OPI APP OCTOBER 293 A

BIG INTERVIEW

Connecting the

business products world

Jennifer Smith, Innovative Office Solutions October 2019

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OO TOP OP INSIDE THIS ISSUE l

Veritiv offloads jan/san unit l All change at HP l Staples Solutions sells German businesses l The issue with credit insurance OPI Global Forum preview

l Packing a punch: the mailroom and packaging sector l Who is king – the customer or consumer? l

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CONTENTS 16 Big Interview Innovative’s Jennifer Smith on why thinking outside the box has become imperative 22 Hot Topic Credit insurance: friend or foe for our industry?

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26 Top 100 Who have been the main protagonists of 2019?

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34 Category Update With e-commerce on the rise everywhere, the potential for the mailroom and packaging sector has become enormous 38 Category Update Emerging markets, technology and even Brexit are all helping to keep the stamping sector relevant

Big Interview: Jennifer Smith, Innovative Office Solutions

US-based Innovative Office Solutions is consistently heralded as an exceptional example of a woman-led business. With CEO Jennifer Smith at the helm, the company has grown from nothing to nearly $150 million in sales in just 18 years. Most recently, Smith received the BSA Leadership Award from the Business Solutions Association at its Annual Forum.

Apart from having obvious business acumen and a talent for spotting opportunities and maximising them, Smith has also injected into Innovative a culture that is outstandingly caring, positive and progressive.

HOT TOPIC: TO INSURE OR NOT TO INSURE

44 How to... ...approach the consumer versus customer marketing debate. Who’s king?

46 Advertorial Rapesco’s reinvention and fresh approach explained 48 Preview: OPI Global Forum Industry leaders to congregate in Chicago for high-profile discussions 50 Preview: Prevail The stage is set for ISG’s new, combined membership

REGULARS 5 Comment 6 News 14 Social Spy 52 5 minutes with...

Thomas Lang 54 Final Word Chris Scott

October 2019

If we had listened to our credit insurance advisors, we would have stopped dealing with ADVEO a few years ago. As it happens, we placed our faith in what we’ve seen, heard and how we administered the debt. And we managed it very closely. As a result, we’ve had millions of euros worth of business that we otherwise wouldn’t have had. We believe in following our own instincts of knowing the OP market inside out and understanding the businesses involved.

42 Advertorial A look at Novus Dahle, its new direction and raft of recent innovations

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

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A sign of the times

n all my years of working at OPI and being involved with this magazine, we’ve never had two women back to back as our Big Interviewees. In fact, over the past ten years, we’ve only had two other women featured in the Big Interview – one earlier this year with HP’s Mercè Barcons and iba’s Christa Furter in 2017. That’s four females in 100 issues of OPI… if that’s not food for thought.

And while Sarah Hunter last month and Jennifer Smith in this issue (see page 16) are quite different in terms of geography, type and size of company they lead as well as in their core values, they have one important thing in common – the realisation that to succeed today, you need to adapt to new realities and have a differentiating factor.

To succeed today, you need to adapt to new realities and have a differentiating factor

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

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

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

PUBLISHERS CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net Executive Assistant Debbie Garrand +44 (0)7718 660249 debbie.garrand@opi.net

These are hugely challenging and fast-changing times, that much is certain. Throwing out the old rulebook and trying new concepts and strategies might not be a necessity for everyone – yet – but an openness and willingness to do so is paramount.

This year’s Top 100 list and the personalities and companies mentioned in detail in this issue of OPI (see page 26) shine a light on some of those differentiators and some of the momentous developments and activities that we’ve witnessed across the globe over the past year or so.

Again, out of curiosity, I’ve been digging through the archives and in our Top 100 too, the percentage of women has become considerably bigger over time. There have been entries over the years, sure, in some more than others, but there’s only been one contender who’s made the cut for many consecutive years – e-commerce veteran and former Office Depot exec (she left in 2012) Monica Luechtefeld. Fast-forward to 2019 and it’s good to see eight women leaders making it into this ‘who’s who’ of the business supplies industry (the aforementioned Hunter and Smith being two of them, naturally).

My point here is not to indulge in a bit of reverse sexism, it is to illustrate that ours is truly an industry on the move. Gender aside, you only have to take a look at the amount of M&A activity going on across the globe, at previously inconceivable strategies by operators such as Staples Inc, Essendant and Depot as well as, of course, the new set-up of the major US dealer groups. As our Big Interviewee concurs, we’ve absolutely reached a tipping point.

HEIKE DIECKMANN, EDITOR Have a great month.

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October 2019

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NEWS

Analysis:

Veritiv closes jan/san business

$170 million worth of business up for grabs after Saalfeld shutdown

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North American paper, packaging and facility solutions group Veritiv abruptly shut down its Saalfeld jan/san and foodservice distribution business in September. Saalfeld was originally a family-owned company based in Ohio, and was acquired by International Paper in 1998, forming part of its xpedx distribution business.

Further facility consolidation and integration of the subsidiary then took place when xpedx and Unisource merged in 2014 to create Veritiv.

It sold a range of jan/san, foodservice and MRO supplies to mainly smaller resellers in the US and had annual sales of around $170 million, about 2% of Veritiv’s total revenue. After reaching the $350-$400 million mark in its heyday in the mid-2000s, it is understood the company had been in decline for the past few years, losing business, for example, when Office Depot acquired OfficeMax.

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AGGRESSIVE COMPETITION In an email to employees, Veritiv CEO Mary Laschinger explained the reasons behind the decision to close Saalfeld: “Saalfeld services primarily smaller distribution companies in the US with a broad array of products and services that are not all aligned with our core Facility Solutions business. Supporting customers in this channel requires considerable small order capabilities with a wide range of products, as well as greater delivery distances from our facilities, all of which are inconsistent with our core Facility Solutions, Packaging, and Print business models and our focus on core suppliers.

“As the business and customer needs in this channel continue to evolve and change, we are faced with significant supply chain complexities in order to provide the level of service customers in this channel require. In addition, the competition is increasingly more aggressive, with many small distributors getting better value from small-order, e-commerce competitors. We could not find a competitive advantage that enabled us to be profitable with this business.”

