen leaders of the US business products industry attended the first OPI Executive Dinner of 2019, hosted by CEO Steve Hilleard.

Held at Gibson’s Bar & Restaurant in Rosemont, Illinois, there was plenty to talk about as the event was held the same week as the announcement of the proposed merger of Independent Suppliers Group, TriMega Purchasing Association and Pinnacle Affiliates.

With the Federal Trade Commission decision on the Staples/Essendant deal also imminent at the time, it was a lively, engaging and valuable occasion for all in attendance.

OPI Executive Dinners are primarily networking occasions and are an exclusive benefit for OPI’s VIP and Corporate Members. For more information, email OPI Chief Commercial Officer Chris Exner on chris.exner@opi.net.

GLOBAL OFFICE SUPPLIES MARKET WILL REACH

$242.6 BILLION BY 2023

GLOBAL STATIONERY AND CARDS MARKET WILL REACH

UK office supplies group SPOT (Spicers/OfficeTeam) has confirmed the appointment of its new CEO following the recent departure of Jeff Whiteway. The group’s private equity firm owner Better Capital has turned to someone from outside the office products industry and with a strong background in B2B supply chain management. It named Steve Horne, former COO of Euro Car Parts Group as the successor to Whiteway, effective 4 March.

In addition to his role at automotive components and consumables supplier Euro Car Parts, Horne’s previous experience includes senior positions at Unipart Automotive and Wickes Building Supplies. As well as supply chain and business transformation expertise, SPOT said he also brings extensive experience in sales, successfully growing businesses organically, through M&A and by new channel development.

It appears that Horne’s skills will be put to the test as soon as he starts in his new job at SPOT. As well as announcing its new CEO, the group also provided details of a network review, saying that to “drive service improvement and unlock duplicated costs”, it has had to “reconsider” its national infrastructure.

In a press release, the company stated: “This review has been further exacerbated by significant rental increases on either rent reviews or rent renewals, as well as cost pressures in a number of areas, including difficulties in recruiting/retaining staff, price increases in packaging, fuel and third-party logistics costs and spreading stockholding over multiple sites.” It added that a consultation process with “a number of staff” has commenced, with proposals tabled to “either reduce or cease activity at certain locations”.

The release also explained how Spicers’ dealer customers would be affected by the changes: “80% of our dealers’ requirements are currently serviced from Greenwich and Manchester and that will not change.

Those serviced from Bristol, which is our smallest stocked RDC, despite an excellent team there, have experienced poor availability which will be enhanced by this change, with routes in the South West Region still being delivered in the same way by the same delivery team, but from a cross-dock in the Bristol area.

“Scottish and North East Regions will now be picked in the Manchester RDC and for Scotland serviced from a new cross-docking depot near Glasgow. The North East will continue to be serviced from the existing cross-dock based in Newcastle. Each RDC will become self-sufficient.

“These proposed changes will have minimum impact on our delivery services, but are intended to better support the Spicers customer through a fit-for-purpose, cost-effective national operational and logistics platform.”

Integra launches dealer acquisition initiative

UK dealer group Integra Business Solutions has released i-merge, a new platform aimed at dealer principals looking to either buy or sell businesses. The confidential facility is designed to find, match and support independent dealers looking to take the next step in their business’s life cycle.

Integra can provide a simple introduction or an all-encompassing service incorporating support with sales and purchase agreements, legal advice and valuations in the UK and Ireland. The dealer group said it has a network of professionals with extensive experience who will also be able to provide practical advice about the pitfalls to avoid.

March 2019

$185 BILLION BY 2022

SPOT reveals new CEO identity

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OPI hosts first 2019 industry dinner

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NEWS

Staples acquires DEX Imaging

Staples Inc has announced an agreement to purchase document imaging technology firm DEX Imaging, one of the largest independent office equipment dealers in the US. Family-based DEX Imaging was founded in 2002 and is based in Tampa, Florida.

Chairman Dan Doyle Sr and CEO Dan Doyle Jr, along with the executive team, will continue to lead the business moving forward.

Staples Inc CEO Sandy Douglas said the reseller will continue to strategically invest in companies that can bring added value to its customers in the form of enhanced products and services. Accordingly, DEX Imaging has strong relationships with its customers through exemplary service and comprehensive industry knowledge in office technology.

Meanwhile, the deal gives DEX greater access to industry-leading technology as well as a world class supply chain to accelerate its position as a premier North American print management provider. Terms of the deal were not disclosed.

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Acquisition for Hummel’s

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US office products dealer Hummel’s Office Plus has announced the acquisition of a fellow independent reseller in upstate New York.

Hummel’s completed the acquisition of Seely Conover, based in the town of Amsterdam, north-west of New York state capital Albany, on 1 December.

Financial details of the transaction were not disclosed.

Seely Conover’s former owners, Wayne and Gary Bovee, said they made the decision to sell their business to Hummel’s after it proved to be their best exit strategy.

The acquisition gives Hummel’s increased market presence in the eastern part of New York state.

Ringel joins Polyconcept

Global promotional products supplier Polyconcept has appointed Neil Ringel as CEO. Ringel takes full group responsibilities for the business, including its primary operating divisions of Polyconcept North America, PF Concept and other global operations. He replaces Gene Colleran, who had served as CEO from 2015.

Ringel joins the company after spending 23 years at Staples in the US, where he held various executive roles relating to sales force, digitisation and M&A activity.

Most recently, he served as Staples Inc EVP of Corporate Development, where he was responsible for executing and integrating multiple strategic acquisitions.

IN BRIEF RJ Young expands in Mississippi state US independent dealer RJ Young has acquired office equipment dealer Digitec. Based in Jackson, Mississippi, Digitec specialises in multifunctional printers and serves customers throughout the state.

IKEA launches leasing office furniture trial Swedish retailer IKEA is piloting a new rental model for office furniture as part of a new strategic direction and its wider sustainability goals. The trial was set to begin in Switzerland in late February and offers businesses the ability to lease furniture.

Office Friendly strengthens Pioneer platform UK dealer group Office Friendly has appointed Will Nixon as its new Learning and Development Officer. Nixon has spent more than 15 years in the public sector, working with over 100 healthcare trusts on the implementation of learning platforms and training over 100,000 people.

Pitney Bowes advances European strategy Mailroom and technology vendor Pitney Bowes has sold its SMB business in Sweden, Norway, Denmark, Finland, Switzerland and Italy to private equity firm Bavaria Industries Group.

Ingram Micro tackles cybersecurity Global IT distributor Ingram Micro is establishing three cybersecurity centres of excellence (COE) across EMEA and Turkey. Each COE will provide training, support, managed services, solution architecting and consulting.

Redundancies for Stora Enso European packaging, pulp and paper manufacturer Stora Enso is implementing a profit protection programme to reduce costs by €120 million ($136 million) and reduce capital expenditure by €50 million. The initiatives will involve all company divisions and include redundancies at several of its mills based in Sweden, Estonia and Finland.

Xerox has announced plans to cut costs by $640 million in 2019 through a new set of initiatives. At its recent annual investor day, the company said it will simplify its business and drive greater operational efficiency through its Project Own It transformation programme.

The strategy is expected to generate a frictionless, high-velocity business for clients, more significant and long-term investments, and bottom-line profit growth.

Other key goals for the project include establishing more effective shared service centres, nationalising its IT infrastructure and real estate footprint, creating greater velocity in its supply chain, and unlocking greater productivity in its supplier base.

Xerox has also announced plans to improve the company’s revenue trajectory. This is made up of several parts: improving the core technology business; expanding services and software; capitalising on the opportunities in SMB; transforming the client digital experience; and driving innovation and new growth businesses. In addition, the vendor will utilise its ‘Powered by Xerox’ strategy to drive developments in digital packaging and print, 3D printing, artificial intelligence workflow assistants, as well as sensors and services for the Internet of Things.

WHO’S WHO IN OP

Top 100 new entry 2019: Lauren Jones, CEO, The Supply Room

NEWS

Xerox reveals growth strategy

Lauren Jones takes over as CEO of US-based independent dealer The Supply Room on 1 March 2019. She replaces industry veteran Patricia Barber, who will retire in June.

Jones, who has 15 years of marketing, communications, and leadership experience, joined the The Supply Room in 2015 as EVP of Communications. She will work with Barber over the next few months to ensure a smooth transition.

Study flags cost of poor print security A new report from Quocirca suggests that 60% of organisations have experienced a print-related data breach in the past year.

According to the industry analyst group’s Global Print Security Report, these incidents cost businesses an average of £313,000 ($403,000) per year.

The study found that 73% of organisations are concerned or very concerned about the risk of print-related data infringements, which make up 11% of all security breaches, while 77% are increasing spending on print security.

It also concluded that most violations stem from accidental

actions by internal users even though firms are more worried about malware affecting print devices.

Quocirca ranks organisations on a Print Security Maturity Index, which looks at a company’s adoption of a range of print security best practices. The study ranked only 27% of businesses as print security ‘leaders’, while 56% are ‘followers’ and 17% are ‘laggards’.

Quocirca also discovered a link between better security and those using managed print services (MPS). While 62% of businesses surveyed use MPS, this figure rises to 76% of print security ‘leaders’ and falls to 44% for ‘laggards’.

Dealers: Do the FTC conditions allay your concerns over the Staples/Essendant deal?

NOT CONVINCED YET 30%

NO 43% YES 27%

March 2019

53%

OF MILLENNIAL CONSUMERS IN EUROPE ARE BOYCOTTING BRANDS OVER PACKAGING SUSTAINABILITY CONCERNS

OPI.NET POLL

13

BIG INTERVIEW

The REINVENTION

of HP Inc

VENDOR SPECIAL

Special Issue

HP Inc – or, in its original iteration, HewlettPackard – is one of the best known brands in the world. Standing for innovation, quality and longevity, HP has defied the many obstacles in the category and continues to post growth both across its hardware and supplies segments

I

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t’s been almost four and a half years since HP made its transformational announcement in October 2014 that ultimately split the company into two entities – Hewlett-Packard Enterprise and HP Inc. The latter which, broadly-speaking, comprises the PC, printing and supplies business, has faced a whole host of challenges since – the relentless speed of digitisation, secular declines in the category and consolidation among industry operators, not to mention increasing environmental pressures and ongoing counterfeiting issues.

HP’s response to this overall sector landscape has been manifold: continue to innovate in new and emerging product areas, focus on sustainability, build a solid channel partner strategy, step up M&A activity to maximise potential in related segments, and invest in more contractual opportunities. In other words, as Mercè Barcons tells OPI’s Heike Dieckmann, reinvent itself.

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OPI: Every single one of our readers will be familiar with HP Inc, but perhaps not too many will know Mercè Barcons. Can you give me some brief background of yourself and your career?

Mercè Barcons: Sure. I was born and educated in Spain and joined HP in 1993 as a financial analyst for the company’s European manufacturing operations in Barcelona. I then held several executive positions in finance, marketing and sales in the EMEA region.

When HP was split into two entities in 2015 and as part of its reinvention efforts, I moved to the company’s HQ in Palo Alto, California, to assume my current role which is General Manager and Global Head of HP’s Supplies Printing Business. In this role, I have worldwide revenue responsibility for the ink, toner and media supplies segment. I’m also accountable at a global level for current business management for competitive intelligence, inkjet supplies manufacturing and business analytics.

Over the past three and a half years, I have been working on the transformation of our supplies business. In addition, I’ve been fortunate to

work with a fantastic global team to shape our global supplies strategy which is built upon the Original HP Supplies marketing campaign, our new contractual supplies business models and offerings, and the expansion of our Instant Ink products and services.

OPI: Before we delve deeper into the supplies category, can we just take a step back, go back all the way to the beginning of Hewlett-Packard and chart some of the major milestones?

MB: Of course. Officially, the company is 80 years old this year. When it was incorporated in 1939, Bill Hewlett and Dave Packard had already been working together for a while, notably making oscillators for the Walt Disney Company.

