OPI 288 APRIL 2019 A

BIG INTERVIEW

Connecting the

business products world

Sandy Douglas, Staples Inc April 2019

INSIDE THIS ISSUE l Exacompta on M&A charge l Depot and Alibaba eye SMBs l ISG and TriMega launch EpiContent l BOSS names new CEO

l CORE Live review l The future of dealer groups l Digital transformation l Education update l EOPA 2019 winners revealed

CONTENTS 18 Big Interview OPI caught up with Sandy Douglas at CORE Live to talk about the new – and disruptive – Staples Inc 24 Hot Topic Is there a need for dealer groups around the world to consolidate? The jury is still out, as OPI finds out 28 Spotlight A look at US franchise operator OfficeZilla and its renewed focus 30 Category Update As education methods change, so do the products needed in this sector 36 Vendor Profile International Paper and its continuing successful relationship with HP Papers

Big Interview: Sandy Douglas, Staples Inc When Sandy Douglas joined Staples Inc a year ago, he wasted no time in showing the US office supplies sector he meant business and that Staples needed a serious shake-up. Just six weeks into the job, he and his partners at Sycamore threw a huge kink in the works of the proposed merger of OP wholesalers SP Richards and Essendant with a seemingly hostile takeover bid of the latter.

A couple of weeks later, in early June last year, he followed that bombshell with the announcement of Staples’ dealer partnership strategy, swiftly confirmed by news that it had just bought one of the largest independents in the US, HiTouch Business Services.

It’s all positive disruption, he tells OPI in the Big Interview.

HOT TOPIC: DEALER GROUPS – WHAT NEXT?

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44 Advertorial Fellowes Brands highlights the growing importance of sustainability in business 46 Opinion

Digital transformation Special Issue and how to achieve HEALTH &it WELL-BEING

49 Review: Partnership Strategic discussions were at the heart of OPI’s event in Amsterdam 50 Review: EOPA Who won the 2019 European Office Products Awards? Find out who was alright on the night

REGULARS 5 Comment 6 News

Special Issue

VENDOR SPECIAL

56 5 minutes with...

Simon Wyers 58 Final Word Ken Lalley

April 2019

Dealers in the US, I believe, typically get their data from the wholesalers and a lot of the supply chain is done by them too.

Here [in Australia], there is no overall source of rich data and supply, pricing and computer systems. Dealer groups have their own bespoke solutions and systems for everything, be that the ERP solution, e-commerce platform or Salesforce Marketing Cloud, and they are often tailored quite individually. As a result, the services we provide are probably more advanced and detailed, and our cost to support our dealer networks are higher than in several other markets. Consolidating all those activities would potentially be highly beneficial – but also a huge undertaking.

40 Category Update The paper category faces multiple challenges. But there are opportunities too

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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 OPI Special Correspondent Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net Freelance Contributor David Holes david.holes@opi.net

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It’s good to talk – followed by action

s the dust settles on the momentous Staples/Essendant deal and with CORE Live out of the way (see page 12), Sandy Douglas and Harry Dochelli have begun the hard work of moving from soundbites to the reality of doing what they said they were going to do. Creating a new structure in the US business supplies sector where everyone is in the “winner’s circle” – that is the plan. Douglas is under no illusion that actions speak louder than words, but he also pointed out at CORE Live and in the Big Interview with OPI this month that nobody was actually winning in today’s market and something had to be done – “positive disruption” as he calls it (see page 18).

[Sandy] Douglas is under no illusion that actions speak louder than words

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 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

The need to be proactive and effect change in these challenging times is evidently also the sentiment of three US dealer groups that are currently in the midst of merger discussions. With more announcements expected imminently, speculation is rife as to how this merger might unfold. It also throws wide open the debate around dealer groups worldwide – how much have they consolidated already, how can they stay relevant and cost-efficient, and what will we likely see in the coming years? See our Hot Topic to find out more (page 24).

What I find really encouraging is the willingness to talk by all parties concerned. By that I mean all of the above – the US industry and its various constituents and dealer groups all the way from Australia to the UK. Talking was also very much the order of the day at two of OPI’s recent events. One was the European Office Products Awards (EOPA) in Amsterdam in early March (see page 50). The awards ceremony, of course, is just the culmination of lengthy discussions that the EOPA judging panel engaged in late last year to find this year’s worthy winners.

The other event was OPI Partnership, wrapped around the EOPA evening. This is where senior-level executives from the leading resellers and vendors across Europe come together for two days of strategic discussions (see page 49). Over the past six years, it has proven to be a winning formula, with many new business relationships formed and existing ones cemented. And once again, during the many networking opportunities – including EOPA – business leaders talked about the industry and how we can all progress in it.

HEIKE DIECKMANN, EDITOR Have a great month.

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April 2019

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NEWS

Analysis:

Office Depot targets SMBs with Alibaba agreement

The US reseller is looking to develop new and deeper relationships with its small business customers US-based Office Depot and Chinese e-commerce giant Alibaba signed a strategic agreement in March aimed at growing their respective shares of the US small business market. The first stage of the collaboration will focus on two sales and marketing workstreams to validate the concept before, it is hoped, expanding into a supply chain and logistics workstream by the end of the year.

The deal appears to be something of a coup for Office Depot after it was revealed that Alibaba went through a competitive process to select a strategic partner as it looks to develop its fledgling B2B supplier portal in the US. At the Bank of America Merrill Lynch 2019 Consumer and Retail Technology Conference in New York a few days after the agreement was announced, Office Depot CFO Joe Lower said talks between the two organisations began in May 2018. He stated that the e-commerce firm had had a number of choices as to who to partner with.

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ATTRACTIVE OFFERING

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Alibaba was attracted to Office Depot for two main reasons, said Lower. The first were the assets that Office Depot has in the US (such as a supply chain, stores, customers and a sales force) which align with Alibaba’s own business goals. The second was a similar focus on helping small businesses.

There also seems to be a good connection between the leaders of the two firms. Following the announcement, Office Depot CEO Gerry Smith and Alibaba Group’s Head of North America B2B President John Caplan held a number of joint TV interviews that revealed a good rapport between them.

Lower said the economics of the collaboration were not a priority at this time, and he admitted that the initiative will not drive a lot of revenue in the short term. For the time being, it is all about demonstrating the value to customers, validating the concept and ensuring the partnership between the two companies is successful.

The trial period includes some of Office Depot’s inside sales agents working with customers to help them source products on Alibaba.com that are not directly available from Office Depot. Lower gave the example

of working with a customer to help it source an actuation system. This, he said, moves Depot away from being a G&A cost to a “trusted provider” that assists with global procurement and impacts the cost of goods line on the balance sheet.

SMALL BUSINESS FOCUS

There is also a co-branded online destination, ‘Office Depot on Alibaba.com’, that provides US SMBs access to Alibaba.com’s 150,000-strong global supplier network. This offers a wide product selection as well as exclusive online and in-store offers for some of Office Depot’s products and services. The launch of this webpage coincided with a month-long Alibaba.com marketing event called March Expo.

The companies intend to help US SMBs sell their products to buyers in the US and around the world through Alibaba.com If the above initiatives prove successful, the collaboration will move into the nitty gritty of distribution and fulfilment. The aim of this will be to shorten delivery times by connecting Alibaba’s global logistics capabilities with Office Depot’s integrated B2B supply chain and distribution network. Over time, the companies intend to help US SMBs sell their products to buyers in the US and around the world through Alibaba.com, giving them better access to the global SMB B2B market that is estimated to be worth almost $24 trillion.

Office Depot is still in the early innings of its transformation to be less dependent on its traditional supplies business. The CompuCom acquisition at the end of 2017 and initiatives such as Workonomy and co-working have been clear signals of its intent to be more service and more SMB-focused.

This deal is one that will potentially take Depot deeper into areas such as SCaaS (supply chain as a service), which makes sense for companies with efficient and large-scale distribution networks. It will also be interesting to what extent Office Depot will leverage this relationship to develop an online B2B marketplace that could rival Amazon Business.

IN BRIEF Xerox announces restructuring In a regulatory filing, Xerox said its board of directors had approved a reorganisation that will see the embattled business become a wholly-owned subsidiary of a new holding company.

The purpose of the restructuring is to provide the firm with “strategic, operational and financial flexibility”.

NEWS

ISG and TriMega launch EpiContent

MasterVision names sales manager Bi-silque visual products brand MasterVision has appointed Paul Ventimiglia as Sales Manager, North America. He has more than 30 years of experience in the OP industry.

US dealer groups Independent Suppliers Group (ISG) and TriMega have launched e-content solution EpiContent. In collaboration with US wholesaler SP Richards (SPR) and online product content firm GfK Etilize, manufacturer partners of both dealer groups can now make all their product content easily available to dealers, regardless of national wholesaler support.

Independent dealers will have access to thousands of additional SKUs via two methods – requested from a dealer’s software provider that can be added to the current SP Richards search/content feed, or downloaded directly from Etilize for a fee.

According to ISG CEO Mike Gentile and TriMega President Mike Maggio, what was considered a key initiative five years ago – content that includes a manufacturer’s comprehensive product offering regardless of distribution channel – is even more crucial today. The pair said that EpiContent is an option that enables all their manufacturer partners the ability to provide best-in-class content for dealers’ websites regardless of whether the product is stocked at a national wholesaler.

SP Richards VP of E-Commerce and Marketing Services Paul Gatens added that SPR and Gfk Etilize have spent the past 12 years building out a powerful content and search network to benefit the independent dealer channel. In addition, working together with the buying groups to allow all manufacturers the opportunity to expand their content offering to include both direct sourced and wholesale supported items is the right thing for the channel.

Office Depot confirms Calkins departure

BIC opens East Africa facility BIC has inaugurated its new facility located in Nairobi, Kenya, which will serve the East Africa region. The stationery vendor’s aim in establishing its own factory is to implement a proximity strategy and expand its brand presence.

New role for MPS expert MacDonald Managed print services (MPS) industry expert West MacDonald has been named as VP of Business Development at technology services and business automation firm Tigerpaw Software.

MacDonald is one of North America’s most recognised MPS specialists.

Ex-Depot exec takes over at Michaels Former Office Depot senior executive Mark Cosby has been named as interim CEO at North America’s largest arts and crafts retailer Michaels. Retail veteran Cosby was President of Office Depot North America between 2014 and 2016.

Mercateo opens Swiss subsidiary German online procurement platform Mercateo has opened a fully-fledged subsidiary in Switzerland. The branch is located near Zurich and is being headed

by Country Manager Thomas Dinkel.

BIC Graphic NA appoints COO Promotional products vendor BIC Graphic North America has appointed Blair Hawley to the newly-created position of COO. He will lead all operations and support functions including procurement, inventory, supply chain and logistics.

April 2019

Steve Calkins, President of Office Depot’s Business Solutions Division (BSD), has left the company. In a short statement to OPI, Depot confirmed that Calkins left the reseller effective 21 March 2019 “to pursue other opportunities”, and that the company has initiated a search for an executive-level sales leader to oversee its contract sales business.

Calkins had been with Office Depot for more than 15 years, initially occupying several senior roles in the company’s legal department. He made the switch to BSD in 2013 before spending a year as the reseller’s Chief Legal Officer between 2016 and 2017. He was named as President of BSD in June 2017.

Clover appoints MPS expert Clover Imaging Group has appointed Dominique Moine as Director of Managed Print Services Professional Services, EMEA. He has spent 25 years in the imaging industry.

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NEWS

Analysis:

Exacompta on M&A charge European vendor Exacompta has made two acquisitions in the space of a few weeks

In mid-March, France-based Exacompta made an offer to acquire Europe’s largest lever arch file manufacturer Biella in an all-cash deal worth €33.5 million ($38 million). It is a transaction that will further consolidate the paper-based filing and organisation category in Europe and make Exacompta a market leader alongside ACCO Brands and Hamelin.

A public tender process for Biella’s shares will run until 12 April, with the option to extend this until 8 May if necessary. The tendering of at least 75% of Biella’s shares is required for the bid to be successful. Three of the company’s largest stockholders representing around 53% of the shares have already committed to backing the transaction.

Regulatory approvals are also required, but given the complementary market positions of the two firms, it would be a surprise if the deal was blocked on competition grounds. Exacompta Managing Director Charles Nusse told OPI that he was hopeful the purchase could close as soon as the end of April.

Providing some background to the acquisition, Nusse said that Exacompta had first been contacted by Biella last July, and that he had been impressed by the size and quality of the Swiss firm’s operations during a trip to Brügg the following month.

Therefore, developing the Exacompta brand in markets where Biella is strong is one of the goals. Biella has been successful in developing customised filing and document organisation products for large end-user customers – that is a capability that Exacompta could also tap into.

One question mark may be over the role that private label manufacturing plays in the enlarged Exacompta/Biella entity One question mark may be over the role that private label manufacturing plays in the enlarged Exacompta/Biella entity. The French firm is predominantly a branded manufacturer, while a significant portion of Biella’s sales, especially in Germany, is private label.

Whether there is any change in that remains to be seen: Nusse agreed that there is a place for private label, but said there has to be the right balance and that an over-reliance on own brand can be damaging to margins.

CHALLENGES AHEAD

SCALING UP

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The rationale for this acquisition is based on combining the scale, resources and the geographical market positions of the two manufacturers. Biella’s annual sales of CHF121 million ($121 million) come primarily from Germany, Switzerland and Eastern Europe, while Exacompta is part of the Exacompta Clairefontaine Group which has annual revenues of around €600 million, with almost two thirds of that achieved in France alone.

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Charles Nusse

Despite a number of acquisitions and cost-optimisation initiatives, Biella has struggled to keep pace with category declines. In 2018, its sales fell by 6% and it swung to a pre-tax loss of more than CHF14 million after achieving a profit of around CHF3 million in 2017. The 2018 EBITDA result was also in the red.

Exacompta will therefore face the challenge of inheriting a loss-making business, but it won’t be going in wielding an axe. Nusse stressed that this was very much a longer-term, strategic trade acquisition, not a financial/private equity type of deal. He said the two companies shared a philosophy of specialised production and that is what the focus will be on.

In the context of the office products market, and the filing/document storage category in particular, this transaction would appear to make sense.

In addition, it gives the French firm a foothold in markets where it has traditionally been weak.

The proposed deal marks a busy start to the year for Exacompta Clairefontaine on the M&A front. As well as Biella, the group recently acquired Eurowrap, a leading European player in the gift packaging category. The Denmark-based firm has a UK subsidiary, employs about 100 people, and has annual sales of just over €30 million.

NEWS

SP Richards launches MPS service

US wholesaler SP Richards has launched a managed print services (MPS) program for its independent dealers called PrintSmart. The program offers a turnkey solution enabling dealers to launch and manage MPS for their customers under two levels of involvement – PrintSmart and PrintSmart Lite.