A Veritiv spokesperson told OPI the discontinuation will result in the elimination of

Saalfeld-specific sales positions as well as some additional non-sales jobs as it consolidates inventory and facilities. Veritiv will retain its Spring Grove brand for foodservice products, but Spring Grove towel and tissue items will be discontinued, with this category being covered by its Reliable brand.

The competition [in this channel] is increasingly more aggressive, with many small distributors getting better value from small-order, e-commerce competitors OPPORTUNITIES ABOUND OPI understands that enquiries had been made about acquiring Saalfeld, but as Veritiv confirmed: “The Saalfeld channel was difficult to carve out and exiting the channel made the most sense for Veritiv’s long-term strategy.”

It would appear that Veritiv’s sudden announcement took the US jan/san distribution segment by surprise although the decision was not a complete shock given Saalfeld’s declines over the past few years. Its demise has now given the likes of Bunzl, Essendant, RJ Schinner and S.P. Richards the opportunity to win incremental jan/san sales as customers look to fill the void left by Saalfeld.

Veritiv stressed that Facility Solutions – a $1.3 billion division in 2018 – remained a core business for the group “with a strategy to be a solution-oriented partner for customers that require product expertise, process optimisation, consistent service and large-scale supply chain capabilities for products in the towel and tissue, foodservice, and cleaning and maintenance segments”.

The Veritiv CEO also confirmed the future of its Canadian Fordis distribution business. “This decision [to close Saalfeld] will not affect our Fordis-branded operations in Canada where the business is local, concentrated in fewer areas, more manageable, and thus more profitable,” Laschinger stated.

Staples Solutions has agreed to sell its retail and online operations in Germany to Netherlands-based Office Centre for an undisclosed sum. The deal comes just a few weeks after Staples agreed to sell its units in France, Italy and Spain to European packaging specialist RAJA Group.

Office Centre had already acquired Staples’ retail network in the Netherlands last year, and Staples Solutions CEO Dolph Westerbos said the latest transaction was “a natural next step”, adding: “This further simplifies our business and allows Staples Solutions to focus on growing our core B2B contract business, serving mid-sized to large enterprise customers as well as public institutions.”

Frans Davelaar, co-owner and CEO of Office Centre, commented: “With its unique retail and online model that is complementary to our business, we see opportunities to unlock further potential from Staples Solutions’ retail and online businesses in Germany.”

He confirmed that the newly-acquired entity – which includes 55 stores and employs about 800 staff – would continue to be headquartered in Hamburg under the leadership of current Managing Director Jochen Bohl.

On the supply chain side, Staples’ warehouse in Waldlaubersheim in Germany will remain part of Staples Solutions, with Office Centre having entered into a third-party logistics agreement.

Back in 1992, German retail represented Staples’ first foray into international markets when it took a stake in fledgling superstore operator MAXI-Papier. After acquiring the business outright, Staples made a further acquisition in Germany three years later when it bought Sigma BüroWelt.

IN BRIEF Egan Reid acquires again UK independent dealer Egan Reid has bought the goodwill and customer base of Burslem Stationery Supplies, a dealer located near Crewe, about 30 miles (50 km) south of Egan Reid’s Stockport headquarters. The acquisition comes following the retirement of owners David and Karen Armstrong after running the business for 40 years. This is Egan Reid’s second acquisition this year, with expectations of more to come.

NEWS

Staples Solutions to offload German businesses

Leadership change at Staples Promotional Products Matt Eckhouse has been appointed as the new General Manager of Staples Promotional Products. He takes over at the $660 million unit from long-time General Manager Rich Witaszak who recently left the company after almost 18 years.

Henkel invests in cleaning start-up Henkel has led a $5 million seed minority investment in US-based cleaning products start-up Truman’s. Direct-to-consumer brand Truman’s was launched just seven months ago. It offers hard surface cleaners that use refillable bottles and concentrate cartridges that are designed to cut down on the need for single-use plastics and reduce the transportation footprint in the cleaning industry.

Kentucky dealer makes acquisition US independent dealer Petter Business Systems has acquired fellow Kentucky reseller Holley Office Products. The transaction was finalised in early September, and Petter said it will enable the dealer to capitalise on the strong Holley presence in western Kentucky.

More staff cuts at Staples Inc

Office Depot Mexico trialling co-working solution Office Depot Mexico is following in the footsteps of its US namesake by piloting a co-working concept. The company – owned by Grupo Gigante – has said it will launch a prototype store in the Villa Coapa area of Mexico City. In addition to the co-working area, the outlet will include a small business service counter and devote more space to in-demand product categories such as gaming accessories.

October 2019

There has been a significant round of layoffs at Staples Inc’s head office in Framingham, Massachusetts. Around 200 jobs are thought to have gone in a fresh round of cuts in early September. These latest reductions follow a similar number of redundancies made in the first half of 2018.

Staples declined to provide any specifics to OPI, but issued a written statement, saying: “Any efforts we undertake to streamline the organisation are aimed at speeding up our decision-making and enabling us to focus on our customers. We will continue to look at the best structure to compete in a rapidly-evolving marketplace.”

Posts on social media forums suggested that these actions have involved management positions at various departments and are not limited to the Framingham head office.

Fellowes buys Classicom Fellowes Brands has acquired privately-owned Belgian archiving products firm Classicom. Fellowes said the acquisition underlined its commitment to the continued development of the storage and organisation category under its Bankers Box brand.

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NEWS

Analysis:

Big changes coming at HP

1 November sees a new CEO and a new global operating model at the print and PC giant News from HP Inc came thick and fast at the end of August and in early September as the company announced some significant management and structural changes and a set of third quarter results that highlighted challenges in its Printing division.

The Q3 earnings report included the surprise announcement that CEO Dion Weisler was to step down from 1 November. He will be returning home to Australia to attend to a family health matter.

Weisler joined HP in 2012 and became the first CEO of HP Inc when the company was split in two in 2015. He can probably look back on the past four years with a degree of satisfaction: in that time, HP has strongly developed its 3D and graphics offerings, moved into the A3 copier category by acquiring Samsung’s print division, and done well in the cutthroat PC market.

