OPI APP MAY-JUNE 299 B

BIG INTERVIEW

Connecting the

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Danièle Kapel-Marcovici, RAJA May/June 2020

DEALING with the UNKNOWN COVID-19 has sent the world into a spin and affected our entire way of working. But for those prepared to think outside the box and seize opportunities as and when they arise, the outlook isn’t so bleak

INSIDE THIS ISSUE l

Staples Solutions eyes growth l EPIC steps up for dealers l The end for Spicers l NXP to the rescue l PPE in a time of crisis

l Cybersecurity at home l A healthy workforce – wherever it may be l The changing world of education l The importance of cleaning

CONTENTS 16 Big Interview RAJA’s CEO talks frankly about Staples Solutions, strategy and, of course, the coronavirus pandemic 24 Hot Topic COVID-19 has brought much hardship, but the outlook isn’t entirely bleak 28 Interview As demand for PPE has soared, sourcing it has been a challenge 31 Feature Cybersecurity takes on a different dimension in this new work-from-home era 34 Spotlight Lomax raises the game with its e-commerce prowess

Big Interview: Danièle Kapel-Marcovici, RAJA

France-based packaging group RAJA raised eyebrows last year with the acquisition of four Staples Solutions subsidiaries. Behind the move was the realisation that B2B purchasers are increasingly looking for one-stop experts for their indirect purchasing needs; it also tied in snugly with the company’s existing packaging, MRO, facilities and business equipment offering. The deal established RAJA as a leading pan-European B2B business supplies reseller with annual sales of more than €1 billion ($1.1 billion) – all under the leadership of CEO Danièle Kapel-Marcovici.

HOT TOPIC: DEALING WITH THE UNKNOWN

38 Category Update New ways of teaching and learning are changing the education sector irrevocably 44 Advertorial Distribution and fulfilment options in evolving times 46 Category Update Visual communications: an adaptable and strong sector 48 How to... ...sell a service long-term and profitably. Step up MPS 52 Research The state of our industry

REGULARS 5 Comment 6 News 54 Generation Game Esmeralda Gonzalez 56 5 minutes with...

Geoffrey Betts 58 Final Word John Barrett

May/June 2020

With countrywide lockdowns and social distancing plans implemented, non-essential firms shuttered their office doors and scrambled to get employees set up for remote working. The implications for the OP sector have been immense and included everything from a non-existent supply chain, the instantaneous decline in certain product categories and retail closures, to the rejigging of deliveries to cope with staff moving out of the office to work at home. But, in the midst of chaos also comes opportunity.

36 Opinion A healthy workforce is vital – wherever it may be

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COMMENT The OPI team EDITORIAL Editor Heike Dieckmann +44 (0)1462 422 143 heike.dieckmann@opi.net Deputy Editor Michelle Sturman michelle.sturman@opi.net News Editor Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net Freelance Contributor David Holes david.holes@opi.net

SALES & MARKETING Chief Commercial Officer Chris Exner +44 (0)7973 186801 chris.exner@opi.net

T

The 'new normal' – but what is that?

here has been an explosion of new words and phrases in these difficult COVID-19 times and many of them will undoubtedly make it into dictionaries around the world, thereby ensuring a certain, if a little dubious, legacy.

‘Covidiot’ or ‘covexit’ anyone? ‘Zoombombing’?

Putting together this issue of OPI, I was struck by one recurring phrase, however – ‘the new normal’. As much as the majority of features in these pages are somehow related to or affected by the coronavirus pandemic – how could they not, given its omnipresent scale – so this phrase is used in almost all of them.

But what is the new normal? Is it here now? Or something that's still to come, eagerly awaited by those that will miraculously emerge from this crisis stronger, either by luck or sheer determination, but dreaded by many at the devastating, negative end of the spectrum? I suspect it's a bit of both, but as Mark Leazer says in our Hot Topic (page 24): “Things won't be quite the same once we are on the other side of this pandemic.”

Things won't be quite the same once we are on the other side of this pandemic

Head of Media Sales Chris Turness +44 (0)7872 684746 chris.turness@opi.net Digital Marketing Manager Aurora Enghis aurora.enghis@opi.net

EVENTS Events Manager Lisa Haywood events@opi.net

PRODUCTION & FINANCE Studio Joel Mitchell joel.mitchell@opi.net Operations & Production Amy Byrne +44 (0)20 7841 2950 amy.byrne@opi.net Finance Kelly Hilleard kelly.hilleard@opi.net

PUBLISHERS CEO Steve Hilleard +44 (0)7799 891000 steve.hilleard@opi.net Director Janet Bell +44 (0)7771 658130 janet.bell@opi.net Executive Assistant Debbie Garrand +44 (0)7718 660249 debbie.garrand@opi.net

As regards the here and now, there are quite a few new normals: l businesses and livelihoods are under threat (see SPOT and NZOS, for example, pages 8 and 12); l increased danger from cyber criminals (page 31); l the need for a healthy – physically and mentally – workforce in extremely taxing times (page 36); l the new realities of homeschooling (page 42) and homeworking (page 54); l immense opportunities in categories such as personal protective equipment (page 28), visual communications (page 46) and cleaning (page 58); l the flexibility and potential of non-traditional distribution (page 44); l the importance of not just relying on transactional sales, but to engage customers in different and, crucially, long-lasting ways (page 48).

Not exclusively tied to any one feature, there's also an overwhelming sense that being technologically savvy is absolutely vital in these socially distanced times – more about that in the next issue of OPI. Until then, stay safe and healthy, and don't forget to get your regular industry updates from opi.net and our relaunched mobile app (page 7).

Twitter: @opinews Linkedin: opi.net/linkedin Facebook: facebook.com/opimagazine App: opi.net/app

Connecting the

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

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May/June 2020

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HEIKE DIECKMANN, EDITOR

5

NEWS

BETTER-THAN-EXPECTED SALES

Dolph Westerbos

Analysis: The comeback kings

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After a tough 2019, Staples Solutions is eyeing growth from a position of strength

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If the COVID-19 crisis had happened in early 2019, Staples Solutions CEO Dolph Westerbos admits that things could have been very different – and not in a good way – for the European reseller. Its liquidity position had been compromised by a loss of credit insurance and the business was still hampered by a high cost structure.

Over the following months, Staples executed a rigorous restructuring plan that reduced its cost base by 25% while securing a line of credit against receivables with its banking partner. The bank balance was also boosted in late 2019 by the proceeds from the divestments of the German retail unit to Office Centre and the Bernard, JPG, Kalamazoo and Mondoffice catalogue and online businesses to packaging group RAJA (see also Big Interview, page 16).

“We ended the 2019 financial year [at the end of January 2020] in a much better place, with significant cash and a good credit position, right before the coronavirus hit,” Westerbos told OPI at the end of April 2020. “Occasionally, you have a bit of luck with timing, making last year’s efforts even more worthwhile.”

The work put in has meant Staples Solutions is probably better placed than many of its peers to weather the current COVID-19 pandemic. From this relative position of strength, and in a refreshing show of openness and transparency while rumours circulate about the health of many industry players, Staples held a well-attended online EU supplier meeting at the beginning of May. The event was hosted by Westerbos himself, along with COO Isabel Ehringer and VP Vendor Management and Procurement Pieter Wolters.

Providing an update on trading, the CEO revealed that sales for April 2020 had declined year on year by around 16% – a very creditable result given the circumstances and ahead of internal expectations. In fact, Westerbos said that revenue overall would probably have been closer to flat versus 2019 had it been able to fulfil all orders in full, pointing to a large backlog and issues in the supply chain for in-demand products.

As Wolters highlighted, business with EU vendors had been more than 10% ahead of budget in the first two months of the current financial year, while EU vendor share at Staples continues to grow. In return for guaranteeing payments – something that cannot be taken for granted these days – Staples is looking for support when it comes to product supply and which resellers to prioritise, certainly for categories that are in high demand such as personal protective equipment and jan/san.

Ehringer explained how Staples Solutions had tweaked its delivery capabilities to ship products to residential addresses during COVID-19; a hybrid office/home delivery model is likely to be the norm going forward. She also gave some good insight into go-to-market initiatives such as selling through online marketplaces – there is already an agreement in Benelux with leading Dutch e-commerce operator Bol.com that clearly has room for expansion. Further potential exists in other markets including Sweden, the UK, Germany and Poland.

Occasionally, you have a bit of luck with timing, making last year’s efforts even more worthwhile The marketplace approach forms part of a wider online strategy that, while it hasn’t been turned on its head due to COVID-19, has seen some opportunistic decisions being taken as the current crisis accentuates the critical need for multiple digital touchpoints with customers. One example of this is a greater use of open websites than had been originally intended.

Staples is well on track to replace its various e-commerce platforms with a new single-platform solution that is set to significantly enhance customer experience and features. As Ehringer noted, Staples’ first customers went live on the new solution in Belgium in April, with the Netherlands following suit in May, and then the Nordics after the summer.

During the Q&A session, Westerbos was asked about acquisition opportunities, both from a channel and geographical perspective. He said the company would take a “wait-and-see” approach, stressing that the market was “very unpredictable” at the moment. That said, OPI believes there are opportunities in the wholesaling, contract and mid-market channels which Staples must surely be looking at – even though Westerbos didn’t give anything away.

Office Depot Europe has continued to downsize its operations after divesting the Nordics business.

Office Depot Nordics has been acquired by its CEO Frank Egholm in a family-backed MBO transaction.

OD Europe said the decision to sell the business comes after a successful transformation of the entity following its acquisition by private equity firm Aurelius in January 2017.

“Since then, Office Depot’s Nordics business has expanded its product and service offerings, the retail channel has been integrated into a multichannel approach, and the business has continued to foster its position among the top three leading players in its core market, Sweden,” the company said.

Based in Sweden, Office Depot Nordics employs 450 people and also services – via partners – customers in Norway, Denmark and Finland. The divestment of the Nordics operations comes after OD Europe sold its Central Eastern European division to PBS Holding in November 2019. According to the reseller, this latest sale has been made with the same strategic rationale: to free up resources “to allow Office Depot Europe to focus on its stronghold European e-commerce-centric business activities”.

OPI relaunches app

OPI has relaunched its mobile app for Android and Apple iOS devices. Whereas the previous app was largely restricted to magazine content, the new version is updated in real time to include all the latest news stories published on opi.net.

It also has features, analysis, blogs and a magazine archive contained within the app and it integrates with the OPI Jobs service and industry calendar. Another benefit is that the latest OPI magazine is available to read the day it is published.

There are more customisable user options too. For example, readers can tag favourite stories and set push notifications based on criteria such as region and type of content. Articles can also be saved to be read offline.

Login details are the same as those for the opi.net website, meaning users only need one password to access all of OPI. The app is available to anyone with a Digital, Premium or VIP membership and can be downloaded from opi.net or directly from the Apple App Store (for iOS devices) and Google Play (for Android).

What next for TOPS?

LEADERSHIP CHANGE AT AIA Promotional products organisation AIA has announced that CFO Nancy Schmidt is taking over as CEO. She succeeds Matt Gresge who is leaving the group to take on a senior role elsewhere.

Schmidt, who has been with the firm for two years, said she would “usher in a season of resilience, stability and, ultimately, growth”. She also confirmed that OP franchise group OfficeZilla – owned by AIA – is now being led by Rochelle Blindauer, supported by Jasmine Kiwus, adding that this business is “an opportunity for diversification and growth”.

EXACLAIR PROMOTES SAVAGE ExaClair, the UK supplier of stationery brands such as Clairefontaine, Exacompta, Rhodia and Décopatch, has promoted Lawrence Savage from within the marketing team to Marketing Manager.

Savage – who has been with the vendor for two years – will be taking over from Clement Rouillard, who is moving into the newly created position of UK Category Manager.

BAUMGARTENS NAMES CHAIR US family-owned office and school products supplier Baumgartens has appointed Kwiyoung Baumgarten as its new Chair of the board. She is an accomplished communications specialist, having spent more than 20 years in senior roles in the financial and payment technology industries with companies such as First Data and Verifone.

Baumgarten also previously worked in the family business, helping it launch and develop brands such as PenAgain, Conserve and SICURIX. NEW ROLE FOR ECI’S JOHNSON Long-serving company executive Traci Johnson has been named Chief Marketing Officer at leading business software provider ECI. Johnson has been with ECI since 2000 following the acquisition of office products systems provider DDMS, where she had been working since 1989.

She was subsequently named VP of DDMS and then President of Britannia, the competitor of DDMS that ECI bought in 2006. More recently, she was SVP of Global Communication and Brand, leading last year’s rebranding process.

May/June 2020

Print and OP group LSC Communications in April voluntarily filed for business reorganisation under Chapter 11 of the US Bankruptcy Code. The company – which includes the TOPS office products supplier business – said it had made the decision following a “comprehensive evaluation” to reduce its $972 million in debt and create a “more sustainable capital structure”.

The move is not a great surprise: in March, LSC had said it was “actively evaluating opportunities to de-lever its capital structure”. However, the firm admitted it had accelerated the timing of the Chapter 11 filing due to the COVID-19 situation. While LSC’s core publishing and print operations have seen sales and profits slide, TOPS has shown itself to be somewhat more resilient. In Q1 2020, its organic sales were down just 5.5% year on year to $112 million, while adjusted EBITDA rose by 9% to $12 million.

The likelihood is that TOPS will find a new home soon. It remains to be seen whether this will involve M&A with another supplier or a standalone transaction.

APPOINTMENTS

NEWS

Office Depot Europe sells off another unit

7

NEWS

Analysis: SPOT broken up

It’s the end of an era as UK wholesaler Spicers goes under Following several weeks of speculation, the future of the UK’s Spicers-OfficeTeam Group (SPOT) was decided in mid-May when its reselling arms OfficeTeam and ZenOffice were sold, while the Spicers wholesaling operations in the UK and Ireland went into liquidation.

Warning signs regarding the health of SPOT were evident at the end of March when, in a trading update, owner Better Capital commented the UK office products group was “in a difficult period with its business affected by the widespread and unprecedented effects of the [COVID-19] pandemic”, and that its future was “uncertain”.

A few days after a Sky News story in April claimed the office products group had been put out to auction, SPOT issued a statement confirming it had filed a notice of intention to appoint administrators. This gave it creditor protection for an initial period of ten business days – which was subsequently extended for ten further days – as it continued to look for solutions. In the meantime, Spicers Ireland, which was not included in the administration process, was liquidated (see below).

LONG HISTORY, SAD DEMISE

The demise of the wholesaler will be very sad news to many in the UK office products industry and beyond

www.opi.net

HOPES RAISED

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The extension raised hopes that a deal was on the cards as this extra period is usually only granted if a transaction is imminent. And so it happened. On 14 May, it was revealed that OfficeTeam, along with dealer ZenOffice, had been acquired for an undisclosed sum by a subsidiary of Paragon Group, a UK-registered but Ireland-based provider of customer communications, identification, graphics and business services.

Paragon CEO Sean Shine said OfficeTeam and ZenOffice would bring expertise to its growing range of workplace solutions and business services. The two acquired companies will continue to be led by former SPOT CEO Steve Horne, with Commercial Director Richard Oates also staying on.

It transpired that this was a pre-pack administration transaction. The acquiror – Paragon Data Analytics – immediately changed its name to OT Group and moved its registered company address from London

to Spicers Ltd’s former home in Smethwick, near Birmingham – the location of OfficeTeam’s main distribution centre. It also bought the rights to the 5 Star product brand and all of Spicers’ stock.

At the same time, it was confirmed that Spicers had ceased trading, other than for the managed wind down of its affairs and the sale of its remaining assets under the auspices of joint administrators from EY. The demise of the wholesaler will be very sad news to many in the UK office products industry and beyond.

Spicers’ history can be traced back to 1796 when John Spicer took over the Alton paper mill in Hampshire. A stationery wholesaling business was set up in London in 1835. For 150 years, Spicers then operated as both a manufacturer and a distributor, only taking the pure wholesaling route in 1985 when it was split in two.

As well as being a force in the UK, Spicers embarked on a strategy of European expansion in the 1990s, acquiring businesses such as Plein Ciel in France and Timmermans in Belgium along the way. When the company was sold by DS Smith in 2011 – with Spain-based Unipapel acquiring the continental Europe subsidiaries and Better Capital taking on the UK – its annual sales were around £715 million ($900 million), fairly evenly split between both entities. By 2019, sales in the UK had dwindled to around £150 million.

Neither Unipapel – which became ADVEO – nor Better Capital were able to turn around the fortunes of Spicers on either side of the Channel. Its winding down in the UK means the only remnants of what was once a major pan-European office products wholesaler is the ADVEO business in France and Benelux, which was saved last year by private equity firm Sandton.

It will now be interesting to see to what extent OT Group can develop its wholesaling operations.

Between them, OfficeTeam and Spicers’ suppliers took a hit that ran into the tens of millions of pounds. After getting burnt like that, they may well not be inclined to offer generous credit and payment terms to the new entity.