The full-service version, PrintSmart, allows dealers to focus on sales while the comprehensive PrintSmart MPS controls customers’ environments through detailed assessments, fleet monitoring, automated supply replenishment and monthly reporting, break-fix solutions, and simplified billing.

PrintSmart Lite, meanwhile, provides a streamlined auto toner replenishment system. Communication is automated through the entire process of ordering, shipping and delivery, eliminating ‘rush’ orders, ordering errors and the need for supply inventory. Both offerings include a flexible online training program to help sales teams learn to sell and implement MPS contracts effectively.

BIRD FEED

@NemoGroupUK

This year’s @BOSS_Fed Leaders of the Future Conference brought together the brightest of the industry’s young talent within the magnificent Stationers’ Hall

Nominations open for NAOPA 2019 The North American Office Products Awards (NAOPA) 2019 are now open for entries and nominations. This year sees the NAOPA celebrating their tenth year.

Organised by OPI in conjunction with US wholesaler SP Richards (SPR), the awards will be presented during SPR’s annual Advantage Business Conference event, this time hosted in San Diego, California, from 7-10 August.

The 2019 categories are: • Best Business Product of the Year • Product Innovation of the Year • People’s Choice • Young Executive of the Year • Professional of the Year • Industry Achievement To enter or be nominated for NAOPA 2019, applicants do not have to be an SPR dealer or vendor, but must operate in North America. It is free to enter NAOPA – for more information on the entry procedures, judges, and categories, please visit www.opi.net/naopa2019.

www.opi.net

Lyreco strengthens innovation strategy

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European business supplies reseller Lyreco has partnered with global investment firm Partech.

The deal sees Lyreco move into the world of venture capital with a first investment in the Partech Entrepreneur III fund.

Focusing on seed investments, Partech Entrepreneur III gives Lyreco access to a significant volume of over 2,000 new start-ups per year in areas such as e-commerce, services, workplace automation, logistics, SaaS, social media, data, and virtual and/or augmented reality.

The partnership aims to roll out innovations at all levels of the business. Commenting on the deal, Lyreco CEO Hervé Milcent said the investment is fully aligned with the company’s transformation plan launched 18 months ago. As the only firm from the OP sector in the fund, the reseller said it is determined to deliver its expertise, operational experience and international footprint to start-ups selected for their outstanding growth potential, well-proven technologies and top-quality teams.

@McBusinessSup

Great day in #dublin today with @ ryan_nectere and @VOW_Ireland.

Thanks for supporting my selected charity Emerge suicide counselling with free stationery.

Also thanks to Emily and Richard @AlphaGrpOffice for the desks.

Appreciated #supportlocal #MCBusinessSupplies #lisburnhour

@paulmartinmagic

Fabulous night hosting the EOPA Awards in Amsterdam last night.

What a brilliant audience, with close up magic from the brilliant @leesmithmagic #Okurahotel #EOPA #OPI @OPInews #awards #yourmagicalhost #magicalhost #eventprofsuk #events

@WBMasonCo

Gold Star Delivery in the Golden City! #TuesdaysAreForTheTrucks #whobut #WBMason Follow us on Twitter @opinews

NEWS

Paperchase set to close stores

eaders brought e hin the ll

with @ Ireland.

uicide nery. ichard esks. l

EOPA night. with rilliant otel awards alhost

UK stationery retailer Paperchase could close up to 28 of its stores as it looks to renegotiate leases with its landlords. In January, it was reported that Paperchase was considering a company voluntary arrangement (CVA), a move that would give it some breathing room to try and reduce store rent costs amid falling sales and a credit insurance squeeze.

A CVA proposal is now being put forward under the supervision of KPMG. It proposes sales-based rents to be implemented on almost half of Paperchase’s 145 stores in the UK. A further 28 stores will have their rent reduced by 50% for three months, after which time there will either be a rent-free period or store closure. It is the future of these 28 stores which are most in doubt, and it is expected that at least five of them will close.

According to reports, a financial restructuring has been agreed with Paperchase’s lenders on condition that the CVA is approved.

OPI.NET POLL

European readers: is Brexit impacting your business?

7% — YES, POSITIVELY

37% — NO

56% — YES, NEGATIVELY

April 2019

olden eTrucks

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NEWS

Harry Dochelli (l) and Sandy Douglas (r) on stage at CORE Live

When Harry met Sandy

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The end of February saw the biennial Essendant CORE Live trade show hosted at the Gaylord Rockies Resort in Denver, Colorado. The highlight of the event was an audience Q&A session with Essendant President Harry Dochelli and Staples Inc CEO Sandy Douglas on stage together.

The pair answered the critical issues on the minds of the assembled dealers and vendors, many of them related to the acquisition of US wholesaler Essendant by Staples parent Sycamore Partners.

While it was inevitably somewhat of a charm offensive, the duo did manage to deliver a session that was not excessive in its promotion and not too lacking in content either. Douglas, who enjoyed a warm reception from the hundreds of attendees assembled, spoke very enthusiastically and sincerely about what he perceives are the many significant effects of the transaction, not just for Staples but for Essendant, its dealers and the vendor community (see a synopsis of Douglas’ speech on page 23 of our Big Interview).

Dochelli, who was first on stage to address the audience, stressed that the two companies still have a lot to learn about each other, but that the deal would provide several benefits for the wholesaler and its dealer channel, including new product categories, digital innovations, lower cost of goods and an enhanced supply chain.

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SCALING UP He said that he was excited to have access to a shared services layer which can help the organisation improve its offerings to customers. In addition, the size and scale of the business gives

him the leverage to bring new concepts, ideas and offerings to the marketplace that Essendant wouldn’t have had on a standalone basis.

Delivering on these benefits and creating some quick wins will go a long way towards allaying any dealer fears. That should at least be somewhat less challenging now that neither organisation has a quarterly responsibility to Wall Street.

Meanwhile, Douglas said he believed there is huge transformational growth in the people-assisted, digitally-oriented, customer-obsessed, office solution/janitorial products/business services space. Addressing the burning question of the ‘firewall’, he explained that it is a set of digital, physical and policy practices, installed in the two companies to ensure people are allowed to see the information they need and only that, as laid out under terms set by the Federal Trade Commission.

The pair answered the critical issues on the minds of the assembled dealers and vendors Other highlights of CORE Live 2019 included a video presentation, during which Staples Chief Merchandising Officer Peter Scala sought to reassure dealers that investments would be made to help drive growth and improve the Essendant portfolio brand. In addition, Essendant Senior Director of Marketing Kevin Casey presented findings from the company’s research into the B2B customer base and their purchasing habits.

THE EUROPEAN FORUM 2019 The 8th annual European Forum for senior executives from the business supplies industry and associated sectors

THE PROGRAMME

WHY SHOULD I ATTEND?

The European Forum will feature focused presentations, in-depth discussions and the best networking in the industry.

It is designed to find answers and solutions to some of the most pressing challenges your business may experience.

Some of the topics to be discussed and debated include:

TO KEEP UP TO DATE with the latest business supplies industry trends and news

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Strategic transformation and execution

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Profit from the core: A framework for growth

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How brands and retailers need to reinvent their collaboration

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B2B sales channel disruption

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The changing landscape of wholesaling

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Trade credit

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Making digital transformation happen

TO UNDERSTAND the impact of new technology, the fourth industrial revolution and how your peers prepare their businesses TO ‘SHARPEN THE SAW’ – Stephen Covey’s 7th habit of highly effective people TO SHARE frankly and openly ideas, challenges and best practices with like-minded executives.

Discover how they are succeeding TO GAIN MORE C-LEVEL experience compared with broad audience conferences. Profit from networking with the most successful, influential people and businesses

DON’T MISS THIS OPPORTUNITY TO MAKE YOUR BUSINESS BETTER!

“

Full programme at www.opi.net/ef2019

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, thought-provoking presentations that provided me with some tangible takeaways for my business to work on.

”

For more information and to book, visit: www.opi.net/ef2019 or contact steve.hilleard@opi.net

5 – 7 JUNE

THE WESTIN GRAND BERLIN, GERMANY

EUROPEAN

Forum 2019

NEWS

Office Outlet placed in administration

Office Outlet, the former UK retail operation of Staples, has gone into administration putting around 1,200 jobs at risk. The announcement came as no surprise as rumours began circulating in the weeks prior that the retailer was struggling to pay its store rents.

The decision came just a few months after Office Outlet launched a company voluntary arrangement (CVA) to try and reduce its cost structure. The CVA included a three-year rent-free period for 20 of the remaining 94 stores, but even this appears not to have been enough, with reports of the retailer trading under budget.

Staples’ UK retail arm was acquired by private equity firm Hilco at the end of 2016 and was rebranded to Office Outlet a few months later. Chris Yates, who steered the turnaround programme under Hilco, then led a management buyout in 2018.

IN BRIEF Newell Brands on hunt for new CEO Newell Brands has commenced a search process to find the company’s next CEO. Current CEO and board member Michael Polk is set to retire as head of the consumer goods firm at the end of Q2. He has been at the helm since 2011, and the company said an agreement had been made between the board and Polk that now was the right time for a management transition.

Staedtler appoints new MD Writing instruments vendor Staedtler has named Karl-Heinz Raue as the new Managing Director of its German affiliate. He began working in the office products and stationery industries in 1982 and joins from Faber-Castell, where he spent the past 20 years as Head of Business Development.

Staples takes coworking in-house Staples Inc is dissolving its relationship with coworking operator Workbar. The reseller is replacing Workbar with its new brand, Staples Studio, at its current coworking spaces located in the Brighton, Danvers and Norwood retail stores in the Boston (MA) area.

BOSS names new CEO

UK office products trade association BOSS has promoted Amy Hutchinson to the role of CEO to succeed Philip Lawson, who recently announced that he would be taking early retirement to spend more time with his family.

Hutchinson is currently Marketing Director at the British Printing Industries Federation (BPIF) which has close ties with BOSS. As such, she is already well known to many BOSS members through events such as the annual awards and the Leaders of the Future Conference, and all of BOSS’s main membership engagement activities.

She will now start a process of working with Lawson to transfer into her new role before formally taking on the job full time after the BPIF’s Members’ Day on 9 July.

Weekly deliveries for Amazon Business Amazon Business has launched a delivery service called Amazon Day for Business for its Business Prime customers in the US. Members who sign up for this option can choose a recurring day of the week to be their delivery day.

Office Choice expands merchandising team Australian dealer group Office Choice has appointed David Williamson to the position of National Merchandise Manager. He will oversee the group’s merchandise department.

Nemo focuses on cybersecurity UK dealer group Nemo has announced its aim to help members achieve accreditation against the government-backed Cyber Essentials scheme for cybersecurity. Nemo is offering to work with its members to assess their organisation, address areas of non-compliance and carry out external testing on systems.

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New name for Plantronics A year after acquiring video conferencing firm Polycom, communications vendor Plantronics is to rebrand as Poly.

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Mercateo’s Unite partners with 2bits Unite, the B2B networking system launched

by German online procurement platform Mercateo, has partnered with 2bits, a SAP-based purchasing company. While Unite directly connects suppliers with buyers, 2bits simplifies the procurement process.

Office Depot’s French subsidiary has a new Managing Director. Succeeding Hervé Gilg – who left the reseller after two years – is Guillaume de Feydeau, an experienced C-suite executive who was a former COO of French public sector purchasing organisation UGAP and CEO of Mediterranean ferry company SNCM. More recently, de Feydeau was CFO at London-based asset management firm Chenavari Investment Managers.

Gilg apparently stepped down because his objectives had been achieved now that Office Depot France is back on a growth trajectory.

Maped Helix commits to plastic reduction Stationery vendor Maped Helix has pledged to reduce the utilisation of single-use plastic in its packaging. The company’s commitment includes removing single-use plastic from at least 50% of its products by 2021.

Maped Helix’s top-selling product, the Oxford Maths Set, is already packaged in a plastic-free sleeve, which the company is planning to roll out to the rest of the Oxford products by next year, including the new Oxford pen range.

According to Maped Helix UK Managing Director Gray Richmond, while many of its office products and colouring packs are also in 100% cardboard packaging, it’s a trickier task for multipack stationery sets, erasers and pencil sharpeners which are currently in blister and clamshell packaging for display purposes.

Richmond advocates for the whole industry to embrace change in the way products are packaged. He said that over many years, the manufacturing infrastructure has been developed in such a way that it is focused towards using plastic in packaging.

Emerald creates dealer accreditation US office products manufacturer Emerald Brand has launched the Emerald Sustainability Accreditation (ESA) programme. The vendor’s licensed dealers can take the programme to gain the accreditation, which allows them to present the brand’s newest sustainable material technology to their customers.

It also provides access to ongoing sustainability education, updates on environmental law and regulations, and allows dealers to participate in research and new product development.

3M realigns business divisions

Top 100 new entry 2019: Sarah Hunter, Managing Director, Officeworks

Sarah Hunter took over as Managing Director of Australian office supplies retailer Officeworks on 1 January 2019. She joined from parent company Wesfarmers’ subsidiary Coles, where she had worked since 2010.

During her time at Coles, Hunter held several positions, including General Manager of Workplace Strategy and General Manager of Finance for Coles Express. Prior to this, she worked in the UK in a number of senior commercial positions in banking and airports.

An experienced retailer and business professional, at Officeworks she oversees almost 170 retail stores nationally and over 7,000 employees. H1 sales for the company until the end of December 2018 were A$1.1 billion (US$780 million), a year-on-year growth of 8.2%.

Under Hunter’s watch, Officeworks has recently acquired technology services firm Geeks2U which she said is part of the company’s strategy to expand its offer to better meet customers’ needs and complement its existing products. In addition, the company is set to open what it says will be the largest office products store in the world in Mentone, Victoria.

The 6,500 sq m premises will be four times the size of Officeworks’ average store.

Look out for our Big Interview with Hunter in a forthcoming issue of OPI.

April 2019

3M has realigned the company to comprise four rather than five business divisions. The newly categorised divisions are: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer.

The combined Safety and Industrial segment encompasses personal safety, adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket and roofing granules. The Consumer business now consists of home improvement, stationery and office supplies, home care, and consumer health care.

3M said the new structure reflects its four key priorities of portfolio, innovation, transformation, and people and culture, while positioning the company for long-term growth.

WHO’S WHO IN OP

NEWS

New head of Office Depot France

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BIG INTERVIEW

The new Staples Inc

SILENCING

THE SCEPTICS

When Staples Inc first made a play for Essendant, followed by buying a number of independent dealers, it signalled the beginning of a new era in the US business supplies sector. CEO Sandy Douglas sits at the very heart of all the upheaval – positive disruption, as he’s keen to point out

www.opi.net

M

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uch has been written about Staples Inc since it was bought by Sycamore Partners, a deal that was first announced in June 2017 and finalised a few months later. Hot on the heels of the news that then CEO Shira Goodman had left the now private equity-held company, Staples announced the appointment of her successor, Sandy Douglas, who started in the role in April 2018.