But it was on 1 January of that year that Bill and Dave formalised their partnership and the name Hewlett-Packard was born. The company’s name, incidentally, was decided by flipping a coin – it was as simple as that.

In 1940, they moved into their first offices in Palo Alto in California, the same town – though not location – where I am based today.

In terms of milestones, I would highlight a number of things: the company’s IPO in 1957 and its first

BIG INTERVIEW Mercè Barcons

Mobile printing began the current decade, followed by the launch of HP Instant Ink and the realisation that 3D printing and immersive computing are becoming ever more important

OPI: How would you describe HP Inc as it stands today on the global stage and the supplies business within it?

MB: Through our product and service portfolio of personal systems, printers and 3D printing solutions, we “engineer experiences that amaze” – that is our global brand promise and we deliver that in every region and country in the world. It applies to everything we do, whether you are printing a business document or a selfie – and Original HP Supplies aim to deliver on this promise.

We strive to offer the best experience for each segment under the broad HP inc umbrella. And we always make sure that the distribution models used, the business model offerings, and even the supplies configurations are tailored for each region or even at a more granular level.

March 2019

joint venture with Yokogawa in Tokyo, Japan, signalling its foray into the Asian market. In the early 1970s HP expanded into business computing which introduced the era of distributed data processing. What followed was the launch of the world’s first scientific hand-held calculator in 1972 and the company’s first PC in 1980.

The 1990s and 2000s were marked by more innovations and events: the colour printing revolution, entering the home computing market, the creation of HP Services, the merger with Compaq, and the move into digital publishing.

Mobile printing began the current decade, followed by the launch of HP Instant Ink and the realisation that 3D printing and immersive

computing are becoming ever more important.

Halfway through this decade, of course, was also when Hewlett-Packard separated into two new publicly-traded companies – Hewlett Packard Enterprise, consisting of HP’s enterprise technology infrastructure, software and services businesses, and HP Inc, the personal systems and printing businesses.

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Mercè Barcons BIG INTERVIEW OPI: What about financial performance – I believe it’s been a good year for you, particularly against a backdrop of considerable challenges in the supplies segment?

MB: In Q4, print sales increased 11% for the full-year, with growth in all regions and across hardware and supplies.

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OPI: What percentage of sales at HP can be attributed to supplies?

MB: Supplies generally account for about two thirds of total print revenues.

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OPI: How do these numbers measure up in terms of market conditions? How would you describe the various business segments?

MB: The office printing environment remains strong for HP and has continued to grow. We are a very trusted brand within the office space.

Toner remains the dominant technology in this space, but HP has also seen increased penetration of ink with its OfficeJet Pro and PageWide brands over the last few years. Growth in the A3 market remains a strong focus for the company in FY2019. We are also excited about the benefits of the recent Apogee acquisition as we look to broaden our A3, A4 and services portfolio and transition to services.

Two years ago, we launched the Original HP Supplies marketing campaign based on our Science of Print messages. This is an ongoing campaign that highlights the science, technology and innovation within our ink and toner cartridges that deliver the quality that customers have come to expect from HP. We have been very pleased with the response to that campaign from our customers. They are

intrigued by the critical role the cartridge plays in delivering a printed page – up to 70% of the print technology is in the cartridge itself.

OPI: Your Instant Ink programme has been very successful too. Can you share some details?

MB: HP’s Instant Ink programme was launched in 2013 and by 2017 had grown in size to 18 countries.

Customer retention rates continue to be very strong, coming in at over 90%. We also continue to see positive growth in cumulative enrollee counts both yearly and quarterly. Customer adoption rates among participating retailers in particular are currently greater than 20%.

The Apogee purchase extends HP’s print leadership by leveraging the industry shift to contractual sales as we aggressively pursue the A3 office market OPI: You’ve just referred to the acquisition of Apogee. What has this UK-based managed print services (MPS) firm brought to the table?

MB: The Apogee purchase extends HP’s print leadership by leveraging the industry shift to contractual sales as we aggressively pursue the A3 office market. We’re augmenting our go-to-market strategy and enhancing our ability to deliver the services necessary to win in this profitable market.

And our focus on contractual selling is working.

HP was named a ‘leader’ in contractual in IDC’s

OPI: So the acquisition was directly related to your plans to go deeper into services? Are any more acquisitions on the agenda in this area?

MB: Yes, absolutely, in answer to your first question.

As I said, the deal advances HP Print’s strategy to disrupt the $50 billion+ A3 copier market.

Specifically, we will be enhancing our A3 and A4 product portfolio and expanding our services portfolio in contractual office printing and MPS. As for future acquisitions, we do not comment on such decisions prior to official public notification.

OPI: You already referred to your channel strategy very briefly. Can you explain a bit more about your Partner First concept?

MB: Our channel strategy remains unchanged. We want to work with our partners and help them grow.

Our perspective remains that the best way for them to service their customers and reduce their costs to serve is by using only Original HP Supplies.

There is no denying the fact that the channel is our biggest asset. For more than 30 years, we have built a deep channel legacy. You may have heard this statement before: ‘The strength of the channel equals the health of HP.’ The Partner First programme represents our ongoing commitment to our channel partners. Those interested in learning more about the initiative should visit the HP Partner First Portal at partner.hp.com.

OPI: What feedback are you getting from your customers about the Original HP Supplies-only strategy?

MB: The feedback is consistent: Original HP Supplies drive the best experience as well as help keep costs down by preventing reprints and reducing maintenance calls.

OPI: Let’s move to another strategy. What’s your view on selling direct to end consumers?

MB: While we support direct sales to end consumers through our HP Store, we also understand the value that our partners bring to the management of customers’ overall needs.

Naturally, preferences vary in terms of how, when and with whom customers want to engage to buy supplies. As such, our effort is to guarantee that through whatever avenue customers want to buy supplies, they have a flawless experience.

We work closely with our channel partners to ensure they have all the tools to serve their distinct customer base in the best way.

OPI: What about consolidation in the reseller space, notably in the US – what has that meant for HP and its channel strategy?

MB: We continue to have a very strong relationship with our global office suppliers. These partners are critical to the strategy of HP Supplies.

The transformation of the reseller space is the result of many of our partners expanding their online presence as a new way to reach their customers. We are working closely with them to ensure these new routes to market continue to provide the best experience to customers.

OPI: On that online note, what’s your relationship with and view of Amazon?

MB: E-tailers such as Amazon are a key go-to-market segment and as HP continues to advance its omnichannel strategy, it’s an important partner for us.

OPI: With digitisation in mind, what do resellers need to do in your opinion to stay ahead or even merely keep up?

MB: The digital curve poses a challenge to everyone as end-user customers are choosing different ways of sourcing and purchasing their consumables. However, every challenge also offers an immense opportunity. The digital revolution will only grow faster and more profound over time.

We would like to continue to see our reseller base embrace these trends and lead the way in enabling their customers in the digital journey.

OPI: What about the impact of digitisation on HP? The paperless and printerless office has proven to be a myth, but where are you seeing declines and where is the growth?

MB: As you say, several trends, including the paperless office, have been exaggerated over the years, but at the same time there is a noticeable movement towards an increased preference for mobile printing and improving process flows. Here is where we have tools like the HP JetAdvantage solution which will allow HP and the developer community to create apps that improve printer workflows and enhance business process automation.

In addition, HP is launching Roam for Business, a solution that will enable easier printing from mobile devices. At the same time, our new selection of consumer printers like the Sprocket and Tango has proven that, as different customer segments discover the ease of printing from mobile devices, innovative printing opportunities are in high demand.

March 2019

OPI: There’s been a fair amount of consolidation in the industry as a whole and the vendor community in particular. HP, while not engaging in phenomenally large acquisitions, has been part of it, of course. What drives this consolidation in your opinion?

MB: Consolidation offers companies advantages to bring expanded product portfolios, solutions and services to the market through new technology, manufacturing and supply chain integration. With our recent acquisition of Samsung Printing, for example, we have secured a fantastic product portfolio for office and enterprise customers, delivering the most secure office printers in the world.

BIG INTERVIEW Mercè Barcons

2018 MarketScape report on contractual print and document services.

Overall, the Apogee deal really complements our broader channel strategy and we remain committed to building our business through our best-in-class partner programme.

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Mercè Barcons BIG INTERVIEW

OPI: Let’s change the subject completely. How serious is the issue of counterfeiting for you and what can you do about it?

MB: The HP brand is a hugely valuable asset to us and, as you can imagine, we take counterfeiting very seriously. We are constantly striving to protect our customer from counterfeiters. The Supplies business, for example, has a dedicated team that monitors and drives enforcement against counterfeit activities on a global basis.

Needless to say, counterfeit cartridges cannot compare to genuine HP products. We continue to invest in new security measures and technology, while working with law enforcement investigations to prevent our customers from being misled about Original HP Supplies.

OPI: Another topic I’d like to touch on is sustainability. There’s been a fair bit in the press recently about HP in that context.

Can you elaborate a little – where are your priorities right now?

MB: That’s correct. In 2018, HP was named an Energy Star Partner of the Year winner for our sustainable product design and energy efficiency within our printing portfolio. And earlier this year, we received a Gold Tier award in the US Environmental Protection Agency’s SMM Electronics Challenge, which recognises companies for their commitment to sustainable materials management and recycling electronics responsibly.

Company-wide, we are focused on transforming our entire business to contribute to creating a more efficient, circular and low-carbon economy.

This also means offering our customers the most sustainable portfolio of products and services. Our efforts include reducing the amount of materials used in our products; developing solutions that keep materials in use at their highest state of value for the longest possible time; ensuring

the materials in our products are properly repurposed at the end of service; and shifting from transactional product sales to service models.

Our Supplies business is a great example of how we manufacture with the environment in mind. Over 25 years ago we launched the HP Planet Partners return and recycling programme, which offers customers in 76 countries and territories around the world a convenient and responsible way to recycle their computer hardware and printing supplies.

Our closed-loop recycling programme allows us to use millions of pounds of plastic to create original ink and toner cartridges

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If we succeed in making Staples Solutions a better run and more efficient organisation, then that will create its own exit strategy

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HP Planet Partners has been groundbreaking – our closed-loop recycling programme allows us to use millions of pounds of plastic to create original ink and toner cartridges. Through this initiative, we’ve manufactured more than 3.8 billion original HP ink and toner cartridges using recycled plastic from recovered cartridges, apparel hangers and plastic bottles. Put in a different way, we help divert on average more than one million plastic bottles per day from landfills. More than 80% of our ink cartridges and 100% of our toner cartridges contain recycled content today.

Ocean plastics is obviously a very current topic and a serious worldwide pollution problem. We are helping to reduce ocean plastics through a recycling programme we run in Haiti. Through this initiative, plastic bottles collected in the country are processed into recycled materials that are then used to produce new HP ink cartridges. To date, we have upcycled more than half a million pounds – or 250 tonnes – of ocean-bound plastic bottles. That’s more than 12 million bottles that are finding their way into our ink cartridges and not into the ocean. We are also investigating opportunities to use these materials in other products.

OPI: To sum up, can you comment on HP’s future plans, in general but also as regards your specific responsibilities?

MB: Sure. In Printing, our strategic growth focus is on shifting to contractual solutions and graphics, as well as expanding our footprint in the 3D printing marketplace. In addition, we are concentrating on delivering new revenue delivery models and higher value units in the marketplace to shift the mix in the installed base, while continuing to expand on our ink, laser, graphics and 3D printing programmes.

For Supplies, the shift to contractual solutions includes an increased focus on MPS and Instant Ink, which presents strong after-market supplies opportunities. The Continuous Ink Supply System offerings in our Home Printing Solutions business are also helping to expand HP’s existing customer base. Finally, our focus is on placing higher-value printer units which offer strong annuity of toner and ink.