Succeeding Weisler on 1 November is company veteran Enrique Lores. The Spaniard joined the firm 30 years ago as an engineering intern and rose through the ranks to increasingly prominent leadership positions across the Print, Personal Systems and Services units. He played a key role in the separation of Hewlett-Packard in 2015 and since then has been in charge of the $20 billion Imaging, Printing and Solutions division.

Lores is seen as a strong choice both strategically and operationally, and his appointment certainly suggests building on the blocks that Weisler has put in place.

As of 1 November, HP will abandon its regional structure comprising Americas, EMEA and Asia-Pacific Japan, and adopt a single Commercial organisation with ten geographical markets. Each of these will be led by a managing director reporting to HP’s first-ever Chief Commercial Officer (CCO) Christoph Schell.

Schell has been with HP for more than 20 years and is currently President of 3D Printing and Digital Manufacturing. He said one of the key advantages of having this new CCO position would be HP’s ability to drive a more consistent approach to how it goes to market globally – something that reseller partners had been asking for in an omnichannel world of global price transparency. How this manifests itself in terms of HP’s ink and toner supplies pricing remains to be seen, but customers, especially in Europe, have been moving to lower-priced compatibles in a big way in 2019.

Lores is seen as a strong choice both strategically and operationally

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NEW GEOGRAPHICAL FOCUS The announcement shortly afterwards of an overhaul of HP’s global operating model and organisational structure was something that had been in the works for a while and is not related to Weisler’s decision to leave.

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Christoph Schell: HP’s first CCO

New CEO Enrique Lores

Look out for next month’s Hot Topic which will focus on the ink and toner category, in particular the dynamics between OEM original, remanufactured and new-build compatible supplies.

SUPPLIES SQUEEZE Supplies sales fell in the mid-teens in the EMEA region, HP admitted in its third quarter earnings call, citing increased competition from aftermarket suppliers in the commercial channel from online sources. CFO Steve Fieler, speaking at the Citi 2019 Global Technology Conference in September, put the declines down to “operational challenges” and said it was a “short-term situation” that HP was dealing with (for example, by letting go EMEA President Nick Lazaridis in August).

However, he recognised that a fundamental strategic challenge facing HP – and other OEMs – was the long-established “seeding model” of selling printers cheap (despite investing billions of dollars in hardware R&D) to create an installed base and then making money on the supplies.

Solutions to help offset the current trends in Europe could include a tightening of authorised supplies resellers, similar to moves seen in North America a few years ago, and a continued rise of contractual sales. Things should become clearer when HP’s new organisational structure is up and running on 1 November.

NEWS

Industry greats honoured at BSA Forum Jennifer Smith, CEO of Innovative Office Solutions, and Yancey Jones Sr, EVP of Sales at The Supply Room, were respectively presented with the prestigious Leadership and Legend of the Industry awards at this year’s Business Solutions Association (BSA) Annual Forum.

Smith (this month’s Big Interview, see page 16) started Innovative in 2001 with about 20 employees. Today, it is one of the largest and most successful independent dealers in the US, employing 300 staff across multiple locations and being highly respected for its strong company culture and philanthropic work. Presenting Smith with her award was Joe Templet, SVP of Trade Development at Essendant, Innovative’s main wholesaling partner.

Jones received his award from Mike Maggio, CEO of Independent Suppliers Group (ISG), who has a unique professional relationship with Jones. At various stages of Maggio’s 40-year career, Jones has been a customer, employer, advisor, mentor and partner to him.

From its humble beginnings in the 1980s as a small retail business in Virginia, The Supply Room has evolved into one of the dominant independent business products dealers in North America. Recognised for his passion, integrity and strong values, Jones has always been a fervent supporter of the independent dealer channel at large, was an early advocate of the merger of the dealer groups and a driving force behind the creation of ISG at it stands today.

L-R: Barry Lane, Jennifer Smith, Joe Templet, Travis Kaste

October 2019

L-R: Barry Lane, Yancey Jones Sr, Mike Maggio

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NEWS

IN BRIEF Knoll acquires e-commerce seller Knoll has announced the acquisition of Fully, an Oregon, US-based e-commerce furniture brand that sells direct-to-consumer into home office and small business customers.

Knoll is paying $35 million plus performance-related add-ons for Fully, and funded the transaction through cash on hand and borrowings under its credit facility.

Static Control invests in Jadi Imaging aftermarket leader Static Control has acquired a 10% stake in Malaysia-based toner manufacturer Jadi for approximately $3 million. Jadi will use the proceeds to expand its production capacity for chemically produced toner (CPT), while Static Control has committed to purchasing a specified amount of CPT from Jadi for a three-year period starting 1 April 2020.

Growth continues for Officeworks Australian OP retailer Officeworks reported top-line growth of 7.6% to A$2.31 billion (US$1.56 billion) for its financial year that ended on 30 June.

The company pointed to “strong sales growth” from both its stores and online operations, plus “strong momentum” in the B2B segment. EBITDA for the year was A$195 million, a 7.7% year-on-year increase.

Shopify acquires warehouse robotics firm E-commerce software provider Shopify has made a $450 million acquisition as it develops its shipping and fulfilment capabilities for small business customers. The company has bought 6 River Systems, a leading provider of warehouse productivity solutions such as robots.

www.opi.net

Another acquisition for Flex Imaging and managed print roll-up Flex Technology Group has made a strategic investment in Ohio-based office technology provider Millennium Business Systems. It takes Flex’s portfolio to 16 dealerships generating more than $340 million in annual sales.

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Integra i-merge success Integra Business Solutions’ i-merge service is aimed at dealer principals looking to either buy or sell a company.

It recently benefitted Integra member Cowans Group which acquired BOS Sales (Office Equipment) at the beginning of August.

Court dismisses Essendant motion in GPC lawsuit

Genuine Parts Company (GPC) can move ahead with its ‘breach of contract’ legal proceedings against Essendant, a Delaware court has ruled. In October 2018, GPC filed a lawsuit against Essendant claiming it (Essendant) had breached its contractual obligations regarding the proposed merger with S.P. Richards (SPR). GPC asserted it was entitled to damages far in excess of the $12 million break-up fee it received after Essendant was bought by Sycamore Partners.