Douglas wasted no time in showing the US office supplies sector he meant business and that Staples needed a serious shake-up in order to future-proof itself. Just six weeks into the job, he and his partners at Sycamore threw a huge kink in the works of the proposed merger of the two main US OP wholesalers, Essendant and SP Richards, with Staples’ seemingly hostile takeover bid of Essendant.

A couple of weeks later, in early June last year, he followed that bombshell with the announcement of Staples’ dealer partnership strategy, swiftly confirmed by news that it had just bought one of the largest independents in the US, HiTouch Business Services.

More acquisitions followed, as did ongoing speculation and discussions about the outcome of the Essendant takeover. At the beginning of 2019, the $482.7 million deal was approved by the Federal Trade Commission, albeit with a number of conditions.

A well-known turnaround and transformation expert, Douglas has always emphasised the win-win elements of the Essendant deal for all concerned.

Needless to say, not everyone shares his enthusiasm and conviction, but all the raised eyebrows and the initial incredulity at what was unfolding have now seemingly mellowed to a slightly more stoical wait-and-see attitude. That was certainly the takeaway for OPI’s CEO Steve Hilleard when he met Douglas – and many Essendant dealers – at the CORE Live event in Denver, Colorado, in late February, just a few weeks after the dust had settled on the deal. Committed and passionate, Douglas outlines that disruption was necessary and how it can benefit everybody.

OPI: Let’s start with an overview of your career.

Sandy Douglas: That shouldn’t take long. As you know, I spent 30 years at Coca-Cola, the last 12 as President of the company’s North American division. Prior to that, I had spent five years at Proctor & Gamble in a number of sales positions.

OPI: You did a lot of transformative work at Coca-Cola which seems to relate to what you’re doing now. Did Sycamore identify the opportunities and particularly a potential Essendant acquisition and wanted someone who had done this type of thing before, or were you parachuted in and came up with this idea of buying the wholesaler yourself?

SD: Let’s just say we found each other. As far back as August 2015, it was clear to me that I would be leaving Coke, but I was in the middle of the transformation of the company’s US business with all the refranchising that we did, so I gave the firm two and a half years’ notice in order to be able to finish the work I started.

As I got closer to the end date, I began to think about what I was going to do next. I was looking for three things: first, a business that had a growth thesis; second, one where the governance

BIG INTERVIEW Sandy Douglas

It’s simpler to concentrate on delivery when you’re not at the same time worrying about 1,300 stores and how to improve them

OPI: I wouldn’t say Staples ticked the growth box at the time...

OPI: Why was NAD identified as the best part of a bad bunch?

SD: Well, I wouldn’t put it like that. What I would say is that Staples as a combined company was barely operable. Sycamore’s vision is to have three sustainable businesses. The separation in the US – retail versus delivery and digital – was simply a recognition of the challenges that existed. The mission of these three businesses including Canada is different, and it’s simpler to concentrate on delivery when you’re not at the same time worrying about 1,300 stores and how to improve them.

All three entities are connected, and the delivery business provides services to the stores. It means that the scale has remained, but the distinct mission for each is separate so that executives can focus on what we’re trying to accomplish. And the valuation of delivery companies is higher than those in retail. As such, the different financial structures make smart

April 2019

relationships were aligned with my values; and third, I needed to be confident that I could do it.

I looked at more than 20 different situations and in particular one that did not come through a traditional search firm contact – Sycamore.

The Chairman of the board of the three Staples companies – Canada, US Retail and North American Delivery (NAD) – is John Lederer. I knew John, a former retail CEO, because he’d been a customer of mine. He called me and told me about the job. We spent a fair amount of time talking and establishing that we were indeed a good fit for each other. That’s how it happened.

SD: It didn’t. Sycamore’s vision for the NAD business was that of a growth turnaround. Figuring out how to achieve that is where my whole energy has been directed.

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Sandy Douglas BIG INTERVIEW

sense. Canada being separate also makes sense, because it’s a different country.

OPI: In many industries, the buzzword for this current decade has been omnichannel. It was also bandied about by Staples prior to the acquisition by Sycamore. Is your omnichannel approach now dead and buried?

SD: No, but there’s a slightly different twist to it now. We are designing ourselves around how customers want to buy and how they want to have things delivered. What that means in reality is that I don’t think of it as omnichannel, I just think of it as customers’ wants and needs.

www.opi.net

OPI: Let’s rewind a little again. When you stepped through the door at Staples in the spring of last year, what did you find?

SD: A couple of things struck me right away.

Number one was a feeling that the company had a lot of latent vibrancy. It was an organisation full of people frustrated with their performance, but proud of what they believed Staples had been and could be again. There was also a lot of openness for change.

We’ve spent some time now on working on our new plan for growth, and we just closed out a very good first year. We’ve created a strategy that involves products, services and new capabilities, which is in the process of being launched. One component of the strategy, of course, was the Essendant partnership.

Essendant serves a market segment where Staples struggles to be successful. I saw that immediately after we acquired HiTouch, which led us to our conviction for the Essendant acquisition. We think the combination of our customer-driven strategy, the capabilities that we’re putting in place at Staples, and the way the Essendant community can benefit, will make the combined Staples-Essendant partnership a strong competitive force in the office solutions area. That’s our belief and we think it will work.

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OPI: No doubt the transition to private equity included a certain amount of rationalisation and streamlining. Can you shed any light on what you’ve done in that regard?

SD: Well, I found a great deal of cost when I joined Staples. A Coke bottler once taught me that cost can really be broken into two parts. The first one is capability – the cost that the customer is willing to pay for; the second one is waste.

Part of the formula that I learned and built into the Coca-Cola turnaround in the US is being applied here. In the first instance, it’s about effectively understanding and making the customer the total focus of the organisation; next is doing the good, honest work to figure out which costs go into the capability basket and which go into the waste basket. In other words, maximising capabilities and doing everything possible to eliminate waste.

Over the past year, we’ve removed some waste.

There’s plenty left to do, but in parallel we’re building key customer-relevant capabilities.

OPI: You just mentioned HiTouch and how through that acquisition you had the opportunity to see the relationships that independents have with customers – although HiTouch admittedly is quite a large and perhaps not that typical dealer. Was that the moment you realised Staples would never be able to tap into that customer base with its existing strategy?

SD: Definitely. Saying that, nothing is ever 100% or 0%, but there was certainly a very clear pattern with both HiTouch customers and how John Frisk, who leads that company, saw his organisation in the context of serving their particular market segment. It was very different from the way Staples was doing things.

You have a choice of approach, of course: you can try to be more things to more people, or you can try to be better at what you do in a focused manner. I believe generally the second choice is the better one. We’re now working on making Staples better at what it does, and the dealer segment jumped out at us as a second opportunity. We don’t just want to be an acquirer, but really work with dealers and help them succeed. Again, it’s a bit related to what I did at Coke and the many local bottlers that we ended up working with very closely.

OPI: When you came out last year with your ‘Powered by Staples’ strategy, did anybody at Boston HQ say to you: “Sandy, do you realise how this is going to go down? The whole industry is going to think we’re absolutely mad.” That is certainly the feedback we received at the time.

SD: Yes, I’ve learned that trite phrases usually come back to bite you. The spirit was right, but the notion that we would be the empowering force and how that idea was received was not our best effort.

I’ve had a lot of meetings here at CORE Live already and the overall consensus that I’ve so far

OPI: You certainly got everybody’s attention with that slogan including, of course, OPI’s.

SD: Who said that all publicity is good publicity? In my experience, it’s not always true. But you have to learn from your mistakes.

OPI: So where exactly is your focus now?

Is it on outright dealer acquisitions? On franchising? Or taking an investment in dealers through Essendant? Is there a master plan that we haven’t heard about yet?

SD: There isn’t. The best way for me to describe our strategy is that we want to be the best Staples we can be in order to create value for our customers in a unique and differentiated way. My conviction is that the independent dealer community (IDC) is a vibrant and powerfully-segmented part of our industry. Our strategy is to help the IDC be as successful as possible by providing to Essendant the resources, supply chain support and products of Staples.

We can do that in a variety of ways, essentially depending on the dealers themselves and how they want to set the road map.

Where independents for whatever reason decide they want to change their capital structure, we’re certainly interested. In my opinion though, family businesses are sold, not bought. So we’re here if they want to talk, but other than that, we want to help them be successful in their own right for as long as they want to be in business.

From an acquisitions standpoint, we’re looking at it from a complementary and adjacent point of view.

Our customers might be looking for something that we believe is relevant and growing, but may not be able to do on our own at the moment. The recent DEX Imaging acquisition is a good example of that.

Again, I prefer the term partnership here, because the plan is to work together. We would like to build a future with DEX and the two business leaders who run that company.

OPI: Is the partnership between Staples and DEX or also Essendant dealers and DEX? SD: All I can say for now is to stay tuned.

OPI: Vendors are always concerned about potential change in the industry. A number of them heard you speak today, but for those that were not here, what would be your message?

When you’re around disruptive change, it’s easy to figure out what the flaws could be, but you forget pretty quickly where things were and what the flaws were SD: Having been on the manufacturing side for most of my career, I would say that Staples and Staples/Essendant intend to be vibrant growth players in the industry. As such, partnering with us would be a good strategy and hopefully that is what manufacturers will endeavour to do.

The vendor community can bring considerable value to us. What we’re looking for from them are high levels of cost competitiveness, unique products and good capabilities. I’ve personally sat in hundreds of meetings like this and often asked myself: do I really believe this is a customer that has a bright future, and can I trust working with it? Hopefully all vendors will say ‘yes’ to both questions regarding Staples and Staples-Essendant.

OPI: You made an interesting comment this morning when you said: “What would have happened without this Staples/Essendant development?”

SD: My point was that whenever you’re around disruptive change, it’s easy to figure out what the flaws could be, but you forget pretty quickly where things were and what the flaws were. And we occasionally remind ourselves at Staples just where we were – not because we want to dwell on it, but because we want to commit ourselves to being better.

The situation at Essendant was not particularly healthy either and there was agitation. What we have to do at both companies is to recognise that while we were challenged, we are participating in an industry that itself is healthy and growing.

April 2019

OPI: The transaction hasn’t closed yet anyway.

SD: No, it hasn’t. Dan Doyle Sr and Dan Doyle Jr are really good at what they do. It’s an important part of the future landscape of the industry. We fully expect to learn from them and capitalise on their growth, and hopefully they’ll find all kinds of innovative ways to do the same through our own infrastructure and potentially through the Essendant community as well. It’s all a little conceptual at this point.

OPI: How supportive is Sycamore in terms of you continuing this route of acquisition, whether it be dealers or in slightly adjacent areas?

SD: Sycamore is very supportive in terms of generating investments that create a great return.

We’re about a year into the marriage, after a period of time when we checked each other out, and my experience has been very positive. I’ve liked working with John, whom I’ve known for 20 years, and I like working with the folks at Sycamore, so we’re off to a great start.

The firm is here to help us be successful. We, in turn, are very bullish about Staples as a business, that’s why we’re doing what we’re doing.

BIG INTERVIEW Sandy Douglas

come away with is that dealers want some key things. We can offer them those and they can then decide which ones to draw from. What’s important is that we – and they – are convinced there’s a significant opportunity for us to help both Essendant and its customers. How we package that offering and whether we call it ‘Powered by Staples’ or something else in the long term is still up for debate.

21

Sandy Douglas BIG INTERVIEW

OPI: It doesn’t feel like it.

SD: That’s because a whole lot of us are not. The challenge is to be bold and listen to customers.

I don’t believe they are only asking for login IDs and passwords. They are asking for a lot of things.

We’ve got to figure out how to meet their needs, what our value proposition is going to be and how it supports the different relationships we have in our overall structure. Vendors will see that they have a great opportunity to grow with us if they choose to go for it.

OPI: One word that hasn’t come up yet is the ‘A’ word. What’s your take on Amazon and how Staples and the independent reseller community deal with that beast?

SD: I never talk about competitors, that’s just my work philosophy. The simplest thing anybody can say about Amazon is that you’ve got to have immense respect for this operator.

Never has there been a more important application of the classic marketing question, which is: “How are you going to be different?”

For us, our question is: “Is there a relevant space in the industry among our customer base for differentiation?” The answer is “absolutely”.

Amazon is an amazing company and one to be reckoned with – I don’t think anybody would miss that point. The challenge for Staples and the IDC is to be different, better and more special than other options for our customers.

www.opi.net

OPI: You have to find a way to differentiate your service and dealers have to find a way to stand out – is that what you’re saying?

SD: I believe so. We have all the tools and I think coming together with Essendant will help resolve some of the obstacles we had around scale, cost and capabilities – at least to the extent that we can bring all of those to dealers that are interested.

Their positioning will be strengthened.

That was certainly my experience at Coke.

Those little family bottlers flourished once we helped them reduce their costs, and scale and streamline their supply chains and IT systems. I believe dealers will flourish in the same way – the good ones anyhow.

I’m hoping that between us there’s a meaningful segment of customers that is looking for various forms of human interaction, whether it’s through sales or service, delivery or product creation, and whether it’s through Staples or Essendant. We want to be good at all of it, and together we can be.

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OPI: Thinking about feet on the street: will there be an inclination to reduce the number of sales people that you have because there’s no incentive to invest too much in sales channels?

SD: It goes back to what I said earlier about cost, capability and waste. We’re in the early stages of that, but it’s a real model, not just some glib way of talking about cost reduction.

The analogy I would use from Coke is that equity-based advertising drives the beverage business. You can come up with all kinds of fancy ways to cut your advertising budget and say it’s

I’m very much a ‘commit to the mission’ kind of person, as you can see from my time at Coke because you’re smarter or you’re going where the consumer is, etc. But show me a consumer products firm that’s cutting its advertising budget and I’m convinced I don’t want to own its stock.

There are aspects in our business that are similar to that. I’m still learning about sales in terms of digital or human interaction. But sales people, product development, customer engagement and delivery service are four components that have immediate value. How to compose the exact segmentation of all of those is the work to be done, but we now have a lot of learning labs, so hopefully we’ll figure it out and be distinctive over time.

OPI: To wrap up, you’ve come in and thrown a gigantic hand grenade into the US industry.

With all due respect, we’ve seen people come in before and try to ‘shake things up’. Maybe not on quite such a grand scale, but it’s often short-lived before they vanish off to the next big idea. Your career history suggests that you don’t flit from job to job.

SD: I don’t. I’m here at the pleasure of my owners and not a day longer. But I am very much a ‘commit to the mission’ kind of person, as you can see from my time at Coke. And I’m committed now and won’t let anybody down.