On the other hand, there is not much appetite for a market situation whereby VOW becomes the dominant wholesale player in the UK office supplies space. Whether that will benefit OT Group or gives rise to other wholesaling alternatives remains to be seen.

SPICERS IRELAND TO BE WOUND UP Liquidators have been appointed for the Ireland operations of wholesaler Spicers after a petition to wind up the Dublin-based business was approved by the Irish High Court on 1 May. Spicers Ireland was not part of the intention to file for administration that was initiated by SPOT in April. This resulted in a withdrawal of support services for the subsidiary, which employed around 40 staff, leading to its collapse.

Spicers Ireland was formed in the late 1980s and is understood to have been under increasing pressure in recent times, particularly after major investments were made in the country by rival wholesaler VOW.

NEWS

Analysis: EPIC steps up to help dealers Independent Suppliers Group’s EPIC Business Essentials platform has helped its members generate millions of dollars in incremental sales during the coronavirus pandemic In April, US dealer group Independent Suppliers Group (ISG) announced the launch of EPIC 2.0, the next phase of its EPIC Business Essentials national accounts programme. The initiative was brought forward by several months as part of ISG’s COVID-19 response effort.

Explaining the new iteration of EPIC, Managing Director Scott Zintz confirmed that, although the initiative had been growing steadily over the past few years, its fee structure had put it out of reach of some business opportunities. “Several dealers said we had a great programme, but that our fees were too high and they would lose margin by converting their business to our programmes or platform,” he told OPI. “We understood that, and our vision over the past couple of years has been to remedy the situation. Now, thanks to a combination of sales growth, vendor funding – which we were able to attract following the dealer group merger – and a reduction in our operating costs, we are very excited to announce that we have been able to dramatically cut our fee structure for new and existing business.”

We have been able to dramatically cut our fee structure for new and existing business

SUCCESSFUL PILOT

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Following a “wildly successful” pilot phase with selected dealers last year, EPIC 2.0 had originally been slated to launch later in 2020. However, it was brought forward due to the COVID-19 crisis as an opportunity for members to win incremental business in a very challenging trading environment; it also reduces the fees they are paying at a time when every last cent counts.

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“You will not be surprised to hear that we have seen a large drop in standard business over the past few weeks, but we have seen enormous demand growth for personal protective equipment (PPE) and safety supplies,” explained Zintz. Two of EPIC’s largest contracts are with cooperative organisation Omnia Partners, which has thousands of local government customers, and CHAMPS, a leading group purchasing supplier to the healthcare channel. Both serve sectors that have been crying out for products such as masks, gloves, hand sanitiser, etc.

“Omnia Partners’ Program Managers have been constantly calling me to see if we can help supply these products,” explained Zintz. “A lot of their traditional vendors have not been able to get them, but we have been working diligently to find legitimate and reputable suppliers for all kinds of PPE. Some of these suppliers are ISG vendors, but others are new relationships that required weeks of vetting. We understand that during this unprecedented time for our industry, dealers need to be able to sell these high-demand items – so we felt it was our job to assist wherever we could.”

Zintz said that millions of items have already been delivered to customers such as first responders and healthcare facilities. At the end of April, ISG confirmed it had helped secure over $15 million in customer purchase orders for PPE and related products. In addition, EPIC has helped secure large, new customers and even state contracts which will hopefully translate into longer-term relationships too.

Scott Zintz

One resource EPIC has put in place is a dedicated COVID-19 response website – epicdealerops.com – where new leads are posted. The site, which has almost 80 participating dealers, also acts as a forum where members can exchange ideas and product sourcing information.

So far, almost 40 new dealers have requested to join EPIC 2.0 since it was launched – which is a positive start. The efforts of Zintz and his team since the onset of the coronavirus crisis are also tangible evidence of how the independent dealer community is able to adapt and ‘step up’ when things get tough.

Zintz concluded: “We know what worked ten and 20 years ago does not always work today.

We at EPIC will continue to develop innovative strategies on how to go to market, thus bringing new opportunities to the dealers that we serve.

The positive results are already showing, and we look forward to benefiting the independent dealer channel over the long term.”

NEWS

Resellers set to benefit from cleaning 2.0 To start with, there is much more awareness of general cleaning and hygiene standards, backed up in many cases by new rules and regulations. “Cleaning won’t be seen as a cost, but as an investment,” said Tops. Other opportunities include: Despite lower office occupancy rates, cleaning frequency is likely to increase. l There will be greater respect for those working in the cleaning community. With that, cleaners will have more leverage to demand the best cleaning solutions and won’t have to accept cheap and/or high-risk products. l Touchless cleaning solutions will become more popular, giving resellers a chance to upsell these types of products to their customers. l As more people work from home (WFH) or in co-working areas, they will expect their spaces to benefit from the same cleaning standards as their corporate offices. This will lead to opportunities for professional grade products aimed at the SOHO market, such as WFH packs. l Local and small-scale tourism is likely to become a trend – these places and areas will therefore require cleaning more frequently. Resellers should tap into their local connections and networks to win new business. l

Johan Tops

European jan/san products manufacturer Greenspeed recently held an interesting and informative webinar that looked at the impact COVID-19 is having – and will continue to have – on the professional cleaning sector.

Hosted by Commercial Director Johan Tops, the session covered the changes which have taken place as a result of the coronavirus pandemic and what they will mean for the cleaning industry going forward. It was a situation he dubbed ‘cleaning 2.0’.

First the bad news: traditional office cleaning is set to decline as building occupancy rates fall; so will away-from-home cleaning and services related to foreign/mass tourism, leisure activities, sports, entertainment and professional events. At least in the short term.

But Tops gave a much longer list of upsides, and there will undoubtedly be good opportunities to supply cleaning products and services post-COVID-19.

The overriding message was that cleaning and hygiene, for those that move quickly and adapt their offerings, will be a category with enormous potential.

May/June 2020 11

NEWS

Analysis: NXP to the rescue

NZOS acquisition will ensure local ownership for troubled dealer

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By the time this issue of OPI goes to press, reseller NXP (formerly Winc NZ) should have completed the acquisition of leading independent dealer New Zealand Office Supplies (NZOS). NZOS went into voluntary administration at the beginning of May after running into difficulties during the country’s COVID-19-related lockdown – despite receiving several hundred thousand dollars in government subsidies.

There was no lack of interest in acquiring NZOS, which has more than 2,000 customers and which, in 2018, acquired the exclusive distribution rights for Fuji Xerox office supplies and copy paper. Joint administrator Ben Verney of insolvency firm Grey House told OPI he had received 20 enquiries.

This may have been because several dominant office supplies players in both New Zealand and Australia are understood to have already held discussions with NZOS over a possible transaction during the previous 18 months – meaning it would have been possible to put in a proposal in a short space of time without the need for much further due diligence.

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Verney confirmed that NXP’s offer to acquire NZOS – which provides for the ongoing employment of all NZOS’s 34 staff members – was “by far” the best deal presented to the administrators. He called the signing of the heads of agreement (HOA) with NXP just four business days after the appointment of the administrators an “outstanding achievement”, especially given the current COVID-19 situation.

The safeguarding of all NZOS’ employee contracts was also a big plus point in a global business environment where jobs are disintegrating in their millions, he noted.

Verney further said a lot of work had gone into protecting the interests of NZOS’ creditors. While final details have not yet been made public, it is anticipated that secured and priority creditors will get back 100 cents on the dollar and unsecured creditors will receive a dividend.

CONTROVERSY

There was a bit of controversy ahead of the execution of the sale agreement when NXP issued a statement suggesting it had already acquired NZOS – when in fact it had only signed the HOA. “The media release was unauthorised, provided without our knowledge and premature,” confirmed Verney.

However, the administrator stressed that this had not prevented others from staying in the race. “[In the days following the HOA], we had correspondence with other parties, but no one provided a counteroffer or a superior proposal,” he explained. “We were open [about the process] and other interested parties had the opportunity to present us with their final bid.”

We saw this as an opportunity to bring together two New Zealandowned companies with shared values under the same umbrella

Ben Verney

Barring any unforeseen circumstances, the transaction was expected to close on 18 May. NZOS Managing Director and co-founder Mike Manikas was understood to have been offered a position at NXP but was still considering his future.

Commenting on the acquisition, NXP CEO Joe Taylor said: “We understand many Kiwi businesses are hurting in the current trading environment and we saw this as an opportunity to bring together two New Zealand-owned companies with shared values under the same umbrella.”

It was always likely that the COVID-19 crisis would put severe stress on some business products companies. It is also hampering the ability to get transactions across the line and making potential acquirors think twice about committing to an acquisition. As such, it is encouraging to see a successful outcome for NZOS, while NXP benefits from greater scale and customer reach.

Office Depot Inc has announced a new restructuring plan that includes slashing its workforce. In a regulatory filing with the US Securities and Exchange Commission (SEC), the North American reseller said it was implementing the plan “to realign its operational focus to support its B2B solutions and IT services business units, and improve costs”.

Limited details of the programme were provided in the SEC document, but Office Depot explained it would involve “closing and/or consolidating distribution facilities and retail stores, and the reduction of approximately 13,100 employee positions by the end of 2023”.

The plan will also cost a lot: incremental restructuring charges are estimated at more than $540 million, with much of that going towards the closures and headcount reductions, including $55 million in cash for employee severance. Depot expects to achieve net savings of around $860 million by the end of 2023.

While the company is “still evaluating” the exact number and timing of potential store and warehouse closures, they are likely to be significant. As of 25 January 2020, Office Depot had approximately 40,000 employees, meaning this latest restructuring will reduce its workforce by around one-third. How many of those will come from the Retail division is not yet known, but the focus on B2B and IT Services will surely mean the biggest cuts come at the store operations These latest developments will no doubt be a body blow to the firm’s retail staff who were on the frontline as the COVID-19

NEWS

Massive restructuring at Office Depot Inc

pandemic swept across the US. Indeed, Depot stores achieved their first quarterly comparable sales increase in years as demand shot up for jan/san, personal protective equipment and work-from-home products, while click-and-collect orders jumped by more than 25%.

During the Q1 earnings call, CEO Gerry Smith applauded the “tremendous effort” by the Retail team and pointed to a “significant improvement” in customer satisfaction metrics.

Nevertheless, although he didn’t discuss mass closures, he referred to accelerating Office Depot’s “B2B pivot”, stating: “We will continually evaluate the profitability and strategic value of each of our retail locations in order to optimise our footprint.”

Prima launches digital marketplace

May/June 2020

Business products cloud and e-commerce solutions provider Prima Software has launched a marketplace initiative to connect dealers and suppliers in an effort to ease supply chain challenges in the UK market.

The online catalogue repository enables more than 220 business supplies dealers that run on the company’s back-office system to browse and order items from over 50 supplier catalogues.

Marketing Director Robert Harper told OPI the initiative was part of a wider strategy by Prima to develop closer ties with the supplier community.

It also tied in with the growing trend of direct purchasing.

The solution offered by Prima allows vendors to make their entire portfolio of products available to resellers.

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NEWS

IN BRIEF Nippon Paper completes Australian acquisition Nippon Paper has folded its Australasian businesses into a new, single group called Opal following the closing of its A$1.72 billion (US$1.1 billion) acquisition of the fibre operations of packaging specialist Orora Fibre. Opal Australian Paper, as it is now called, is the maker of the leading local brand of office paper, Reflex.

Insights-X off The Insights-X stationery and back-to-school trade show originally scheduled to take place in Nuremberg, Germany, this October has been cancelled.

Organiser Spielwarenmesse said a number of digital alternatives would be offered this year, with the physical event returning in 2021.

90%

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crease Year-on-year in t a in online sales onth Costco for the m of April 2020

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Green Seal to waive recycled content limits US ecolabel organisation Green Seal is to temporarily allow manufacturers to continue to retain their GS-1 certifications even though some products may have fallen below the recycled content thresholds. Green Seal’s decision comes after what it called “unprecedented disruptions” to supply chains that have led to shortages of recycled fibres in North America.

14.7% US unemploy ment rate – April 2020

75%

Employees who feel they can do their job effectively from home (Source: IWFM/YouGov April 2020)

We are witnessing the biggest shift for a generation – huge, centralised HQ buildings are the new dinosaurs [and] we are entering a culture of flexible working and regionalisation of office space Jonathan Ratcliffe, Senior Broker, Offices.co.uk

Durable converts production Manufacturer Durable has transformed production at its Gotha facility in Germany to focus on the production of face visors in place of loose-leaf binders, folders and name badges.

PICTURE OF THE MONTH Employees at VOW Wholesale in the UK donned fancy dress costumes while working from home in April. The initiative, started by staff members Donna McDonald and Jess Emsley, helped raise more than £1,000 ($1,200) for NHS Charities.

Redoffice joins Interaction European purchasing alliance Interaction has strengthened its position in the Nordics with the addition of Redoffice Supply & Logistics. The Danish group comprises three OP dealers – Scan Office, Konpap and ABSJ Office – and has annual sales of €100 million ($110 million).

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How confident are you that your business will still be operating this time next year?

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BIG INTERVIEW

Standing

FIRM

France-based packaging group RAJA raised eyebrows last year with the acquisition of four Staples Solutions subsidiaries. This firmly established it as a leading pan-European B2B business supplies reseller with annual sales of more than €1 billion ($1.1 billion)

W

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hile RAJA’s 2019 acquisition of Staples Solutions’ operations in France, Italy and Spain (collectively known internally as RAJA Office) may have taken the OP world somewhat by surprise, it was really a continuation of a product and geographical expansion that began in the mid-1990s. Nevertheless, with annual sales of around €320 million and the addition of about 1,000 staff, RAJA Office was by some margin the reseller’s largest acquisition to date.

Behind the move was the realisation that B2B purchasers are increasingly looking for one-stop experts for their indirect purchasing needs. The office products offering of JPG, Mondoffice and Kalamazoo, coupled with the jan/san-focused Bernard, tied in snugly with RAJA’s existing packaging, MRO, facilities and business equipment SKUs. There was also very little customer overlap, meaning there was substantial cross-selling potential among existing clients.

Of course, no one could have predicted that a global pandemic of colossal proportions would strike just four months after the RAJA Office acquisition had closed. This has presented unforeseen challenges but, as RAJA CEO Danièle Kapel-Marcovici explained in a telephone interview to OPI’s Andy Braithwaite during her lockdown in Paris, the group is standing firmly by its newest members and has an unwavering belief in its strategy.

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OPI: We’re living in unprecedented times. Firstly, I sincerely hope you, your family and your staff are all safe and well.

Danièle Kapel-Marcovici: Thank you. It’s been a difficult situation. I have stayed at home in Paris throughout, even though I am not far from the office – that has made everyone feel secure.

OPI: Are all your subsidiaries still operating?

DK-M: Yes. We implemented our business continuity measures very early on and have maintained operations in all 18 countries across the group. RAJA Italy is located right in the middle of the first isolation zone in Piacenza, the capital of the Emilia-Romagna region. But we organised ourselves to keep working with a maximum of employee protection, distancing measures and working from home even before it was mandatory.

It was very much a question of ‘battle stations’ across the whole group and I’m extremely proud of the commitment of our teams. That is really where our company culture has shone through, I believe – the focus on clients, service and also our suppliers. It was important to have stock available and our purchasers have been working their socks off – from home – calling existing vendors and even opening accounts with new ones.

It has been a very complex and unprecedented situation in which everyone has been playing an important role, stepping up and doing more. But the company spirit has been incredible – in the end, you reap what you sow.

Company: RAJA Total sales: approx. €1 billion ($1.1 billion) – 51% in France Coverage: 25 companies in 18 European markets Staff: 3,000 Logistics: 14 distribution centres comprising 330,000 sq m (3.3 million sq ft) of storage space SKUs: 200,000 Customers: 1 million

BIG INTERVIEW Danièle Kapel-Marcovici

FAST FACTS

Photo: Daniel Besikian

I have never seen anything like this, both in terms of a health and economic crisis. [...] What comes next will also be very complicated and challenging

OPI: You’ve obviously experienced a number of other financial crises during your time at RAJA. How does this compare?

DK-M: I have never seen anything like this, both in terms of a health and economic crisis.

But I realised just how important it was to keep operating. What comes next will also be very complicated and challenging. The more we resist now, and react, the less difficult the

May/June 2020

OPI: How has the supply chain been holding up?

DK-M: It has been a challenge to maintain stocks and find certain items. As I said, our buyers have been working on all fronts. It has also helped that we have very strong partnerships with suppliers which means we are relatively well stocked and able to get products.

That said, there have been some problems with deliveries. It’s not just us; it’s a general problem in Europe, in particular in France, Spain and Italy, as some freight companies are shut and it’s difficult to find drivers.

Despite this, our strategic distribution centre in Belgium, which delivers to Belgium, the Netherlands, Germany, Switzerland and Austria, is fully operational.

OPI: What about business performance?

DK-M: Our RAJA Packaging side has been doing quite well. We have a lot of clients involved in e-commerce, and they are counting on us. As for our clients in the food and medical supplies industries, it’s very important that we can continue to service these.