Essendant motioned to dismiss GPC’s claims on the basis that the break-up fee was the “exclusive remedy” for the termination of the SPR merger agreement.

This argument was rejected by the Court of Chancery of the State of Delaware in a ruling on 9 September. “I see no basis to conclude that GPC’s acceptance of the termination fee precludes it from pursuing breach of contract claims as a matter of law,” wrote the court’s Vice Chancellor Joseph Slights in his memorandum opinion.

GPC alleges that Essendant violated the terms of its merger agreement for SPR by concealing its contact with Sycamore until after it had already signed the agreement with GPC. The judge agreed that there was enough in GPC’s claims to pursue the lawsuit.

“I am satisfied GPC has adequately alleged enough in total from which I can infer that Essendant, at least indirectly, encouraged or facilitated a proposal with respect to a competing transaction,” Slights wrote. The case continues.

Kaut-Bullinger confirms Adamek departure Cordula Adamek, joint Managing Director of Kaut-Bullinger’s Office + Solution division, is to leave the leading German independent dealer at the end of the year.

Having started at the dealer in 2001 in a sales management role, she took over as Managing Director of its Büro-Systemhaus unit in 2013 and then held a joint leadership position of the Office + Solution division with Bernhard Greinsberger when the Büro-Systemhaus was merged with Kaut-Bullinger’s office supplies business last year.

Office + Solution will continue to be led by Greinsberger in tandem with Group CEO Robert Brech, the company said in a statement. No direct replacement for Adamek will be sought and some of her business unit responsibilities will be handled by a sales manager reporting directly to the executive management.

The theme of the main conference at this year’s Big Buyer trade show in Bologna, Italy, is well-being in the office. The session will take an in-depth look at the impact that the quality of workspaces has on employee productivity. It’s designed to provide strategic and commercial insights to facility managers and office supplies resellers.

Representing the office products manufacturing sector will be Fellowes Leonardi, while leading operator GBR Rossetto will explain the opportunities from a distributor’s point of view.

Also featured will be the latest study from business property experts CBRE, which will highlight innovations that are emerging in the office

architecture segment and refer to the growing need, for example, to combine acoustics, air quality and lighting. In addition, case studies on well-known companies such as Tetra Pak and Max Mara will

demonstrate how embracing a philosophy of well-being in the workplace has achieved significant results.

Moderating the conference will be Adriano Alessio, Managing Director of leading Italian dealer group In

NEWS

Workplace well-being in focus at Big Buyer

Ufficio, and Paola Cecco, a journalist specialising in the field of office design.

The well-being conference will be part of a wider seminar programme at Big Buyer which will take place from 13-15 November.

October 2019 11

NEWS

UPM announces capacity reductions Paper and packaging group UPM plans to reduce its uncoated paper capacity by more than 500,000 tonnes in an effort to safeguard its competitiveness in Europe. The company intends to permanently close a supercalendered (SC) paper machine in Rauma, Finland, and sell its Chapelle newsprint mill in Grand-Couronne, France.

If realised, the measures would result in a reduction of 265,000 tonnes of SC capacity and 240,000 tonnes of newsprint capacity in UPM’s portfolio. Both paper machines are the least cost competitive UPM assets in their respective product segments, the company revealed, adding that these actions would help protect the overall competitiveness and support the long-term performance of the business.

“Graphic paper demand in Europe has declined structurally for more than ten years, [while] this year the decline has been accentuated by the adverse economic development,” said Winfried Schaur, EVP at UPM Communication Papers.

UPM also announced plans to establish a shared services centre in Wroclaw, Poland, that will bring together various customer, supplier and finance functions in a single location.

A total of 168 jobs in 11 different offices will be affected by this decision, with the company’s Finance & Control, Communication Papers and Raflatac units being the first users of the new centre.

PICTURE OF THE MONTH

It was a colourful end to Barry Lane’s (right) tenure as President of the Business Solutions Association at the organisation’s Annual Forum in September. Taking over the role is 3M’s Travis Kaste (left). The incoming President, as well as other delegates at the event, donned ‘snazzy’ attire in honour of Lane’s always ‘flamboyant’ dress sense!

FTC looking into Amazon Marketplace

www.opi.net

Clover buys LMI assets

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Cartridge remanufacturing giant Clover Imaging Group (CIG) has signed a definitive agreement to purchase the business assets of US rival LMI Solutions. Subject to approval by the court overseeing LMI’s receivership process, Clover Imaging will purchase all of LMI’s inventory, intellectual property rights and manufacturing equipment. No reference was made to LMI’s staff or facilities.

Arizona-based LMI went into receivership in August when it lost the backing of its private equity partners. CIG Chairman Jim Cerkleski said the deal demonstrated the company’s confidence in the strength of the imaging supplies market, adding: “With the focus on environmental sustainability at an all-time high, we are seeing businesses and consumers alike abandoning single-use cartridges for our lower cost, environmentally-conscious printing solutions.”

The acquisition is certainly a display of strength from Clover at a time when there are still uncertainties over its longer-term financial structure.

‘‘

The US Federal Trade Commission (FTC) has begun speaking to Amazon third-party (3P) resellers as part of an enquiry into possible anti-competitive behaviour by the e-commerce giant, it has been reported.

According to Bloomberg, a team of FTC investigators has been making calls to small businesses that sell on Amazon as the government agency looks into how much power Amazon wields over its 3P vendors. Whether the FTC has launched an official investigation into Amazon’s practices is not clear, but its move comes amid increased government scrutiny into the influence of large tech companies such as Amazon, Facebook, Google and Apple.

Earlier this year, the European Commission opened a formal antitrust probe to assess whether Amazon’s use of sensitive data from independent resellers that sell on its Marketplace platform is in breach of EU competition rules.

That investigation is ongoing.

SOCIAL SPY Social media highlights from the business products industry around the world Alex Price

Michelle Hartman

National Director of Community Investment, Office Depot

Snr Director of Sales – US Distribution/Inside Sales Development , Brother International

We hosted the largest Start Proud! event of the year in Homestead, completing our South Florida campaign throughout Palm Beach, Broward and Miami-Dade counties. This was a colossal effort requiring the teamwork of over 350 #OfficeDepot volunteers.