There are 17,000 Staples staff, 6,000 Essendant staff, and a whole lot more people that we collectively serve in this industry. As long as I’m the right person to be playing the role that’s asked of me, I’m going to play it. I think that what we’re proposing is doable and I’m super excited about it.

During the opening session of CORE Live and after Essendant President Harry Dochelli took to the stage first, Sandy Douglas addressed a congregation of 500 customers in an impassioned speech. He tried to reassure, build trust as well as engender enthusiasm for just how good this new relationship between vendors, dealers, Essendant and, of course, Staples could be. Here’s a synopsis...

“W

good hands. Essendant and Staples have come together because it was thought by Essendant that the challenge was real; the challenge to many of its customers was real. The future was very foggy. It is at times like that when disruption is possible.

Not all disruption is good, but Harry and I have spent a lot of time talking about this and we are excited. We are just in our third week of this merger and a lot of people think that for months beforehand we were able to just sit and plan, but we couldn’t. In the eyes of the government we were to be kept very far apart and we had to have rules worked out for how we could collaborate. But when the deal was passed, we got busy – busy working on ideas, programmes, initiatives and synergies.

Not all disruption is good, but Harry and I have spent a lot of time talking about this and we are excited Can we possibly imagine a scenario of family and local businesses supported with an incredibly strong back-end alongside a national player like Staples? Like I said, the idea would simply be that when the winner’s circle party starts, one of us is always in it and the rest of us are close by.

The truth is, there won’t be room for everybody.

This industry is going to shake out somewhat.

What is important to us is that we target the people in this room who we serve and the people back in Boston who I serve – we want to make sure we are part of that winner’s circle. One of the things that has changed at Nascar is how they have used combined capabilities to make cars faster and racing drivers more successful, while sponsors are getting a good return on their investment.”

For more details on CORE Live, see page 12.

April 2019

e are creating a very unique environment, a new structure, a disruption in order to help everyone in this room and everyone in my company be more successful because we came together.

We have to do that in a very careful way, because a whole lot of the energy we are going to create together is fuelled by trust – trust that what we say is what we are going to do, and trust that what we say we will not do, we will in fact not do. Only with that combination of integrity can we actually work together to create a disruptive, powerful and new successful future for all the businesses represented in this room, whether they be Essendant customers, suppliers or anybody else in this ecosystem.

I was trying to think of a relevant analogy [that might explain where I’m coming from]. I spent many years at Coca-Cola working with Nascar.

In the old days, Nascar was all about a single team owner, with a sponsor and a car, and all the teams operated against each other. Then somebody came up with the idea of multiple car teams, where they could share engine manufacturing, work on technical training and capability building. At the end of the day, when it came to the race, they tried like hell to win it, but they were able to scale certain things. They ultimately became the great race teams that have gone on to dominate the sport for 20 years or so.

Effectively, what we are trying to do here is to have our own version of that. We are trying to leverage our scale so that we can buy better, curate better and develop systems together, whether they be front-end selling or back-end distribution systems. And yes, we may occasionally be coming down the home stretch, just two cars fighting it out to win, but what a great thing it would be if our team was always in the winner’s circle, always in the top three, four or five, metaphorically-speaking.

Think about that vision versus the current vision – business for many of us hasn’t been very good, with declining or flat sales, costs coming up and profits challenged. It ultimately challenges our very future.

Let’s speak plainly. A year and a half ago, Staples was sold for cents on the dollar, its public shareholders happy to sell it to private shareholders because for whatever reason they didn’t believe that their investment was in

BIG INTERVIEW Sandy Douglas

A question of trust

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HOT TOPIC

Dealer groups:

WHAT NEXT?

Dealer groups have become an integral part of our industry landscape in many parts of the world. But recent events in the US have heightened the perennial question: is it time for further consolidation in this space?

Heike Dieckmann finds out…

I

n mid-January 2019, the three leading office products dealer groups in the US signed a letter of intent to merge their organisations into a single entity. For the past couple of months, a steering committee comprising representatives of Independent Suppliers Group (ISG), Pinnacle Affiliates and TriMega Purchasing Association have been thrashing out the details of what this new entity could look like, what it would be called, how it could operate and, importantly, who would lead it.

www.opi.net

Consolidation in the US dealer group space has been talked about for many years, with both current leaders of the two biggest groups in terms of member numbers – ISG and TriMega – frequently reiterating that more and better collaboration between the groups is absolutely vital. And, of course, some cooperation has already been going on – the EPIC show was one of them, for example, and most recently, the two groups launched e-content solution EpiContent (see News, page 7).

But what’s being discussed right now goes way beyond joint initiatives and events. The prospect of over 1,000 dealers coming together under one dealer group roof, with the benefits and power that this could potentially bring, is tantalising. Not all may agree with that notion, admittedly, but let’s leave the speculation and analysis for when there are actually some facts on the table. For now, the independent dealer community in the US and the business supplies industry at large are watching with interest as talks are drilling down into the finer details, with an update expected before this issue of OPI hits readers’ desks.

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THE BIGGER PICTURE All the action in the US has raised again the perennial debate around the validity of dealer groups on a global basis. The necessity of groups per se is not called into question – few would argue that there is a need for their existence: aside

from the obvious increased purchasing power and access to a wide range of products, they provide programmes and services that many dealers can’t create themselves. And even if they can, a group can do it in a more cost-effective manner because it’s aggregating resources.

The question is more to do with just how many groups are needed in any given market to provide these services and give dealers more visibility. OPI canvassed opinion from a wide range of groups around the globe. The upshot? Considerable consolidation has already happened in many markets, but there’s likely plenty more to come.

Three separate entities and support structures [in Australia] will simply not be sustainable – or necessary – going forward CONSOLIDATION DOWN UNDER One of the regions of the world where more consolidation is on the cards – ultimately, not imminently – is Australia. The country currently has three dealer groups – Melbourne-based Office Choice, and Office Brands and ASA Australia in Sydney. The former two are by far the largest in terms of membership, serving between them about 350 dealers. By comparison, ASA's membership is in the high single, low double-digit range, but with those members typically having considerably higher revenues individually. And while Office Choice and Office Brands are in make-up and remit not dissimilar from each other, ASA can best be described as a small, family-run niche operator.

So is there enough room for three groups in a market with a population of 26 million? Not long-term, says Office Choice CEO Brad O’Brien.

“I’ve always had the view from when I first started at Office Choice in 2012 that consolidation

Companies consolidate in times of crisis – there’s no crisis in our market and no crisis at Soennecken “Take a look at the Australian market versus the US: if the three US groups pulled off their intended merger, they would be bringing together in excess of 1,000 dealers. That’s in a country with a population of 327 million, over 300 million more than we have here and we’re talking about 350 dealers combined in all groups. Three separate entities and support structures will simply not be sustainable – or necessary – going forward.”

O’Brien’s counterpart Gavin Ward at Office Brands agrees that it will be incredibly difficult to sustain three groups in the long term, but also highlights the fact that the remit and scope of the buying groups in Australia is somewhat different to those in the US or indeed many other countries.

This is partly to do with the role that wholesalers play in the market.

Currently, only about 15% of volume from dealers goes through wholesalers such as GNS Wholesale Stationers (see Big Interview, OPI February, page 18). This compares to a percentage as high as 75-80% in the US and around 50% in the UK. It means, says Ward, that the services dealers get from the wholesalers in those markets are simply not available to independents in Australia.

“Dealers in the US, I believe, typically get their data from the wholesalers and a lot of the supply chain is done by them too,” he explains. “Here, there is no overall source of rich data and supply, pricing and computer systems. Dealer groups have their own bespoke solutions and systems for everything, be that the ERP solution, e-commerce platform or Salesforce Marketing Cloud, and they are often tailored quite individually. As a result, the services we provide are probably more advanced and detailed, and our cost to support our dealer networks are higher than in several other markets. Consolidating all those activities would potentially be highly beneficial – but also a huge undertaking.”

Gavin Ward, Office Brands

Craig Noyle, Inovocom

Dr Benedikt Erdmann, Soennecken

April 2019

MEMBER AFFILIATIONS Another factor that plays a huge role in the if and how of dealer group consolidation is the issue of ‘fit’. What kind of an organisation do dealers want to be a part of, what are they looking for in terms of branding, services and solutions?

Brad O’Brien, Office Choice

Aside from franchise operation PNA which works in a somewhat different way, South Africa has two dealer groups, Inovocom and Office National. While from the outset, the two groups look quite similar, co-founder and Director of Inovocom Craig Noyle says that they are indeed totally different in terms of outlook and strategy.

His group, for example, operates without a common brand identity while Office National does the opposite. “It would be unlikely at this stage to see a merger between the dealer groups in South Africa. To my knowledge, there have never been any discussions along this thought process. Of course, there would be efficiencies if we were one entity, but I believe this would also bring about losses of membership due to group affiliations and ethos, which could then possibly result in a splinter group emerging.”

He adds: “The South African office products industry follows the local economy fairly closely and this is showing zero to little growth. As such, we are convinced that our sector would not sustain another group in the country, firstly because suppliers could not fund another group – and most of the funding comes from suppliers – and secondly because there are not enough stationers in the market to make a third option viable. The only way another entity could emerge is through the cannibalisation of the existing groups and that is unlikely too.”

Noyle’s comment about the sector being closely aligned to the economy echoes the sentiments of an operator in a completely different market – Germany. The country, in OP terms, is still highly fragmented, with dealers large and small battling with the global operators and often doing very well indeed. Many, but by no means all of them, are organised in two large dealer groups, Büroring and Soennecken. Unlike in the markets in the southern hemisphere but similar to operators in several other countries such as Quantore in the Netherlands or Novexco in Canada, they have sizeable wholesale operations that tie their dealer members to the groups from a logistics as well as service and solutions point of view.

Both cooperatives have had challenges over the years, Soennecken in particular having come back from the brink on a number of occasions. Way back in 2002, it merged with fellow group Büro Aktuell. Under the leadership of Dr Benedikt Erdmann, it has defied many critics and coped with the loss of two of the country’s largest independent dealers – Plate and Kaut-Bullinger – by doing what it does very well, consistently evolving and adding new facets to the organisation. Consolidation, for Erdmann, is not necessary and absolutely not on the cards. As he quite simply puts it: “Companies consolidate in times of crisis – there’s no crisis in our market and no crisis at Soennecken.”

Confident and brave words in an industry that is rattled by change. Looking at neighbouring France – quite different in its industry make-up – the market has already consolidated to a large extent, and has become more of a hybrid mix that combine wholesale, retail and B2B.

HOT TOPIC Dealer Group Consolidation

and collaboration across the dealer groups would make enormous sense because of the amount of duplication and replication of services and infrastructure that occurs. It's a well-known fact that we’ve been in various partnerships over the years, including BPGI and OPANZ, but for a myriad of reasons we’ve never been able to progress beyond concept in terms of working together more closely with the other groups. But there absolutely could and should be consolidation in Australia, perhaps more so than anywhere else.

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Dealer Group Consolidation HOT TOPIC

Wholesaler ADVEO owns reseller brands Plein Ciel and Buro+ as well as independent dealer franchise network Calipage while fellow Spanish wholesaler Comercial del Sur’s Comlandi has a host of newsagent-type members, including those affiliated to its Rouge Papier network. Then there’s French cooperative Groupe Alkor, which owns three different entities that dealers can sign up to: Majuscule, Burolike and IOBuro.

For the moment, the French market appears relatively stable. But there’s the question mark over ADVEO France and what will happen to it.

Feasibly, either Alkor or Comlandi could snap up this operator wholly or in part, to execute on their growth strategy.

Cautious stability is also the case in the Nordics where consolidation swept the sector many years ago when the big boxes came in and took considerable market share. Independents and by default several dealer groups in Sweden, for example, fell by the wayside back then, leaving standing strong for now cooperative RKV which in 2015 added former group NioFem into its fold. The group is now the country’s largest entity of office supply dealers with approximately 25 members.

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CROWDED MARKET Last, but most certainly not least, is the UK where dealer group concentration is as dense as anywhere in the world. There has, of course, been plenty of consolidation in the market already in the country. From about 14 groups in the mid-1990s (anyone remember OSTA, Momenta or, more recently, XPD, for instance?), the current total comes to about seven, not counting slightly adjacent bodies that cannot be classed as dealer groups, including Nectere and Office Power.

Some are closely aligned to a specific wholesaler while others are wholesaler-agnostic.

Office Friendly, for example, has long been linked to VOW. With regards to the future, as Managing Director Julie Hawley says, it’s all about relevancy.

This will go some way towards determining the groups that stay and those that will ultimately disappear, whether it's through being folded into other ones or simply by ceasing to exist.

The consensus is certainly that there’s room for a tightening of the current status quo, with some seemingly good fits and some obvious clashes. From the outset, commercially-run groups like Superstat or Office Club might not be complementary with cooperatives such as Nemo, Integra Business Solutions or Office Friendly.

The latter is a group that has always been strong on the marketing side, certainly since Hawley has

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Julie Hawley, Office Friendly

Aidan McDonough, Integra Business Solutions & BPGI

been in charge. According to her, the issue of data and how to mine and use it, is of huge importance.

She says: “Manufacturers are putting promotions out there and quite often it’s a bit of a shot in the dark for them if they do that through the dealer community. Because of that, there has been a growing tendency to go straight to the end user.

“Vendors know about their end-user communities. In education, for example, and universities specifically, they know about the age, interests and preferences of that customer segment. But we really need to get all that information through the dealer community, whether it’s through back office systems or otherwise.

Having that data makes all selling activities and promotions much easier.

“We adopt a very consultative approach at Office Friendly when it comes to working with our suppliers," Hawley continues. "When we do promotions for them, for instance, we ask about the target community. Because of social media and all the different communication methods we use, we can then report back to our suppliers the kind of response we’re getting. As a result of that feedback, we can deduce who would actually place an order with one of our dealers.

So what we’re saying to our suppliers is: ‘This is the promotion that you wanted us to run. This is what we’ve done, these are the statistics and those the results on the sales.' In a nutshell, every conversation we have has to be relevant and that is very much fuelled by data.”

Every conversation we have has to be relevant and that relevance is very much fuelled by data THE NEED FOR RELEVANCY That relevancy also applies to broader entities.

It could be argued that dealer group consortium BPGI is past its former heyday when it had wide global appeal – back in 2000, it represented about 11,000 dealers worldwide with total combined sales of over $12 billion. That said, it's in growth mode right now, adding new members in Europe and former departee Quantore also having returned. The benefit of BPGI, says Chairman Aidan McDonough, predominantly comes from its vendor contracts whereby there’s a requirement of the member group to stock certain products and agree specific aggressive marketing campaigns in return for preferential terms. According to McDonough, sales growth stemming from that vendor community has been very encouraging of late. Beyond that, best practice sharing remains part of BPGI’s wider remit.