We have actually had some very large orders from companies that were not necessarily customers of ours before the crisis. Their regular supplier is closed and they are turning to us – we’ve seen this all over Europe.

Of course, the RAJA Office businesses have been heavily impacted. We have seen 40-50% declines in sales in some places.

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Danièle Kapel-Marcovici BIG INTERVIEW

aftermath will be. It will be tough for everybody, but hopefully a little less so for us.

attended the final signing of the contract. Our legal representatives had never seen anything like it.

OPI: We hear a lot about cash and liquidity challenges. What is your financial position?

DK-M: We have a solid financial base in the group.

However, it is not impossible that JPG, Mondoffice and Kalamazoo will need liquidity support. They were stripped of their financial strengths and their marketing and commercial acumen, first by Staples and then by the ‘vulture fund’ we acquired them from – stripped in a shameful manner, that’s the only way I can describe it.

OPI: There appears to be quite a cultural difference between you and the former owners...

DK-M: A huge cultural gap. I dread to think what would have happened to those businesses if we had not acquired them. They were all very happy to join RAJA and even during this difficult period, I hope they still feel they are better off with us than they would have been under Cerberus.

OPI: Those are strong words.

DK-M: That’s how it was. They sold the property assets, took all the cash and, quite frankly, used them in an outrageous way. The result is that those businesses have been left vulnerable when faced with a crisis like this current one. As a group, we are stable and solid, but those companies in particular will suffer.

OPI: But you will support them?

DK-M: Yes, of course. We will do whatever it takes to help them get back on their feet again and grow.

OPI: So no regrets about acquiring them?

DK-M: Absolutely not. The timing hasn’t been perfect, but it was – and still is – a strategic opportunity. I cannot say it was a financial opportunity though, let’s be clear about that.

OPI: You overpaid?

DK-M: Good question. There are some things I cannot talk about. Let’s just say, we paid Cerberus a very good price. But I want to stress that our ambition to integrate these businesses into the group, as well as the strategic opportunities, still exist. This wasn’t just a transaction to add extra revenue. The longer-term view is to develop our RAJA Market concept, and RAJA Office is a key component of that.

The challenge ahead of us is no doubt more difficult than we had imagined, but our ambition is not diminished in any way.

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OPI: We’ll come back to RAJA Market in a bit.

How did the Staples acquisitions come about?

DK-M: It was our initiative. We had identified an opportunity to diversify our product offering and propose a much wider range to our customer base. That was a goal we had established for some time, although not necessarily via such a large acquisition.

We had heard that Cerberus had received offers for Staples, so we approached the private equity firm in March 2019. It would have sold us the whole company, but we were really only interested in France, Italy and Spain because they have a similar business model to ours.

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OPI: The transaction closed last October. What were your priorities at that time?

DK-M: Yes, it closed on 7 October. Just to illustrate a point, no one from Cerberus or Staples even

OPI: How would you define RAJA’s culture?

DK-M: It’s based around a number of things: the client at the heart of what we do, a commitment to service, quality excellence, providing expertise, respect, social engagement, diversity and social progress. When you look at these words, they don’t sound unique – these are universal concepts.

But I have always thought that businesses not only have an economic role to play, they also have a role in society. We manifest the culture via the RAJA Foundation and in many other ways within the company. I would describe it as mutual respect between all our stakeholders.

OPI: Going back to your priorities last October...

DK-M: The first thing I did was go on a roadshow.

I went to meet everyone, presented the group and our plans. That was a big moment for us and for the companies we bought.

We looked at how we could improve operations and took some important decisions about making these businesses autonomous again: their IT, customer service and catalogue production had all been centralised.

The challenge ahead of us is no doubt more difficult than we had imagined, but our ambition is not diminished in any way OPI: You have a service agreement with Staples, don’t you?

DK-M: Yes, and it’s absolutely critical that we meet the timeframe for completing the decoupling process. IT was handled in Poland, purchasing came out of Amsterdam, customer service was based in Portugal and the catalogues were produced in Portugal as well. We may have some things ‘on hold’ during this crisis, but this autonomy project is not one of them.

OPI: What have you achieved so far?

DK-M: We have taken charge of the catalogues for 2020 and moved our JPG customer service department back to Survilliers, near Paris. And we are working to bring in all the purchasing and make the companies digitally autonomous.

OPI: What about synergies?

DK-M: There have been joint visits for key accounts, especially in Italy and Spain, to offer

BIG INTERVIEW Danièle Kapel-Marcovici

RAJA OFFICE JPG (FRANCE) Founded: 1977 Employees: 370 Sales (2019): €125 million

packaging solutions to our RAJA Office customers.

The teams have been working closely together and this was something that was relatively straightforward to set up.

Important synergies are taking place in IT and web activities as well as in marketing, and our teams are sharing best practices.

In terms of logistics, we are evaluating how we can optimise our space now that we have the JPG facility in France. For example, in RAJA we also sell office and cleaning products. It may make sense to have these stocked and shipped from our JPG site, thereby allowing RAJA to expand its packaging ranges.

KALAMAZOO (SPAIN) Founded: 1972 Employees: 160 Sales (2019): €38 million

OPI: Is this temporary?

DK-M: Yes. We have discovered that the three office supplies businesses were not really working closely enough together. I think it had to do with how they were organised before. It’s something we have learned and will address going forward.

BERNARD (FRANCE) Founded: 1970 Employees: 130 Sales (2019): €33 million

OPI: You made a leadership change at JPG earlier this year, didn’t you?

DK-M: Correct. In January, we reached a mutual decision with Sacha [Tikhomiroff, former Managing Director of JPG] that a change would be for the better. That business is now being run by

OPI: Has the COVID-19 situation forced you to change your strategy in any way? Perhaps combine locations?

DK-M: No, we are not going to consolidate any sites. We believe that local managers should be fully in charge of their businesses. But there are plenty of other opportunities we had already identified in France, Spain and Italy.

At the moment, it’s more a question of getting through this period and maintaining our activities.

Then we will work on the various synergies. Those things are less urgent than the decoupling tasks I mentioned earlier.

OPI: What are your plans for the private label range you inherited?

DK-M: Staples branded products will become RAJA products. We have already been in talks with suppliers since the acquisition. In October, we held a suppliers’ day which was very well received.

I gave them my ‘one-woman show’, explained our company culture and our philosophy. I told vendors we have a certain vision of a partnership and that we would pay them.

OPI: They weren’t being paid before?

DK-M: Not all of them. Some of them had JPG on stop. That’s why our event was well attended – vendors wanted to know what we had to say. It was a very interesting day!

May/June 2020

MONDOFFICE (ITALY) Founded: 1989 Employees: 310 Sales (2019): €122 million

OPI: You’ve grouped the acquired companies under an umbrella called RAJA Office. How is this organised?

DK-M: There isn’t a specific division that oversees the four subsidiaries; they report directly to me and the executive committee. Having said that, I have put Emmanuel Clair, who is Managing Director of Information Systems & Acquisitions, in charge of RAJA Office during the current crisis.

Jean-Louis Coustenoble who has returned to the JPG fold. I have known him for 25 years and have every confidence in him.

It’s tough for Jean-Louis at the moment, but I’m glad we made the change before the crisis happened and not during it. He knows our team very well and that made it easier for him to settle in.

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Danièle Kapel-Marcovici BIG INTERVIEW

OPI: You have a lot of office products purchasing experience in RAJA already. I imagine that helps.

DK-M: Absolutely. Both Alain Josse, who is our Group Managing Director of Products, Purchasing and Supply Chain, and Group Purchasing Director Ulrick Parfum worked at Office Depot for many years, so they have a good understanding of the category. In the UK, we have Tom Rodda, formerly of Spicers, while in Germany Christa Furter – ex-CEO of iba – is leading our Udo Bär subsidiary.

Combined with the expertise that we acquired, we are very confident.

OPI: I believe that with your packaging products, your policy is to source locally where possible. Will you look to do this with your office products ranges as well?

DK-M: Depending on the market, about 80-90% of our packaging products are from local or at least European manufacturers. Supplier proximity

provides work for local companies, reduces shipping distances – which is an environmental consideration – and also transportation costs. I believe all of those things are important.

For office supplies, it is very different as a lot of products come from South-East Asia. We have not changed our purchasing strategy for the time being, but it is something we will look at. Perhaps one of the changes post-COVID-19 will be a return of manufacturing to Europe. Products might be a bit more expensive, but they would travel less distance. If we could source from Europe, then I think that is an option for us, even if there was a difference in price.

What we see in packaging certainly is that clients respond to the fact that 85% of our products come from European factories. That is a USP or a value-add for us, and customers are sensitive to it. If there is enough pushback from office products buyers, then that may help manufacturing return to Europe.

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RAJA TIMELINE

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1954: Cartons RAJA founded by Rachel Marcovici and Janine Rocher 1976: First catalogue 1982: Danièle Kapel-Marcovici becomes CEO 1992: Name shortened to RAJA 1994: International expansion begins with acquisition of Binpac in Belgium 1997: Move to new headquarters in Roissy, near Paris 2000: First web shop launched 2006: RAJA Foundation created 2007: Acquisition of L’Equipier (France) 2010: Acquisition of CENPAC (France) 2015: Acquisition of Morplan (UK) 2017: Acquisitions of Udo Bär (Germany) and Welco (UK) 2019: Acquisitions of Bernard, JPG, Kalamazoo and Mondoffice from Staples Solutions

Photo: Rémy Deluze

OPI: You mentioned RAJA Market earlier. Can you explain this concept?

DK-M: The overall goal is to enable customers, wherever they are, to buy and receive all the products we have available across our group: packaging, industrial equipment, storage and handling, office products, furniture and jan/san.

It’s a one-stop solution.

In order for that to happen, we need to integrate all our companies on a single IT platform. This takes time and an important step in that is making the RAJA Office companies autonomous because they will move onto our system.

When we have connected IT, it will then be possible to link our distribution centres. Earlier this year, we commissioned a consultant called Philippe Hemard who spent 15 years working with Amazon on its European supply chain network.

That was before the crisis so, apart from the RAJA Office integration, the project is somewhat on hold.

OPI: When do you expect to fully launch the RAJA Market concept?

DK-M: It won’t be a ‘big bang’ launch; it’s an ongoing project. Last year, for example, we integrated our L’Equipier cleaning and hygiene products into the RAJA catalogue, adding around 2,000 SKUs. Also, we acquired an industrial supplies distributor called Welco in the UK in 2017 – its products have been integrated into the main RAJA UK catalogue. So again, that was the RAJA Market concept, but at a local level – it’s a constantly evolving programme.

OPI: What do you mean by making field sales more effective?

OPI: As part of a multichannel approach, would you consider having, for example, a JPG store on the Amazon Marketplace?

DK-M: It’s not something we plan to do. We prefer to have Amazon as a client. Our goal is really to integrate the acquired companies and to develop synergies within the group – including expanding JPG internationally.

OPI: Really?

DK-M: Yes. We are not sure yet exactly what form it will take, but it will be an important project for us. I expect it will probably start towards the end of 2021.

OPI: How else do you see RAJA developing over the next few years?

DK-M: At the moment, it’s difficult to see what lies ahead in three months’ time, let alone years. For now, we are trying to be optimistic about 2020, at least for certain markets. It’s about preparing for the return to growth, and following through with the synergies and integration of our acquisitions.

The crisis happened really soon after the acquisition closed. It has meant complex conditions for our integration plans, but there are things we will simply have to get done. After that, the key aspects will be the availability of the RAJA Market platform and expanding our offering internationally.

OPI: Just to finish – what about your own future? You have been at the helm of RAJA for nearly 40 years...

DK-M: (laughs) This is probably the way these interviews normally end, but it’s not something I really want to discuss, nor something I think about too much. Let me just say that in times like these, companies need leaders who can act with reflection, responsibility, strength and energy. If I felt I wasn’t the right person to steer us through this situation, I would be questioning my position.

But that is not at all the case.

In fact, I feel on top form and am more determined than ever to come through this crisis and implement our strategy. I still get a lot of pleasure from leading this group, and I hope all RAJA employees feel the same about me.

OPI: And long may that continue. Thank you very much for your time and insights, especially during this challenging period.

For more exclusive content from the interview about RAJA Foundation, please visit the Magazine section on opi.net.

May/June 2020

OPI: I have read that Amazon is your largest customer, at least in France. Will your relationship with Amazon change in any way following the RAJA Office acquisition?

DK-M: There’s a big difference between the packaging and office supplies categories.

Packaging is a technical sale, the items are bulky, there is greater investment by the client and buyers place more trust in a specialist like us.

Of course, we know office supplies is one of the sectors where Amazon has invested a lot and where it will be a strong competitor. That is why we are re-energising the multichannel commercial strategy at JPG, Mondoffice and Kalamazoo – making the field sales teams more effective, bringing the telesales unit in-house in Survilliers, differentiating ourselves with a general catalogue.

For example, in 2020, it was the first time in four years that Kalamazoo had its own main catalogue – it had been stopped for cost reasons, which I find a strange move for a direct selling business.

DK-M: I mean for key accounts and for categories like office furniture and workplace design where there is a lot of potential. Last year, JPG opened a great showroom near Paris where we can highlight design services such as 3D modelling, creating co-working spaces and other added-value solutions which are not Amazon’s strong point. We need to differentiate ourselves.

BIG INTERVIEW Danièle Kapel-Marcovici

OPI: There are several well-known office brands that already produce in Europe.

DK-M: We are interested if we can find suppliers that have a good quality/price ratio. Our private brand strategy is not entry level, so I believe it would be a sensible policy to source these products from Europe.

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HOT TOPIC

DEALING with the UNKNOWN

COVID-19 has sent the world into a spin and affected our entire way of working. But for those prepared to think outside the box and seize opportunities as and when they arise, the outlook isn’t so bleak – by Michelle Sturman

T

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he world continues to grapple with the coronavirus pandemic that has transformed life as we know it. As this article was being written, the number of coronavirus cases passed the four million mark, with over 300,000 people sadly lost to the disease. COVID-19 has impacted – and continues to do so – every facet of our lives and left companies with tough decisions to make about their present and future.

As history tells us, crises typically generate an explosion of innovative thinking and novel ways of addressing a situation. During these times, there is the inevitable emergence of entrepreneurs and heroes – often also charlatans – causing a sea change across many aspects of society. There are invariably winners and losers during any turbulent period, and the current circumstances are no exception.

When COVID-19 began spreading around the globe, panic buying led to mass shortages of toilet paper and hand sanitiser. Suppliers of these products gained sales, while others in different industries set about amending their manufacturing facilities to also produce the aforementioned items as well as vital supplies such as face masks.

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MOVING QUICKLY The business supplies sector may not be renowned for its innovative mindset and lightning-quick response to change, but during this pandemic, many channels moved swiftly and decisively to address the needs of their customers.

With countrywide lockdowns and social distancing plans implemented, non-essential firms shuttered their office doors and scrambled to get employees set up for remote working. The implications for the OP sector have been immense and included everything from a non-existent

supply chain, the instantaneous decline in certain product categories and retail closures, to the rejigging of deliveries to cope with staff moving out of the office to work at home. But, in the midst of chaos comes opportunity.

Many vendors, wholesalers and dealer groups were quick to reassure their partners that all would be done to help them survive the pandemic.

Undoubtedly, plenty of communication has been going on behind the scenes that OPI was not privy to, but there have also been many reports in terms of the industry trying to shore itself up, often in unparalleled, unexpected and speedy ways.

CLOSE COOPERATION UK dealer group Integra Business Solutions, for example, instigated measures that included a 50% reduction in membership fees for three months, free marketing collateral and the option for the wider OP community to use its facilities and services. In a move that would have been highly unlikely before the pandemic, Integra also announced that it would work on joint initiatives with fellow group Nemo.

In the US, Independent Suppliers Group acted to protect its members with extended payment terms, an early rebate and increased proactive communication on a broad range of topics. Dealer groups in Australia declared initiatives to assist their members. In addition to reducing its own running costs – measures have included several redundancies and shorter working hours – Office Brands has been working with its wholesaler partners to provide stand-in drop-shipments if a dealer is forced to close, for example.

According to Office Choice CEO Brad O’Brien, his group has been taking a very proactive approach from both a mindset and business practice perspective. This is coordinated by its

EDITOR’S NOTE This feature was written using information available up until mid-May 2020. We appreciate how the coronavirus situation continues to evolve at a different pace around the world, and that new, important developments will most certainly have occurred by the time you read this.

Please check the News section on opi.net for the latest information on how this crisis continues to impact our sector.

product available and the repercussions of this: “Almost all of the orders we are processing currently are heavily weighted towards PPE and jan/san, or – more appropriately – hygiene. Early into this pandemic, we were extremely busy but when Wisconsin instituted its stay-at-home policy, we saw volumes steadily decrease. Product availability has been a real struggle, so we've improvised and gone outside traditional channels to source goods. Had product been available, we would not have taken as severe a hit to sales volumes.”