Staples Inc So proud to participate in the fourth annual Bike for Hope event with our partners at Supplies Network/Distribution Management to support the amazing City of Hope.

Imperial Dade Proud to announce that our very own Cristina Gonzalez was named to ALPFA’s (Association of Latino Professionals For America) 2019 Most Powerful Latinas list.

www.opi.net

CEP Office Solutions

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Our Managing Director Cédrik Longin was interviewed on French national radio station Europe 1 in September for the programme La France Bouge!

Our Miami Branch making its first hurricane relief shipment to the Bahamas.

Office Friendly

Congratulations to our Business Development Manager Lyndsay Pitchley on her new role as Chair of Barnsley and Rotherham Chamber’s Women in Business working group.

Officeworks

Our Central Operations team went to Maroochydore to undertake a ‘Day in the Life’ of our store teams. They’re learning more about the day-to-day of store staff, ensuring we continue to deliver great service to our customers.

BIG INTERVIEW

An Innovative

CULTURE

Passionate, innovative and hugely successful, here’s an independent dealer that is acutely aware of the seismic challenges in our industry and always on the lookout for the next opportunity

U

S-based Innovative Office Solutions is consistently heralded as an exceptional example of a woman-led business. With CEO Jennifer Smith at the helm, the company has grown from nothing to nearly $150 million in sales in just 18 years.

Apart from having very obvious business acumen and a talent for spotting opportunities and maximising them, Smith injected into Innovative a culture that is positive, caring and progressive. It also, importantly, generates outstanding results. OPI’s Steve Hilleard caught up with her at Innovative’s offices in Burnsville, Minnesota, during the week she was awarded the BSA Leadership Award at the Business Solutions Association’s Annual Forum in early September.

www.opi.net

OPI: How did you come to be in the OP industry?

Jennifer Smith: It’s a long story. I grew up in this industry because my father owned an OP company called Town & Country. I worked in the firm during summers and at other times, but I never intended to make it a career after I graduated from college.

But then my mother became very ill and I needed to help my family, so I left my job buying shoes at Dayton-Hudson Marshall Field’s in 1994. My dad had actually sold most of the company in the early 1990s, but I ended up buying it back and then grew it from a $1 million to a $12 million dealer in 18 months.

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OPI: You went from $1 million to $12 million in 18 months? That’s phenomenal.

JS: Yes, it was a fast ascent. I sold it to USOP in 1997 where I worked for a while and learned how the whole corporate game was played. But, like I said, I never really intended to work in this industry and decided to leave in 1998 to buy a medical manufacturing company with my husband, Brooks.

Then, lo and behold, the month that my non-compete ran out, USOP went through bankruptcy, selling its assets to Corporate Express. About 20 people working there at the time asked me if I would consider starting up an OP company again. I did and Innovative Office Solutions was born in June 2001.

OPI: It’s still a relatively young company then.

What have been the key milestones over the past 18 years?

JS: It’s been an interesting journey. We did things quite differently from the start. We operated on a stockless model right away, for example, and sold pretty much online-only from the beginning.

It was something quite transformative and new at the time. All I can say is thank goodness we did because we opened in June, then 9/11 happened that same year – I doubt I would be sitting here now if I had $1 million tied up in inventory at the time.

We’ve had to reinvent ourselves several times to stay relevant over the years. We started with office products and some furniture. Today, we have six different business units: OP, furniture, print and promotional products, technology, facilities and breakroom and, lastly, a kitting and fulfilment division. We’ve grown every year since 2001.

OPI: You mention your stockless model. Was the decision to go down that path luck or judgement? Did you foresee something down the road that made you think “this industry is going to change, we need to be online and we need to be stockless”? Or was it just an easy way of getting back into the business

BIG INTERVIEW Jennifer Smith

We operated on a stockless model right away [...] and sold pretty much online-only from the beginning

OPI: So where are you today – can you give me some facts and figures?

OPI: 300 staff for $150 million in revenues – that’s a lot of sales per head.

JS: It is. About 60 people work completely on frontline sales.

OPI: You and your husband founded the business. Are you sole shareholders?

JS: Brooks has always helped me with different things, but he only came on board full time in 2009.

We had some partners from the beginning that helped us get started, so I have never been the sole owner of the company.

OPI: You mentioned your six divisions. Do you have plans to diversify further into other product or service categories beyond the ones you’re in already?

JS: In those six categories, we offer solutions and services in addition to the products, so what we’re currently doing is to expand within those categories with a focus on even more solutions and services.

October 2019

which turned out to be a great choice because you didn’t have all the legacy stuff that some dealers are still trying to get rid of?

JS: A bit of both to be honest. Having had the luxury of a little time out of the industry, when we made the decision to get back in, we approached it with a different perspective. The wholesalers specialised in inventory and turns; I specialised in sales and marketing. It seemed to make the most sense to leverage that expertise and implement their stockless model. Additionally, we knew that the industry was starting to embrace technology.

As a start up, it was a little easier to jump in all the way from the beginning.

JS: We will hit almost $150 million this year. We have 300 associates and operate with physical locations out of three different states – Minnesota, North and South Dakota. Our coverage is completely nationwide – we’ve got quite a few national accounts.

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Jennifer Smith BIG INTERVIEW

At this time, there are no plans to add another category, but we are always looking for opportunities that leverage our existing relationships OPI: Where are the best margin opportunities as far as you’re concerned? Probably not in traditional OP… JS: It goes back to what I’ve just said. There is more value to customers in services and solutions than in the actual products. For example, we offer what we call Insight Workshops. What that means is that we have staff members who run workshops for small and medium-sized businesses around topics such as ergonomics, healthy workplaces, culture, strength finders and so on – it’s an additional service that we offer that has a much higher value to our customers while at the same time also leading back to the products we sell, so it’s nice and complementary.

OPI: You’ve been quite acquisitive over the past few years. How much of your $150 million in sales is organic as opposed to gained through acquisition?

JS: We got to about $60 million before we onboarded some major companies. It probably began in 2015 with S&T Office Products.

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OPI: How did you find that process? You didn’t have a huge amount of experience buying and then integrating businesses I guess.