Everyone is in agreement that greater and better collaboration among independents and the dealer group community is essential, whether it be in terms of wider issues such as single-use plastic and Brexit, industry specific topics like data mining, or indeed full-on consolidation. Interesting times ahead, for sure.

SPOTLIGHT

OfficeZilla: RENEWED VIGOUR

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ay back, in the April 2016 issue of OPI (News, page 9), we ran a feature on two office products franchise groups in the US that were gaining traction: OfficeZilla and Regency Franchise Group (RFG). Since then, both organisations have changed hands – RFG was acquired by Office Depot in 2018 while OfficeZilla was snapped up by promotional products dealer organisation AIA. In February of this year, AIA confirmed the appointment of Kristen Murphy as General Manager of OfficeZilla, creating a new role at the company. Murphy came to OfficeZilla with more than ten years of B2B sales and operational experience, most recently with RFG. In fact, she wasn’t the first executive to make the switch to AIA from Regency in the past few months: in September 2018, RFG’s former Director of Franchise Development Kimberly Fulford joined AIA as its SVP of Owner Success, and she will be on hand to provide support to Murphy.

AIA CEO Matt Gresge, of course, is also no stranger to the office products industry; his previous senior roles have included that of President of US manufacturer TOPS. He told OPI that much of the focus for OfficeZilla in 2018 had been on readying the platform and developing the infrastructure for growth following its acquisition.

This included implementing some shared services synergies within the existing AIA organisation as well as finalising the dedicated OfficeZilla team, culminating in Murphy’s appointment. Other key team members include Operations Manager Jasmine Kiwus and Customer Support Kati Quinn.

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PENDING CHANGES Despite being in her role for just a few days when OPI spoke with her, Murphy said she was already considering whether it would make sense for OfficeZilla to maintain its own open website. She also confirmed that dealers have a choice when it comes to branding, either by retaining their own

brand/business name or using the OfficeZilla name.

This is a new option since the AIA acquisition.

With a lot of work going on in the background in 2018, OfficeZilla’s dealer numbers have remained relatively stable over the past 12 months (currently standing at 32), although Gresge did refer to one “notable” addition during the year.

We want a partner that aligns with our longer-term strategic goals and vision

Matt Gresge

Kristen Murphy

He said that technology has often been the Achilles heel of the independent dealer community (IDC), but that the OfficeZilla platform will do much of the heavy lifting for dealers in this respect and allow them to better align revenue to expenses and be more profitable.

Clearly, Gresge and Murphy will be hoping that recent industry consolidation will play into the hands of OfficeZilla, and there may be opportunities as lines are drawn in the sand between those backed by the big box organisations and those that remain truly independent.

The group’s strategic wholesaling partner has traditionally been Essendant, although it is not clear whether this relationship will continue. Gresge confirmed that there was currently “an evaluation” of the wholesaling situation, a process that was still ongoing as OPI went to press.

He did refer to a blurring of the lines between suppliers and competitors in the channel and confirmed that OfficeZilla would provide “market clarity” with a “100% focus” on supporting the IDC. It makes sense for the group to play its independent card as it competes with Office Depot-owned RFG, and Gresge’s wording may provide a clue about the choice of wholesaler going forward. “We want a partner that aligns with our longer-term strategic goals and vision,” he concluded.

CATEGORY UPDATE

A different

CLASS T

With an increasing focus on scientific subjects and an uptake in technological products, the education sector is undergoing radical change – by David Holes

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he global drive to invent and innovate is forcing educators to keep up with the pace as they seek to shape the minds of the future. Encouraging digital literacy is now prevalent in schools everywhere in a race to help students navigate through today’s technologically-driven world. Education apps, e-textbooks and virtual classrooms are all being integrated into the learning sector, and these educational technology (EdTech) products are selling well into those markets that have the infrastructure to support them.

Curriculum changes are also playing a part, with a shift in focus towards STEM subjects (see ‘Jargon Buster’) and schools putting greater emphasis on hands-on techniques over textbooks.

Educators are realising that this approach makes learning less mundane and repetitive, with practical work often being more effective at teaching a wider range of students. As Ashish Jain, Director at Hong Kong-based school and office supplier Maxton Global, says: “This means that primary school students will require more art supplies and learning games. Secondary students will need more 3D modelling tools for experiments, while tertiary students will rely on the technology and software that caters specifically to their chosen subject needs.”

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GEOGRAPHICAL DIVIDE But EdTech take-up varies considerably across the world. Developed countries usually have a larger education budget which means they are more willing to invest in new technologies and products.

In contrast, emerging nations will generally be more focused on the physical infrastructure and basic educational supplies because these provide the foundations that enable learning to happen.

However, as Jain reports, it’s not always as black and white as this: “Some emerging countries, such as Rwanda, are putting huge amounts of money into schools to, for example, provide laptops for every student, as they see this as vital if they are to keep up with the rest of the world. The African continent as a whole is the second largest market for mobile phones globally.

As such, a huge number of African people are now able to access the internet, which makes it an important EdTech market.

“Globalisation is bringing the world together and this means different nations are increasingly aware of each other’s strategies and advances. This has created an open-source platform for governments to learn from each other. The gap between developed and emerging countries is narrowing, slowly but surely, and the educational advances made worldwide over the next decade will lead to a widespread, burgeoning demand for new and innovative products.”

THE K-12 COHORT Current educational philosophy across the globe is placing greater emphasis on the importance of early years education – from birth to five years of age – and this is leading to a growth in products and furniture that are suitable for this age group.

In the US, for example, $10.1 billion has been invested in the ‘Head Start’ programme which specifically targets children in this age range who are identified as coming from ‘at-risk’ backgrounds and helps families with their education and physical/emotional well-being.

Technology is driving how teachers, parents and students communicate with each other But it’s the K-12 (typically 5-18 year-olds) sector that remains the main focus for IT distributors, national solution providers and resellers in the B2B EdTech channel.

Leen Nsouli, Office Supplies Industry Analyst at NPD Group, has identified several key trends affecting this market: “Technology is driving how teachers, parents and students communicate with each other, with social media, podcasts and a wide array of other channels being used to keep students engaged and parents informed.

Preparing pupils for the digital age with lessons in

CATEGORY UPDATE Education

High-performance workstations are further being installed to teach statistics, business intelligence and how to process and interpret ‘big data’.

Around schools and university campuses there’s growth in digital signage and equipment like display screens, for instance, that promote communications. To improve contact with families, there’s investment in solutions that facilitate

Jargon buster

The education sector is awash with buzzwords and acronyms.

Here are a few that encompass the shift in educational techniques and focus that has taken place over recent years, with a long list of ‘core’ curriculum subjects now receiving the most attention: Collaborative learning: An umbrella term for education that involves joint intellectual effort, with groups of students working together to overcome a problem, create a product or produce a piece of work Design thinking: A way of looking at problems by putting people and values first. Its human-centric approach teaches pupils to observe, ask questions and understand user needs, before seeking a solution Makerspace classroom: Incorporating special areas for thinking, problem-solving and collaboration SEN: Special educational needs STEAM: Science, technology, engineering, arts and mathematics STEM: Science, technology, engineering and mathematics STREAM: Science, technology, reading, engineering, arts and mathematics

April 2019

research methodology and media literacy are also gaining in importance.

“However, the flipside of this widening access to the online world means there’s more focus on cybersecurity to keep children safe. Their physical safety is also a concern, with a growing trend in home schooling that is partly attributable to school shootings [in the US]. Products and learning aids that help support parents that want to go down this route are popular.”

In the classroom, teachers are increasingly using tools such as ‘mind maps’ – visual representations which show how themes relate and interact – that foster creativity and are also encouraging students to present topics to each other. Such techniques require investment in visual communications equipment, causing a surge in demand for items such as interactive whiteboards.

US sales of these grew by 48% from Q3 2017 to Q3 2018. In addition, document cameras, projectors and Chromebooks are in high demand, with wifi infrastructure upgrades and software products like Google G-Suite and Microsoft Office 365 now high on the list of school priorities.

With the spotlight on STEM/STEAM subjects in many countries, technologies such as 3D printers, computer-aided design, microcontroller units, miniature computers and even drones are being used more extensively to teach students about robotics, sensory devices and wearable tech. Some schools are also investing in complex audiovisual equipment to prepare pupils for careers in broadcasting, or theatre and movie production.

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Education CATEGORY UPDATE www.opi.net 32

emailing, texting or ‘robo-calling’ parents with important messages about attendance, upcoming events or safety issues.

As Michael Diamond, Director for Industry Analysis & B2B Technology at NPD Group, confirms: “Any software solutions that can reduce carbon footprint and energy costs or simply ease the management of school plant and administration are keenly sought. Additionally, students’ physical security and surveillance is now one of the top issues for school districts, and equipment that can support this is needed. Even outfitting school buses with wireless access points so students can do their homework en route using their laptops is growing, particularly in remoter areas where travel can take up to an hour each day.

“But school funding is a key barrier and this, coupled with increasing class sizes, means teachers are often being asked to do more for less. Technologies such as learning management systems can help here. The ‘flipped classroom’ concept – where students are introduced to online learning material before school, with classroom time used to deepen understanding through discussion and problem-solving activities – is also being used more and more.”

THE DEVELOPING CLASSROOM The varying needs and changing educational techniques being adopted by schools is leading to the alteration of classroom layouts. Collaborative learning periods interspersed with smaller group breakout sessions mean that flexible furniture that can be rearranged to suit different types of teaching are in high demand, for example. In addition, acoustic screening is popular as it allows for the establishment of quieter areas where students can work alone or engage in different activities.

“Mobile soft seating in all shapes, sizes and colours that allows students to work where and how they want is very popular,” says Ashley Houck, Senior Manager, Vertical Markets K12 at Safco Products. “Ergonomics is also a big issue, with design now aligned with more of a focus on comfort and well-being. Just as the office has transitioned to a more active, collaborative, residential-like environment, schools are following suit, with collaborative tables used instead of individual desks, and seating targeted at lounging and reading. As physical books and reading materials make way for e-books and laptops, less space has to be devoted to their storage which is opening up areas for social spaces and interactive settings.”

The rise of technology means that having sufficient power points in the classroom, with effective cable management solutions, is vital.

While the provision of furniture with multiple, built-in USB ports continues to gain traction, the rising popularity of ‘bringing your own technology’ to school for use in class also highlights the importance of providing secure storage areas.

Cabinets for this purpose, featuring multiple lockable compartments, each with individual charging cables, are burgeoning in demand.

Images from the 2019 Bett Show in London, UK

Students’ physical security and surveillance is now one of the top issues for school districts Shannon Bradford, Senior Manager for K-12 Education at Staples Business Advantage in the US, has seen strong growth in this sector and expects 2019 to build on this: “We are bringing on more technology and furniture vendors to meet the developing needs of a collaborative classroom, with hands-on supplies such as blocks, building and construction sets incorporating robotics noticeably rising in demand.

“With more attention now being given to improving indoor air quality, there’s also a shift towards environmentallyfriendly facilities management and cleaning products. Additionally, there’s an attitudinal difference to the type of life skills being taught that’s gaining prevalence.

This manifests itself with greater emphasis being given to the incorporation of positive thinking, kindness and social interactivity within lessons, together with training in coping mechanisms using specially designed teaching aids and games.

Education CATEGORY UPDATE

However, as Bradford adds: “Schools are going to need to budget for present and future technological needs if they want to keep up with the lifecycle of developments. In order to do this, many districts are undergoing a process known as ‘strategic abandonment’. This involves evaluating their operations from top to bottom and stopping anything that doesn’t provide value for money, in an effort to free up funding for changing classrooms.”

DEALER OPPORTUNITIES Over 30% of US traditional educational supply stores have closed their doors since 2010, according to wholesaler SP Richards (SPR), a trend that is expected to continue. This isn’t due to a lack of opportunity in the education market, but a result of educators purchasing in a different manner today to what was typical 10-15 years ago. This opens the door for the independent

dealer which may already have a relationship with the district or school – delivering paper, ink/toner, janitorial supplies and other resources on a daily basis. “Here at SPR,” says Business Development Manager Travis Holland, “we believe that if you tip a school upside down and shake it, we can supply our dealers with everything that falls out except the teachers. Dealers need to leverage their relationships with educators and cross-sell and up-sell at every opportunity.

“We offer a comprehensive education programme called ‘Heroes 4 Education’ which is supported by our specialist team and includes a dedicated education catalogue, website, marketing resources, education newsletter, promotions and much more. It’s designed to support the dealers that realise the potential this market has to offer and decide it’s an opportunity they want to pursue.”

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SPECIAL NEEDS AND HOW TO ADDRESS THEM

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Around 15% of students worldwide have been identified as having a special educational need.

As such, products and learning techniques that can help them is an educational sub-sector that’s projected to have considerable growth.

Travis Holland, Business Development Manager at SP Richards, says: “In the US, one in every six children has a sensory issue that makes it hard for them to learn and function in school. While sensory processing problems are often seen in autistic children, they can also be found in those with attention deficit hyperactivity disorder [commonly known as ADHD], obsessive compulsive disorder [OCD] and other developmental delays – or with no other diagnosis at all. These kids have trouble handling the information the five senses take in and their processing difficulties mean they experience too much or too little stimulation. This can make it very hard for them to [...] be open to learning and socialisation.”

A seminar given recently at the Bett 2019 show in London, UK, highlighted how EdTech is coming to the aid of pupils who have a wide range of special educational needs (SEN). Tablets and laptops that can, for example, translate text to speech can help those with a visual impairment or dyslexia. Simple features like the ‘magnify’ function on a smartphone can be used to enlarge text on paper or real-world objects while easy tweaks such as changing the font or background colours can help people with colour blindness and other sight issues. The use of touchscreens is vital for people with limited dexterity or who have lost limbs, with many software programmes now available that can be operated using a single finger or even a ‘nose press’ if injury has caused lower body paralysis.

A concept known as ‘scaffolding’ is increasingly being used to help SEN pupils. This initially lays down full support structures and technology to aid students, but is then gradually reduced over time as they gain confidence and new skills. The ultimate aim is to move them as far as possible towards a more typical learning environment.

It’s not just SEN students who are benefitting from these technological advancements. Many adaptations that help people with special needs can also help learning among regular students or those who may simply have a temporary need for assistance due to an injury or illness. In addition, the ‘gamification’ of learning software has added a huge level of fun to education and many pupils can be encouraged to ‘raise their game’ through using these programmes and try to outscore their classmates.

In the US, one in every six children has a sensory issue that makes it hard for them to learn and function in school Even behavioural issues can be tackled with EdTech. Mobile phone apps are available that are specifically designed for motivating and encouraging performance, with points awarded for good behaviour (or deducted when naughty). These points awards and other feedback comments are shared with parents, and schools can choose to give prizes when certain thresholds are passed.