Europe’s largest business supplies reseller Lyreco is another operator experiencing extraordinary demand for PPE and jan/san products. It too is constantly on the hunt for alternative sources, but they have to comply with more stringent requirements than before the pandemic. “We have put processes and measures in place to secure sourcing, but also compliance with regulations, our quality standards, and our ethics and CSR policies. Our most important criterion is to not compromise on quality,” Lyreco Group Marketing Director Franck Suhit told OPI. “We need to ensure the businesses we are talking to are CSR-compliant to our standards and make sure we’re not buying from those that don’t necessarily share our principles.”

HOT TOPIC COVID-19

Support Office which has been aggressive with its marketing in terms of regular electronic direct mail focused on high demand products and customer acquisition, as well as significantly increasing its media spend, particularly in the consumer arena.

O'Brien adds: “We set up a COVID-19 information hub very early in the process, providing guidance and direction for our dealers regarding government stimulus offerings, tips and hints, and regular information and training webinars.”

Predictably, the global shutdown has already started claiming some casualties. Towards the end of April, UK business supplies group Spicers-OfficeTeam (SPOT), for example, filed a notice of intention to appoint administrators.

Unpredictable trading due to the pandemic was cited as a primary reason for the board exploring options. That said, as was pointed out by SPOT CEO Steve Horne, the company is backed by private equity and therefore has always been ‘up for sale’ (for more information, see News, page 8).

SPOT is not the only company in distress; the impact of COVID-19 is taking its toll on the entire sector, with manufacturing shutdowns, redundancies, short-time working and many other initiatives as firms fight for survival.

Office Depot Europe – also private equity-backed – not only irked its vendor partners by extending payment terms without warning, but owner Aurelius also commented it had decisions to make regarding the companies in its portfolio.

There is pressure on all companies, however, as a survey conducted by UK industry association BOSS in late March/early April revealed. The results were not wholly unexpected. Key issues

SOURCING DIFFICULTIES The issues of obtaining goods have primarily stemmed from the upheaval in the manufacturing community in China. This is coupled with the global competition to purchase extremely high quantities of PPE and hygiene items for frontline healthcare staff.

Product availability has been a real struggle, so we've improvised and gone outside traditional channels to source goods revolved around bad debt exposure and cash flow, supply chain disruption, a significant decline in orders, staff shortages due to necessary redundancies and the survival of the business.

May/June 2020

RIDING THE PPE TRAIN It’s not all doom and gloom, of course, as declines in some product categories have been offset by gains in others. Unsurprisingly, jan/san, personal protective equipment (PPE) and safety items have been in high demand and have led some dealers to seek out new suppliers to satisfy requirements.

Says US-based Kerr Workplace Solutions President Brian Kerr: “During the past few months, it has been challenging to get products that our clients need from our current supply partners. We identified an additional source for PPE and the orders have been flowing in as word got around that we have access. This has allowed us to pick up new customers and show them that an independent dealer is vested in their business and not just in a transaction like the online retailers or big box stores.”

Gary Molz, VP of fellow US dealer EZ Office Products, agrees but also alludes to the lack of

As Helen Wade, Marketing Director of UK wholesaler VOW, explains: “The switch in our product mix has changed; we have seen exceptional demand for all cleaning and personal hygiene products. There has been unprecedented demand for PPE, and we are trying to ensure that supply goes via our sales channels to healthcare and frontline workers as quickly as possible. This is proving to be very difficult as much of this category is manufactured in Asia.”

Steve Carter, Managing Director of UK dealer group Advantia, concurs, adding: “A lot of this product has been diverted into the NHS, and rightly so, but it has meant that fulfilling orders has become a challenge.”

While supply has been impacted across the world, some countries have fared better than others. Take Germany, for instance, which has been lauded for its handling of the crisis. This is a sentiment echoed by German dealer group Soennecken which told OPI that there was indeed a run on coronavirus-specific products such as breathing masks and those related to hygiene, but the delivery situation was better than expected and its purchasing department was doing a “great job”.

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COVID-19 HOT TOPIC www.opi.net 26

SEIZING OPPORTUNITIES Perhaps the most significant ramification of the lockdown for the business supplies sector is the mass migration of those working in an office decamping to a homeworking environment.

Again, some members of the industry have been quick to react to an extraordinary situation and seized the current opportunities.

Predominantly, they have come in the shape of swiftly adapting and shifting deliveries from the office to an employee at their home address.

US wholesalers S.P. Richards and Essendant were fast in promoting work-from-home (WFH) programmes to their dealer members, with vendors and dealer groups playing their parts too.

Says Office Plus and Office Furniture USA Las Vegas President Trace Marrs: “Support has been exceptional. We've received daily updates on back orders and shipping schedules, so we can keep in communication with our customers. Regional updates on the outbreak, customised marketing materials, and some great resources have additionally been provided. In a time like this, we truly realise the value of doing more than you are expected to, and our suppliers are setting a leading example of that. It’s not merely about providing the products, it’s around sharing resources and solutions to help keep our community strong.”

Kerr agrees, adding: “I know our business partners are working hard to make sure we obtain the items we need. They are seeking alternative manufacturers and providing online webinars to help guide us through this pandemic.”

Quick on the WFH initiatives was US-based FSIoffice which created a separate ‘at home’ website, with orders delivered by its trucks or FedEx. CEO Kim Leazer said multiple customers had requested this kind of service, and the company had also promoted it outside its normal client base. “We have several ‘at home’ marketing pieces that have bundles and standalone components to mix and match for individual needs. Plus, we have witnessed a rise in demand for home office furniture and technology supplies during this time,” she adds.

US dealer Intivity, meanwhile, offers home delivery and has put together a ‘work-at-home package’. But, says Intivity Workplace Consultant Larry Hann, the business has shifted almost entirely to PPE and jan/san for the time being: “We have established contacts for masks, gloves, hand sanitiser as well as surgical suits, gowns and splatter shields. We have also delivered ‘hospital in a box’ packages that include an inflatable tent as well as furniture and supplies.”

Lyreco was already on board with the growing homeworking trend before the coronavirus struck, which enabled it to speedily launch its Home Delivery facility. As Customer Experience Director Cyril Quinzin explains: “Our Home Delivery service was already in gestation when the COVID-19 crisis started. As the countries where we directly operate went into lockdown one after another, we were able to make this resource live in just a few days; its development was coordinated at group level and implemented in 25 countries in Europe and Asia.”

Lyreco’s capacity to introduce – and maintain – Home Delivery relied on several elements, including the ability of its customer services, warehouse and delivery teams to keep on operating, even in those European countries most affected by coronavirus. Other essential building blocks involved the reseller’s flexible IT systems and integrated e-commerce infrastructures; the commitment, synergy and agility of its staff at group and local levels, plus constantly adapting the solution based on regular customer feedback.

“As soon as we launched, the demand for Home Delivery was exponential, obviously first in nations where the lockdown was sudden and strict such as Italy, Spain, France and Benelux.

We reached a high volume of orders within the first four weeks,” adds Quinzin.

Initially aimed at Lyreco’s existing customers, the reseller has subsequently opened up the delivery programme to new B2B clients.

ONLINE ORDERING Everyone OPI spoke to acknowledged the role an e-commerce offering played as a vital part in developing a successful home delivery service, with most also seeing an upswing in online sales due to the implementation of lockdowns.

Soennecken, for example, said that while online ordering figures have continually grown over the past few years, in recent months they have increased very significantly. It added that almost all of its retail members use the group's open web shop, which has positioned them well even during this time of enforced homeworking.

Interesting insights from the Adobe Digital Economy Index recently revealed that in the US, the impact of COVID-19 on online buying has been astounding. Between 1 January and 11

Those moving back into the workplace will face social distancing requirements – which may require a complete overhaul of the office layout – along with a higher emphasis on hygiene and safety. The impact of COVID-19 will likely force many firms to downsize or even forgo traditional office space altogether, resulting in a novel way of working and fewer employees in a dedicated workplace, at least for the foreseeable future.

It’s not merely about providing the products, it’s around sharing resources and solutions to help keep our community strong The rapid shift of employees sent to work from home for an indefinite period has further led to a rise in certain OP categories, such as office furniture (including ergonomic options), monitors, paper, printers and consumables. The advent of mass homeschooling has presented additional opportunities. Office Choice's O’Brien, for example, refers to the group's newly launched ‘Learn from Home’ programme, which features education-centric products and offers in addition to core stationery.

“This has been well received and is generating ancillary income,” he adds.

THE NEW NORMAL All that said, the initial demand spike created by the requirement for home office supplies has pretty much subsided now. And although many countries are implementing a cautious lifting of lockdown, it seems the re-opening of offices will be a long and drawn-out process. Ultimately, the result will be a complete shake-up of the working environment, both immediately and in the long term.

HOT TOPIC COVID-19

March 2020, several products saw a tremendous jump in sales: 807% for hand sanitisers, gloves, masks and antibacterial sprays and 231% for toilet paper. Linked to the start of lockdown in March, orders for desktops and laptops saw sales rise 55% and 40% respectively. Additionally, the Index reported a 62% year-over-year increase between 24 February and 21 March in ‘buy online, pick up in store’ shopping.

Suhit is convinced that while the homeworking phenomenon was already there before the pandemic, it will now become the ‘new normal’.

He says: “As the crisis will last months, it will anchor the working-from-home trend, particularly as companies have realised that it is not as complex to adopt as perhaps thought. Other factors influencing this direction will be the economic aftermath and a positive environmental impact through reduced commuting. With all of this becoming the norm, the needs in remote working will certainly evolve towards the ‘professionalisation’ of the home office.”

Mark Leazer, Executive Director of US national accounts dealer network AOPD, thinks there will be seismic shifts as a result of COVID-19. He points out that videoconferencing, for instance – not a nice-to-have but a must-have these days – has exposed how simple it actually is to use some of these communication tools. “Things won’t be quite the same once we are on the other side of this pandemic,” he concludes.

HOW TO... MAKE THE MOST OF A DIFFICULT SITUATION At the onset of the coronavirus pandemic, US wholesaler S.P. Richards (SPR) was extremely proactive in assessing the situation and evaluating the likely outcomes that COVID-19 would bring. Quick off the mark, SPR sent its dealer partners ideas on what to do differently to support their customers to ensure they become an essential resource during the crisis.

Below are some of the ideas that were communicated. OPI felt they were an excellent how-to guide for dealers in the coming months as workplace requirements continue to shift.

May/June 2020

Kerbside delivery: As an essential business supplying vital products, could you provide kerbside delivery and keep social distancing? The customer pulls up to your business and you load the car. l Home delivery: Even with lockdown easing in certain parts of the world, the majority of office employees are still working from home and will continue to do so for some time. Can you offer home delivery to your customers’ employees? Maybe just make a ‘porch drop’ to maintain social distancing for a specific order minimum and within a certain radius? l Business supplies for the home: Homeworkers still need office supplies. These may include desks, folding tables and chairs, cleaning equipment, breakroom snacks and coffee, batteries, ink, paper, headsets, charging stations and organisational products. l

Show your appreciation to staff, customers and the community: Cleaning staff may be working overtime right now, deep cleaning facilities. Bring them a snack or goodie bag with a 'thank you' card. Some customers may also still have a skeleton staff onsite; drop off a goodie bag or lunch with a message of appreciation, or an ‘always here to help’ note. l Sanitiser partnerships: Are there any distilleries nearby that you could partner with in the short term to provide your customers with sanitiser? l Turn temporarily closed businesses into a donation: Many outlets such as hair salons or tattoo parlours use disposable gloves, masks, etc. Check to see if they would be willing to donate their unused products to healthcare facilities. Perhaps offer to pick up the supplies and provide a discount on their new order when they return to work. l Opening day email: When clients return to work, send a ‘Welcome back’ letter with a ‘here to help’ note, a list of essential back-to-work supplies, a discount coupon... l Be a true resource: Educate yourself as much as possible on jan/san, health and hygiene and become an expert. Join LinkedIn if you’re not already using it, follow the jan/san suppliers and share their posts. Ask customers if they have a ‘healthy office plan’ and help them establish one.

Source: S.P. Richards l

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INTERVIEW

SEEKING PROTECTION

in a time of crisis

Demand for personal protective equipment has never been higher than in these difficult coronavirus times. Sourcing these products in the quantities needed, however, is a challenge, to say the least

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cme United is a supplier of cutting, measuring and safety products for the school, home, office and industrial markets in the US, Canada and Europe. In these exceptional times, however, it’s its personal protective equipment (PPE) and first aid kits that are in extremely high demand. OPI’s David Holes talks to the company’s CEO Walter Johnsen about the effect the COVID-19 crisis is having on the business and the huge challenges it is facing to keep supplying these vital items to the healthcare market (editor’s note: this article was written in early April and was up to date at that time – a number of things will undoubtedly have changed in the intervening weeks).

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OPI: What’s the current situation at Acme?

How are you and your team managing to run the company?

Walter Johnsen: We’re coping well at present. Our headquarters building in Fairfield, Connecticut, is empty, with all operations now carried out remotely, but our US factories are still open, with staff working incredibly hard to keep things running.

However, at both our North Carolina and Washington State facilities, people have had to

go home in March because they were feeling ill.

This meant we had to shut down production for a few days at both sites and perform deep-cleaning operations before bringing them back online. We haven’t had a confirmed case of COVID-19 yet, but it was difficult operating in conditions like this.

OPI: How about your Chinese operations?

WJ: Our China team is incredibly focused and dedicated, but they have also faced considerable challenges, with restricted travel hampering operations. For example, our staff based in Hong Kong can’t get to our facility in the city of Guangzhou. And within mainland China, staff based in Guangzhou aren’t allowed to travel to our office in Ningbo. Thankfully, our factory in Yangjiang, Guangdong Province, has continued to run fairly smoothly, albeit with production levels at 65-80% of normal capacity.

OPI: How have Chinese supplies of PPE been affected over recent months?

WJ: We had huge problems in January and February getting PPE items such as masks, head bonnets, foot coverings and protective isolation gowns. When the crisis first hit, China diverted all production of PPE to its own critical needs.

OPI: Is it possible to source this type of PPE equipment from within the US or elsewhere?

WJ: Up to a point it is. Protective masks are made by 3M in Minnesota and other types of PPE is manufactured by DuPont. Honeywell has a factory in Rhode Island that it converted to make masks.

There are also factories in Europe, but the crucial point is that nobody was set up to produce the vast quantities now required. Hence the shortages across Europe and the US – the volumes just aren’t available.

It’s an uncomfortable thing to say, but from a business perspective the company is doing very well at the moment, of course, due to the incredible demand OPI: Are Chinese supply lines now operating normally again?

WJ: We are still able to get stocks from our Chinese suppliers. Although we are having to compete with a lot of other companies and pay more for products, we are a long-standing, valued customer which helps. However, things are far from normal. In the past, we placed an order which would then be manufactured and shipped in an orderly fashion. That’s completely changed. For example, a factory will contact us saying it’s got 10,000 masks and do we want them? We’ll say ‘yes’ and effectively write the cheque on the spot to secure the deal. That’s not normal business practice.

Additionally, we’ve had to become far less selective about the particular type of product we’re getting. Within all sub-categories of PPE, there’s a range of different styles and usually we’d order a specific type. These days, as long as the products are hospital-grade quality and perform the function required, we’ll take a far greater range of styles than we’d normally be interested in. Getting our health workers the equipment that keeps them protected is the overriding factor.

OPI: Do you supply directly to medical institutions, such as hospitals?

WJ: No, we don’t. It was a decision we took many years ago as it’s a completely different business model. Currently, a lot of our products do end up in hospitals, of course.

OPI: How do you see the coronavirus crisis affecting your business going forward?

WJ: It’s an uncomfortable thing to say, but from a business perspective the company is doing very well at the moment, of course, due to the incredible demand. The products we can supply are ones badly needed and we’re working with a real sense of urgency and purpose to get them to market.

From a manufacturing point of view, we’re already preparing for a second wave of this virus to hit us in the autumn. It’s hard to picture now and something we desperately hope won’t be needed, but all indications are that it’s likely to happen and we must be ready.

Longer term, I think this crisis is going to change the whole make-up of Acme. I see it increasingly shifting towards first aid and safety products. We would expect some of the increased market share we’re currently experiencing in this sector to stay with us and this is changing our focus.

For example, the relative importance of products such as wipes and hand sanitisers has fundamentally shifted in the minds of companies and consumers. It’s a market we’ve been involved in at a minor level before, but one where we’ve seen limited demand. That’s all changed now and it’s in areas like these we need to scale up to meet future needs when this awful time has passed.

May/June 2020

OPI: How are PPE shortages affecting those professions on the frontline?

WJ: It’s having a big impact and some people are resorting to incredible levels of improvisation at this terrible time. We’ve heard of people making their own masks and fashioning their own protective clothing. I saw an image recently of a healthcare

Walter Johnsen

OPI: In terms of the distribution of your products, are routes to market affected?

WJ: Our usual model is B2B, with the likes of Staples and Office Depot buying the different types of packages we offer – body fluid spill kits, isolation kits or spill clean-up kits, for example. All these contain typical PPE equipment within them, such as masks, goggles, gloves, etc.