JS: It was absolutely fascinating. The first large acquisition we did was S&T, as I mentioned.

That company was selling just a couple of the categories we did, and we thought it would be complementary to take on its existing account rep base that had relationships with certain customers. We then added on the four other business units we had. The combination turned out to be very successful.

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OPI: Did you manage to retain most of S&T’s revenues?

JS: Oh yes. I believe that all but one person in the sales force doubled their business by adding these categories in the two years following the acquisition, so it was a good model.

The pre-work that independent dealers do around making sure an acquisition is the right cultural fit for them is one of the keys to ultimately being successful OPI: Why do you think you’ve been able to do that? The likes of Staples, Office Depot and several years ago Corporate Express never really managed to retain anywhere close to 100% of the revenues and volumes that they had acquired.

JS: Well, that’s the strength of the independent dealer. Many of us have been very successful in buying businesses and integrating them. In my view, the pre-work that independent dealers do around making sure an acquisition is the right cultural fit for them is one of the keys to ultimately being successful.

OPI: Not just volume for volume’s sake then?

JS: Exactly. You mention Depot and how it wasn’t very successful in the past with acquisitions.

With its new Federation strategy – leaving the company name, identity, etc – it’s trying something different and I give Depot credit for that. We’ll see how it all turns out.

OPI: That reminds me of Sandy Douglas’ comments last year about having this ‘Powered

BIG INTERVIEW Jennifer Smith

by Staples’ strategy. Would Innovative Office Solutions powered by Staples be a tempting offer for you at all?

JS: I know what you’re referring to – that conference in Denver where Sandy spoke.

One of the points made there was that our real competition is Amazon and other online operators.

Our whole industry is changing so fast and I guess we have to figure out who we can align ourselves with to stay relevant in these changing times.

OPI: I’m going to come back to this, but let’s stick with acquisitions for a moment. Do you have any more planned – what’s your strategic approach in that respect?

JS: Somebody once told me that when you get to $5 million this happens, at $10 million that happens and once you get to the $50 million mark, opportunities open up and people come knocking on your door – rather than me knocking on theirs I mean.

Yes, there have been opportunities for us and acquisitions are definitely in our strategy, but we want to pick the right companies that fit in, complement and enhance our culture and bring value to our customers.

OPI: Are we at that tipping point already then where we’re going to see a lot of businesses folding or selling?

JS: We are absolutely at that tipping point. And that’s why we’re seeing some new strategies now – Depot and Essendant/Staples are just two examples. Our industry is looking outside its traditional box now and it has to.

OPI: Talking of Depot, I’m sure this operator has knocked on your door with its new strategy.

Any interest there?

JS: I’m happy where I am right now, but it will be interesting to see how this all shakes out in the next couple of years. Like I said, I applaud Depot for trying something different and it has some very good, nice-sized dealers on board now.

OPI: Staples has taken a different approach with acquiring a wholesaler. Do you envisage Depot being forced to do something similar with S.P. Richards?

October 2019

OPI: Beyond culture – and again, I’ll get back to that later – what other boxes need to be ticked to pique your interest?

JS: It could be category alignment. If there is a solution out there that’s being provided and I don’t offer, but I’m selling the product, that’s interesting to me. Or a strategy whereby another dealer hasn’t penetrated the categories we have and we’re able to take advantage of that in some way.

OPI: Do you have any fears for the future of the independent dealer community (IDC)?

The need to be online, embrace new product categories and in fact solution-orientated services are all things that have been talked about for years and years. But many independents still seem to be talking rather than doing, would you agree?

JS: I would. Dealers that don’t invest in technology aren’t going to be here soon unless they get acquired. That, of course, presents great potential for operators that have made significant technology investments.

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Jennifer Smith BIG INTERVIEW

JS: I have no idea, but I think absolutely anything is on the table.

because they’re splitting their purchases between Amazon and traditional dealers?

OPI: There was a lot of panic when Staples and Essendant first got together. In the intervening months, do you think Essendant – which, I believe, you’re very close to – has managed the partnership to a point where the initial concerns of the IDC have been allayed?

JS: When something of this magnitude happens, you always hope that there’s no or very little disruption to your customers – that was our main fear. We’ve seen no disruption in service and I haven’t heard of anyone else having any issues, so I think that’s a really good sign. Staples and Essendant seem to have done a good job with the FTC firewalls too – that was another initial concern of independent dealers.

Again, it’s good to do something different because the real issue is the online competition.

Overall, communication and transparency from Essendant has been good, but we also now need to see some things come to fruition. Broadening the breadth of assortment and the categories, increasing buying power and all those things – the wholesaler needs to execute on this now.

OPI: History tells us that businesses always get to a point where they fail, are broken up or get disrupted. Do you think something may befall Amazon which kind of knocks it off its perch at some point?

JS: Disruption will definitely continue. What will that disruption be and how can we take advantage is the question.

Amazon is a huge threat to us and we see leakage every day

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OPI: Going back to the event where Sandy spoke about the coming together of the two entities, he pretty much said Staples was in a shocking place at that point, as was Essendant, so perhaps the outcome we got was a lot more palatable than any of the potential alternatives?

JS: Absolutely, I agree.

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OPI: You talked about the need to invest in technology. You’re a very sizeable business, as are organisations like Essendant and Staples, but it’s clearly a struggle to compete with the capital expenditure and investment that companies like Amazon make in technology. Is that a concern for you?

JS: It’s a real concern and I am banking on the Essendant/Staples alliance to help the IDC on that front. It’s a bigger and bigger investment every time. I’ve spent a huge amount on technology and I think it’s gotten me where I am today, but I have to keep investing, trying to be ahead of the game and it’s harder and harder to do. We need to pull together. I know some people have tried to do something in the past and it hasn’t worked, but it’s absolutely crucial that we make it work.

Amazon is a huge threat to us and we see leakage every day. The IDC has to figure out how we are measuring retention to make sure we’re keeping our eye on that particular ball. I still have the same customers, but they’re buying less. Why are they buying less? Because their businesses have changed and they need fewer products or

OPI: Let’s move on to the dealer group situation.