The possibilities of using EdTech to aid all types of pupils are wide-ranging and the use of mobile technology including tablets and smartphones – once outlawed in many school environments – is now often being actively encouraged as it has the potential to assist with learning.

VENDOR PROFILE

Perfect

SYNERGY International Paper and HP Papers continue to work in harmony, boosting innovation in the traditional office paper products category

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t’s rare that business partnerships retain longevity, but the collaboration between International Paper and HP is thriving and growing stronger. Celebrating almost 20 years of doing business together, the relationship was further strengthened when HP Papers recently stepped up and rebranded its portfolio.

Originally known as HP Everyday Papers, the rebrand at the beginning of 2018 streamlined the

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The rationalised range makes the positioning of the six specialised products easier [...] for consumers to understand

range’s available office papers products from 14 to six, while ensuring the extensive range still caters for just about any office application. The new HP Papers portfolio is now segmented into three distinct groups: Best, Better and Good – each consisting of two paper choices. Best includes Color Choice and Premium paper; Better is formed of Office and Everyday paper; and Good is made up of Home & Office and Copy paper.

The rationalised range makes the positioning of the six specialised products easier for channel partners to present, and for consumers to understand. In addition, all HP Papers are technologically advanced and scientifically engineered and tested to work seamlessly across all models of printer and copier equipment.

TAKING THE LEAD The HP Papers range was launched in 1996 under Champion International, which was acquired by International Paper in 2000. Now, the HP Papers office paper range is manufactured and marketed exclusively worldwide in over 100 countries

by International Paper under licence from the Hewlett-Packard Company. According to a 2016 InfoTrends report by Keypoint Intelligence, 53% of A4 colour inkjet printers and 49% of A4 format laser printers installed in Western Europe are HP. This means around half of the installed printer base in the region is HP branded.

For both manufacturers, customer requirements and tying these closely to consumer trends constitute an important element in the success of the HP Papers range. Part of this is ensuring the

VENDOR PROFILE

THE PREMIUM CHOICE

The priority for IP and HP is to give users the best professional result with everything they create

International Paper

Launched in EMEA in 2018 as part of the newly rebranded HP Papers portfolio, HP Premium has been well-received by customers across Europe. As a high-quality and reliable product, it has gained praise for its premium look and feel, along with excellent durability.

Thanks to HP’s technological superiority, HP Premium paper uses ColorLok technology for excellent colour reproduction, especially on inkjet printers, which were traditionally more challenging for competitive grades available in the market.

HP Premium is whiter and brighter than most ordinary office papers, with stronger, sharper colours and text. Heavier and thicker with optimised stiffness, the paper offers reliable feeding and performance, and is designed to work perfectly with both inkjet and laser printers.

Ideal for reports, graphics, letterheads, presentations and proposals, HP Premium is available in A3 and A4 formats in 80, 90 and 100 grammage.

sustainability of products – all HP Papers sold in Europe are certified to the standards of the Forest Stewardship Council (FSC) or to the Programme for the Endorsement of Forest Certification (PEFC).

Following HP’s deeply ingrained ethos of innovation, the HP Papers division is situated within an interconnected global HP brand, continually creating technology to reinvent the world and making life better for everyone. In Europe, the Middle East, Africa and Russia, International Paper focuses on the production and marketing of office papers and fibre-based packaging. It is a leading supplier of high-quality cut size papers, coated and uncoated paperboard and corrugated containers for a wide range of applications.

April 2019

WHAT PRINTERS DREAM OF The priority for IP and HP is to give users the best professional result with everything they create.

It all starts with the HP Printing System, which is made up of elements designed from the ground up to work together in perfect harmony.

To promote the compatibility and synergy between HP Papers and HP devices, and to communicate this message in an impactful way, International Paper launched the What Printers Dream Of campaign across Europe in the last quarter of 2018.

This showcased each of the six paper products paired with an HP printer, imaginatively showing their devotion to one another. The concept expresses the inspiration and emotion that those working at HP Papers – and all printing professionals – feel about the craft. Moreover, the campaign was accompanied by a host of available marketing materials, which are available on the hp-papers.eu website.

In Q4 2018, International Paper also undertook a quantitative and qualitative content analysis of the rebranded HP Papers portfolio. The survey with 743 respondents was conducted in

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VENDOR PROFILE International Paper

HP OFFICE PINK REAM CAMPAIGN RETURNS

the e-commerce channel in two representative European markets – the UK and Germany.

Sources included wholesaler websites; online retailers selling office supplies, stationery and consumer electronics; and e-commerce platforms such as Amazon and eBay. The key research goals were to understand the perception of the HP Papers brand by customers; explore satisfaction levels in relation to the various products, in particular the advantages of the paper; and gain valuable knowledge about the attributes and features of the different HP paper products that may affect the willingness to buy and use the brand.

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All of HP Papers’ products received high end-user ratings

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The findings revealed that not only was there a favourable perception of the paper quality (91% of reviews were positive), but also of price versus quality. All of HP Papers’ products received high end-user ratings of between 4.56-4.92 out of a total of 5. Those participating in the survey remarked on the compatibility of the products with different device makes and models, and the excellent standard of printed materials.

This last finding comes as no surprise, especially for users with HP printers. HP paper used in conjunction with HP ink and toner and an HP printer is developed to work in harmony for better quality, improved runnability, less waste, lower total cost of ownership and extended printer life. The synergistic nature of all these print elements together give HP printer owners the best possible printing results.

In addition, the innovative nature of the HP Papers range means it is optimised for HP’s PageWide technology and new A3 and A4 laser printers, meeting the growing requirements of office workers for efficiency, speed and professional printing and communication.

International Paper wants to thank its customers for joining the fight against breast cancer in 2018 and has announced the continuation of the HP Office Pink Ream campaign in 2019.

For each distinctive HP Office Pink Ream sold throughout October (Breast Cancer Awareness Month), IP donated €0.10 to European programmes focusing on breast cancer research, awareness and prevention.

For 2018, a total of one million HP Office Pink Reams were sold across 16 European countries, raising €110,000 ($124,000). The campaign impressed judges at the European Office Products Awards 2018 so much that it won the Initiative of the Year trophy.

IP also partnered with Think Pink Europe last year, an umbrella group that unites more than a dozen national breast cancer organisations.

In countries where Think Pink Europe operates, 80% of the funds collected during the campaign were transferred to local initiatives.

The rest of the money was used to support pan-European projects.

Think Pink Europe’s flagship initiative is The Race for the Cure, the world’s biggest walking and running event in the fight against breast cancer. The first race took place back in 1983 in Dallas, US, about a year after Nancy G Brinker founded the Susan G Komen organisation in honour of her sister who had died of breast cancer.

There are over 150 races that take place globally, with around one million participants walking and running in aid of supporting initiatives in the fight against the disease.

Across Europe, the Race for the Cure takes place in Antwerp, Athens, Bari, Bologna, Brescia, Brussels, Bucharest, Namur and Sarajevo. Don’t forget to mark your calendars for 29 September 2019!

CATEGORY UPDATE Declines in paper volumes along with high prices have created an even more challenging environment for the entire supply chain in this category. Is there light at the end of the tunnel? – by Michelle Sturman

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t’s no secret that the paper industry is going through a tumultuous time with uncoated freesheet (UFS) paper volumes down across the board, especially as the copy paper market continues its downward trajectory. Most of the major paper manufacturers reported a decline in orders for UFS last year.

Overall, estimates suggest the office paper market in Europe declined around 7-10% in 2018 compared to 2017.

Iwan Le Moine, Director of paper consultants EMGE, says: “Challenges come from overall falling demand, high prices and increased competition from non-European suppliers.”

It is a similar story in North America. The paper industry there has been experiencing a secular decline for almost two decades. In 2000, there were approximately 5.7 million tons (5.2 million tonnes) of copy paper in North America, which today has declined by almost two million tons. As one industry expert points out, even though copy paper has been more resilient than other UFS grades, demand is still contracting at an alarming rate each year.

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PRICE PROBLEMS Over the past year, the volume slump has been coupled with hefty rises in pulp and paper prices. Contractual obligations have often precluded paper merchants from raising pricing to their customers at the same rate as the price increases. In the US, this has been combined

with significantly lower mill inventory levels which scuppered the opportunity to capture pre-increase purchases. Indeed, the country now likely has the highest priced copy paper globally. Throw in rising freight costs, and this has led to the OP industry experiencing margin erosion in one of its most dominant SKUs for the first time in many years.

Challenges come from overall falling demand, high prices and increased competition Copy paper prices are pushing office managers to reduce consumption even further, and they are increasingly turning to technology-based solutions such as the cloud or opting for cheaper grade paper. Says Tim Percival, Office Divisional Director of Antalis UK: “We print less, read on screen more and archive digital files, not paper. We are far happier to accept online statements, bills and invoices, which contributes to a slowing demand from banks, utility companies, offices and the public sector. The result is a decline in the demand for copier paper in the professional environment.”

All this is being compounded by paper manufacturers pumping resources and converting mills towards other products, such as packaging, to take advantage of the growth in e-commerce.

SHOCK EXIT The announcement at the beginning of 2019 about Georgia-Pacific (GP) exiting the communications papers business completely with just two months’ notice, has thrown the US paper industry into a tailspin (see News, OPI March 2019, page 9). Speaking to OPI, one industry source that wished to remain anonymous, says: “In an already

Paper CATEGORY UPDATE

secular declining product category, the recent price increase notification after the unexpected GP closure of its Port Hudson, Louisiana, facility has changed the position of the leading domestic manufacturers of office papers from a soft to a tight allocation. I think it would have been a better approach if the paper mills had demonstrated some patience after their strong earnings to wait and see the true impact on the market of GP’s closure before implementing another increase.”

The removal of GP’s copy paper from the market is estimated to be around 500,000 tons, representing a sizeable proportion of the total available volume. Some experts believe there isn’t enough capacity, either domestic or foreign, to replace these tons fast enough.

It’s not just the US that’s feeling the strain.

UK wholesaler VOW told OPI that it has been challenging to manage price increases, restricted paper availability, as well as a shift from A/B grade to C grade paper due to higher costs. Antalis’ Percival agrees: “While we’ve seen modest growth in digital paper, the majority of the volume sold is moving towards commodity grades. We now see a growth in C grade paper and spot purchases, and a decline in A and B grades.”

www.opi.net

Recycled paper presents a significant opportunity for growth

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AND NOW FOR THE GOOD NEWS… It’s true that the copy paper market is expected to be tight for the rest of this year, but it’s not all doom and gloom. There is still plenty of innovation forthcoming and, as Le Moine points out, while the tonnage is limited now and in the foreseeable future, the push towards digital printing papers and technology is exciting. Last year, for example, Antalis said its value-added printing papers posted a better performance when compared to its overall paper segment.

The Navigator Company has just launched the Navigator UHD premium brand of office paper, which includes a special surface treatment that the company says provides “an even better printing quality, with an improved machine performance”.

Meanwhile, International Paper continues to work closely with HP Papers on its range of innovative office papers (see also Vendor Profile, page 36).

The consensus is that office paper is generally becoming more accepted as being eco-friendly.

“Paper is highly sustainable as a product and it’s more a case of passing that message on to customers, rather than making any wholesale changes to already very advanced and environmentally-compliant production methods,” says Le Moine.

VOW is expecting growth in ‘green’ papers as more consumers become attuned to global sustainability, which fits with trends seen by Antalis. “Recycled paper presents a significant opportunity for growth as currently it is not much

different in performance to virgin pulp paper.

Being produced from de-inked fibre, it is more eco-friendly and, as such, vital to supporting a business’s green agenda which is increasingly important to end-users and shareholders alike,” says Percival.

STRONG DEMAND In the US, North Pacific Paper Company’s (NORPAC) environmentally-friendly paper Natural Choice is starting to gain in popularity and market share. Talking to OPI, NORPAC VP Sales and Marketing Tom Crowley said demand for its Orca and Natural Choice copy paper brands has been so strong that the company will be installing a second sheeter at its facility later this year.

Natural Choice paper sales have grown dramatically over the past 18 months. “A superior environmental story, excellent performance on all types of printers and copiers, a price point that saves people money and nationwide availability have been the keys to growth for Natural Choice. In addition, we expect consumer acceptance of copy paper made with alternative fibres to continue to grow as cost pressures on producers of traditional UFS papers rise,” comments Crowley.

To further enshrine its environmental credentials, NORPAC has commissioned an independent life cycle assessment of Natural Choice, with the results due to released once the peer review process has been completed. “Our customers, especially the younger generation, want to buy from sustainable producers that make sustainable products. NORPAC ticks both boxes,” he adds.

The current paper category remains in a state of flux and is challenging for all those involved across the entire supply chain. But pulp and paper prices are expected to stabilise over the course of 2019, and there are bright spots including the aforementioned increased uptake of more sustainable paper, which can only be a good thing. “Customers are open to new ideas in a way they weren’t in the past. Don’t assume you’ll get the same answer this time around,” concludes Crowley.

For more information on the paper category and from some of the interviews, visit the April 2019 issue on opi.net.

ADVERTORIAL

TACKLING Climate Change

With Trees A

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s awareness of the value of sustainability grows, so does its importance in business decision-making. The benefits of thinking green in the buying process could be much greater than we think.

Although cost concerns might prevent some businesses from embracing green initiatives, an environmental ambition could instead put them on track to greater revenue, reduced costs and an improved reputation. Beyond Supply Chains, a World Economic Forum report, uncovered just how compatible environmental and profit goals are.

The research, which investigated firms using 31 different supply chain practices to increase profits but also contribute to society and the environment, found that they enjoyed a ‘triple supply chain advantage’. This included a revenue uplift of 5-20%, supply chain cost reduction of 9-16% and a brand value increase of 15-30%.

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PLANT-A-TREE WITH BANKERS BOX

One sustainable business mission underway across Europe is the Plant-a-Tree initiative by global storage and archival brand BANKERS BOX from Fellowes Brands. This is set to contribute to reforestation projects around the world and give European customers the chance to be part of a campaign helping to tackle around 17% of climate change.

The BANKERS BOX brand has partnered with Tree-Nation, an established global organisation with a goal to tackle climate change by planting trees. Every European customer that purchases BANKERS BOX corrugated products throughout 2019 can register to have a tree planted in the global forest.

Trees are planted by plantation team members across the world, with the Plant-a-Tree initiative aiming to proactively increase reforestation while tackling wider humanity issues caused by deforestation. Research shows that 17% of climate change can be attributed to deforestation, making tree planting essential to the future of the planet.

Steven Hickey, Fellowes Brands’ European Business Team Manager for BANKERS BOX, says:

BANKERS BOX products have long been recognised for their strength, simplicity and sustainability, and are both recycled and recyclable.