HOT TOPIC Special Issue HEALTH & WELL-BEING Special Issue HEALTH & WELL-BEING

VENDOR SPECIAL

Special Issue

E

For this OPI Vendor Special, Heike Dieckmann, with the help of some industry experts, takes a look at private label in our sector, exploring why this topic ruffles so many feathers but is unlikely to go away. In fact, quite the opposite...

verybody does it (almost), nobody Special Issue really likes it (almost), price is the most

VENDOR SPECIAL

www.opi.net

common reason for getting involved (almost always) and it’s growing steadily in use and adoption. What is it? It’s private label and its use in our sector.

There are several iterations of the concept – own, store and proprietary brands, white box and private label, to name but a few. Interaction’s Europe-wide Q-Connect, Spicers’ 5 Star, the US wholesalers’ Universal and Sparco ranges, plus many more – all these lines have enjoyed broad appeal over the years. Consumers like them because private label products, in whatever industry, are typically available at better prices. Brand manufacturers, on the other hand, hate them as they are essentially cheaper copies of what they make. Category killers is a term that’s often used.

The middlemen, meanwhile – resellers and by extension the wholesalers and dealer groups – often find themselves trapped between a rock and a hard place: they need lower-cost products to compete while also wanting to build brand loyalty and visibility of their own brands – that’s one side of the coin. The other is the erosion of profits for the category as a whole because of heightened price sensitivity by consumers.

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FACT OF LIFE Private label has been a fact of life in our industry for over 30 years. In other sectors, it goes back up to 100 years. It tends to follow the peaks and troughs of the economy, rising and falling in popularity and adoption depending on financial affluence.

Pentel is a writing instruments manufacturer that witnessed the first private label boom in office products. Says Ken MacKenzie, Director of Pentel Europe: “For our category, private label

became a real hot topic in the 1990s. We were invited to go into tenders and all sorts of things for own label. We made the decision back then not to get involved as there was no way we wanted to compete. We would rather spend our money on our brand. Our strategy hasn’t changed.”

First and foremost, ACCO Brands is a brand-focused company and we believe strong brands are essential to a thriving, profitable industry Many manufacturers, however, do get involved.

The reasons are manifold. There are vendors that, as a strategy, are very orientated towards own label – they tend to have a low-cost structure and are tightly-run organisations that are geared up for it. R&D and innovation – the essence of all top-of-the-market, successful brand manufacturers – are low on the list of strategic priorities.

For others, it's more of a practical solution as opposed to an overall business or company focus. An example is plant utilisation. Our industry today as a whole and varying from segment to segment, has considerably more manufacturing capacity globally than there’s demand. As such, it can make sense to use these expensive plants in order to chew up some of the fixed costs rather than having them sit idle.

RESELLER/VENDOR RELATIONS Brand manufacturers working with their reseller partners on private label is a common, though not often readily talked about, practice. As Richard Scharmann, CEO of multichannel operator PBS

HOT TOPIC Private Label

Holding puts it: “We see private label activities increasing. Our own brand percentage of product sales is around 14% now, coming from less than 10% three years ago. We see 20% as a necessary and healthy target, but we are eager to partner with our brand manufacturers in our private label focus as consolidation is key to our supplier strategy.”

ACCO Brands is one such company that combines both branded and private label product manufacturing. Its Leitz lever arch file in several markets is probably one of the best-known and most highly-rated traditional office products. But the company also caters for the private label audience. As Nigel Gunn, SVP of Sales at ACCO Brands EMEA, says: “First and foremost, ACCO Brands is a brand-focused company and we believe strong brands are essential to a thriving, profitable industry. We continually invest in our brands to ensure they deliver quality and value, which in turn leads to loyalty, commitment and repeat purchase for our resellers.

“That said, if we have resellers that fully support our brands and share our belief in trading end-users up to the most suitable solutions, we do consider supporting them with private label as we understand the benefit for them of having one supplier/delivery/invoice in the categories where we operate.”

Interaction's Q-Connect private label range is available across Europe

We are eager to partner with our brand manufacturers in our private label focus as consolidation is key to our supplier strategy

Spicers' 5 Star: in the market for over 20 years

March 2019

BALANCING ACT As with all things and never more so than in a challenging and declining industry, it’s a balancing act. Judging by feedback received by OPI, a private label brand should be viewed and treated as just that – another brand, something that creates visibility and has a clear market positioning and pricing strategy. But many feel this is not happening as a general rule, instead turning private label into a race to the bottom, thereby further dropping category value.

Says Jonathan Smith, VP of Sales Europe at Avery: “There is no doubt that the resellers’ focus on private label has taken some value away from A-brands. It's been a stated aim of almost all major resellers over the past ten years to increase the share that private label has in their mix. Unfortunately, in many cases that means the reseller is trading down the end user, even when that end user has been quite content buying the premium product.

“There have been some notable efforts over the years by some resellers to differentiate their private label – in terms of packaging, environmental aspects, product specification, etc – but none of these come for free and have to be actively managed and paid for by the reseller.

And that adds cost.”

As Smith says, all the larger resellers, such as Office Depot, Staples Solutions and Lyreco, have big private label ranges. None of them were outspoken about these to OPI, although it’s clearly a hot topic in their overall strategy.

Against that kind of competition, independent dealers have a veritable mountain to climb. As a result, practically all the dealer groups these independents are organised in have their own private label ranges. Aidan McDonough is CEO of Integra Business Solutions, one of the biggest dealer groups in the UK. He asserts: “We’ve had our private label 'initiative' range for over 20 years – it’s just a reality of business. We have around 350 SKUs in the range. They are all about price, albeit in a tiered ‘good, better, best’ approach.

“In certain instances, we would also source white boxes because we have dealers that operate in the contract market and they simply can’t compete against the likes of Depot, Staples and Lyreco with their extensive own brand lines.

“We have no plans to expand our range in traditional OP, particularly given how mature the market is. Our aspirations are more geared towards the facilities category, including jan/san and breakroom products.”

Gavin Ward, CEO of Office Brands, concurs with the ‘no choice’ notion. His Australian dealer group also works with the initiative brand, under licence from Integra, an arrangement that appears to be working well. Ward believes that private label and direct sourcing has become absolutely imperative in order to remain competitive. “We’re very aggressive marketers, but can’t compete on price against an Officeworks that sells a brand name product. And, of course, all the big operators in our market, such as Officeworks, Staples and OfficeMax [now Winc], source high-volume products directly and sell them under their own label. They market themselves as the cheapest in the market and if they’re not, they’ll cut the price further.

“Essentially, we have no chance if we’re not even on customers’ shopping lists. Take the example of a whiteboard: you can pay A$100 ($72) for it or you can pay A$1,000. But if you don’t come up in search results and are not in the right price bracket, you can’t explain the difference.

You can’t say to a school: 'This whiteboard will be no good for you because you need a surface that you can write on easily, one that cleans well and doesn’t have any shadowing.' You can’t

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Private Label HOT TOPIC www.opi.net 24

recommend a porcelain board or a glass board because you’re just not on the shopping list to start with. In other words, we need private label to get on that list so dealers can (a) win a contract; and (b) have a conversation with the customer about better – branded –alternatives.”

DIFFERENTIATE BEYOND PRICE While price is the main driving factor behind private label, as mentioned before, there have also been attempts to differentiate in other ways through private label. Most recently, fellow Australian dealer group Office Choice has made this point with the launch of the Bibbulmun range of Indigenous-branded workplace supplies.

Bibbulmun is exclusive to Office Choice dealers and features about 80 products ranging from Australian-made carbon-neutral copy paper to office stationery and washroom products, with plans to further expand the range in 2019.

Says Office Choice CEO Brad O’Brien: “The launch of this range is significant because it gives our dealers a point of difference to everyone else.

Usually, private label is your price fighter, the product that stands out in the commodity product categories where it’s all about volume, the bottom line price and mass consumption – and not the brand. Bibbulmun is a completely different proposition in the market.”

Like Office Brands’ Ward, O’Brien admits that dealers in Australia often can’t compete on price because the national operators are able to push so aggressively with private label ranges sourced from abroad. He says: “Independent dealers and the buying groups in Australia are still heavily dependent on domestic suppliers and the contributions and support they offer in terms of competitive invoice pricing, back-end programmes, rebates over and above advertising, etc. As such, we have to take a balanced approach to private label.”

BONE OF CONTENTION One of the biggest bones of contention among brand manufacturers is that they spent resources on R&D and innovation, for many ideas then essentially being copied. The irony here is that the proliferation of private label only adds to the pressure on brand manufacturers to become ever more innovative to remain relevant.

That said, the perception among those OPI spoke to is that the vendors operating in the upper echelons of our space perhaps have relatively little to fear; it’s the middle-of-the-road companies that are neither particularly price-competitive nor engender a huge amount of brand loyalty that are most at risk.

As ACCO Brands’ Gunn says: “Branded products have usually had years of investment in their design, functionality as well as how they have been communicated to the market.

BACK TO BASICS WITH AMAZON? Amazon tends to play a role in most industry discussions nowadays.

Private label is no exception. The online giant has been selling these products for many years, but over the past couple its range of brands has positively exploded, with lines in categories ranging from automotive and pets, food and drink, to home office and small business.

The selection of Amazon own brands is estimated to move in the high double, low triple digits, but from a business supplies point of view, most products fall under the AmazonBasics umbrella. The range is comprehensive and in addition to the more traditional items now also comprises jan/san and food service categories as well MRO products and educational supplies – in other words, everything a typical, progressive reseller in our industry would be involved in.

Price is evidently the main differentiator, with generic non-brand searches frequently putting the online giant’s products right at the top of the table in terms of cost. With the exception of ‘sponsored’ results, of course – brand manufacturers' final chance before purchase to convince consumers that theirs is the better, albeit more expensive product – Amazon’s ‘Choice’ is almost always its own brand, whether it’s paper, a shredder, stapler or monitor stand.

Particularly from a B2B point of view – and the AmazonBasics range is sold across the Amazon and Amazon Business platforms – where product is bought in bulk and price sensitivities are much greater, this proliferation must be a considerable headache for brand manufacturers. And that’s not even to mention the debate around the use of data. Amazon has all the product data from its manufacturer partners and obviously owns the highly valuable customer data, so absolutely knows what sells well on its site. If it chooses to, it can source products itself at a lower cost, easily supplanting a brand. Amazon-branded batteries, for example, which are among the longest-standing in its private label range, allegedly now outsell the top-selling Duracell and Energizer batteries.

If A-brand manufacturers stop adding value, differentiating, innovating and communicating with consumers, then private label will compete effectively Office Choice's new range of Indigenous-branded workplace supplies

They are trusted. We have seen very little impact on our strong brands as we continuously invest in understanding our end users’ needs and ensuring we have the most enticing proposition to them as well as supporting our resellers with very impactful trade-up and cross-sell solutions. Those manufacturers not investing in their brands or how they communicate with the end user and drive consumer-relevant innovation are struggling more and more against private label.”

As Avery’s Smith sums up: “Can private label ever compete with the high-end range of branded products? The answer to that should be a firm ‘No’. However, if A-brand manufacturers stop adding value, differentiating, innovating and communicating with consumers, then private label will compete effectively.”

VENDORIssue FOCUS Special

FACILITIES SUPPLIES STRATEGIC

innovation

OPI’s Michelle Sturman, in our Vendor Focus, FACILITIES puts the spotlight on those manufacturers that have demonstrated innovation and are keeping SUPPLIES

Special Issue

their eyes firmly on the future

VENDOR SPECIAL

Special Issue

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VENDOR SPECIAL

Special Issue he past 12 months have certainly thrown up plenty of excitement and curveballs in the business supplies industry – consolidation, the rapid pace and changing nature of technology, turmoil in global trade relations, and much more. It’s clear that some OP manufacturers have dealt with these better than others, embracing the alterations that are happening all around them.