You were with Pinnacle and switched to TriMega and now, of course, they’ve finally managed to get everybody together under the ISG umbrella, Office Partners and some others excepted for now. What’s your take on this new entity?

JS: I’ve always thought we needed just one large group, so I’m very happy the three have come together and joined forces.

OPI: What value does a company of your size get from being a part of that community?

JS: Because we have a stockless model, the biggest benefit for us is sharing best practices with like-minded and similarly-sized businesses. We are also invested in the continued success of the IDC and ISG will play a key role in this success.

OPI: Do you think other groups will join as well, as ISG clearly has enormous mass now and they would otherwise fall by the wayside?

Would it be foolish not to align, given the current market conditions?

JS: I think it would.

OPI: You’ve just been honoured for your leadership by the Business Solutions Association (BSA). The BSA, of course, had been spearheading an initiative to create an Industry Week which sadly, from a vendor perspective at least anyway, is not going to come to fruition. Do you share its frustration?

JS: I do. I was totally on board with that initiative and thought it was the right thing to do. Maybe we can get there in another, but different way. I remain hopeful.

OPI: You’ve alluded earlier to the fact that your company culture is paramount to you. I can gather just how important by looking at your Culture Book that you produce every year.

When did you decide in your 18-year Innovative journey that this was a differentiator for you?

JS: It’s always been there for me. When you’re starting up a company you wear many different hats of course and are involved in absolutely everything.

One of my favourite things to do was interview every potential member of staff who came through the door. But as you get bigger, it becomes an impossible thing to do – that’s just a reality.

I still meet with every employee and do certain things, but I wanted to make sure that our culture was communicated very clearly, so I incorporated it in our onboarding process. That’s how the

periods like this and you have to figure out how to be the disruptor and jump in, it’s also very exciting.

Over the course of Innovative’s history, there’ve been a number of these inflection points. 9/11 was a huge thing as I mentioned before – very very difficult and something that really shaped our culture as well. 2009 when the huge recession hit here in the US was another massive tipping point for us. It’s actually also the time when we grew the most because we had a strategy and worked out a way to turn that horrible time into an opportunity.

You always have to look at different ways of doing things and be innovative – no pun intended – to survive difficult situations.

OPI: And it must help with the hiring process where it all started anyhow.

JS: Absolutely. We hire on culture over a particular skill because you can always teach the skill, but you can’t teach the culture. We have a long recruitment process that imbeds a lot of questions – at the end of it, we know what we’re getting and any new recruits most definitely know what they’re signing up to.

OPI: There was a speaker at S.P. Richards’ ABC event in August. His basic message was “stand for something”. Don’t just be an office supplies company, but have something else that resonates with the customer and gives you a way of standing out from the crowd. Innovative very clearly has that special extra.

JS: Thank you. The community aspect and giving back is a big part of the culture I was referring to.

Our whole purpose is to inspire people to love what they do and who they do it with.

OPI: Let’s wrap up with a somewhat predictable question: what keeps you awake at night?

JS: Well, the state of the industry would be the quick answer. But that sounds very negative – it’s not all bad and stressful. When you have inflection

BIG INTERVIEW Jennifer Smith

Culture Book started – potential employees can see very clearly what we’re about, what we do and what we expect.

It kind of took on a life of its own, with people wanting to take a copy home because they were so interested in our initiatives, core values, brand values, incentive programmes and so on. Then vendors wanted the book as well as customers – they all thought it was a cool thing to do and to have. Now our sales professionals actually use it as a differentiator. When you’re signing up with Innovative, relationships matter and the Culture Book offers a little insight into what you’re going to get with us.

For more information on Innovative’s non-profit arm and its initiatives, look out for OPI’s Green Thinking publication which will be published later this year.

October 2019 21

HOT TOPIC

To insure or not TO INSURE… T

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...that is the question. The topic of credit insurance is constantly in the headlines, but for all the wrong reasons – by Michelle Sturman

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he use of credit insurance in the office products industry is nothing new. But as our sector undergoes massive changes, the issue has persistently risen its ugly head, especially in Europe, over the past year or so. This is mainly due to high-profile bankruptcies, the asset-selling of large companies, and a general malaise in the stationery, paper and OP segments.

Recently, outlets such as Paperchase and Office Outlet (formerly Staples UK's retail arm) entered into compulsory voluntary administration in a bid to remain open on the UK’s high street, with the removal of credit insurance cited in both cases almost a forewarning as to the likely outcome, and certainly a hook in the news stories.

Indeed, Martin Loag, Trade Credit Specialist at global insurance firm Chubb, believes that a negative decision of an insurer can lead to massive issues at a supplier, especially when the decision is made public.

These are not isolated instances. European wholesaler ADVEO is perhaps the best example in recent memory to highlight the issue of credit insurance and the fear it sends through the supply chain when it’s removed. The company’s liquidity and credit insurance issues were no secret and in a vendor meeting last year (see opi.net), ADVEO’s senior management called upon suppliers to “look beyond” their credit insurance limits, and ultimately take on board some risk in dealing with them.

Jump forward to 2019, and ADVEO has been broken up and many of the firm's subsidiaries across Europe have been sold off. What, if any,

part in ADVEO’s continual downward spiral did the removal of credit insurance play in giving suppliers and the wholesaler’s customers a negative impression and exacerbating its woes?

Clearly, it didn’t help matters, and it certainly seems that the mere mention of it spooks customers. However, as one vendor – who wishes to remain anonymous – points out, it used to be a ‘shivers down the spine’ moment, but over the past four years or so, the industry has lived with these warnings on a regular basis.

But, here’s the thing, the vendor says: "If we had listened to our credit insurance advisors, we would have stopped dealing with ADVEO a few years ago. As it happens, we placed our faith in what we’ve seen, heard and how we administered the debt. And we managed it very closely. As a result, we’ve had millions of euros worth of business that we otherwise wouldn’t have had. We believe in following our own instincts of knowing the OP market inside out and understanding the businesses involved.”

WORTH IT? This then begs the question: is credit insurance worth the expense? The concept in some form has been around for about a century, but with all the uncertainty following the 2008 global financial crisis, it’s no surprise that banks providing debtor-based lending facilities became more cautious and instigated the implementation of credit insurance policies across many industries.