We’ve strived to improve on this over the years. In 2010, we gained Forest Stewardship Council (FSC) chain of custody certification and were the first to market with FSC on archival storage boxes. Products sourced from FSC-certified forests give buyers and sellers the assurance that these products are renewable and come from forests that are managed responsibly.

For 2019, we decided it was time to take the next step and give our support to carbon offsetting and tree planting. We chose Tree-Nation because we were hugely impressed with its ethos and proposition.

This initiative is an ideal way for the BANKERS BOX brand and our customers to make a difference. By getting involved, businesses can build another element into their CSR activity, engage with their customers and communities, enhance their reputation, and attract and retain employees.

As an industry-leading brand with a 101-year history, this project also perfectly complements our strong values of sustainability and Fellowes’ global GIVE Program, which is dedicated to building partnerships that address humanity’s greatest needs.

TREE-NATION Tree-Nation coordinates reforestation efforts worldwide through its unique platform, enabling citizens, companies and planters around the world to take action. So far, it has been involved in more than 50 planting projects in 14 countries, working with approximately 100,000 citizens and 928 companies.

Maxime Renaudin, founder of Tree-Nation, said: “Trees address some of the most important problems our generation faces, such as climate change, desertification, deforestation, CO2 emissions, malnutrition, food shortage, floods, healthcare, land ownership and poverty. For many of these problems, planting trees is a critical part of the solution.

“We’re delighted to welcome partners such as BANKERS BOX that will help to spread vital messages about reforestation and encourage businesses and individuals across Europe to get on board. Customers choosing a BANKERS BOX anywhere in Europe this year will be making their purchase in the knowledge that they’re making a contribution to the fight against deforestation and playing their part in combatting climate change.”

BANKERS BOX BANKERS BOX products are 100% recycled and recyclable. Giving customers the confidence that contents are organised and protected, these corrugated boxes are one of the most environmentally-friendly ways to archive and store as they ship flat-packed.

Engineered for strength and designed for convenience, the range has been made for easy transport and file access. BANKERS BOX products include the System ERGO-Stor Maxi and Heavy-Duty boxes, with ergonomic handles to reduce wrist strain when lifting, a hinged lid with locking tab closure and FastFold automatic assembly for quick and easy construction.

The Premium Tall Storage Box range is available in red, blue and green, and features the PRESTOTM instant assembly pop-up storage system, with double-end sides and base to give maximum stacking strength.

The Earth Series Storage Box range comes in heavy duty, standard, flip top and budget. These large boxes are designed to store ring binders and transfer box files, and include two layers of board to the end panels and base to give extra strength.

ADVERTORIAL Fellowes Brands

SHARE YOUR TREE Anyone who buys a BANKERS BOX-branded product in Europe can register with the Plant-a-Tree initiative at bankersbox.com/tree. After registering their product, customers will receive an email with a unique link to see their tree in the global forest and check the location and species information about the real tree.

They will be sent more information about CO2 compensation values and plantation details, and be able to view and download their own tree certificate, which they can display in the workplace.

Customers can also personalise their virtual tree with a picture and a message to let their social networks know why they are planting this tree.

They can share their involvement with the campaign on social media using the hashtags #PlantaTreewithBankersBox and #Treeinabox.

FELLOWES’ GIVE PROGRAM

April 2019

The GIVE Program is dedicated to building partnerships that address humanity’s greatest needs. It is committed to supporting initiatives in four key areas: social services, world aid and development, education and medical research.

Two current projects include a clean water initiative in Mozambique through World Vision, and a vocational school project in Nicaragua through Opportunity International. All Fellowes Brands employees have an opportunity to volunteer for designated community projects during normal work hours.

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OPINION

Digital transformation?

A WORK IN

PROGRESS…

Few companies and leaders question that digital transformation is happening and is indeed necessary. Their willingness to embrace it is an entirely different matter, however, says Tim Cole

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here can be no doubt: the future of business will be digital. The internet has wrought fundamental change over the past 20 or so years, but that is nothing compared with the upheaval yet to come in the next two decades. Networks and intelligent systems will cause huge growth, but unfortunately only those who choose to play an active role can hope to profit.

But are we ready for the digital transformation of business? Will the world see a kind of economic miracle similar to the one Germany experienced in the aftermath of World War II, a ‘Wirtschaftswunder 2.0’? Or will companies and their leaders in the ‘old Europe’ freeze ahead of the looming spectre of total transformation of their business models, processes and even their relationships with customers?

Sadly, the latter looks more likely. No, this doesn’t mean all companies are doomed to fail. And yes absolutely, there are many entrepreneurs around with vision and courage.

Unfortunately, they are a minority. By way of an example, the majority of German companies, namely 70%, still require a physical presence from their employees, meaning they will not allow them to work from home or from some other location (the nearest Starbucks?).

This 9-to-5 mentality is a major stumbling block.

It’s also one of the reasons why firms fail to make best use of the many opportunities the internet age offers them to increase personal productivity and give employees a change to accept responsibility for their own working environments and timetables.

THE NEED FOR SPEED Speed is essential in the new world of digital transformation: data flows around the world in nanoseconds and can be received and processed anytime, anywhere. The only requirement is a fast internet connection.

As companies move to a system of management by results, everyone will be judged by their ability to deliver on time Today, that means fibre-optic cables and powerful computer systems capable of transporting and analysing gigantic amounts of information – the crude oil of the digital age, as my friend and futurist Gerd Leonhard calls it – in record time.

Most of Europe lags behind the rest of the world and especially behind emerging economies in Asia and Latin America in terms of broadband connectivity. Germany ranks next-to-last in the OECD’s list of fibreglass broadband usage, with only 1.1% of households and companies hooked up to the superfast grid; in South Korea that number is 66%, in Japan 71.5%.

Increasingly, smartphones are the device of choice to view and process information. Here, Europe is keeping pace with the rest of the world, with some 96% of German users under the age of 25 already owning one of these handheld gadgets.

People around the world have long cut the wires that used to bind them to their desktop computers,

? enabling them, at least theoretically, to determine when, where and how they want to work. Some of us are at their most productive early in the morning while others prefer to work late at night; some would prefer to read emails and study documents while pedalling on their home trainers, others may choose to work from a hammock in their garden.

‘Loafers’ is one of the less offensive terms many superiors attribute to such staffers, and they prefer to keep an eye on them during working hours in order to better control their habits and therefore, presumably, their output. These types of employers are possibly unaware of the fact that many employees have equipped their computers with ‘boss buttons’ which allow them to make stock quotes, naughty pictures or the latest eBay auction disappear from their work screens by simply pressing a key if they hear the boss approaching. Instead, it looks like they are deeply engrossed in spreadsheet columns or their SAP applications; in short, as if they were doing their jobs; which mostly they actually are – just not when the boss expects them to.

INCREASING ACCOUNTABILITY Digital transformation, in other words, means that both sides will need to rethink the way work is organised. The leader needs to make the first move, but the onus is also on employees to come to grips with a totally new situation: the need to accept self-responsibility. The price of their new freedom is increasing accountability. As companies move to a system of management by results, everyone will be judged by their ability to deliver on time. Staff must see themselves as members of a team where players may be scattered around the globe or possibly sitting at the next desk. Location in a networked world is less important than the ability to cooperate across borders and time zones.

In the future, employees will need to keep up in a world where the emphasis is more on personal competence and professional qualification. In a digitally-transformed working environment, there is less and less room for mediocrity.

Instead of grasping new opportunities, meanwhile, many managers seem to be either paralysed with fear or caught in denial.

According to a study published in early 2015 by German digital association Bitkom, “every fifth enterprise is fearful for its continued existence”.

This begs the provocative question: Is digitisation a danger to developed economies?

Most businesses, it seems, already recognise the need for more digitisation. But are the leaders of these companies prepared to accept the consequences? Hardly.

April 2019

German-American Tim Cole has worked as an internet journalist for almost 25 years. He has written numerous bestsellers, among them ‘Success Factor Internet’ in 1999, the first book to describe the impact of digital technology and the internet on companies and organisations. In ‘The Customer Cartel’, published in 2004, he correctly predicted the power shift between customers and vendors in an age of total connectivity.

His latest book, ‘Wild Wild Web – What the history of the Wild West teaches us about the future of the Digital Society’, will be published in October 2019. It explores the need to curb the power of giant corporations like Google, Amazon, Facebook and Apple, known collectively as GAFA. Since 2016, he has also been the editor of ‘Smart Industry’.

Cole will be speaking about digital transformation at the OPI European Forum at the Westin Grand Berlin, Germany, which will be held from 5-7 June 2019. For more information, visit www.opi.net/ EF2019.

OPINION Digital Transformation

This deep distrust is a worrying feature of the mental make-up of business leaders towards their own staff members. Many employees realise this, of course, and as a result play a game of cat and mouse with their bosses.

In a digitally transformed company, there is no time for games like these. And were employers and employees engaged in a dialogue of equals, they wouldn’t need to play them. Both would know what needs to be done, which would allow managers to let go the reins, secure in the knowledge that everyone agrees on what the goals are and how to reach them. And the employee would feel free to choose the best way to get to the desired result.

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JOINED IN

Partnership N

EVENT

OPI PARTNERSHIP 2019

ow in its sixth year, the annual OPI Partnership is the leading relationship-building event for the European business supplies industry. Connecting vendors with resellers in an intimate and confidential setting, hour-long, in-depth meetings are designed to both consolidate existing relationships as well as build new ones.

Top executives from across the continent congregated at the Hotel Okura in Amsterdam, Netherlands, between 4-6 March for strategic talks, with ample time provided for all-important networking opportunities.

OPI Partnership is an excellent use of my time, effort and money.

Overall, it is a great event RON BIESAART, MANAGING DIRECTOR, SAFESCAN

This year’s gathering featured over 20 well-known and respected vendors covering the full product spectrum of the business supplies sector. Among the attendees were 3M, BIC, Bi-silque, ACCO Brands EMEA, Fellowes Brands and International Paper. They were joined by approximately 50 senior-level executives from the region’s leading resellers and wholesalers, including Office Depot Europe, Staples Solutions, Lyreco, EVO Group of Companies, SPOT Group, AllOffice, eBay, Wulff and Interaction.

Over the past few years, there has been a noticeable improvement in the relationships and volume shifted with those [vendors] that we meet during Partnership

ANDREA KENNA, SENIOR DIRECTOR MERCHANDISING EUROPE, OFFICE DEPOT

CONDUCTING BUSINESS

An intense schedule of at least 12 meetings formed the crux of the two-day event, which also included a welcome dinner at Sazanka, Europe’s only Michelin-star Japanese teppanyaki restaurant. As always, the second evening played host to the OPI European Office Products Awards (EOPA), where more industry executives joined Partnership delegates to celebrate the best the European OP sector has to offer in terms of companies, individuals, products and initiatives (see page 50 for the full EOPA 2019 review).

Now very well established and highly regarded, OPI Partnership continues to offer a unique opportunity to further cement existing relationships and forge new ones. As OPI Chief Commercial Officer Chris Exner said: “It is the most extraordinary experience to have over 100 of the most influential people in European office products engaged in 260+ meetings over two days in Amsterdam. It’s an amazing event with a huge amount of business conducted and great relationships formed. I can’t wait for next year.”

The next OPI Partnership is scheduled to take place in March 2020 and will once again be held in Amsterdam.

STEVE HAWORTH, CEO, EVO GROUP OF COMPANIES

April 2019

As a direct result of attending the OPI Partnership event, I’ve agreed a significant deal with a supplier

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EVENT

EUROPEAN OFFICE PRODUCTS AWARDS

EOPA 2019: A sprinkling of magic

T

www.opi.net

he leading lights of the European business supplies sector came together in early March to celebrate exceptional companies, personalities and all-round achievements. The occasion? The 18th European Office Products Awards (EOPA), held at the spectacular Hotel Okura in Amsterdam, Netherlands, during OPI’s sixth Partnership event (see Review, page 49).

It was an evening of magic in every sense of the word. Starting with a networking drinks reception, business leaders from across the industry were dazzled by some jaw-dropping card tricks from magician Lee Smith. The entertainment continued during the fabulous presentation dinner where Smith was joined by equally mesmerising host and compère for the evening, Paul Martin.

The business end of the night kicked off with a short and engaging industry toast by Staples Solutions CEO Dolph Westerbos. This was

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followed by the awarding of ten EOPAs, covering a wide range of achievements by companies and individuals across the channels. These included creating and successfully selling the most innovative product of the year and coming up with an inspiring and results-driven marketing campaign as well as re-energising a dealer group and defying all the odds in a challenging retail environment.

Interestingly this year, none of the winning companies were new to the EOPA, all having been shortlisted or, in several cases, winning in various categories before. It’s a fact which once again proves that continuous innovation, keeping abreast of opportunities and embracing them – in terms of digital or sustainability, for example – and an unwavering eye on the customer pay off. The winners are clearly the crème de la crème of the European business supplies industry, so a very emphatic congratulations to them all!

OPI would like to thank the following sponsors for their generous support:

EOPA EVENT

PRODUCT OF THE YEAR WINNER: HP INC Product of the Year is often the category with the most entries and this year was no exception. But are the nominated products truly innovative? Importantly also, have they resulted in commercial success and benefit both the reseller community and the end consumer?

These were the types of questions the EOPA judging panel asked before coming up with a shortlist and then, ultimately, a winner.

HP Inc’s Sprocket Photo Printer ticked all the boxes, particularly in the B2C segment where the product has done much to reinforce HP’s outstanding brand recognition. Meeting the needs of next-generation customers, the Sprocket’s sleek design fits into any handbag or pocket. Users can print instantly from their mobile, and personalise prints with frames, icons, emojis and text. The Sprocket represents best-in-class print quality using ZINK technology. A deserved winner in this category.

Quantore’s Arnold Theuws (r) presented the award to Lars Faustmann from HP Inc

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VIDEO OF THE YEAR WINNER: BROTHER INTERNATIONAL EUROPE

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As video content becomes increasingly vital, companies that produce interesting, creative and informative videos to showcase their products and services while engaging the customer are reaping the rewards. The EOPA judging panel looked at how the diverse entries submitted attract the viewers’ attention, bring the subject to life and convey the intended message. Return on investment is also important, either in terms of sales generated, customer engagement or enhancement of brand awareness.

This was a category that had some big names with big resources in it on the one hand, while also containing entries that produced engaging as well as informative videos on more of a budget. Hotly debated, Brother International Europe pipped everyone else to the post by creating a striking video that captures the essence of a new Brother product and “brings labels to life”.

Pan-European in its target outlook, Brother’s video has also enjoyed outstanding exposure across various social media platforms.

Highly commended: ZenOffice

Office Depot’s Andrea Kenna with Brother International Europe’s Mathew Pearson

This is a relatively new category that recognises initiatives which, in one way or another, have a positive impact on an organisation. Whether they be charitable or local community activities, new online or e-commerce solutions, pioneering technologies or new revenue opportunities, the EOPA judges were keen to see why initiatives were introduced and how they delivered the desired outcomes.