To this end, we certainly applaud all manufacturers that keep their eyes firmly on the ball, and particularly those actively engaged with the entire supply chain. All the vendors included in this year’s feature thoroughly deserve their recognition, all for different, but equally important reasons, including sustainability, acquisitions, product innovation, conquering new categories or entering new markets.

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EMERALD BRAND

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Emerald Brand is one of those rare companies that lives up to its ethos – in this case, to combat climate change through sustainable manufacturing, materials and products.

Ensuring it remains at the forefront of sustainable innovation has seen the company implement several new initiatives. Most recent was the appointment of OP industry veteran Jay Mutschler (formerly of Corporate Express North America and President of Staples Australia and New Zealand) as a strategic adviser – the first of several experts that Emerald expects to appoint in an advisory capacity.

Mutschler will consult with Emerald on its Tree-Free, Made in USA Pulp licensing division.

Emerald’s Tree-Free manufacturing facilities in the US launched last December, starting with the brand’s industrial towel and tissue line, with additional product rollouts due in the first quarter of this year. Talking about the transition at the time, Emerald Brand Managing Director Jaclyn McDuffey said: “Emerald’s commitment to sustainability is what has continued to drive our material innovations and supply chain improvements. Producing our Tree-Free technology in America for our US-based clientele is yet another improvement and value-add that we can be proud of.”

Emerald has also formed the Ecovations division, which will license the company’s sustainable Tree-Free raw

material and products to brands worldwide. This enables businesses to add the sustainable solutions to their own line of disposable paper and plastic products.

In addition, the Eco-Squad group, introduced at the beginning of this year, has a mandate to educate, communicate and implement environmental strategies to Emerald’s licensed distributor and client base. Services include tools to quantify a company’s environmental impact and consulting solutions that aim to lower an organisation’s carbon footprint.

ACCO Brands has long been a giant in the OP world, but it took a big leap forward just over two years ago when it acquired Esselte Holdings. The integration of established businesses is never easy, but ACCO Brands EMEA has cleared any hurdles with the minimum of fuss, and quickly.

The amalgamation affected offices across Europe, several factories, distribution centres and almost all functions throughout the legacy ACCO and Esselte businesses. The process started with the UK and Spain in October 2017 and was completed across the 24 European countries ACCO now operates in by June 2018. “Our stated objective of the integration was to bring together two large market leaders, and offer customers the opportunity of placing one order, receiving one delivery and paying one invoice across a wide range of products,” says ACCO Brands EMEA SVP Sales Nigel Gunn.

Now, ACCO Brands EMEA has eight core brands – Leitz, Rapid, GBC, Nobo, Esselte, Rexel, Kensington and Derwent – with a portfolio of 20,000 products. The company's marketing communications were comprehensively reviewed which led to a relaunch of the Rexel, Nobo and GBC brands across Europe.

Logos were refreshed, brand guidelines re-written, and new imagery and websites were developed.

In fact, due to accelerating sales growth with online customers, greater investments have been made in all areas of online resources, from specialist teams to extensive content, ensuring the brands are relevant and fully accessible in the digital world.

Elsewhere, ACCO has also been making moves to extend its market presence. Last year, it acquired GOBA Internacional, a branded school and craft products company in Mexico, while at the beginning of this year, it bought all brands and distribution rights from fellow Australian vendor Cumberland Stationery. This purchase includes lines that are both owned and distributed by Cumberland, such as Aurora, Cleanlink, Colourful Days, Dahle, Durable, Falcon, Justick, Novus, Orange Circle Studio, Safco and Wedo.

As to the company's future outlook and plans, Gunn says: “Looking forward, ACCO Brands will maintain its relentless investment in innovation within paper-associated products and beyond, while delivering programmes that drive growth for ACCO and its business partners. These activities must be complemented by a continuous ambition to improve every element of our supply chain and service offering if we want to be the vendor of choice for our customers."

VENDOR FOCUS Manufacturer Excellence

ACCO BRANDS

Looking forward, ACCO Brands will maintain its relentless investment in innovation within paper-associated products and beyond

FELLOWES BRANDS RT to suit a variety of platforms and price points. The company also offers ergonomic accessories such as wrist supports, sit-stand mats, foot supports and vertical mice.

"We have been expanding our workspace well-being products to bring solutions that focus on supporting increased movement throughout the workday, and we are excited about the future," says Nancy Heaton, VP Global Marketing – Work Solutions at Fellowes Brands.

Importantly, Fellowes always ensures that resellers have all the marketing material, product and data information necessary to succeed in this category, including sales training toolkits, catalogues, white papers, print and digital marketing collateral. "We see innovation opportunities in all of our categories, driven by a focus on well-being in the workplace both by employees and employers, increasing 'resimercial' design-driven environments, and a heightened global awareness of the need for data protection," adds Heaton.

March 2019

This is the third consecutive year Fellowes Brands has made it into OPI’s Vendor Focus feature, unsurprising when the company is renowned throughout the OP industry for providing quality, innovation, performance and outstanding customer service.

Not a business to rest on its laurels, Fellowes Brands has made a success of branching out from its traditional office products roots and aligning itself with the biggest workplace trends. As a leader in workspace solutions, entering the healthy working sector was a natural area of progression for the company and it has certainly made its mark.

While a relative newcomer to the office furniture space, Fellowes has rapidly become a respected and well-known brand in the ergonomics segment through products like the Lotus sit-stand workstation and the recently launched Levado height-adjustable desk.

Sales have grown steadily across a range of different business verticals, introducing new sit-stands such as the Lotus

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Manufacturer Excellence VENDOR FOCUS

LOGITECH

HP INC

Logitech may be best known for its gaming technology and as a consequence flies just under the radar of the office products industry, but its Video Collaboration division is currently on fire.

The rise of video conferencing continues unabated as businesses look to curtail unnecessary travel expenditure and reduce CO2 emissions, and Logitech is cashing in. Over the past year or so, its Video Collaboration sector has been growing at a massive rate – the last quarter saw high double-digit growth of 60%, with a 25% increase the quarter before.

Logitech Video Collaboration VP & General Manager Scott Wharton says: “A great philosophy that we all live by at Logitech is based on the fact that ‘Success is Never Final’. It is always important to acknowledge success, and we had a lot to celebrate in the past few years. But it is equally important that we remain humble and create environments which allow teams to fail. This helps us learn and sets us up for further successes.”

The company offers hardware such as webcams and conference cams for unified communication and collaboration solutions based on open standards. This has made its products accessible for just about all cloud and video conferencing software. As the workplace has changed to a more collaborative nature, Logitech has also been savvy enough to team up with office furniture giants such as Herman Miller in order to integrate video collaboration with innovative furniture designs.

In February, a deal was signed with Google to develop a portfolio of pre-configured room solutions for Hangouts Meet using its hardware. The 'Logitech Room Solutions for Google Hangouts Meet' use the new Logitech Tap, which offers one-touch video calling and can be deployed at scale.

“Our Video Collaboration business has experienced tremendous growth in the past few years, but competition is becoming increasingly fierce.

We’ve even seen the market shift to align with our strategy, which is quite validating. We’ll continue to innovate and look for new opportunities to help us stay relevant in a market that is continuously evolving,” says Wharton.

HP Inc is the only vendor to have featured in all the Vendor Focus articles in OPI, and it’s easy to understand why. Since the split of the enterprise products and services business (now Hewlett Packard Enterprise) and the printer and PC division (now HP Inc) in 2015, the latter has gone from strength to strength under the leadership of CEO Dion Weisler.

The renewed focus on printers has led to continued quarters of growth. The strategic acquisitions of Samsung's printer business and managed print provider Apogee in the UK, meanwhile, has placed HP Inc in prime position to capitalise on the burgeoning A3 printing segment.

Both sales and profits for the printing segment of HP Inc are increasing, as are hardware units and supplies sales. In addition, the Personal Systems category has been turned around, posting sales of $10 billion in its most recent quarter.

The company is also priming itself to be in pole position for Industry 4.0 through its 3D printing business and the addition of robotics and artificial intelligence pioneer Yoky Matsuoka to its board of directors. HP recently expanded its 3D printing solutions portfolio with the introduction of the Metal Jet platform and has been busy onboarding new partners such as design and manufacturing software firm Autodesk. The company is also making headway in applications across the transportation, industrial, medical, and consumer sectors. (For more on HP Inc, read this month’s Big Interview with Mercè Barcons on page 16.)

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ONES TO WATCH

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CLOROX US cleaning products manufacturer Clorox recently relaunched its Professional division as new ‘megabrand’ CloroxPro. The brand includes the company's industry healthcare and commercial cleaning products.

Positioning the division for growth, the professional products segment recently posted double-digit sales increases across all its categories as it takes advantage of the burgeoning health and wellness drive in the workplace.

KIMBERLY-CLARK PROFESSIONAL As part of its K-C Strategy 2022, which aims to deliver balanced and sustainable growth, the Kimberly-Clark Professional (KCP) division has outlined plans for expansion into new regions over the course of this year. It will focus on developing and emerging markets as part of its “growth priorities” for 2019 due to relatively low levels of category penetration and frequency.

KCP said it will look to launch differentiated product innovation, drive category development, and leverage commercial capabilities in sales and marketing in order to scale up in these particular markets.

STABILO A traditional writing instruments vendor, Stabilo has fully embraced social media as it looks to connect with consumers. It’s a strategy that’s working and it also enables the company to tap into the latest trends.

This plan has seen the successful launch of its pastel highlighters. In fact, the category set recent sales records for the company, with production almost doubling compared to the previous year.

A focus on the education sector is also doing well, thanks to innovations such as the EASYbuddy fountain pen and EduPen, which helps develop handwriting skills. In addition, the Digipen turns handwritten notes into digital data for tablets and smartphones.

that our products will do well. We’re building a global brand,” Pukka Pads Managing Director Mike Davis told OPI. The US is not the only market that Pukka has its eyes on. Although it has been trading in the Far East – most notably China through its Hong Kong operation – for some years, the firm now has a sales office in Thailand and will open another in Vietnam at the end of March. Australia and New Zealand are also growing countries for the brand and Pukka is looking to increase its presence in the region through a distribution deal with one of the large business supplies resellers.

Closer to home, and after several acquisitions in the UK market, Davis says the past 18 months have been

about putting the company on solid ground. “We are now positioning Pukka for steady and strategic growth,” he adds.

It’s been an interesting year for stationery group Hamelin. Not only did the French company re-enter the Australian market in April 2018 through a controlling interest in Bantex, it has also been busy cementing its place in the digital world with its Scribzee app.

But first to Australia. The territory is already familiar to Hamelin as, when it first acquired Elba Bantex in 1999, it included a subsidiary in the country.

However, this division was sold in 2001 as Hamelin focused on restructuring in Europe. Hamelin now owns 60% of Bantex Australia, while two partners own the remaining 40% – one being the former owner, Michael Stathakis.

The company has rebranded to the Hamelin name down under which,

according to CEO Eric Joan, has been a smooth process. “We’re extremely happy that we’ve been able to turn the business around in the first year and break even – something that hadn’t happened for a while. However, it will still be a long road to develop the market penetration that we’d like to have, especially in categories such as books and pads.”

According to Joan, the Bantex acquisition was driven by a strategy to grow the category, in particular the Oxford brand outside Europe. Under the guidance of current Managing Director Nicholas Afriat, the Oxford range will be launched in the country in time for the next back-to-school season, which is in February 2020.

Meanwhile, Hamelin’s move into the digital realm two years ago with the Scribzee app has been going exceptionally well. The app enables handwritten notes from Oxford notebooks, notepads and diaries to be scanned, saved and encrypted in the cloud. Scribzee now has around 800,000 regular users worldwide in more than 100 countries. So far, more than three million pages have been scanned.

The app is constantly updated with new features and functionality. Hamelin is also working on new physical items, such as revision cards, to accompany the digital product. “We are very happy with the development and pace of growth in terms of number of users of the Scribzee,” says Joan.