Wholesalers like Essendant are buying a lot of our safety equipment currently, for onward distribution into dealers. Then there’s Grainger, the US and Canada’s largest distributor of industrial products. All these B2B channels are continuing because their warehouses are still open.

Amazon is also buying an immense amount of PPE, as you know. Because small retailers are now closed, consumers are shifting to buying these items from online operators and, consequently, we’re getting a lot of orders from that direction.

Walter Johnsen

worker who had made a gown out a plastic bin liner, with holes cut in it for head and arms. It seems so primitive, but these unprecedented times are forcing these unprecedented measures.

As you will know, the US Army Corps of Engineers has built a military-style field hospital under canvas in New York’s Central Park. It’s incredible – these are scenes that you would normally see during war times, but the deaths are just as real; it’s a very frightening situation.

INTERVIEW

Absolutely nothing was getting shipped to Europe or the US during these two months. Container loads of equipment which were destined to go to US hospitals were diverted to Wuhan, in Hubei province. The same thing happened to shipments supposed to go to Europe, Australia and elsewhere around the world.

We just didn’t predict the global scale of this. The combination of shortages in supply coupled with a huge spike in demand meant that existing stocks of this type of equipment ran dry very quickly.

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FEATURE

Staying ahead of the CYBER CRIMINALS

ReSolve Cyber’s Jim Wheeler warns of the dangers that the new work-from-home regimes bring from a cybersecurity point of view

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t is fair to say that 2020 started off in a fashion that very few of us were expecting.

Way back in 2015, Bill Gates delivered an excellent TED talk stating that we need to seriously increase our preparedness for the next epidemic. However, in my experience spending time and budget on preparation and thinking about the worst just isn’t something businesses like to do. It can be especially difficult to see the value of spending time and money if it does not directly increase profitability or growth in the short or even medium term.

But the worst has indeed happened – and continues to happen – and many of us have had to change the way we do business as a result of the global coronavirus pandemic.

The fastest area of business to adapt to a crisis is organised crime Governments around the world announcing fiscal stimulus packages also creates a ‘target rich environment’ for criminals who, no doubt, have been preparing their phishing attacks and robocalls to hit us with a volume and complexity we have never previously seen.

Many OPI readers will already know that cybersecurity consists of three pillars: • Technology: is the business using secure hardware/software?

• Process and policy: are staff using technology in a secure way?

• People: have staff been trained and tested in their awareness?

May/June 2020

NOVEL REGIMES The unprecedented changes we have been facing have placed increased demand on our IT teams/suppliers across the world who scrambled to quickly set up the infrastructure and new ways of operating to support many of us now working from home. These novel regimes at home can be great for some, but are challenging for others.

I recently had a conference call with a client interrupted by my five-year-old son asking me how we grow sausages! Thankfully, the client was very understanding, illustrating that a new kind of tolerance is also needed in terms of what might be – albeit hopefully temporarily – acceptable.

Typically, our home is a place where we can relax, take off our business suit and wind down.

Now we are working from home permanently and wearing something far more comfortable, there is a real risk of relaxing too much in the wrong area: cybersecurity. It is true that criminal organisations are gaining in capability and capacity, and it is easy to feel worried about these issues (as if there isn’t enough anxiety at the moment already).

THE DANGERS OF ORGANISED CRIME Unfortunately, the fastest area of business to adapt to a crisis is organised crime. Every recent crisis (9/11 in 2001 or the tsunami in 2004, to name but a couple) brings with it criminals who are leveraging the increased uncertainty and pressures in order to scam companies and steal from its cash reserves at a time when cash is king.

Many people are using Virtual Private Networks (VPN) which is a great tool that allows secure access to their businesses’ servers and data.

But phishing attempts now focus on trying to gain victims’ VPN login details. These scams are so successful that they are likely to have netted criminals over £1 million ($1.1 million) already in the early lockdown stage in the UK, according to the National Fraud Intelligence Bureau (NFIB).

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Cybersecurity FEATURE

anti-malware services running on whichever devices they use. Malwarebytes and Bitdefender are cheap and work well. Buy them, download them and keep them updated.

If we do not prepare to reduce the risk and increase resilience in all three areas, we will get caught out and suffer the consequences.

Coronavirus-related fraud reports increased by 400% in March, according to figures by the NFIB. Awareness of cyber-based fraud attempts has never been so important. If you haven’t already, now is the time to communicate the following four key points to your staff. I guarantee that if your employees heed this advice, you will have reduced your risk from attacks significantly.

1. Phishing You have heard it before, but phishing remains to this day the most successful way to launch an attack. It is far easier to get some untrained victim to install your malicious software than ‘hack in’ and do it yourself. All staff should be trained in spotting these attempts as it is costing businesses across the world billions of their hard earned profits every year.

Action: Take it slowly when evaluating emails asking you to access items via hyperlinks. Give yourself time to read them; these emails can be really convincing. As always, if you get a gut feeling that something isn’t quite right, it probably isn’t. Verify the emails’ legitimacy with a phone call to the sender.

Jim Wheeler is CEO of ReSolve Cyber, a cybersecurity start-up that provides services such as strategic consultancy, executive and workforce training, cyber wargaming and maturity assessments.

Ensure everyone who connects to or touches any business information has up-to-date anti-malware services running on whichever devices they use

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2. Malware prevention Many people are using their personal devices to conduct business operations. This may not be avoidable in the current situation, but there is no excuse for not having anti-malware software running 24/7.

Action: Ensure everyone who connects to or touches any company information has up-to-date

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3. Multifactor authentication This adds another layer of security to your logins.

So now you need your username, password (not reused) and a code. This can be via SMS or by using an app. These are usually completely free to set up.

Action: Enable this for everything in your digital life who requires a login. If you go to your online account settings for, say, Amazon, Netflix, Spotify and eBay, and go to security, you can usually find it there. Turn it on. Free apps that can help you with this are Google Authenticator and Authy, for example, but there are many more.

4. General cyber awareness This is a bit of a catch all, but Business Email Compromise or BEC Fraud as we call it is the highest earning cyberattack vector these days. It usually starts with a successful phishing attack, the attacker gains access to the victim’s email and then goes about altering invoice information, creating false details, etc. In 2019, the FBI’s Internet Crime Complaint Center – also known as the IC3 – reported that this attack/fraud method saw the loss of $1.8 billion in the US alone.

Action: When you receive something that seems unusual or get told that you are sending out odd messages, act. Contact a professional and seek help to remediate the problem before it turns into something bigger and more costly. Most cybersecurity firms will typically give you 20 minutes on a call for free and that might be all that’s needed.

GET THE BASICS RIGHT If you have all these areas already covered that’s great. There is always more you can do to protect yourselves, but getting the basics right goes a really long way in reducing your risk. Let’s hope we can start returning to business soon, rebuilding our societies, communities and economies.

SPOTLIGHT

A pioneering SPIRIT

Building a successful e-commerce business seemingly eludes many OP dealers – not Denmark’s Lomax, as OPI’s Michelle Sturman finds out…

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raditional office products dealers are not often revered for their online prowess, let alone rewarded for it.

But exactly this was the case for Denmark-based reseller Lomax, which was awarded the coveted Reseller of the Year in the ‘revenues under €100 million’ category at this year’s European Office Products Awards (see Event, OPI April 2020, page 44).

Lomax may not be a familiar name outside its home nation, but it’s the number two OP player in the country. However, with trending high growth for 2020, it is snapping at the heels of European giant and number one operator Lyreco. It’s a firm with a long history, having been established in 1962 as a mail order company before shifting its focus to e-commerce with the launch of Lomax.dk in 1999. This, incidentally, happened at the same time that current CEO Kenneth Borup joined the company as a product manager before being promoted to Marketing Director three years later.

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TAKING SHARE After continuously capturing share from competitors in the Danish market, Lomax now offers over 35,000 products on its website with more than 50,000 business customers – primarily from the SMB sector – placing orders exceeding 350,000 on an annual basis.

Talking to OPI, Borup reveals almost 90% of its revenue originates from e-commerce, with a CAGR of 11% and margin increases of 16% over the past five years. “Our vision is to be the best total supplier of office products and furniture for businesses. Our internal culture is an important element of that success.

“We cultivate a unique atmosphere whereby we actively encourage calculated risks, but also have fun while you work – we have campaigns where we dress up in different themes, for example,” he says.

MARKETING RULES This strategy is paying dividends, but it is just one component – albeit vital – in the overall mix, as Borup explains. In the online world, customer retention is key, and a lot of effort is placed on digital marketing activities including SEM, SEO, campaign sites, social media, personalised emails, etc. “When customers are engaging in business with us, we try to provide them with a personalised experience. We focus firmly on different customer journeys and their various contact points,” he says.

Accordingly, Lomax utilises an efficient marketing setup based on four key principles: 1. Attract: aims to secure new prospects through SEO, Google AdWords, social media and offline ads and campaigns.

2. Convert/growth: targets new clients through cross-selling and dedicated account managers to increase the share of wallet. Lomax’s renowned website and the release of Lomax 3.0 in 2019 are key growth and conversion drivers.

3. Retention: relates to personalised emails, quarterly bonus programmes, gift concepts, events, and online and offline interactions to retain existing customers.

4. Win-back: marketing targets former customers with special offers, gifts and emails with personalised content.

All of the above, comments Borup, has led to extremely high customer retention rates of around 90%. And while acknowledging the indispensable role online marketing plays, he believes the critical factor is “making it convenient for customers to buy from us and honour our promise to meet their expectations”. In terms of range, Lomax offers a wide breadth of categories, covering everything from traditional office supplies and office furniture, through to technology, jan/san, breakroom and warehouse products.

CHANGING TACK The company’s shift from mail order to e-commerce was due to several reasons. Firstly, to expand the available assortment and move outside the confines of catalogues. Secondly, to advance the business by following the trend towards online ordering and e-commerce. Thirdly, to become more competitive and cost-effective.

Lomax has been so successful in executing the move to online sales because its focus from the outset involved the whole organisation. This was achieved by ensuring the following criteria were met: recognition of why this needs to be done; it’s not just about saving money; goals have to be defined for every department; and investment in

good e-commerce platforms. Subsequently, a team with the right competencies was imperative to develop the online business.

With a pioneering and can-do attitude, Lomax has proven e-commerce can be a lucrative proposition for dealers in the business supplies sector. Perhaps surprisingly, the inevitable arrival of Amazon in the Nordic region holds no fear for Borup. “We respect and learn from this operator as its e-commerce capabilities are exceptional.

This has aided us in being as good as possible by optimising our online user experience,” he states.

While there have been rumours about Amazon’s entry into the Nordic countries for several years, Borup explains that penetrating the market is not that easy: “The market is relatively small with around 24 million people divided into five countries with various languages and different tax rules, and not all are members of the EU.”

SPOTLIGHT Lomax

A significant portion of the current portfolio consists of environmentally friendly goods. The reseller carries copy paper with the Nordic Swan Ecolabel, IT products that are TCO Certified and EU Ecolabel cleaning products, for instance, and focuses on partners that are as committed to the environment and sustainability as Lomax is. Corporate social responsibility is also high on the agenda. “We want to spread joy and make a difference to other people. Therefore, we support two Danish charities – Danske Hospitalsklovne (Danish hospital clowns) and Julemærkehjemmene (Christmas Seal Foundation homes),” says Borup.

Establishing a versatile system has been essential in terms of Lomax’s ability to supply a broad assortment of products. The company has a warehouse, with 75% of revenue derived from goods in stock, while the other 25% is obtained via drop-shipments. High growth rates resulted in an option to either build a bigger warehouse or find a third-party logistics provider. “We opted for the latter since it’s more flexible and we also prioritise drop-shipment vendors,” Borup confirms.

Not all categories lend themselves easily to online selling. As Borup explains: “Office furniture and warehouse products are more difficult to sell online, but we nevertheless ensure good sales over the phone. We retain an in-house online team that constantly measures those categories that do sell well on the website and look to create the best conversion rates. Simultaneously, we continually try to improve e-commerce sales in those product groups that don’t perform as well.”

Kenneth Borup

We focus firmly on different customer journeys and their various contact points EXPANDING HORIZONS Lomax itself, meanwhile, with its intimate knowledge of the region, is currently preparing to venture outside of its native Denmark with plans to launch a Swedish website later on this year. Initially scheduled for last year, the start of the platform was delayed due to the rollout of the latest version of the Danish site which saw the team concentrate on additional improvements.

“We decided to focus on Lomax.dk before shifting our attention to the launch of the Swedish site. The ERP system and logistics are ready to go and we are presently working to finish the website,” says Borup.

There are still many new products areas to delve into, he adds – in 2019, one of its best-selling products was scooters. The company is also exploring several options in terms of its logistics efficiency. In addition, Borup alludes to “other types of sales” that the company is currently investigating to target the B2B segment, though he would not be drawn on the specifics for the time being. There’s more to come.

May/June 2020 35

OPINION

A HEALTHY WORKFORCE – wherever it may be

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ver the past few years, employers everywhere have finally begun to realise how important a healthy workforce is. Active Working has been conducting its annual Office Sitting Survey in the UK for six years and during that time we’ve seen some dramatic developments.

Almost 74% of employers are now aware of the health risks associated with prolonged and excessive sitting, for example. That compares to a mere 14% in our first survey in 2015. Importantly also, staff themselves believe their bosses care about their well-being, with 80% saying they would consider switching companies if they were not offered a healthy workplace. Almost 60% of those surveyed believe their manager is concerned about how long they spend seated at their desk, and only 7% blame the boss for failing to enable greater activity in the workplace. Being encouraged to use the stairs rather than the lift, doing desk stretching exercises and having a height-adjustable standing desk are among the most common active working solutions available in workplaces right now.

There is still a long way to go in terms of improving activity levels, however. The recommendation to incorporate regular activity into the working day, use sit-stand desks, balance boards and so on is well accepted, but the reality is often still different – bad habits are hard to shift.

Even among generally active, motivated people, more than half (55%) spend six or more hours sitting at their desk or in meetings or similar during the course of their working day, according to this year’s survey. Almost the same amount (54%) ‘always’ or ‘usually’ sit for prolonged periods at work (90 minutes or longer).

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UNCHARTED TERRITORY With the rapid spread of COVID-19 around the world, we’ve entered completely new territory, with a huge percentage of the workforce now obliged to work from home. But most people are not properly equipped to work healthily from home.

There’s unlikely to be a sit-stand workstation or an ergonomically appropriate desk chair.

Despite a surge in the sales of activity-friendly homeworking solutions such as desk risers, electric sit-stand desks, treadmill desks and even exercise desk bikes, the vast majority of people are currently building up new or underlying health and back problems. As such, it is now more vital than ever that our research-backed #MoveMore #SitLess message is getting through.

For those who cannot afford (or whose employers won’t fund) a sit-stand solution, there are some key recommendations. These include basic desk exercises such as stretches and walking around as well as frequent mini-breaks to incorporate into the new daily routine. Influencers like Joe Wicks in the UK and his morning #PEwithJoe are to be applauded, but you don’t need to leap around in Lycra. Just set a regular alarm to remind you to stand and stretch at the very least every 60 minutes to avoid the risk of workstation slump.

For many, home working will be a new experience and the isolation that comes with that is not to be underestimated. Activity is a scientifically proven mood-booster as well as a powerful driver of productivity and creativity. This is why it is more critical than ever to emphasise the importance of regular screen and desk breaks.

Self-motivation is key and it’s important to remember that even when we are in lockdown, we are not alone. Reaching out to colleagues, friends and family via tech channels as well as more traditionally via the phone will help support workers’ mental health in these difficult times.

Try and encourage participants when using worktime Skype calls/Hangouts/FaceTime or Zoom conferences to have standing meetings during lockdown. Is there any reason why phone calls can’t be taken while on your feet? We also recommend for employees and co-workers to

Gavin Bradley is the founder of Active Working, a community interest company that focuses on reducing excessive sedentary behaviour in the workplace.

Our horizons may have contracted temporarily, but now is a good time for us all to develop new habits and establish ways of active working keep their minds fresh by opening a window during working hours, taking a brisk (socially distanced) walk around the block before or after a meeting, and to share tips, ideas – even images – of how they are staying active while home-based. All this will help create a sense of shared experience while colleagues are geographically distanced.

Our horizons may have contracted temporarily, but now is a good time for us all to develop new habits and establish ways of active working that can stick with us even after our office doors reopen for business.

MARK THE DATE Active Working’s ‘On Your Feet Britain’ day, which was scheduled for 24 April 2020, has been postponed to 24 September this year.

CATEGORY UPDATE

The CHANGING world of EDUCATION Classrooms and teaching methods are evolving rapidly, with a focus on technology increasingly prevalent within the education sector – by David Holes

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gnoring for one moment the monumental changes that are happening around the world in the education sector because of the global COVID-19 pandemic (see ‘Educating from home – Coronavirus update’, page 42), new ways of teaching and learning are fundamentally changing this category. Both established and emerging economies are placing a heavy emphasis on schooling, particularly in the science, technology, engineering, arts and mathematics (STEM/STEAM) areas. As such, there is huge worldwide potential for suppliers of products that can improve learning or reduce administrative burdens on teachers – allowing them to spend more time on classroom activities.