The shortlist covered pretty much all of the above criteria, but it was Fellowes Brands with its social responsibility activity that captured the judges’ imagination and scooped its first trophy of the evening. The vendor’s winning initiative was the long-standing GIVE Program which is dedicated to building local and global partnerships that address humanitarian needs in a number of key areas. To commemorate its 100th anniversary, Fellowes had set an ambitious GIVE target and challenged its European team to raise €100,000 ($114,000). By March 2018, it had already made €104,290.15, overachieving its target at an early stage.

Highly commended: BIC and JGBM

Pieter Wolters (r) from Staples Solutions with Fellowes Brands’ Guido Venverloo

EVENT EOPA

INITIATIVE OF THE YEAR WINNER: FELLOWES BRANDS

WHOLESALER OF THE YEAR WINNER: EXERTIS SUPPLIES The shortlist for the Wholesaler of the Year award displayed some well-known names from across the European business supplies industry. Quite different in make-up and outlook, it covered the spectrum from broad, multichannel operator to small, almost niche, player. It was certainly among the most hotly contested categories, exacerbated by the fact that wholesaling in general is facing considerable challenges.

But it was UK-based Exertis Supplies that came up trumps, winning for the second time in three years. The EOPA judges were impressed with this operator because it does what it sets out to do extremely well. Simplistic and highly effective in its approach, the focus is on low cost and service. Not value-added sales or marketing services, but range, availability and speed of delivery. Exertis Supplies was also commended for its excellent vendor and dealer partnerships.

Bi-silque’s André Vasconcelos (middle) with Raj Advani (l) and Tim Holmes (r) from Exertis Supplies

MARKETING CAMPAIGN OF THE YEAR WINNER: FELLOWES BRANDS

Highly commended: Durable and Avery

April 2019

International Paper’s Gerald Demets (r) with Fellowes Brands’ James Webb

This category is open to any organisation that can clearly show the success of a specific marketing campaign. Judges evaluated the objectives of the campaign, an understanding of the target audience, specific marketing methods and their creativity, and return on investment.

The entries received were many and varied, with the resulting shortlist covering everything from low-key, in-house marketing on a budget to resource-heavy broad campaigns. Deciding on the winner was a difficult task, with the judges looking for a demonstration of visible success.

After very long discussions, the winner was one that did exactly that – it was Fellowes Brands with its Sensible Steps for GDPR campaign which aimed to educate OP resellers and business consumers about the new European GDPR legislation.

Aside from increased awareness, its integrated campaign resulted in a considerable uptick in the shredder category overall, with Fellowes specifically benefitting with market share gains and sales increases.

Well done to Fellowes for winning its second EOPA of the night.

Highly commended: Avery and Durable

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EOPA EVENT

VENDOR OF THE YEAR WINNER: ACCO BRANDS EMEA Vendor of the Year is always a hugely popular category that encourages entries from companies big and small across a broad product spectrum. With initial nominations whittled down, the judges quickly zoomed in on the shortlist of four to find an operator that has really set itself apart from the competition in some way.

Discussions soon turned to ACCO Brands EMEA for its all-round excellence in the face of considerable upheaval.

Over the past 20 months or so, the company faced the task of integrating two businesses in Europe – Esselte and ACCO Brands. And it’s done so with great aplomb, resulting in the judges unanimously deciding that the Vendor of the Year award should go to this manufacturer for outstanding efforts and initiative. Highly regarded across a vast product portfolio, ACCO Brands EMEA has done a remarkable job combining the two entities while at the same time instilling a positive, new culture among the workforce and with its channel partners.

ACCO Brands EMEA’s Cezary Monko (l) receiving the award from Corwell’s László Fehér

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RESELLER OF THE YEAR WINNER: BUREAU VALLÉE

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The shortlist in this category was short and to the point. In addition to quite simply highlighting the best and most successful resellers in the European OP space, it also reflects just how challenging the industry is right now for many operators. And while the two runners-up – Germany’s Böttcher and Amazon – have done exceedingly well, it was France-based Bureau Vallée that received the highest accolades.

As the EOPA judges commented: “Office supplies retailing is a tough business in which to succeed and very few players have made it work in Europe. Bureau Vallée is a real stand-out performer. Despite its size – almost €500 million ($565 million) in sales and with double-digit growth every year – the company has always retained its start-up spirit and is the envy of its on- and offline competitors.”

From opening its first outlet in Paris in 1990 to currently running about 350 stores in Europe and Africa, Bureau Vallée has defied all the challenges that exist in the retail sector. This is partly due to the fact the online revolution hasn’t had such a ferocious impact on its French home market or indeed its other locations just yet, but also because the reseller has retained its incredible brand success as a result of consistently good service, product availability and an excellent staff work ethic.

Bureau Vallée’s Bernard Cloquet (l) accepts the Reseller of the Year award from Pilot Europe’s Urban Martell

The Young Executive of the Year category was the first of three ‘people’ awards announced during the EOPA night. It seeks to reward young and dynamic individuals who are making a real difference to their organisation already and have the potential to really shape the future of our industry.

Scott Castle, Marketing Manager at VOW, had no trouble convincing the EOPA judges that he was the right candidate to receive this accolade. Having been at VOW for over five years, Castle has shown creative initiative, endless enthusiasm and a thirst for sourcing new opportunities. He has already shown some leadership skills when he developed a fully-integrated marketing plan for the wholesaler. He has also displayed wider-ranging industry commitment through his role on the BOSS Leaders of the Future Committee.

EVENT EOPA

YOUNG EXECUTIVE OF THE YEAR WINNER: SCOTT CASTLE

Winner Scott Castle receives the award from VOW colleague Debbie Nice

PROFESSIONAL OF THE YEAR WINNER: JULIE HAWLEY

Steve Haworth from the EVO Group of Companies with Office Friendly’s Julie Hawley

The second individual award, the coveted Professional of the Year, went to someone who has spent many years in the business supplies industry, but who, over the past couple of years, has really excelled at reinvigorating one of the UK’s dealer groups.

Introduced during the EOPA evening by long-time friend Steve Haworth, CEO of the EVO Group of Companies, it was Office Friendly’s Julie Hawley who was the deserving winner of the award. Hawley has done a fantastic job at putting her mark on Office Friendly since her permanent appointment as Managing Director at the end of 2016. Since that time, she has been involved in a whole host of different and new strategic initiatives, both on a national and also international basis, all of which have driven the group forward and had a positive impact.

Hawley is highly regarded for her expertise as well as integrity and foresight in a market – and channel – that is facing huge challenges.

INDUSTRY ACHIEVEMENT WINNER: BRUNO PEYROLES

April 2019

The final award of the EOPA evening was dedicated to an individual who has had a significant impact on our industry. The prestigious Industry Achievement trophy is given to someone with outstanding leadership qualities, often running a company very successfully for many years with great integrity and with much more than just the bottom line in mind.

This year’s winner, Bruno Peyroles of French retail operator Bureau Vallée, is all of that and much more. Peyroles has been instrumental in securing the continuing success of his company through sheer hard work, perseverance and unwavering entrepreneurial spirit. Evidence of that success was already seen earlier in the evening when Bureau Vallée secured the Reseller of the Year award.

Presenting the trophy to Peyroles was Charles Nusse, Managing Exacompta’s Charles Nusse (r) with Industry Director of Exacompta. Nusse referred to Peyroles as a “bold and Achievement winner, Bureau Vallée’s Bruno Peyroles courageous person”, someone who has made a profound difference to the industry, putting people at the heart of his company, making sustainability a key component of his business policy, and aspiring to total customer satisfaction at all times.

Charting Peyroles’ career, Nusse referred to his friend and business partner as having first witnessed the OP superstore concept in the US in the 1980s when it was launched. He took on board what he saw and created the first 900 sq m (9,000 sq ft) store in 1990 in Maurepas, west of Paris, with the following concept: an office supplies store, self-service driven and located on the outskirts of town, with an amazing discount positioning. Branded discount stationery was born in France.

The rest, as they say, is history. In 1995, Peyroles opened a second store, then a third in 1997. His introduction of the franchising concept in 1998 then enabled the brand to develop very quickly, resulting in nearly 350 stores today in countries reaching from France, Italy, Belgium, Spain and Malta in Europe to burgeoning outposts in Cameroon and Tunisia.

Humble, loyal, resolute, committed and demanding are all words associated with this great leader. Another one is progress: Peyroles never rests on his laurels and continuously, with the help of his team, comes up with new ideas to make sure the company will still stand strong in many years to come – despite the predicted demise of traditional OP retailing.

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5 MINUTES WITH...

Simon Wyers

CAREER Q&A Please describe your current job.

Retail Account Director at paper merchant Antalis. I’m responsible for managing and growing the trading relationships with the UK’s largest retailers.

What makes you happy?

I like to think my love for my football team, Liverpool FC. But considering it makes me feel equally as frustrated as happy, I’ll have to say my wonderful partner, Annabelle.

If you were Prime Minister, what would be the first law you pass?

Ooooh, difficult. Abolish working on Mondays?

What secret skill do you possess?

With a dog, a cat and pet rats in the house, I often think I’m Dr Doolittle and can happily converse with animals!

Best way to spend the weekend?

Currently, I spend most weekends travelling around Leicestershire to support my son’s football team, so any weekend they win is great.

How would you describe yourself?

A ‘heart-on-sleeve’, instinctive relationship builder inside the workplace. Supportive, loyal and fun-loving away from the office.

Your favourite gadget?

Amazon Alexa. My partner says she’s the only woman who listens to me!

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

John Lennon – an amazingly talented musician, who used his celebrity to try and change the world. I would love to understand what made him tick.

What would be a good theme song for your life?

You’ll never walk alone by Gerry and the Pacemakers – an obvious choice for a Liverpool football fan. But it also makes sense that you need your good friends and family to support you through the tough times.

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What’s your favourite food?

As I’m the least fussy eater in the world, the options are endless. I do love a hot curry to cry over, but I’m told I make a mean pasta bake.

I would love to be a better, more enthusiastic cook, but I need to download instructions to simply boil an egg!

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Simon Wyers, Antalis

Where would you most like to visit?

Firstly, Mexico, or wherever we decide to get married in 2020! Secondly, if I could tolerate the very long flight, Australia has always appealed to me. It’s such a diverse country with almost endless possibilities.

Favourite month?

May. It’s my birthday, the FA Cup Final and summer is just around the corner. It’s also the month I began dating my wife-to-be.

Your favourite apps?

Facebook and Instagram, otherwise I wouldn’t have any idea what my children are doing even though they live in the same house. Talking is so old-fashioned nowadays.

Favourite author?

I don’t have much time to read fiction, but have enjoyed some of Dan Brown’s books.

What was your last online search?

Hotels in Blackpool, Lancashire. During the Easter holiday, my son will be playing in a football tournament there.

I’m not entirely convinced, but my son assures me that I will like the Big One [rollercoaster]!

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

I’d love to run my own business, maybe something to do with photography which is a hobby of mine.

Outside of work, I’d love to be able to travel more. Perhaps take a sabbatical like my fiancée once did – just sell up and move to Thailand for a year!

Best moment in your career so far?

It must be back in 2007, when we won the paper business for one of the UK’s top four supermarket chains. The firm is close to my heart as it has remained a loyal customer ever since.

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

In the current climate?

To reverse the decline in usage of fine paper would be a good start, especially in the UK. Also, perhaps give some tax relief for using paper again, although I’m not sure how universally popular that would be!

What personal item is on your desk?

A photo of my two wonderful children, Abbie (19) and Fred (13).

Oh, and of course my Liverpool FC calendar!

FINAL WORD

How well do YOU

KNOW YOUR SUPPLIER?

I

was promoted to CEO at Static Control in August 2018 after nearly two decades of experience in the imaging aftermarket. On my journey to this position I learned many lessons which can be applied not just to cartridge businesses, but all office products businesses.

One of the most important issues that the industry is facing today is dealing with the supply chain. The question is: how well do you know your suppliers? If a supplier fails you, you risk failing your customer, so having dependable, reliable partners that meet your needs is of the utmost importance.

Here are my top five tips for learning more about your suppliers which have certainly helped guide Static Control over the past year.

1. FACE-TO-FACE In the modern world, it’s easy to overlook one of the most important steps to knowing your suppliers. Meeting them at their business face-to-face can provide insight that simply cannot be gained otherwise. You can get a grasp of the full capabilities of the company. A brief tour of their facilities can tell you a lot about a business – how operations run, if they comply with regulations, how they treat their employees, and many more details.

2. FINANCIAL HEALTH Complete a thorough credit check on the potential supplier. Also search the internet for news stories that involve the company. A sound financial background and long history shows the firm is reliable and able to deliver your products effectively.

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3. QUALITY & CAPACITY Does your partner have quality and reliability metrics to show you? Suppliers with a deep commitment to delivering quality products will also have the relevant and necessary certificates. Static Control, for instance, has ISO standards to ensure environmental and quality metrics are met.

It’s also important to understand their capacity. If you are pleasantly surprised with a large order, can your suppliers help you meet demand quickly and efficiently?

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4. AUDITING Unfortunately, having suppliers telling you what they are going to do is not the same as what they actually do in practice. Inspections of products should be conducted on a regular basis to ensure that they are fulfilling their end of the deal.

5. COMMUNICATION Communication is key with any relationship. Does communication with your suppliers flow easily? Do they respond to your calls and emails quickly? It’s important for them to understand the needs of your business and keep all channels of communication open at all times.

Ken Lalley, CEO, Static Control

If a supplier fails you, you risk failing your customer, so having dependable, reliable partners that meet your needs is of the utmost importance LEARNING THE HARD WAY

Effective sourcing of products and materials requires a deep dig into your suppliers’ attributes and reputation. This issue has never been more important in the imaging industry than right now.

Those involved in this sector will be fully aware of the headlines last year that new-build compatible toner cartridges being sold in Europe contained elevated levels of a banned toxic fire retardant called decabromdiphenyl ether (more commonly seen as decaBDE). The use in toner cartridges stems from its presence in recycled plastic for cartridge casings that can stand up to the high heat involved in the fusing process. And indeed, we learned that one supplier had provided plastics that did not meet our stringent quality guidelines.

To address this issue and any others that may occur in the future, we’ve implemented more rigorous testing and auditing practices.

We plan to test random samples of products moving forward to ensure our partners start and remain compliant to our standards. Our supplier agreements are crystal clear in setting out our requirements and the penalties for failing to meet them.

Despite having the most rigorous testing and qualification process, mistakes can happen.

We’ve taken this experience and learned from it. It’s important to follow the steps for properly vetting a supplier, along with continually revisiting the product, to ensure that your business needs are being met – all the time.

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