PLANTRONICS Given the decline in traditional video products, audio communications manufacturer Plantronics has helped secure its future through the recent acquisition of video conferencing firm Polycom. While this deal has resulted in the doubling of its quarterly sales, the firm has also reported double-digit growth in its desktop phones, audio conferencing, and unified communications headsets categories. In addition, it is making a move into new vertical markets such as multimedia video solutions.

Like Logitech, Plantronics is a major player in the rapidly expanding unified communications market.

KIMBALL As its most recent quarter attests, US-based office furniture manufacturer Kimball is certainly delivering the goods – sales were the highest in over 15 years, on the back of previous quarterly double-digit organic sales growth.

The company has also acquired contract furniture designer David Edward, which includes two production facilities. Kimball has said its strong financial position will enable it to make investments in growth initiatives this year, which will include new products and a deeper focus on areas such as the design community.

MITSUBISHI PENCIL Keep an eye on writing instruments manufacturer Mitsubishi Pencil following its recent expansion into the North American market with the launch of its new uni-ball division. The company has appointed two industry veterans to run the subsidiary in the form of Mike Parker (best known for his time at Fellowes Brands) as President, and John Burgess, formerly with US wholesaler SP Richards, as Sales Director.

In addition, Mitsubishi Pencil will take full control of the distribution of its products in the region from January 2020 when its long-standing agreement with Newell Brands ends.

Creating a global brand isn’t easy, but UK-based stationery firm Pukka Pads is doing just that. Over the past year or so, it has been putting in place and executing an expansion plan that is now coming to fruition.

In October 2018, the company entered the US market with the opening of an office in Madison, Wisconsin, with products being made available for the domestic market in February.

Initially, Pukka is aiming for the college sector in the US with its range of books and pads, and it has partnered with a big supplier in that market. In addition, the company has enlisted the expertise of a third-party e-commerce specialist to drive sales online. “We researched the US market thoroughly and believe

VENDOR FOCUS Manufacturer Excellence

PUKKA PADS

HAMELIN BRANDS

March 2019 29

EUROPEAN

Forum 2019

The 8th European Forum for senior executives from the business supplies industry and associated sectors WHY SHOULD I ATTEND? TO KEEP UP TO DATE with the latest business supplies industry trends and news TO UNDERSTAND the impact of new

technology and the fourth industrial revolution

TO ‘SHARPEN THE SAW’ – Stephen Covey’s seventh habit of highly effective people TO SHARE frankly and openly ideas, challenges and best practices with like-minded executives TO GAIN MORE C-LEVEL experience compared with other, broad-audience conferences TO BREAK OUT of your comfort zone

WHO SHOULD ATTEND?

Company Founders, CEOs, Managing Directors, Directors, Presidents and anyone in a senior leadership position within the business products industry.

BOOKING

Places at OPI Forums are strictly limited in order to maintain a senior, exclusive and interactive experience, so we encourage you to book as soon as possible. To find out more, please visit www.opi.net/EF2019 or don’t hesitate to contact Steve Hilleard directly at steve.hilleard@opi.net or call +44 7799 891000.

“

This year’s OPI Forum was one of the best that I have attended. As always, plenty of networking opportunities but combined with interesting, relevant, thoughtprovoking presentations that provided me with some tangible takeaways for my business to work on.

”

5 – 7 JUNE

THE WESTIN GRAND BERLIN, GERMANY

EUROPEAN

Forum 2019

Special Issue HEALTH & WELL-BEING

SPOTLIGHT

Special Issue HEALTH & WELL-BEING

VENDOR SPECIAL

Special Issue

As theIssue packaging industry gets to grips with sustainability Special under an intense public spotlight, the sector is awash with VENDOR innovation, as Michelle Sturman finds out…

SPECIAL

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he scourge of plastic pollution has brought the use of single-use plastic, barrelling into the public domain and left companies scrambling to pledge to vastly reduce the amount of plastic packaging they use. And it’s working. Consumer giants such as Unilever, P&G, PepsiCo, Coca-Cola and Nestlé, along with supermarkets like Tesco, Waitrose and Marks & Spencer in the UK and Europe, have all officially announced measured to drastically curb plastic in packaging.

One of the most prominent endeavours involves the Ellen MacArthur Foundation, which launched the New Plastics Economy Global Commitment in October 2018. More than 250 global organisations have signed up, along with financial institutions and governments. Founder Ellen MacArthur says: “We know that cleaning up plastics from our beaches and oceans is vital, but this does not stop the tide of plastic entering the oceans each year. We need to move upstream to the source of the flow. This is just one step on what will be a challenging journey, but one which can lead to huge benefits for society, the economy and the environment.”

More recently, Unilever, Clorox, P&G and many other well-known brands signed up to TerraCycle’s Loop, a first-of-its-kind global packaging and shopping circular solution platform. It aims to improve the environmental performance and convenience standards compared to current e-commerce offerings through packaging that

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is collected, cleaned, refilled and reused. The company said that while Loop is being launched initially for the consumer market, the B2B space is being explored.

Speaking to OPI, TerraCycle CEO Tom Szaky says: “Every day, more disposable material gets put in the ocean and landfills, so no matter how much we clean the ocean or recycle, we’re never going to solve the problem. To us, the root cause of waste is not plastic, it’s using things once, and that’s what Loop is trying to change as much as possible. We believe that Loop is a manifestation of the future of consumption – one where disposable products are replaced by durable, reusable and high-quality alternatives.”

It’s not the only work going on in the online packaging space. European packaging, pulp and paper manufacturer Stora Enso is looking to replace plastic bags and padding through its e-TALES portfolio, which includes packaging produced from renewable materials. “These convenient solutions also free up space in the lorries transporting the goods and as such reduce CO2 emissions” says Carl Norell, SVP Communications for Packaging Solutions at the company.

CLOSING THE LOOP A World Packaging Organisation position paper that was published last year asserts: “In the future, all packaging should be based on renewable raw material and be recyclable. If the packaging is based on non-renewable raw material, it must

This is just one step on what will be a challenging journey, but one which can lead to huge benefits for society, the economy and the environment

ALL ABOUT THE BOX European start-up LivingPackets has designed THE BOX, a “revolutionary, sustainable and trackable shipping box which generates almost zero packaging waste”.

The ‘box’ is reusable up to 1,000 times and features real-time environmental monitoring, electronic address display, and an automatic holding system eliminates filling materials.

“In addition to a massive reduction in cardboard and plastic waste, THE BOX can save merchants and logistics companies significant costs – up to ten times less as compared to one-way packaging,” says LivingPackets CEO Alex Cotte.

SPOTLIGHT Sustainable Packaging

always be 100% recyclable. Only packaging that is intended for continuous and long-term reuse can be based on non-renewable material and not recyclable… At the end, all packaging material must either be biodegradable or suitable for energy recovery.”

Closed-loop and the circular economy have become buzzwords for the packaging industry, especially in Europe, which is generally years ahead of the rest of the world in terms of environmental legislation. Activities were taken a step further recently with the introduction of the EU Circular Economy Package (CEP), a pioneering strategy that focuses on the prevention of waste and which has set new targets on recycling and waste management (see ‘Waste not want not’, page 34).

In addition, CEP introduces new requirements for Extended Producer Responsibility schemes which, by 2024, will be mandatory for all packaging. Says Lyreco Group Quality, Security & Sustainability Director Nasser Kahil: “I understand that the producer’s responsibility is extended to the post-consumer stage of a product’s life cycle, so for a company such as Lyreco, it will involve our own branded products. This will be achieved through dedicated ‘schemes’ and the related requirements will lead to better performance and governance of these schemes.”

Norell adds: “At this stage, it is too early to comment on exactly how the directive will be defined and how different parts of the value chain and individual EU member states will be impacted.”

There are other similar CEP-type schemes around the world, but on a much smaller scale.

Extended Producer Responsibility is in place in multiple jurisdictions in Canada, for example, while in the US, CalRecycle has plans for packaging reforms in California.

We are increasingly receiving questions about the different packaging options available

March 2019

OFFICE PACKAGING The request for sustainable packaging in the business supplies industry is also gaining ground – hardly surprising as office-based employees are also consumers and as such have a considerable voice while from an employer standpoint it makes business sense to ‘go green’.

Single-use plastic, especially in relation to the food and drink industry, has endured most of the backlash against packaging, but it is certainly not the only culprit. Most of us have ordered an item online that would fit into a small parcel or even a padded envelope, only to arrive in a cardboard box ten times the size necessary and filled with reams of needless padding.

“We are increasingly receiving questions about the different packaging options available, and why certain materials are used,” says Andrew McKenzie, Head of CSR for UK business services supplier Commercial Group. The reseller is well regarded for its sustainability practices, including its packaging strategy. Its London office, for example, distributes products in reusable despatch boxes – textile bags with carry handles and a Velcro lid – which are filled in-house and delivered to the customer. They are then flattened and go back to Commercial to be used again, many times over. “In London, we have a closed-loop distribution where we will collect packaging, cardboard, plastic and metal for onward recycling. We have also removed plastic wrappers from our paper supplies and notebooks,” adds McKenzie.

Another large reseller told OPI that its distribution centre trims its boxes according to the

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Sustainable Packaging SPOTLIGHT

customer order, and cardboard packaging waste is concertinaed and used as packing material to help mitigate the use of plastic.

According to a survey undertaken by global management consulting firm LEK Consulting, brand owners are anticipating more demand for new packaging and packaging formats. In addition, 40% of those questioned stated that they’ve made changes towards more sustainable packaging over the past two years while the majority plan to move a portion of their packaging volume towards sustainable options over the next five years.

PACKED FULL OF INNOVATION Paper and cardboard are still the obvious sustainable option due to their recyclability, but there is plenty of innovation that is currently affecting the packaging industry in a variety of ways. At the end of January, for example, the Plant Based Products Council was launched, which seeks more sustainable consumer products and packaging through greater use of plant-based materials. Members include Emerald Brand and Georgia-Pacific, and the council will promote the adoption and use of products derived from renewable biomass. To this end, it has launched a database of more than 480 plant-based and bio-based products that are already on the market.

North American B2B distributor Veritiv, meanwhile, has teamed up with Carvajal Pulp and Paper to market Earth Pact paperboard-based packaging that is made with 100% sugar cane bagasse fibres, an annually renewable fibre source that is both recyclable and compostable.

“Specifically for the office products industry, there are two areas that Veritiv is currently looking at. One is alternative fibre substitutes for papermaking, including sources such as wheat straw, bamboo and sugar cane bagasse; the other one is ocean plastic that can be used to replace virgin plastic resins,” says Veritiv Director of International Sourcing Bin Jiang.

“We are partnering with industry-leading companies to responsibly source and develop new technologies that improve sustainability by reducing negative environmental impacts. We have successfully implemented different levels of moulded fibre technologies in the retail and consumer electronics industry by leveraging

WASTE NOT WANT NOT In Europe, the recycling target set for packaging waste by 2030 is 70% for all packaging

85% 75% 55% GLASS PACKAGING

PLASTIC PACKAGING

Paper and cardboard are still the obvious sustainable option products that are produced from recycled materials and agricultural waste such as bamboo, bagasse and wheat straw,” she adds.

However, recycling and composting facilities may not always be available to deal with this type of material, especially at a local level. So while the options available for sustainable packaging are expanding, the elephant in the room remains the growing worldwide problem of how to deal with all the material for recycling. It is going to take a concerted effort throughout the entire supply chain to create a truly circular packaging economy, but the impetus is most definitely gathering pace and momentum.

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BETTER PLANET PACKAGING DESIGN CHALLENGE

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Paper-based packaging provider Smurfit Kappa has issued a challenge to the world’s innovators to contribute to the development of sustainable packaging solutions.

The Better Planet Packaging Design Challenge competition is part of the company’s drive to solve one of the biggest issues in the packaging industry – to reduce the amount of non-recyclable waste that is generated every day.