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A GLOBAL PERSPECTIVE At the Bett 2020 education show in London, UK, in January, Vipul Bhargava, an international schools specialist from the UK Department of International Trade, outlined the top five geographical regions presenting the greatest opportunities for suppliers of educational products:

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1. China: Beijing and Shanghai and their surrounding provinces have over 1,000 international schools – more than any other country in the world. Their greatest need is for apps and assessment tools that can monitor both teacher and pupil performance/progress. However, lack of technological literacy within the profession can be a big stumbling block and the ‘Great Firewall’ restricting the country’s internet access means that you may have to host compatible servers within China, rather than abroad.

2. Vietnam: The second fastest-growing economy in the region (after Myanmar). Among its population of 95 million people, 50% are under 35, so there’s a huge market for educational products and a fast school building programme is underway. The focus is on robotics, artificial intelligence (AI) and IoT, with products that can help train or upskill teachers urgently sought. As the country allows up to 50% of its school intake to be international students, English language learning items are in high demand.

3. Malaysia and Brunei: A quickly growing market focused heavily on products that can help teach financial literacy and offer computer-based assessment. Teacher training programmes and items covering special educational needs (SEN) are also keenly sought. However, internet coverage is considerably poorer than in other Asian countries, so packages that predominantly use ‘offline content’ have an advantage.

4. Middle East: Saudi Arabia has the largest educational budget of countries in this region, with the United Arab Emirates – with over 600 international schools – representing the second biggest market. The focus is on AI products, but there’s a huge emphasis on proving that a solution will achieve outcomes before buyers will commit to a purchase. Dubai has also set itself some tough challenges and is looking at educational technology (EdTech) to help it achieve these. Oman is a smaller, but rapidly growing opportunity too.

STATESIDE STATUS In the more developed economies, consumers are increasingly moving online when purchasing educational supplies. In the US, for example, the 2019 back-to-school (BTS) season saw e-commerce sales grow by more than 20%.

According to Leen Nsouli, Executive Director and Office Supplies Industry Analyst at The NPD Group, there’s a noticeable shift in the way consumers purchase products, with retailers now actively targeting the items on school supply lists.

‘Kitting’ or buying pre-packaged school supply bundles is one example and an accelerating trend among US consumers. These are usually offered through a school’s Parent Teacher Association (PTA) organisation and allow parents to purchase all their child’s supplies through one site. The latest data shows that 27% of parents have been offered these kits by schools, with 61% of them having bought one, up from 55% last year.

“While the majority of consumers still purchase in-store, those who buy kits primarily do so to save time,” says Nsouli. “But, apart from their price, most of the aversion to buying them stems from the desire to involve the student in the selection process.”

In the more developed economies, consumers are increasingly moving online when purchasing educational supplies

With the increasing use of expensive technology in schools, both staff and pupils are looking for secure areas where they can store their valuable equipment.

When Haringey Sixth Form College in London, UK, was looking for a simple, secure access control solution for the lockers at its newly built learning and resource centre, it flagged a number of essential requirements.

As they would be used by both staff and students, the school’s main priority was to have an affordable system that was simple to manage, quick to access and provide a high level of security without the need for electronic cards or keys. An integrated ability to charge mobiles, tablets and laptops was also vital.

John Mansfield, Head of Campus and Estates at the school, decided to opt for the keyless Codelocks KitLock KL1000 system: “This product gave us full flexibility, with the option of using the lockers in either ‘private’ or ‘public’ modes. The private ones are for staff and operate using the same code over and over again, whereas public ones are for students; they use a single-use code that locks and opens once before the code is erased and reset by the next user. They also have two USB ports along with a plug socket inside, so users can charge their portable technology if need be.”

In addition to greater versatility, the school is finding that maintenance costs have been lowered, with coded access to the electronic lockers meaning caretakers spend less budget and time repairing the mechanical keylocks used previously. The new method also helps to ensure both students and teachers are spending less time searching for misplaced keys and more time in the classroom.

May/June 2020

CONSOLIDATION BITES Despite burgeoning demand in general, some suppliers in the educational sub-categories are still facing headwinds. Nick Cash, owner and Director of Nick Cash Agencies – a furniture specialist selling into the UK education market – says: “Last year saw the demise of the largest school furniture supplier in the country and others have also struggled. But is the category actually in trouble or were these companies just badly run? I think it’s the latter as spending and demand hasn’t changed dramatically, so reducing overall supply will help growth in the companies that remain.”

Dana Flaherty is President at Catalog Solutions, a specialist in school supplies based in Florida in the US. She remarks that the past 12 months have witnessed considerable sector consolidation, with the closure of several large, long-established educational distributors. Despite this, her business is seeing continued interest – and, importantly, the necessary funding – in early childhood programmes, investment in STEM/STEAM subjects and technological integration, as well as greater emphasis on inclusion and special needs.

CODELOCKS CRACKS IT

CATEGORY UPDATE Education

5. Latin America: Brazil represents the largest market in the region by far, but the recession and political turmoil are having an impact on educational investment here. Outside Brazil, Columbia, Panama and Mexico are the best countries to target in the region.

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Education CATEGORY UPDATE

She says: “There’s also pressure to move away from ‘teaching to pass tests’, with parents preferring a broader curriculum that includes sports and arts for a more rounded educational experience.

EdTech is playing an ever more significant role in classes across all age groups, but while it can be an effective vehicle for reinforcing learning care is needed, it isn’t right for all subjects or always the appropriate delivery method.”

Toby Watson, General Manager of Merchandise at Officeworks in Australia, agrees: “Parents are seeking products that give children the chance to be creative and artistic. While tech-based STEM products are a growth area, we are looking at ways in which we can use non-tech merchandise to teach in these segments. Some concepts such as coding or robotics can be daunting for both educators or parents, particularly those who haven’t studied these subjects themselves. To combat this, it’s vital to make resources as user-friendly as possible. There’s an excellent opportunity for companies to make STEM more accessible by using simpler arts and craft products to help teach the skills of the future.”

ExaClair in the UK is an example of a company that focuses on these more traditional educational products. Its Category Manager Clement Rouillard says the main challenge in selling into this category is cost: “Public sector budgets are extremely tight, so retaining margins is very difficult. However, volumes are large and as such it remains a worthwhile area for us that we’d like to develop further. There’s a good market for those willing to spend more on robust, brightly coloured books, pads and filing products which stand the test of time. This is our specialism, and we expect it to be successful for us in the future.”

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INDEPENDENT OPPORTUNITIES UK dealer group Office Club is comprised of over 350 independent OP suppliers, the majority with a retail presence. Its Marketing Manager Alan Calder says turbulent times on the high street mean getting stock levels right and selecting the products that will sell quickly are vitally important in this category. He adds: “On the plus side, responsibility is increasingly falling on students to print out documents from homework websites

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which is driving demand for printer cartridges and paper in the home. This often necessitates a visit to the local shop when supplies run low and pupils need to have homework completed by the next morning – even the speed of Amazon can’t help here – thus providing local retailers with opportunities for extra sales. Additionally, our members’ BTS sales have risen over the past year, with demand now dictating they cover higher education needs too, which lengthens the selling period throughout September.

The key to success is being the local all-round solution that does more than just deliver goods

Officeworks’ education aisle at its Mentone store in Victoria, Australia

“In the past 12 months, we’ve additionally seen a massive increase in requests for support from independents that have got a foot in the door at a school and are now looking to gain extra sales.

The key to success is being the local all-round solution that does more than just deliver goods.

Our members are growing their revenues through hard graft and a can-do attitude. This includes full furniture installations, painting and refitting changing rooms, designing library facilities and even installing bike sheds.

“We also work with dealers selling paper into schools that want to raise awareness of their ability to provide jan/san supplies too. Once they’ve established a relationship with a school, becoming the supplier of facility supplies is an easier sell.”

As the number of autonomous academies grows, more schools are gaining control of their budget and choosing how to spend that money.

“Our dealers are using this opportunity to target prospects with additional services such as shredding or printing,” says Calder. “Once they’ve demonstrated their ability to supply, schools can be very loyal and supportive customers.”

Driven by technology and innovation, those supplying the education sector are revolutionising the way we teach and learn, with ingenious new ideas and clever product development. In this information age that’s defined by the needs of the current generation of digitally native students, the potential is enormous.

Education CATEGORY UPDATE

EDUCATING FROM HOME – CORONAVIRUS UPDATE

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Since the bulk of this article was written, the world has changed beyond measure, with the COVID-19 pandemic forcing millions of educators and more than a billion students worldwide to teach and learn remotely for the first time. However, although many buildings are closed – some schools remain open to cater for the children of ‘key workers’ – the education community is pulling together to share solutions and find new ways to educate from a distance.

Reports reveal that secondary schools and higher education settings have had an easier time making the transition as most students were already signed up to Google Classroom or had other arrangements for distance learning in place.

Statistics gathered from US colleges suggest that around 80% of students are successfully interacting with their teachers, although the increased stress on the internet is causing some slowing in access speeds. Students not equipped with the necessary technology are being loaned laptops.

Some innovative schools are even setting up wi-fi hotspots in their car parks or deploying mobile technology to remote locations, to ensure that those with no internet access at home can still stay connected.

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SALES SURGE Leen Nsouli, Office Supplies Industry Analyst at The NPD Group, says: “The way consumers are conducting schooling from home varies from district to district and even from home to home. Not all classrooms have had a seamless transition to virtual learning environments and a lot remains to be

done in this space to improve access and capabilities.

“To fill the gap, teachers, parents and school districts are becoming creative in how to approach schooling from home.

Sales of art and drawing products, for example, are up in the triple digits as parents find different ways to evoke

home-based learning and keep children occupied. Specifically, we’ve seen strong sales for our Décopatch, fine art and handicraft Clairefontaine products. We predict more incremental growth in sales of exercise books, home filing and organisational products as families adapt to learning and working from home. Even after the crisis recedes, this trend is likely to continue as businesses realise the effectiveness and cost efficiencies to be gained from a remote workforce.”

Australia-based Officeworks is also seeing growth in the popularity of educational resources and has launched a content hub to help support parents as they become teachers to their children. “It’s known as ‘Noteworthy’,” says Corporate Communications Manager Carla Carafa.

“It hosts videos and articles to help parents of pre-school and primary-aged students learn in a fun and inspiring way. The hub is updated regularly and during this time of uncertainty will hopefully provide our parent customers with ideas of home-based activities to assist them in their teaching.”

Homeschooling is driving the need for resources so parents can participate in their children’s learning learning, while also occupying children during the day as they themselves work from home. Encased and mechanical pencils have also seen growth during specific weeks in March as students have transitioned to homeschooling.”

The closure of retails outlets – a huge cause for concern for those affected – has prompted many distributors to offer new innovative shopping options, according to Dana Flaherty, President at Catalog Solutions: “Some are facilitating ordering via Facebook or employing FaceTime to replicate an in-store shopping experience, with subsequent kerbside pick-up. Homeschooling is driving the need for resources so parents can participate in their children’s learning, with puzzles, games and science experiments in high demand.”

In the UK, Lawrence Savage, Marketing Manager at ExaClair, says that the industry is quickly responding to the rapidly changing situation, with the majority of suppliers operating as normal through their e-commerce channels: “There has been an uplift in demand for items that can aid

FURNITURE FALLOUT While most suppliers seem to be weathering the storm or even seeing a sales surge in certain categories, things are not looking good for vendors of school furniture. In the UK, Nick Cash, owner and Director of Nick Cash Agencies, says that delivery and installation dates are being moved or put on hold: “The industry usually works towards the summer holiday period for major installations, but […] the order pipeline has slowed to a trickle.

“The big question is whether suppliers will have enough work to keep them going for however long it takes to get through this period. If things get back to normal before the summer, there will be a mad rush to furnish schools. If not, then the industry will suffer an even worse scenario. I don’t see how this year will be anything but a big financial loss for all furniture manufacturers.”

With both winners and losers in this category as a result of the COVID-19 crisis, there’s scant hope that all involved will manage to pull through with the minimum of damage.

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Committed to DISTRIBUTION

OPI talks to David Concors, SVP of Sales at Distribution Management, about scaling both print distribution and fulfilment opportunities

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istribution Management is a US operator with a two-pronged approach.

One part of the business is Supplies Network, a wholesaler of predominantly copy and print hardware and consumables; the other is DM Fulfillment, a hybrid distributor with a third party fulfilment-as-a-service model.

Supplies Network has historically had a much bigger slice of the overall pie, but in these challenging COVID-19 times, the fulfilment side is seeing an exponentially significant uptick in sales due to bottlenecks in other distribution channels.

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OPI: Let’s start with a quick synopsis of the state of play at Distribution Management.

David Concors: Perhaps predictably, there are two iterations to that answer – one is a pre-coronavirus, the other a COVID-19 pandemic picture. From a revenue point of view, Supplies Network is still considerably larger and before the virus hit, we were very well positioned in the channel and growing substantially.

Right now, however, the trends are shifting a bit to the extent that DM Fulfillment is slightly better positioned to increase sales as a result of the challenges in getting products direct to consumers. That’s what this part of the business specialises in – direct to consumer shipment.

Some of our existing – and many new – manufacturers are struggling to get their products into the hands of the consumers as a result of Amazon or other e-commerce operators preventing them from shipping goods into their warehouses for distribution, as they are deemed non-essential items (see ‘Distribution Management steps up for Amazon 3Ps’ on opi.net). We can help them with that.

OPI: Can you give an example?

DC: We have a coffee manufacturer that is no longer able to ship product into Amazon

Fulfilment by Amazon (FBA) because of the non-essential nature of the goods. This manufacturer has reached out to DM Fulfillment to see if we have the capacity to ship its orders direct to the consumer. There are several other examples like this.

OPI: You started the third party fulfilment business over a decade ago, largely to diversify, but partly as a result of gloomy predictions about the future of print which would obviously directly affect Supplies Network. Have those fears materialised?

DC: There’s no doubt the print industry is declining, but we are not seeing it in our business.

I attribute that to the fact we have a focus on specific channels and a commitment to being the most comprehensive print distributor in the industry. We have a depth and breadth of SKUs from all the major OEMs which our customers need, even in an industry that is contracting.

As a general comment, I’m convinced there’s still plenty of share to be had in this space despite the declines, and we’re growing our piece of the overall pie.

Another factor to bear in mind is that our roots are in consumables. But over the past few years we’ve also made strong inroads into hardware such as A3 and A4 printers and copiers – the copier channel in particular is hugely important to us. Finally, we offer an award-winning, turnkey managed print services (MPS) program which is very successful and plays into the fact that most of our customers continue to drive a contracted sale. It’s healthier and more cost-effective for them and it fosters longevity and loyalty for us. We invest very significantly in this contractual business and it forms a large part of Supplies Network’s revenues.

Historically, OP dealers haven’t been very focused on MPS, but the necessity to get involved in these types of contractual deals is becoming ever

OPI: Let’s move on to the fulfilment side.

When we spoke last about two years ago, you were strong in product categories such as apparel, dog food, mouth wash and personal accessories. One of the ambitions was to get more into OP. Has that happened?

DC: All of what you’ve just mentioned continues to be in our client portfolio. And we’re expanding into areas such as beverages. Regular and sparkling water as well as flavoured drinks are among our fastest growing categories.

Our third party fulfilment model offers companies a comprehensive omnichannel option – they can ship bulk into retail but also satisfy smaller orders direct to their consumers, regardless of the source of the order.

DM Fulfillment is able to satisfy [...] omnichannel requirements out of one single set of inventory

David Concors

OPI: Talking of inventory, you’ve expanded your capacity substantially over the past five years, is that correct?

DC: That’s right. We completed the expansion of our facility in Carlisle, Pennsylvania, in November

OPI: You mentioned earlier that you have interest from non-US manufacturers wanting to distribute their goods in the country. How about outward expansion?

DC: From a Supplies Network standpoint, we are completely focused on the US. With regards to DM Fulfillment, we are currently shipping product into 20-25 countries outside the US, predominantly Europe.

It’s not a primary growth area of the business, but there are specific customers that use us for our ability to ship internationally. You may be aware that one of our distribution centres near Chicago, Illinois, specialises in international freight. It’s a Transportation Security Administration Certified Cargo Screening Facility that allows us to deliver from the US to Europe and other countries in a cost-effective, efficient manner, with lower freight costs and fewer days in transit.

OPI: Crystal balls are unreliable at the best of times and never more so than now. So let’s go with a rounding off comment instead.

DC: We have a deep-rooted commitment to both of our businesses, that’s how I would sum it up.

On the Supplies Network wholesaling side, our mission is to be the most comprehensive print distributor in the industry.

As it relates to the fulfilment side, we are very excited about the greater space we now have.