PAPER & CARDBOARD PACKAGING

The two challenges outlined in the competition are: 1. To develop an alternative for the plastic stretch wrap that is used around pallets to provide stability during transport and storage 2. To develop a fully paper-based parcel with thermal protection for chocolates, to use in the e-commerce sales channel

Entries are open until 29 March 2019 and applicants – who can be any innovator in the world – can submit an idea to address one or both design challenges. The company says the competition is a key part of its Better Planet Packaging initiative, which is at the heart of its core business strategy and aims to “deliver breakthroughs that will re-imagine packaging for a more sustainable future”.

Special Issue HEALTH & ADVERTORIAL WELL-BEING

VENDOR SPECIAL

Special Issue

VENDOR SPECIAL

Special Issue

ALL SET UP FOR

the (sustainable)

FUTURE

As viscom vendor Bi-silque celebrates its 40th anniversary, it has made sure it future-proofed the business to meet and excel customer expectations head-on

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his year is going to be a very exciting one for Bi-silque as the manufacturer celebrates its 40th anniversary. And while the company very proudly looks back on the past few decades, its eyes are now firmly on the future, focusing on sustainability and on delivering a high-quality service to its customers.

Bi-silque began as a small family business owned by two people. Almost 40 years later, it has over 700 employees and exports to 86 countries. Valued in the market for its product and manufacturing expertise, the company continues to stay ahead of the curve by investing in innovation, and meeting and exceeding customer expectations, year after year.

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COMPLETING INVESTMENTS 2018 marked a year of big improvements for Bi-silque. It completed several investments and increased its installed capacity, a move that was instigated in order to keep up with the continuing demand in the visual communications market and to support its expected growth. The company concluded the construction of a new state-of-the-art distribution centre in Portugal, for example, doubling its storage capacity, with more than 3,000 additional pallet positions available. With the new centre also came an improved loading dock, allowing Bi-silque to triple its loading capacity.

Away from its homeland, the company opened a new warehouse in the US last year. In that facility,

the storage compound is fully equipped with six docks. The warehouse is strategically located in Savannah, Georgia, next to the deepwater port and close to the airport. The idea behind the new facility was to be able to distribute its MasterVision products more easily and faster to all locations in the country. This strategy not only guarantees a better service to its customers, but also to end users.

MANUFACTURING INNOVATION Innovation in the manufacturing process has always been critical for Bi-silque and provides a vital differentiating factor. Not only has the company doubled its production capacity in the past ten years, over that time it has continuously invested in improved equipment as well as a specialist workforce.

Bi-silque’s locations in Europe and North America

board system, is geared towards agile working

ADVERTORIAL Bi-silque

SUSTAINABILITY FOCUS January’s Paperworld marked the beginning of Bi-silque’s 40th anniversary celebrations.

During the trade show, the company revealed the ‘Together for a sustainable future’ motto, thereby highlighting its sustainability focus and introducing a number of environmental and socially-responsible long-term initiatives.

The idea behind the motto is to work with its employees, the local community, suppliers, customers and other partners in order to build a more sustainable future.

Bi-silque already makes every effort to offer sustainable products, not only by incorporating eco-friendly materials but also by using renewable energy. In terms of its energy sources, it currently has approximately 2,000 sq m (20,000 sq ft) of photovoltaic solar panels in use at its manufacturing facility in Portugal which produce almost 446,000 kWh/year. This is the equivalent to the energy 600 fridges would use in a year.

The company has also developed a range of eco-friendly products. Its EARTH Collection is a selection under the overall Bi-Office and MasterVision brand umbrella, all with the same design, functionality and quality that customers have come to expect from Bi-silque. Some of the

As a company that has been in this market for almost 40 years, it’s important to continuously reinvent yourself and always look for ways to improve

Bi-silque’s head office in Esmoriz, Portugal

Last year, it implemented SAP software, a process that was demanding and challenging, but highly necessary in order to facilitate the company’s future growth. It also gave the team the perfect opportunity to review its entire operation and all processes. It enabled employees to update the latter where necessary in order to

products in this collection are cradle-to-cradle certified. They are highly regarded and are testament to the company upholding rigorously high standards in terms of the materials and manufacturing processes used.

Overall, it’s Bi-silque’s mission to have 90% of its products made with recycled and recyclable materials by 2020, not only to reduce its own environmental footprint, but to help customers do the same as well. ensure quality and a more efficient service while at the same time giving them more control over the entire supply chain.

Appreciating that its target markets are very mature, Bi-silque is highly aware of the fact that its customers value suppliers they can work with easily, directly and with simple processes. The goal was very clear: to choose and implement a robust software that could improve overall service to customers, all the time focusing on the OTIF (On Time In Full) indicator.

March 2019

A NEW AND IMPROVED BI-SILQUE With all these investments completed in 2018, Bi-silque is now well-placed to sail through its anniversary year with the ability to improve its customer service. As CEO André Vasconcelos says: “As a company that has been in this market for almost 40 years, it’s important to continuously reinvent yourself and always look for ways to improve. We are now stronger and better prepared to respond to our customers’ needs.”

Throughout 2019, Bi-silque is going to offer its customers activities to celebrate the anniversary, always with the future in mind, but never forgetting its history. “Bi-silque’s leadership has been in its second generation since 2012.

Therefore, and as a family business – in addition to focusing on the future and creating new and advanced products – we are going to celebrate our values and our origins,” says Vasconcelos.

He adds that its employees represent a very important proportion of Bi-silque’s success. As such, the company will also mark the special anniversary occasion with several internal activities throughout the year.

37

FEATURE

Building resilience

to DATA BREACHES

Cybercrime is something every business has to be prepared for these days.

Data breaches are among the most common incidents, says ReSolve Cyber’s Dr Danny Steed, and building resilience to such breaches is paramount

C

ybercrime is in the news on a daily basis, with stories rife of victims inundated with fraudulent emails and various kinds of online crime. Those running a business could be forgiven for almost despairing at the thought of how they can ensure their own resilience in cybersecurity. But it can be done, so long as executives prepare intelligently for the most likely incident to happen to an organisation with a large customer base – a data breach.

Among the litany of cyber incidents encountered, data breaches are one of the few disturbing constants in cybercrime. UK businesses will all remember the TalkTalk breach in 2015, which compromised 15,000 users’ details and cost the telecoms provider almost £60 million ($77 million) in total damages. It also resulted in the loss of more than 95,000 customers. How many businesses can survive such an incident and the negative press that comes with it?

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In the event of a data breach, the first task is to carry out an effective triage of the data that has been compromised

38

But data breaches have only become worse.

The December 2018 breach of the Marriott hotel group has taken the volume of a breach to new heights. The personal information of almost 500 million guests was accessed, among them at least five million unencrypted passport numbers and eight million payment card details. As a result, Marriott is now facing multiple class action lawsuits for its failure to protect customer data.

No one wishes to be in this position, yet if the worst was to happen, three effective steps can be taken to build resilience across any company – whatever its size or type of business. These will help to ensure that you are treated as the victim of a crime, rather than a negligent company liable for a lawsuit or a fine by the regulator.

STEP 1: TRIAGE Many organisations assume they know where all of their data is held, yet different departments and teams may use entirely different filing and storage systems, creating pockets of unknown and perhaps unprotected data. In the event of a data breach, the first task is to carry out an effective triage of the data that has been compromised.

This relies heavily on an effective audit of your data having previously been carried out.

There are many questions that a company’s leadership needs to answer, foremost among which should be: “What type of data is involved?”

It could be client-facing or internal staff data, confidential emails or intellectual property.

Knowing the answer to this question lets executives understand how sensitive the data affected is. This understanding then allows judgement on whether the incident is, at worst, simply a bad PR moment, or whether the loss of the data is likely to cause actual harm to either people (staff and/or customers) or the business itself.

Finally, as part of this first step, you should endeavour to ascertain what has actually happened to the data. All follow-on actions are determined by the nature of the incident itself, so it is important to remember that a data breach can be caused simply by a wayward email with a confidential attachment as much as by an advanced hacker breaching your network. Once you have judged whether the loss is accidental

STEP 2: DISCLOSURE No matter what the answers are to the above questions, it is a critical requirement in the event of any kind of data breach to carry out responsible disclosure to all those who have had their data compromised. This cannot be done, of course, if you are unable to identify exactly what data has been breached and who it is linked to, hence why a previous data audit is so crucial.

Responsible disclosure is highly likely the most taxing part of managing a data breach as, depending on the number of those affected, it can require significant resources. TalkTalk needed to disclose to 15,000 customers, Marriott to almost 500 million. A clear part of any organisation’s risk register should be to consider how many customers it actually holds data on.

Once this is known, there is then a need to create and test a plan for how your company would carry out disclosure in the event that this data was stolen. Testing a response plan is a proven method for ensuring a business can operate effectively during a live incident. This could well prove a decisive factor in the survival of a business should a data breach occur.

Dr Danny Steed is Head of Strategy at ReSolve Cyber, a cybersecurity start-up that provides services such as strategic consultancy, executive and workforce training, cyber wargaming, and maturity assessments to SMEs and large entreprises as well as private clients.

What all businesses need to prepare is not an impossible strategy of perfection, but the absolutely achievable strategy of resilience

STEP 3: REPORTING With General Data Protection Regulation – better known as just GDPR – now in full effect, your firm (if based in the UK) faces the legal requirement to notify the Information Commissioner’s Board of a data breach. But here’s a key detail that can really help businesses carry out the steps I’ve mentioned before: they have 72 hours from discovering the breach to the time they have to submit notice.

So instead of reporting to the regulator right away, it is far better to examine the situation methodically. Carrying out triage and disclosure as best as possible within this time limit allows executives to establish exactly what has happened before carrying out their legal obligation to report.

By doing so, not only will they already have mitigated the harmful effects of the data breach itself, they will also demonstrate to the regulator elements of best practice in the event of a cyber incident. This will go far in making your company appear as what it is – the victim of a crime, rather than a negligent business that is likely to face a punitive fine.

FEATURE Building Cyber Resilience

or perhaps the result of criminal malice, you can identify the appropriate course of action, such as involving law enforcement.

AIM FOR RESILIENCE, NOT PERFECTION Given the catalogue of names that have fallen victim to data breaches – from TalkTalk and Marriott to Yahoo! and Sony, and British Airways to Twitter among many more – it’s clear that data breaches are inevitable among even some of the biggest companies in the world.

What all businesses need to prepare is not an impossible strategy of perfection, but the absolutely achievable strategy of resilience. Given the reliance all companies have on technology now, ensuring resilience must be considered a top-level board priority.

March 2019 39

The modern workforce

RESEARCH

IN FOCUS O

SURVEY RESULTS

Few comparable results remain entirely unchanged from those recorded in the previous survey. Unsurprisingly, the main reason why respondents have reduced their usage of many key OP items in the last five years remains digitisation/computerisation.

In general, most of the differences to the 2012 report are due to an intensification of previous trends. For example, although there is still a broad range of office products being used regularly (ie every week) by respondents, virtually all of the OP products investigated by this report are now being used significantly less widely (see Fig 1). The differences are even greater when respondents work at home, where their behaviour is less likely to be governed by employer requirements.

Another intensification of a previously-identified trend has been the substantial increase in the imposition of printing and document storage controls by employers (see Fig 2). The new research also found that end-user observance of such policies has tightened recently – more respondents are claiming 100% observance and fewer are admitting non-compliance.

BOILING THE FROG: REVISITED

ver the past few years, the needs of the office workforce have continued to change as technologies and staff behaviour have evolved and the younger generation has entered the workplace – the latter often with very different ideas and expectations about what a good place to work should look like. It’s clear that some end-user needs and priorities have changed while others have intensified.

That’s the broad conclusion of a new research report by OPI and Martin Wilde Associates (MWA) entitled Boiling The Frog: Revisited. Published in January 2019, this 200-page report repeats many of the key questions of the groundbreaking 2012 Boiling The Frog survey, which showed that young office workers can behave very differently from their older colleagues in terms of their usage of office products.

Questions revolved around the type of OP items regularly being used at work; which products are being used more – and less – than in 2012; how important branding and eco-friendly products are; the extent to which documents are still being printed and/or filed and stored; what social networking sites are used in the work environment and many more.

Using a sample of 500 office worker respondents (250 in the US and 250 in the UK), the survey’s results are analysed by country and – within each country – by age, gender Extract: OP Items Used Regularly and company size, ensuring that the maximum OP Items 2018 2012 possible value from the data.

Pens is extracted 92% 97% Extract: OP Items Used Regularly Notepads/memo pads 84% 83% Compared OP Items 2018to the 2012previous study, some results are 78% Pens 92% Envelopes 97% 75% Shredders 73% 73% the same, some are different and – because new Notepads/memo pads 84% 83% Envelopes 75% Staplers 78% 73% 88% questions have been asked in the 2019 report – Shredders 73% 73% Highlighters 71% 80% Staplers 73% 88% Files and binders 70% 84% some are entirely Highlighters 71% new.

80% Files and binders

70%

84%

WHAT’S NEW?

‘Boiling The Frog: Revisited’ clearly shows that the market has moved on from 2012: end-user needs have changed and intensified.

As such, it’s essential reading for all industry business leaders who need to consider the implications on their future strategy. The report is available now for £2,950 (approx. $3,895) from www.opi. net/frogrevisited.

FIG 1: OP ITEMS USED REGULARLY 2018 2012

Pens 92% Pens

84%

0

20

40

0

60

20

FIG 2: EMPLOYER POLICIES THAT RESTRICT DOCUMENT PRINTING

80

40

Source: MWA

100 %

60

March 2019

Files and binders Highlighters

Files and binders

• To what extent is product colour important?

• Do workers share a printer and has this affected their usage?

• Are printer cartridges sourced via MPS? • How important is it that an employer offers a variety of employee benefits, such as barista-style coffee, sit-stand workstations, social spaces/breakout areas, natural lighting and the latest technology products?

• Is Amazon/Amazon Business being used to source OP? If so, for which product categories?

• How do workers select OP items? Are online product reviews important?

27% Yes – formal policy 16% 40% Yes – general guidelines 27%

2% Yes – the amount that is printed is automatically logged against me/my department 3% Yes – printers are set 4% up to print double sided 1% 24% No 53%

3% Don’t know 2%

97% Notepads/memo pads 84% Notepads/memo pads 83% 75% Envelopes 78% Envelopes 73% Shredders 73% Shredders 73% Staplers 88% 71% Highlighters Staplers 80% 70%

Source: MWA

Given the fast-evolving workplace, Boiling The Frog: Revisited investigates today’s office workers’ needs and behaviour. New questions asked include:

0

80

100 %

10

20

30

40

50 %

41

60

HOW TO...

Find your brand ambassadors...

AND USE THEM

A

In this How to… guide to referral selling, Roy Sheppard highlights the benefits of using existing customers to generate future sales with potential clients

s competitors continue to tighten their grip around the world and your industry, it’s time to ask some questions about how we generate sales and where future sales are most likely to come from.

How much is each client worth to your business? The full value of a customer is usually far higher than people assume. Stan Rapp and Tom Collins in their classic book Maxi-Marketing: The New Direction in Advertising, Promotion, & Marketing Strategy introduced the concept of the lifetime value of a customer. So ask yourself these simple questions: How much revenue does your average customer provide your company with per year? Over how many years? How much profit does each customer generate over the entire period they remain a customer?

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FACTOR IN REFERRAL VALUE

42

Research by Lexus Cars in the UK found the average lifetime value of each of their customers to be a staggering £600,000 ($774,000). How is that possible?

A Lexus customer can’t spend that much on cars. And why is it relevant to office products businesses anyhow?

Quite simply, the same principle applies to all.

Lexus calculated average revenues from servicing, of course, but it also included the referral value of each customer. In focus groups it discovered that large numbers of customers were so evangelical about the brand and its world-class quality of service, they told all their family and friends about Lexus. A significant proportion of those people then go on to become customers and, in turn, recommend Lexus to their family and friends.

If an average customer is worth £10,000 per year and remains a customer for five years, this person is obviously worth £50,000 to your business. Each new customer can add significant sales to the business over

a long period. But this still represents only a small part of the full value.

So what could be the lifetime referral value for each of your existing and future customers?

In some cases, this could be far higher than the actual revenues you currently earn from those customers. Referrals are more likely to happen when we feel reassured about our buying decisions. What more then could you do to reassure potential customers that doing business with you is a smart decision? And what could you do to help new customers look good to their bosses? It’s often as basic as that.

No matter what business you are in, it’s all about reassuring potential customers. As a consumer, think of a time when you were considering a significant purchase. How much attention did you pay to the marketing and sales literature from potential suppliers? How much did you base your purchasing decision on what you saw?

Conversely, overwhelmed by the choices available to you, and aware of how much time it takes to do your own research or due diligence, did you take the advice of a trusted friend? Or were you prepared to accept company reviews by people you don’t know, rather than believe what a company says about itself? Customers don’t care about the latter, ie self promotion – that is why websites like TripAdvisor and TrustPilot have proven to be so valuable to buyers; it’s how we all tend to buy.

COLD-CALLING DIFFICULTIES

Every sales professional will tell you that trying to engage with strangers, even if the products and services are what they really need, can be incredibly time-intensive, frustrating and

ASK FOR REFERRALS

In front of his sales team at a conference, a senior executive at a major global bank once told me with a great deal of pride that a recent client survey found 92% of the bank’s customers would choose to recommend its factoring service. “How many do that?”, I asked. “Nothing like that number,” he replied. “Has anyone ever thought to actually ask them?”, was my next question.

He admitted no one had. In my experience, the reason for this is often a simple one – we don’t always know how to ask. Inexperienced sales people often feel uncomfortable about doing so because they’re afraid they might damage the

existing relationship they have with a customer.

But if many of your current customers are pleased with your offering, they would surely willingly recommend you – if only they knew you would like them to.

It could be as simple as asking every existing client the following question: “We are looking to grow our business so we can serve you better.

What would we need to improve and do for you to feel really confident about recommending us to people you know?”

If they tell you what they think needs fixing – get that done before you ask the next question. If they’re happy to recommend you, go on to ask: “Who do you know who would also value what we do?” If they hesitate, add: “I don’t expect you to come up with names right now. When could we talk about this further, after you’ve had some time to think about it?”

These ‘soft’, non-threatening questions have been proven to open up future conversations that often lead to high-value referrals. Each time you speak with a referral, that person actually wants to talk to you because you are perceived as someone who is offering to help solve a problem, rather than just trying to sell something.

Roy Sheppard is a business development and business relationship specialist. He is the author of numerous books, including ‘Rapid Result Referrals’ and ‘Meet Greet & Prosper’.

A former BBC TV news anchorman in London, UK, Sheppard also works as a facilitator and emcee at major international corporate and medical congresses.

For more information on his new online video-based course ‘Referral Selling: The Classy Way’, visit www.people portfolio.com.

HOW TO... Referral Selling

expensive. Most of the time you’re trying to talk to people who simply don’t want to talk to you.

They don’t have the time, they don’t trust you, they already have a supplier, etc.

This is invariably why sales people don’t get put through to the people they want to talk to, calls are not returned and if they are lucky or persistent enough to finally get through to someone, there’s a high risk of being dismissed or rejected.

Sometimes politely, but in many cases quite rudely. It can be so demoralising being a sales person when the majority of your time is spent trying to engage with strangers.

The costs of turning those strangers into new clients through cold-calling, traditional as well as digital, is getting more and more prohibitive. And in too many cases, less and less effective. Therefore, wouldn’t it make sense to have more business development conversations with delighted clients who are already open to talking with you?

Don’t stop whatever you’re doing to drive sales, of course. Just bear in mind the proportion of your existing activity (and sales and marketing budget) that is aimed at trying to get the attention of these ‘unknowns’ who are also being bombarded by sales messages from everyone else. Compare that to the proportion of your time currently invested in exploring referral opportunities from your existing fans and brand ambassadors. Is the balance right?

No matter what business you are in, it’s all about reassuring potential customers Sophisticated CRM systems and many other technologies may be essential parts of doing business today, but even though it’s a cliché, perhaps we all need to be reminded that people still do business with people and the office supplies industry is absolutely no exception here. Therefore, remember to be proactive about building more high-trust, person-to-person relationships to create a growing fan club of those who choose to spread the word about your business for you.

March 2019 43

VENDO SPECI

Special I EVENT

VENDOR SPECIAL

Special Issue

Innovation

ALIVE & KICKING at PAPERWORLD Optimism in Frankfurt as traditional office supplies vendors evolve in response to modern workplace trends – by Andy Braithwaite

I

PAPERWORLD 2019 REVIEW

n recent years and as a result of feedback from many industry peers, OPI has questioned the continued relevance of Paperworld to the office products and wider business supplies industries, certainly from a B2B angle. Indeed, the very name ‘Paperworld’ conjures up images of a bygone paper-based age that is quickly being left behind by the changing needs of modern, dynamic workplaces.

With the secular declines in traditional office products and the channel facing its own various challenges, many typically considered to be the ‘A’ brands in the sector have stayed away from Paperworld. And once again, the likes of 3M, Newell Brands, ACCO Brands/Leitz, HP Inc, Pilot, BIC and International Paper chose to keep away from the event, while Fellowes was not there this year after having attended in 2018.

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PLENTY TO GAIN

44

However, looking at things from a glass half-full perspective, there is still plenty to gain from exhibiting at and visiting Paperworld. While they may be declining, traditional office products are not going to go away and the event remains a key date on the calendar for a broad cross section of international resellers. In the exhibition halls and aisles, senior executives of some of the aforementioned leading brands were also spotted: they may not be exhibiting, but Paperworld is still a convenient place for them to meet customers and partners, and network with peers.

Anecdotal evidence suggests that there were fewer German resellers in the office supplies section this year. Whether that had anything to do with the growing Insights-X show in Nuremberg last October is not clear, but some certainly prefer the timing of the rival show which, despite some

international participation, caters essentially to the German retail trade.

At this year’s Paperworld, meanwhile, international visitors from more than 60 countries represented nearly 23,000 of the 33,000+ visitors.

It is unlikely that many travelled further than the team from New Zealand-based distributor Acme Supplies. “We come to Frankfurt every second year,” Managing Director Lindsay Knowles told OPI. “Many of our suppliers are here in one place, so that’s a key benefit, and we also like to see what’s trending in office supplies and in Creativeworld. The networking is equally important.”

Indeed, the ability to meet a wide variety of customers in a short space of time is a key reason for many exhibitors to be at the show.

“We invite all our export customers and we are fully booked throughout the show,” said Peter Achterberg, Sales Director at European manufacturer T3L Group. “It is the right opportunity for us, especially with the launch of 200 new products. I tend to look at the positive reasons for attending: if we have all these people at our booth and all these meetings, then we should be here.”

António Quirino Soares, Marketing Director at office paper producer The Navigator Company, concurred: “We do see a lot of value and our sales teams are engaged the entire time. It is an effective platform to see customers, not only from Western Europe, but from Eastern Europe, the Balkans, North Africa and the Middle East. It is also a good opportunity to see other partners in a short space of time.”

We invite all our export customers and we are fully booked throughout the show Danny Berendsen, Sales Director EMEA at Bi-silque, added: “It is important for us to be here every year,” he told OPI. “We do business in almost 100 countries and have customers that come from all around the world to meet us.”

For Chris Stott, founder of UK-based vendor Pukka Pads, the strong international aspect of Paperworld is helping him grow his firm’s expanding network of distribution partners as part of a strategic growth plan that has been in place for

INVESTMENT IN INNOVATION

The number of new product launches at Paperworld is indicative of manufacturers’ continuing R&D investments in the office supplies category. One of the hottest new products at the show was COLOP’s e-mark electronic marking device (see below left and Vendor Profile, OPI February 2019, page 44) which is being heralded as “a new era in stamping”. The product was the centrepiece of the Austrian firm’s booth at the trade show and staff were busy throughout the fair conducting product demonstrations.