Part of our challenge over the past couple of years has been limited capacity. We simply haven’t been able to onboard customers due to these limitations. By more than doubling our warehousing capacity, we can scale up and that’s what we’re doing right now.

May/June 2020

OPI: What about the more traditional OP side – are these manufacturers signing up?

DC: No, we are not seeing much adoption of the model from manufacturers in the OP space.

There hasn’t been a substantial shift in behaviour that would allow them to explore multiple paths to market. I believe it’s a legacy-driven mindset that is taking longer to change than in many other product categories which are evolving to meet the needs of customers. It remains a work in progress..

I’m only speaking for US-based manufacturers, however. We’re now fielding interest from vendors outside the US – they need distribution in the country and we give them the instant benefit of an omnichannel approach.

As you know, in the DM Fulfillment model – unlike Supplies Network – we don’t own the inventory.

We’re ‘merely’ providing a service to help move product through the distribution networks as needed by the vendors. Typically, they have had to rely on multiple third party fulfilment companies which specialise in the various ways to market, be that executing orders from retailers’ web shops, e-commerce websites, direct from the manufacturer, and so on.

DM Fulfillment is able to satisfy these omnichannel requirements out of one single set of inventory resulting in a far more efficient supply chain. We do the rest.

2019 and opened our new distribution centre in Dallas, Texas, in March. We’re also on track to open our much larger operation in St Louis near our HQ in St Charles, Missouri, in May. The timing of the expansions has been very fortunate, as we have the capacity immediately to scale up the amount of items we’re carrying in these difficult times, helping manufacturers that need different routes to market.

We are also looking at increasing our SKU offering in adjacent product categories that fit into our business model. We’ve made big investments in expanding our resources and inventory into the thermal and barcoding industry, for instance.

Based on the shifts in consumer purchasing, we believe that the industry will rely far more on products such as these in a number of settings.

We’re currently seeing a spike in many items into the healthcare market. Patient wristbands are just one example whereby they get printed on as patients are admitted. That’s already part of our thermal and barcoding business.

In addition to the capacity improvements, the upgraded facilities are also jam-packed with new technology in terms of artificial intelligence and robotics. All of our distribution centres serve Supplies Network and DM Fulfillment, and the technology we invested in them is leveraged to satisfy both businesses.

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more important. We make our resources, products and services available to independents, so that we can help them capitalise on that market opportunity.

In addition, we put a lot of energy and effort into our relationship with the buying group(s) and one area of interest for them is certainly MPS.

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CATEGORY UPDATE

SIGN of the TIMES

The visual communications sector continues to prove its adaptability and strength, even in the face of profound changes to the way we work – by Michelle Sturman

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t’s an extraordinary time to be writing about any OP category and updating the industry on its sales figures, product releases and innovations, along with the latest trends.

Because this is not business as usual, of course, with the coronavirus pandemic having upended life as we know it in just a matter of months.

The typically buoyant and creative visual communications (viscom) sector has not been immune to the crisis either. Fortunately, stellar sales over the past few years have provided many vendors in this sector with a small cushion to soften any interim economic blows brought about by COVID-19. Portugal-based Bi-silque, for example, had a strong year in 2019, despite a SAP implementation, opening a new warehouse and merging production facilities.

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PLUMMETING SALES According to Danny Berendsen, Sales Director EMEA at the vendor, investments made in the previous two years were significantly paying off and 2020 began extremely well. “By February, we were already up 20% year on year. However, as of March it all plummeted, starting in southern Europe and a little later on the rest of the continent and the US. Dealers, wholesalers and the pan-European accounts are all suffering. On the other hand, we are seeing a robust performance from our online customers.”

He explains that, as Portugal went into full lockdown, Bi-silque had to close its factory for ten days in April. It has since reopened and is fully operational, albeit at 30% capacity at the beginning of May when OPI spoke to Berendsen.

While it has been difficult to engage with many of its OP clients as they have understandably been dealing with their own issues over the past few months, Berendsen says Bi-silque saw record sales with its e-commerce customers such as Amazon and Böttcher in Germany.

Viscom mounting specialist NewStar also put in a solid performance for 2019. With the introduction of innovative products, the company expects this to be reflected in its next results, despite the unpredictability of 2020 so far. During this current turbulence and rapid change in working practices, NewStar is keen to assist its partners by providing the correct product assortment and creating a key mix of homeworking equipment for home offices. “As part of our new Partner+Reseller programme, we aid dealers with training and support to drive their mounting accessory business and identify opportunities,” says Suzanne Tiernan, Head of Sales UK & Ireland at NewStar.

CHANGING DEMANDS While the mass migration of employees to a homeworking environment, the closure of educational facilities and the resultant homeschooling has altered the ‘traditional’ product sales path for many viscom vendors, it has also introduced a myriad of new options.

Orders for items like easels and revolver boards used by large groups in the workplace may have dipped due to reduced demand, but these revenues are being replaced by an uplift in categories such as whiteboards and noticeboards for the SOHO market.

“People are used to having a whiteboard, planning board, noticeboard or easel in their daily work, and we see these products currently being purchased for home offices,” says Berendsen.

“The ranges required are likely to be design-driven and materials like wood and the use of various colours are more common. People tend to personalise their home space much more than their workplace,” he adds.

Visual communication in verticals that have remained open during the crisis, such as healthcare, food outlets or many manufacturing

Viscom has become doubly necessary with new regulations and stipulations and is now required everywhere Bi-silque has also been working on a range of plexiglass safety panels for walls and desktops with a go-to-market launch at the time of going to press.

“We have adapted our sales strategy and dived into the needs and wants of our customers. The product range we are developing and manufacturing will tap into that,” explains Berendsen.

With health and safety of paramount concern as workplaces start to open again, clever solutions that still enable communication are going to be vital as the days of close physical collaboration and flexible office spaces become a distant memory. US vendor Ghent has introduced partitions that can be used to separate workstations with several options, including a clear mobile divider or a double-sided whiteboard.

Meanwhile, Germany’s Franken offers acrylic and tempered glass partitions as well as counter and desk dividers. With glass representing a favoured option nowadays, it is thankfully unlikely we will ever witness a return of the ‘grey cubicle’.

UPS AND DOWNS AHEAD Recent figures released by Futuresource Consulting showed that last year, shipments of interactive whiteboards and interactive flat panels surpassed the two million mark for the first time.

According to the data, the US education system in particular offers huge sales prospects, as many of the five million+ interactive whiteboards installed in schools are approaching their end of life.

Although Futuresource maintains the global market for interactive viscom products will continue to grow throughout the forecast period to 2024, it also acknowledges that the current pandemic will impact manufacturing, leading to product delays and shortages.

COVID-19 is creating a topsy-turvy year for the viscom industry, with a steep drop in requests for some product ranges for the office and education markets, counterbalanced by an initial desire for them in the home. Furthermore, for those on the ball, any revenue fall is being offset with growth in other areas such as protective screens, interactive displays and signage. Demand for the latter product categories will undoubtedly persist as the year progresses and more businesses and schools around the world return to some semblance of normality.

ENHANCING VISIBILITY As manufacturing slowly ramps up again, academic institutions tentatively open their doors, and staff steadily return to their workplace, visual communication has never been more important. Here are four things dealers can do right now to help ensure customers’ working environments are safe and healthy: 1. Ensure you are up to date with any government information regarding current health and safety advice for the workplace.

2. Contact your customers about their requirements for signage, including non-digital and digital displays and wall and floor signs.

3. Consult clients about the need for safety partitions for all areas of the workplace.

4. Promote home office and educational products to your customers’ staff with the offer of home delivery or kerbside service (if that’s feasible).

May/June 2020

THE RISE OF DIGITAL The installation of safety panels for enhanced protection against COVID-19 as well as the increased use of visual communication signs are not the only changes expected as staff slowly transfer back into an office environment.

The pandemic has led to the extensive use of videoconferencing for meetings and catch-ups, with some users experiencing it for the first time.

This will continue to play a part in everyday working life, especially if, as expected, numbers of employees who work remotely both now and in the future maintain their upward trajectory.

CATEGORY UPDATE Viscom

Additionally, social distancing rules will prohibit clusters of people sitting around a conference table and the current design trend for open and collaborative workspaces will be severely restricted. Berendsen comments: “While project planning techniques like stand-ups, agile management and brainstorming were very popular before the coronavirus hit, it is currently impossible to come together in large groups. However, we still see requirements for these practices, but they have to adapt to the present-day reality.”

Many viscom manufacturers already include interactive communication tools in their product portfolios. Legamaster, for example, offers the ETX-20 range of screens with state-of-the-art mirroring technology in 4K Ultra-HD, coupled with a line of electronic mounting solutions and accessories. Ancillary products like floor stands and motorised trolleys will be key items as the use of mobile communications and videoconferencing grows.

sectors, has become vital to ensure the safety and protection of workers. Bi-silque, for example, has seen considerable demand for floor signage as well as display cases to inform and communicate rules and regulations. “In general, viscom has become doubly necessary with new regulations and stipulations and is now required everywhere, from the office floor, factories and warehouses, to the grocery industry and our own home office spaces,” states Berendsen.

The call for these types of products will continue and even escalate, as countries begin to ease their lockdown, with governments prescribing enhanced safety procedures in many places of work. This will certainly last for the conceivable future and likely become a staple fixture within the office environment.

With the push for workplace health and hygiene provisions at an all-time high, viscom manufacturers have risen to the challenge.

“Supporting the return to work, NewStar has introduced the PLXPROTECT safety screen range which will be extremely beneficial for increased protection in the workplace,” says Tiernan.

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HOW TO...

At YOUR service Managed print services is a contractual offering that not only ties in the customer in several different ways, it’s also one that’s somewhat bulletproof as well as highly lucrative

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n the first part of this How to… guide (see OPI April 2020, page 36), Jeff Gardner talked about selling services and how important this is, but also how the execution is often easier said than done. He referred to managed print services (MPS) as one of many avenues OP dealers can venture down. The concept is long-established, the reality among the independent dealer community sketchy at best.

Source Office & Technology (SourceOT) is one of the rare breeds of companies in our sector that generate more revenues from its service solutions than from transactional business. And MPS is one of its standout components. OPI’s Heike Dieckmann speaks to SourceOT’s President David Sass about why this service extension to the printer and copier – and also consumables – category makes so much sense, especially in these difficult COVID-19 times.

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OPI: It’s SourceOT’s 30th anniversary this year. I’m sure it’s not quite the 2020 you had imagined it to be.

David Sass: You’re not wrong about that. But I’m hopeful that we will emerge from this crisis soon and get back to some kind of normality in the summer.

OPI: It’s good to see some positivity – it’s a rare thing right now. Please tell me a bit about your MPS business and how it’s evolved.

DS: SourceOT is a $44 million company, based in Denver, Colorado. We started in MPS a very long time ago and were one of the early adopters.

It’s integral to the technology part of the business where we focus on copier and printer sales.

Tech solutions are about 40% of SourceOT’s overall revenues and our fastest-growing category. Half of those 40% come from hardware sales – the printers and copiers I’ve just referred to. The other half is the MPS portion of it – servicing that hardware.

OPI: I expect you have faced an enormous challenge in these past couple of months, given that so many offices are empty right now because of the COVID-19 situation?

DS: It’s been difficult, certainly, dealing with the variables and trying to forecast when we’ll be back to any kind of normal working environment. MPS is all about the number of printed pages in the workplace and they obviously fell off a cliff in April and even May.

OPI: Have you been able to send your staff for maintenance and service calls still?

DS: It’s been ok. We’ve had to take some precautions, but for the most part it’s been fine.

OPI: Crisis aside, the number of printed pages is going down globally, and there have been mutterings that the potential in this category is actually diminishing rather than increasing.

What’s your view?

DS: You’re right about the printed pages, but I think office supplies dealers have a tremendous opportunity to convert their customers to MPS agreements. I would go as far as to say the opportunity is greater now than it was ten years ago.

Yes, the print industry is shrinking, but OP dealers have little or no share of that market right now – that’s where the potential lies. And, as I said before, it typically runs at 35-40% gross profit both on the hardware and the MPS side.

HOW TO... Managed Print Services

That said, the printer and copier business is a great one to be in and is almost recession-proof because about 90% of the hardware is bought on a lease. How this works is that you sell a customer a five-year lease. It means you get the revenue from the hardware sale up front. Then you usually sign a five-year maintenance agreement, thereby guaranteeing a continuous, recurring revenue stream associated with that sale.

Of course, the latter is a variable as our model is based on cost-per-page. If, like currently, customers don’t print or copy much, they don’t owe us as much and we don’t have ink and toner costs. But we also don’t have service calls, so our expenses go down significantly too.

In addition, we can exchange and replace customers’ hardware if fewer people are working in offices and save them operating expense that way. Over a five-year period, it all aggregates.

And at the end of every lease, there’s also a

The printer and copier business is a great one to be in and is almost recession-proof because about 90% of the hardware is bought on a lease buying opportunity. This part of our business is very profitable – tech services typically runs close to a 40% margin.

OPI: With COVID-19 in mind, the healthcare vertical is really important to you I believe. That side of things at least must have been doing well for SourceOT? DS: Absolutely. One of our largest MPS customers is a children’s hospital here in Colorado. That facility is printing at levels much higher than normal which is helping us.

OPI: What would be your advice to an OP dealer trying to get into this space?

DS: Step one is to make sure all of your current transactional ink and toner sales – and OP dealers usually have a good percentage of that in their mix – is moved under an MPS agreement so that they can protect it. If it’s under agreement, nobody can touch it – not Amazon nor the copier industry.

Once you get, say, 80% of your transactional ink and toner revenues under such a deal, step two is to pick a manufacturing partner, and go and start selling copiers and printers to your existing customers.

May/June 2020

OPI: Is there an appetite for making this work by dealers in the US in your opinion?

DS: Well, that’s an interesting one. As you know Sycamore Partners – which owns Staples – bought DEX Imaging in 2019. DEX is a large copier dealer from Florida and I think Sycamore was very smart with that acquisition and recognised the opportunity.

Following that deal, there appeared to be a renewed interest to really develop this category.

As the lines are blurring between the various product segments and dealers are expanding their reach, they are realising that selling copiers is a whole lot easier when you have a relationship already with an office supplies customer. The wholesalers can help here too – Essendant obviously under the Sycamore umbrella.

S.P. Richards, with which we have a very long and deep partnership, has been using SourceOT as a role model in terms of helping to educate dealers how to best transition into selling copiers, printers and MPS. At the moment it’s predominantly about resources, but there’s plenty more to come in this area.

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Managed Print Services HOW TO...

OPI: You mentioned manufacturer partners earlier. You work with HP, Canon and Xerox, is that right?

DS: That’s correct. We’ve recently expanded into both Xerox and Canon large-scale production copiers as well. These are expensive devices and very profitable from a service standpoint. They print in excess of 100,000 copies per month. With the five-year reoccurring MPS revenue that I have alluded to, they’re terrifically profitable for dealers.

OPI: What’s the nature of the relationship with these three operators?

DS: Xerox and Canon both have a certification process whereby you need to go through mandatory training for your service technicians and salespeople to be authorised to sell their products in a specifically defined territory.

OPI: What about HP Inc? DS: SourceOT has had a strategic relationship with HP for over 20 years and considers it to be a critically important partner. We sell HP copiers and printers, OEM ink and toner, wide format, and we have had preliminary discussions to become an HP 3D Printing distributor partner as well.

SourceOT is in alignment with HP’s corporate strategy of being a global industry leader in both hardware and supplies across multiple technology services categories. It’s a partner that our customers trust and respect in terms of quality, security and innovation.

OPI: Do you operate the tech services business on a nationwide level?

DS: We’re about 80% Colorado and Wyoming, and 20% in the rest of the country – pretty similar to the rest of SourceOT. We have many nationwide contracts whereby we’ve placed copiers and printers across the US in large companies. We bill them for MPS as well and use affiliate partners to actually make the service calls.

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We only hire recent college graduates because of their aptitude with technology

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OPI: When you say affiliate partners, what does that mean exactly?

DS: It’s different for each manufacturer. For Canon, for example, there’s a group of about 70 Premier Canon Dealers in the US – we’re one of them. If we have a customer in another dealer’s territory, our contract is with that customer, but the affiliated Canon dealer charges us for the service calls it makes. There are a lot of dealers that we have been doing business with for years. We help them, they help us, and it’s a really nice network across the country to rely on.

Similar to Canon, SourceOT has HP Certified technicians locally and partners with other HP Certified dealers around the country to service our national customers. HP has also been instrumental

in helping us develop and draft tailored MPS agreements for our customers.

With Xerox, it’s a bit different. We have nationwide agreements with Xerox as well, but we use the vendor’s corporate technicians for service calls outside of Colorado and Wyoming.

OPI: How do you go about recruiting SourceOT staff for this side of the business?

DS: We’ve got a very specific model. We only hire recent college graduates because of their aptitude with technology. They’re digital natives – they grew up with and are very skilled at learning new technology.