Bi-silque’s Berendsen also pointed to the importance of showing something new and innovative. “There is a lot of competition in the viscom category, but it also has many ‘me too’ products,” he said. “We are showing that we are a market leader and bring innovation to the category and to the market,” he added, particularly referencing the company’s Archyi brand.

One company that was bringing more than just new products to the show was German manufacturer Sigel. The firm has been through a strategic transformation in the past two years, re-defining its vision and making significant internal and go-to-market changes (see Advertorial, OPI February 2019, page 32). At Paperworld, this manifested itself in Sigel’s viscom and office acoustics solutions offerings that tie in with workplace trends such as mobility and office well-being.

One interesting aspect of Sigel’s transformation has been its approach to selecting the right reseller partners. As International Sales Director Sven Reimann (pictured below) explained to OPI, this has meant re-evaluating many existing relationships. He pointed to the successful

OPI HOLDS INDUSTRY ROUNDTABLE

EVENT Paperworld 2019

the past 18 months. “We want to be everywhere,” he explained, “and the quality of the visitors at Paperworld makes this a good place to be.”

Some vendors prefer a biennial exhibiting cycle. AF International didn’t exhibit in 2018, but was back this year with a range of new products.

“Every other year ties in nicely with our product development,” said Ron Jakeman, Managing Director of parent company HK Wentworth.

“This year, for example, we have launched our Anti-Bac+ line that is compliant with EU standards – it is important to introduce these products to our European customer base.”

Approximately 20 senior business supplies executives took up OPI’s invitation to take part in an industry roundtable session in Frankfurt on the Tuesday morning of Paperworld. While participants were predominantly from the vendor community, the CEOs of two of Europe’s top reselling and wholesaling organisations were also in attendance.

The goal of the roundtable was to hold frank and open discussions about the key issues facing the industry, with a view to developing a roadmap for meaningful change. From that perspective, the morning was a resounding success.

Following two hours of lively debate, facilitated by OPI’s Chief Commercial Officer Chris Exner, the attendees agreed that there were several areas where industry-wide cooperation could be harnessed to drive change in the channel, enabling our sector to better respond to its many challenges and opportunities.

OPI hopes to be the driving force behind some of the initiatives discussed, and will start working with industry partners and stakeholders to evaluate the best ways to proceed. Watch this space.

DATE FOR YOUR DIARY The next Paperworld will take place 25-28 January 2020 in Frankfurt, Germany.

partnership that Sigel has developed with Lyreco, with both companies aligned over their commitment to providing customers with added-value solutions.

Paperworld 2019 once again featured a Future Office space in Hall 3.0 which included a series of well-attended presentations. The concept could perhaps be developed further by incorporating product displays and ideas from a wider range of manufacturers, and by a more international speaker line-up.

As the saying goes, “If it ain’t broke, don’t fix it”.

Paperworld organiser Messe Frankfurt enjoyed a record year in 2018, with sales of around €715 million ($800 million). Like many firms in our sector, Paperworld has displayed resilience in the face of adversity. It may have lost some of its lustre over the years, but continues to be the leading international trade show for the stationery and office supplies industry.

March 2019 45

EVENT

Science CITY OF HOPE TOUR AND HALL OF FAME DINNER REVIEW

CREATING HOPE M embers of the National Business Products Industry came together in early February to hear first-hand from doctors, researchers and scientists about the life-saving work being conducted at City of Hope (COH) as part of the annual City of Hope Tour and Hall of Fame Dinner.

The Duarte, California-based research, treatment and education centre, which is dedicated to the prevention, treatment and cure of cancer, diabetes and other life-threatening diseases, has been supported by the office products industry for the past 37 years.

The event – held from 4-5 February – as always served as the official start to the annual fundraising campaign, in 2019 entitled Science Creating Hope and spearheaded by this year’s Spirit of Life honouree Brad Graves, VP & General Manager of 3M’s Stationery and Office Supplies Division.

Bringing together many industry executives who have provided long-standing support for COH, engaging not only themselves, but also their companies, families and friends, the tour of this extraordinary research facility and hospital always makes for a humbling experience – the facts speak for themselves (see ‘City of Hope facts’, below).

HALL OF FAME FINALE

Concluding the two days, celebrating achievements and looking forward to another outstanding fundraising year was once again the Hall of Fame Dinner, this year hosted by the National Business Products Council at the trendy Westdrift Manhattan Beach hotel. While Graves gave an impassioned speech about his plans and aspirations for the 2019 campaign, two more

Bringing together many industry executives […], the tour of this extraordinary research facility and hospital always makes for a humbling experience industry personalities were inducted into the Hall of Fame – Jack Reagan, SVP Merchandising for SP Richards, and VP National Distribution for Georgia-Pacific, Kevin Toale.

Culminating this year’s campaign, the Spirit of Life Gala will be held on 26 September 2019 at the famous Navy Pier in Chicago, Illinois.

CITY OF HOPE FACTS standard of care for leukaemia and other types of cancer. l COH was one of the first cancer centres in the US to adopt robotic prostate surgery and is considered an expert in the field, training surgeons from all over the world. l COH includes three manufacturing facilities that make both biological and chemical compounds. This infrastructure helps to quickly turn

breakthrough discoveries into life-saving therapies. l COH researchers are investigating ways to harness the body’s natural defences to fight cancer, an approach known as ‘immunotherapy’. One approach reprogrammes patients’ T cells to defeat lymphoma and brain cancer. Another shuts off a gene that promotes cancer while stimulating the immune system to fight.

March 2019

Numerous breakthrough cancer drugs, including Herceptin, Rituxan and Avastin, are based on technology pioneered by COH. l Millions of people with diabetes globally benefit from synthetic human insulin developed through research conducted at COH. l Regarded as a pioneer in bone marrow transplantation, COH has developed what is considered the gold l

47

5 MINUTES WITH...

Bob Taylor

CAREER Q&A Please describe your current job.

Chief bottle washer (aka Managing Director) at UK dealer Everything Office.

What would you be the patron saint of?

Stopping smoking everywhere. There’s no one as bad as a reformed smoker. Guilty as charged.

Your life philosophy?

Don’t expect anything from anybody and you will never be disappointed.

What special skill do you possess?

I’m good at spotting technology that works.

What do you do in your spare time?

I play racketball and five-a-side football. I also listen and try to play music. I’m a massive blues fan, but I love any music that conveys emotion, either happy or sad.

Your guilty pleasure?

High-end audio equipment – I’m a huge music fan.

The hardest thing you’ve ever had to do?

30 years ago I had to close my design business due to a company refusing to pay a large invoice.

Early bird or night owl?

“Twit-twoo”.

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If you could trade places with someone for a day, who would it be and why?

God, so I could make it rain at night and have sunshine during the day. There are a few other bits to fix as well, such as eradicating wars, racism, sexism and greed.

48

Bob Taylor, Everything Off ice

What would be a good theme song for you?

Respect Yourself by the Staple Singers.

The last gift you gave someone?

Christmas presents!

What would you cook for a dinner party?

Chicken and chorizo. It’s not a time-sensitive dish, so is usually well received.

Your favourite gadget?

My plunge saw. It’s like a circular saw but runs on a rail. Brilliant DIY tool.

What is humankind’s greatest invention?

It must be the wheel.

Your childhood ambitions?

To be an electrical engineer and succeed in athletics. I did ok in athletics at school level.

However, as I became a Chartered Product Designer, clearly the electrical side didn’t quite work out!

A favourite place to visit?

Las Vegas. I don’t gamble but love the place. I was at the Consumer Electronics Show recently and there’s just so much to see and do.

If you weren’t doing your present job, what would you ideally like to be doing?

I only have four minutes and 55 seconds left...

There are so many things: be a professional musician, although a major drawback is you need a degree of competency. I also love design as it’s my background, and I’m still involved with interiors and other projects.

Travel. Build a house…

The industry figure you most admire?

Although not strictly from our industry, it would have to be Steve Jobs.

His vision was to make technology easy to use and synchronise effortlessly.

He would ask the question: “What are the benefits for the user?”

If you could change one thing about the industry, what would it be?

Reduce the number of comparable products to a sensible size range. Having said that, they must sell somewhere, otherwise the manufacturers would discontinue them.

What personal item do you have on your desk?

My iPhone. It’s umbilically attached to me.

VEND SPEC

Special

FINAL WORD

ACT NOW

VENDOR SPECIAL

Special Issue

or get left behind

W

e live in exciting times. Industry is undergoing its fourth revolution: the real and virtual worlds are converging, while products are being made and distributed flexibly at unprecedented speeds and unmatched levels of resource efficiency.

Years ago, China was regarded and used as an extended workbench for many manufacturers. Today, the country no longer represents just a production location and a huge market to sell into – it’s become an innovation hub for digitisation. Whether we are talking about new artificial intelligence technologies, facial recognition, mobile payments, mobile commerce, innovative delivery services or new retail – China is a pioneer in all of these areas. In fact, I would strongly urge everyone to pay a visit to the country to understand and appreciate the full extent of what is happening.

In our daily business, my company Commerce Connector supports global brands in boosting their online sales in China. Our team experiences first-hand just how much e-commerce is booming. And more and more, I wonder why so many retailers, dealers and vendors in Europe and the US appear to be asleep, not adopting best practices and acquiring much-needed knowledge.

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MASSIVE CONCENTRATION WORLDWIDE

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In a digital world, customers don’t need 100 online touchpoints per market where they can buy office products. In the next few months and years, I’m convinced that we will see a massive concentration of operators. I fear a reduction to three or four relevant digital platforms per country where consumers and businesses do their purchasing.

With this considerable consolidation comes intense competition. Currently, for example, multi-brand resellers are struggling to sell products on digital platforms – they can only survive with strong private label brands. At the same time, brands are fighting to outbid each other with huge ad spending to be the first in search results.

Time and again there have been attempts by brand manufacturers – in a wide variety of industries – to participate in e-commerce with their own online shops. Today, many brands are giving up on this idea, realising that customers tend to shop fewer and fewer touchpoints.

Excluding Apple and the luxury industry, there are hardly any examples of successful

brands with their own relevant standalone shops.

THE NEED FOR CONTENT

So what’s the answer? Let’s go back to China. If you compare product presentations in the western world to China, there is one glaring difference. In China, operators focus on convincing storytelling. In Europe and the US, we use boring feature lists. Do resellers really think that consumers feel engaged by lines and lines of text? A product’s “why”, its sustainability, its uniqueness are rarely found.

Its story remains untold.

Marc Bürkle, CEO, Commerce Connector

I often get the impression that brands do not see product content as an opportunity for differentiation, but as a necessary evil I often get the impression that brands do not see product content as an opportunity for differentiation, but as a necessary evil. And many dealers and retailers watch powerlessly as products are presented hopelessly in online shops. If brands want to survive, they have to connect with consumers and convince them of their brand. Outstanding content is the foundation they all need.

For a healthy industry, we need more than the few online touchpoints that I’ve alluded to and which we’ll be left with. To achieve that, I absolutely believe that brands and their reseller partners have to reinvent collaboration: bring product content to the next level; extend the exchange of data, with initiatives such as reviews; optimise and establish new delivery processes; build joint marketing and category teams; create new in-store experiences... these are just a few examples. In this changing world, if we are at the forefront of the action, we can still define how to go forward and succeed. Let’s bring collaboration to the next level. There is still time, but you have to act now before it runs out.

Marc Bürkle will be speaking at the OPI European Forum about how brands and retailers need to reinvent their collaboration in the digital age. For more information about the forum, which will be held from 5-7 June 2019 at the Westin Grand Berlin, Germany, visit www.opi.net/EF2019.

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