Copiers, for instance, are becoming quite complicated, with a whole new suite of apps that are available to end user customers, artificial intelligence options, and so on. When these graduates join us, they go through a very comprehensive 13-week training programme before they go out and start selling.

OPI: Does this just apply to the tech services part of the company?

DS: All new recruits – all of our generalists and specialists – are recent college graduates. Our generalists go out and they have a defined territory. They sell all of our six categories. They lead with office supplies initially, but are also very skilled at telling the story of our other divisions, tech services included.

OPI: Is that recruitment approach quite typical?

DS: It’s common where I come from in the copier industry, but I can’t think of another OP dealer with the same approach, no. I won’t hire legacy OP salespeople or indeed legacy copier reps because they both have a different mentality.

Our model is about comprehensive business solutions and I would rather start with somebody recently out of college who we can train up with our messaging.

OPI: You offer a multitude of categories and services, including furniture and its design and installation; office coffee services (OCS) and breakroom supplies; office supplies; and of course tech services, all it entails and that we’ve just talked about. Is it an advantage to have all these categories under one roof, so to speak? Or can it be a case of Jack of all trades, but perhaps master of none?

DS: It’s only an advantage if you’re master of all of them too. Our whole strategy is that everything is intertwined and works together.

Something like 35% of all office supplies a dealer sells comprises copy paper, ink and toner – that’s long been the case. All of those items flow through copiers and printers, so it’s a completely natural business discussion to have.

If you have that relationship with the customer – use it and maximise it. I probably don’t make as much on copy paper as other dealers, but we aggressively sell services into that customer too, so it’s a natural extension. Office supplies is almost a lead generation process for us to get into the copiers, printers and printing services – all things that we establish once we’ve secured the transactional business.

The same is true for coffee and the wider breakroom category. We provide the consumables – why not provide the ‘hardware’ as well and tie it all together?

OPI: Who are your MPS customers? What is large or small, for example?

DS: That’s a good question. Large to me is a company with an opportunity of 100+ copiers. We have a telecom customer with 300 copiers around the country – that’s certainly big. Overall, our clients are in multiple industries, including financial services, technology and healthcare. They tend to have offices all over the US, so we’re pretty evenly distributed in that sense.

OPI: Is there a lower limit, as in a minimum fleet size, that would warrant an MPS program?

DS: It’s probably smaller than you think, mostly because of troubleshooting. There’s often no expertise in a company when a printer actually breaks and, like I said before, copiers are becoming incredibly sophisticated. All this can be frustrating for users, so I’d say any company with more than ten devices should consider it.

David Sass, President, Source Office & Technology

May/June 2020

OPI: What about the consumables side, how do you deal with that?

DS: Well, as at least 80% of our customers are under some sort of MPS agreement, we’re tying this in with offering a proprietary brand – we call it SourceOT Premier MPS Technology Paper and we’re doing that with Domtar.

It’s heavier in weight and brighter than your typical private label copy paper. Most importantly, our copy paper includes HP ColorLok technology, so it’s high quality that looks and feels different and produces much improved printing results. We typically use this premium copy paper as a bridge for a discussion between the technology and office supplies product categories.

So our salespeople would say: “Hey, we’ve just sold you $500,000 worth of copiers and printers.

That’s a big investment. I will match the Office Depot or Staples copy paper price and, actually, why don’t you consider this paper instead? It’s heavier, it looks better and if you print a couple

OPI: Just to finish up… When I last spoke to your CEO John Givens, we talked in some depth about the coffee business. We haven’t mentioned it much here, but out of interest, how does OCS compare in terms of growth rates for SourceOT, margins, etc, to the MPS side?

DS: As John would have said, OCS is a huge part of the company and has been growing in the 20-30% range every year since I joined the company four years ago. Like with MPS, we sell the transactional items such as tea, coffee, cups, plates, cutlery, napkins and so on, as well as the installation and service part. It’s a fantastic business.

But I have to admit, I like printers and copiers a bit more because typically, as I mentioned, the equipment is purchased through a lease by the end user. That’s generally not the case for coffee machines. We provide the equipment and then pay for it over time through the services we offer. It means from a cash flow standpoint, selling technology hardware is far more lucrative. I’m a copier guy at heart really!

HOW TO... Managed Print Services

of pages, you’ll see the difference. You’ve spent a considerable amount of money on your hardware. Don’t now put cheap paper through it. It doesn’t look nice and creates paper jams, misfeeds and service calls.”

All we ask is for the customer to listen and give us a try – for printers and copiers, for consumables and for office supplies. This strategy has won us a lot of business both from the copier and OP space.

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RESEARCH

DIFFERENT DIMENSION But the world has been shaken to its core, of course. Historically – and the aforementioned examples illustrate that – there has been change that affects a company, its employees, customers and immediate market. What we’re experiencing now is upheaval on a completely different scale.

Since interviews for this report were carried out, the COVID-19 pandemic has struck. With it have come unprecedented new realities.

Adjacent categories such as PPE and jan/san have indeed grabbed the headlines and grown beyond all expectations for many operators. But what happened to many of the other plans and aspirations? Some will undoubtedly have been dashed, while others have taken on a different direction completely, if only to have a chance to survive the current crisis.

To ensure that a genuine and up-to-date assessment of the market conditions in 2020 is obtained, which factor in the inescapable recent, ongoing and future COVID-19 realities, survey respondents will be invited to review and revise their initial estimates and opinions in a number of areas. Carried out by MWA and published by OPI later in the year as a supplement to the original report, these updates will be free of charge to all those who purchase the survey.

A new

WORLD

P

lenty happened in 2019, much of it groundbreaking and unprecedented.

US dealer groups Independent Suppliers Group, Pinnacle Affiliates and TriMega Purchasing Association finally merged; Staples Inc’s owner Sycamore Partners completed the acquisition of wholesaler Essendant; the last remaining UK OP superstore, Office Outlet (previously Staples), went into administration; ADVEO’s operations in France and Benelux were bought by private equity firm Sandton Capital Partners; and RAJA acquired four of Staples Solutions’ European direct brands (see Big Interview, page 16).

What we’re experiencing now is upheaval on a completely different scale These developments and many more are explored and analysed in the latest report researched and published by Martin Wilde Associates (MWA) and OPI respectively. The View From The Top: The State Of The OP Industry Report 2019-20 is the seventh annual market research study of its kind; it is based on more than 60 in-depth interviews with senior OP industry executives from around the world and their perceptions and forecasts. thecore OP sales were Survey results show that resilient in 2019, with more than half of the respondentsfrom indicating that traditional product the sales had increased versus 2018. That said, the most widely reported growing categories were in adjacencies such as breakroom, jan/san and PPE. Another finding is that a majority of executives were looking to acquire another business in 2020, although less than half were interested in buying an OP specialist.

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the

OP INDUSTRY SOURCEBOOK The State Of The OP Industry Report 2019-20 provides – and will continue to do so – a firm perspective on what is happening in our sector, before as well as during COVID-19. From product demand and distribution, underlying and evolving trends, to market fears and opportunities, this authoritative sourcebook for the OP industry aims to provide the answer. Topics covered in the current and updated report include: • The value of the core OP market in 2019/2020.

• The extent to which the core market is expected to change during and after COVID-19.

• The value of the addressable facilities supplies market – and its key constituent categories.

• Product categories that are actively being developed by survey respondents.

• The share of the core OP market held by Amazon/Amazon Business in the countries that were surveyed; which type of customer does this operator most successfully capture?

• The future of OP wholesaling in each country.

• The extent to which OP vendors are looking to develop sales outside of the ‘conventional’ office products channels.

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from the

The State Of The OP Industry Report

2O19-2O

Please visit www.opi.net/soti2020 for more information about The View From The Top: The State Of The OP Industry Report 2019-20 and to order your copy.

GENERATION GAME

A new way of working – FROM HOME

I

t’s hard to believe how many things we were taking for granted just a few months ago have drastically changed. They seem like something from the distant past: a time when we could travel to other countries, have a meal together with family and friends, or even greet each other with a handshake during a business meeting.

Many of the adjustments we’ve had to make have temporarily altered our daily routines significantly. In my case, several days after I was presented with the Young Executive of the Year award on 9 March at the European Office Products Awards (see Event, OPI April 2020, page 42), the UK was placed into lockdown due to the COVID-19 crisis. As a result, working from home became the ‘new normal’ for the foreseeable future – for myself, many other Fellowes Brands employees and indeed entire workforces in countries around the world.

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FEAR OF CHANGE Our fear of change can hinder our ability to embrace this new workplace reality and shift our focus to the ‘unknown’. But there was simply no option not to adapt. Everyone was forced to fast-track and then get used to this new normal to ensure business continuity. Agility and the ability to be flexible will become the key to survival in the long haul for many businesses.

Working from home can feel daunting to start with, especially if you haven’t experienced it before or only infrequently in the past. It’s a complete change of dynamic in your environment and includes physical isolation from the team and colleagues as well as the often blurred lines between office and home life.

I’m not going to lie, there are times when I really miss the office atmosphere, my comfortable, large height-adjustable desk, having lunch with different people or even bouncing ideas off colleagues when you casually meet at the coffee machine.

It’s social and, as a result in my opinion, often spontaneously constructive and creative.

However, we are very lucky to have technology available at our fingertips these days that enables almost everything to be transformed into a virtual activity. As I get to grips with working from home full time, here are some suggestions that I’ve found make the process a little easier:

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• Stick to a routine and be disciplined by minimising distractions. Try being as efficient as possible so you can make the most of the hours you are getting back from avoiding all that commuting time.

• Have a designated space for working. It may be tempting to sit on the sofa, at the kitchen

table or in the garden, but finding a suitable desk and chair would be better in the long term. There are already studies available highlighting an increase in musculoskeletal discomfort from poor working practices since the implementation of lockdowns in Europe. Given the nature of my employer, I usually have access to many ergonomic accessories and furniture that can help improve posture and well-being while working. However, due to a lack of space at home, it’s not always possible to use all of those ‘aids’, so I improvise and ensure I stand and walk when talking on the phone, for example.

• On that same health note, ensure you take breaks, stretch your body and change posture frequently.

This is as important in the home office as in the regular workplace. It will help you feel more energised and in the best mindset to tackle the day (see also Opinion, page 36).

• Keep communicating with the team regularly to make sure you still have the support necessary if projects are not going as planned or priorities need to be amended.

Esmeralda Gonzalez, European Category Development Specialist, Fellowes Brands

Agility and the ability to be flexible will become the key to survival in the long haul for many businesses CHANGING HABITS I’m convinced there will be several learnings and outcomes that remain in the business environment when this crisis is over. They will hopefully change some behaviours and attitudes for the better and include: • Improved speed on corporate decision-making to enable faster adaptability to changes.

• Cleanliness: while there is no doubt already some avid cleaners (see also Final Word, page 58), I believe we will all think twice about ensuring our hands, surfaces, equipment and even air, are regularly cleaned.

• Business trips: are they all strictly necessary or would virtual meetings be a feasible alternative in some instances?

• Increased digitisation, all the way from SMEs to global multinationals.

• Flexible working: this will no longer be viewed as a career obstacle or a ‘nice-to-have’, but be adopted more broadly at all organisational levels. It could translate into redefined measures of productivity.

It will be interesting to see whether this current situation is indeed creating and then ultimately cementing some positive new ways of working.

5 MINUTES WITH...

Geoffrey Betts

CAREER Q&A Describe your current job.

I’m Managing Director of UK-based office products manufacturer Stewart Superior.

What would you be the patron saint of?

Enthusiasm.

Your worst ever job?

Plug socket salesman.

What’s your life philosophy?

Get up every morning with a smile on your face and contemplate what you will achieve that day.

Geoffrey Betts, Stewart Superior

What special skill do you possess?

I love to sing and play the guitar.

What do you do in your spare time?

Spare time… what’s that?

If you could have the answer to any question, what would you ask?

Optimist or pessimist?

How do we give hope to the homeless?

What is the hardest thing you’ve ever had to do?

What’s your worst character trait?

My cup is always full to the brim.

Representing my school in the triple jump. I pulled a muscle in the warm-up, resulting in the hop being more of a trip and the skip being more of a hop.

Your favourite gadget?

Alexa. I ask her to play a song that I like – and she does!

Best compliment you’ve ever received?

That I remind someone of my dad.

Saying: “Let’s have one more…”

What’s your guilty pleasure?

Chewy sweets. I should work for Haribo.

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

Nothing. We are what we are.

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

Busking in the south of France.

Best moment in your career so far?

Being given the Industry Outstanding Achievement Award for services to the industry at the 2013 BOSS Awards. A very emotional moment.

The industry figure you most admire?

Eileen Ward. We have worked together for almost 25 years. In my view, she is a class apart in terms of ethics and professionalism.

Your best piece of advice to someone who has just joined the OP industry?

Work damn hard but also don’t forget to play just as hard. Life has to be fun, it’s not a dress rehearsal.

What do you like best about the OP industry?

What’s your favourite cuisine?

The people, always.

They are extremely educated and driven.

What words do you use the most?

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

A plate of really good escargot or shellfish, accompanied by a bottle of white wine, preferably Muscadet.

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“This is fab.”

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Best way to spend the weekend?

Chilling on Friday night, playing or watching sports on Saturday and then spending Sunday with my family.

It is still maturing and as challenging as it has always been, but it would be great to have a little more margin to play with.

FINAL WORD

Cleaning for health: IT’S NEVER BEEN MORE IMPORTANT

R

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ecently, I had the honour to represent ISSA on a White House communications call with President Donald Trump. Calling on executives from industrial supply retailers and wholesalers who are responding to COVID-19 demands, the President thanked us for providing the goods US citizens rely on every day and expressed his gratitude to the incredible employees who work tirelessly to that end.

As we navigate the pandemic, the cleaning industry – which has become an integral part of the business supplies sector – continually steps up to the plate to show its resilience, preparedness and leadership. This crisis has required numerous businesses to evolve overnight, be that through accommodating unprecedented demand for products and services or addressing and solving deep business disruptions. Our industry is viewed as an essential first responder during this difficult time, and it’s ISSA’s duty to serve our members and leverage our collective voice to help mitigate the effects of COVID-19.

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A ‘NEW NORMAL’ In the near future, the world will likely settle into some kind of ‘new normal’. Customers will expect businesses like hotels and restaurants to follow a different standard of clean and have steps in place to prevent the spread of infection.

Likewise, schools and government facilities will face the same increased pressure to protect students, staff and guests from infectious agents.

This new reality may be shocking to some, but it is one the cleaning industry is prepared for.

The Global Biorisk Advisory Council (GBAC), a division of ISSA, trains workers to be ‘microbial warriors’. What this essentially does is provide cleaning professionals with the planning, knowledge and processes needed to prepare for, respond to and recover from biohazard crises. Its new training certificate course, the GBAC Fundamentals Online Course, is specifically designed for the heroes without capes – the cleaning staff on the frontlines of the coronavirus fight.

Supervisors, managers and frontline workers will learn infection and contamination control measures for infectious disease outbreak situations, such as coronavirus. Upon successful completion, participants will receive a certificate from GBAC to illustrate their competency.

Providing staff with the necessary training and cleaning education around biohazards is just as

important as giving them access to personal protective equipment (PPE) and effective disinfecting products. Unfortunately, not all cleaning staff are equipped with the right tools to combat an outbreak of the current size, making it more essential than ever to take the necessary steps to prevent the spread of infection.

Additionally, ISSA has taken the lead in terms of providing tools and resources to help our sector respond to the pandemic and underscore how cleaning can reduce its impact on human health.

I encourage everyone to use our free online resource, Coronavirus: Prevention and Control for the Cleaning Industry, which includes guidance, news, webinars and practical tips on PPE, risk assessment and disinfection from GBAC. Like many organisations, we’ve had to cancel, postpone or reschedule live events. However – again, like many others – we’ve chosen to provide topical training and education via virtual channels.

Our goal is to ensure our industry has the latest information and equipment to combat this outbreak and prepare for the next phases.

John Barrett, Executive Director, ISSA

It’s ISSA’s duty to serve our members and leverage our collective voice to help mitigate the effects of COVID-19 THE FUTURE OF CLEANING During this difficult time, I’ve seen our members engage in significant initiatives to flatten the curve, protect employees and customers, and provide the cleaning products desperately needed. Not only have these efforts inspired me, but they’ve given me hope for a bright future with a new and improved focus on and appreciation for cleanliness and the industry’s workers.

For years, ISSA and its more than 9,300 members from around the globe have shared with customers and the public the importance of cleaning (for more details, see ISSA.com). Today, we have the unique opportunity to showcase it as a valuable investment in human health, the environment and the bottom line. Moving forward, I’m confident we will change the way the world views cleaning.

On a positive note also, I think there’s been an unprecedented display of leadership, support and partnership in the ISSA family at this challenging time. One of my favourite sayings is that difficult times don’t build character – they reveal it.

NEXT ISSUE Big Interview Brian Bowerfind, President, Global Distribution & NET1 Divisions, ECI Category Updates l Technology Solutions l Furniture