In our sector, it has only really taken root in the past decade or so as banks have attempted to reduce their exposure by moving to more

AN IMPOSSIBLE TASK Determining what constitutes an increased risk in the eyes of a credit insurer is an impossible task.

“All carriers have their own internal credit profiling that occurs based on the information they have.

Whether it is the office products or the oil and gas field, for example, there are always going to be good and bad categories and the macro environment of that industry is also a part of the decision. The positive news is, even when the sector isn't great, there will still be good coverage risks,” adds Clark.

Currently, it seems, the OP industry falls into the ‘bad’ sector, with manufacturers, wholesalers and resellers alike experiencing difficulties in obtaining credit insurance regardless of whether they are generating cash and honouring payments on time.

Explaining the situation, the UK’s SPOT Group CFO Andrew Mobbs says: “It seems that insurers are averse to the OP sector and are taking the view

that they wish to reduce their credit exposure in this market. They see it as one that is in decline, especially with traditional OP contracting and business collapses in the sector, including that of ADVEO. Then you have the likes of Staples Solutions and Office Depot and their challenges, in addition to failures in related areas such as the paper merchants. All of this doesn’t help their outlook on the industry.”

He continues: “I think it’s slightly unfair inasmuch as they’re looking at our sector with a one-size-fits-all approach, and I believe they’ve lost sight of the fact that there are profitable dealers and contract stationers out there.”

HOT TOPIC Credit Insurance

asset-based lending. Changing business practices that have resulted in some companies becoming reliant on fewer but larger customers have also upped the uncertainty in the eyes of lenders. However, in many cases, it still provides assurance and security, as Mike Maggio, CEO of US-based dealer group Independent Suppliers Group, says: “We rely on our insurer to determine the creditworthiness of our shareholders and the amount of credit they are eligible for. At any one time, we have $50 million+ in receivables and our credit manager is able to focus on collections instead of tracking down references.”

Some credit insurance carriers can cancel coverage of a customer at any time during the policy period if they feel the chance of default has increased. “The positioning for this type of event is that the carriers are an extension of the client's credit department and are providing information and direction on the credit health of the customer.

If that customer has deteriorated in their analysis, they will cancel the coverage going forward. As you can imagine, this could be a major concern for that customer who needs access to a viable open terms arrangement,” David Clark, VP of credit insurance brokerage services firm ARI Global, told OPI.

If we had listened to our credit insurance advisors, we would have stopped dealing with ADVEO a few years ago Coincidence or not, the pullback seems to correlate with the rise of private equity (PE) investment that has taken place within the business supplies sector. Naturally, PE-backed entities have a different financial make-up compared to a traditional, family-owned business, but as the aforementioned anonymous manufacturer remarks, there’s clearly something in their model that credit insurers don’t like.

Additionally, it's the PE-owned companies that, on occasion, have delayed or withheld payments or asked for extended terms.

October 2019

ON THE CASE SPOT’s Mobbs casts light on the matter: “Credit insurers have never been particularly enamoured with private equity. Typically, they have less equity as the investment is made in the form of a small amount of equity and then loan notes on top.

Loan notes owned by PE firms have the ability to trigger repayment on demand which makes credit insurers nervous. For SPOT, however, this is not the case as our loan notes are subordinated to the bank and we are currently halfway through a two-year credit insurance policy.”

Clark elaborates further on the inner workings of credit insurers and private equity, stating that PE firms can be a concern for credit insurers, because they typically don’t like to provide credit and financial data, and most have some sort of management fee they withdraw from the company they own.

“Financial information is used in the credit insurance analysis, and some carriers look upon this lack of data as an issue," he explains. "With regards to the management fee, the bottom line is that the PE firm wants to take money out of the company to cover its needs. It may lead to asset sales, low liquidity and losses which can push that operator closer to an arranged bankruptcy.

Of course, this is not a practice that all private equity firms engage in, but it still represents a concern for an insurer.”

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Credit Insurance HOT TOPIC

Chubb’s Loag adds another perspective: “I would say the biggest problem is the lack of emotion for the company in which the PE firm has invested. Private equity is rather driven by financial gain and if the business is not profitable, then the investor could quickly exit the firm again. However, there are many examples where successful long-term investments have been made, with benefits for all parties.”

KNOWING THE UNKNOWN With unknowable algorithms and often a lack of understanding of the diverse business models that make up the OP sector, is it worth buying credit insurance? Mobbs believes that the topic has polarised the industry. “There are some suppliers that won’t trade without credit or commercial exposure, which is often dictated to them by their ultimate owners. There are others that take a more balanced view,” he says.

From Maggio’s viewpoint, there is often no outward, easily determined signal that a company is having trouble paying its bills or is headed for insolvency. “Our insurer does provide a limited amount of intelligence on members and will contact us when their credit worthiness is in question and their credit line has to be adjusted," he says.

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Credit insurance is like an umbrella that gets taken away when the storm clouds gather

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“As a cooperative, unlike a traditional corporate, our shareholders are all liable for any loss we incur in a calendar year. We prevent that from happening by running a very tight efficient ship, keeping our costs down, and insuring all receivables. If a member defaults, the others are not responsible to pay that member's outstanding receivables."

He adds: “The bottom line is credit insurance is an effective way for us to focus specifically on collection, while protecting our members from catastrophic losses on bad debt.”

At the other end of the spectrum – and the globe – the Australian OP industry appears to be doing pretty well without credit insurance. While the concept broadly functions in the same way as it does in Europe and there are the same large insurers, few OP players take out credit insurance.

GNS Stationers CEO Paul Yardley says that while none of the insurers have withdrawn from the

industry completely, they are “certainly cautious”, particularly on larger exposures. Having said that, he admits that some manufacturers have 'chosen’ to effectively self-insure, but are managing supply via credit limits/terms quite carefully.

Meanwhile, others will not trade unless they have cover, which is limiting their sales growth.

“There is one very large PE-owned contract stationer that has incurred continual trading losses and is now rumoured to have had all credit insurance withdrawn, giving many manufacturers real issues as to how they can continue to trade effectively with that operator,” he adds.

Office Choice CEO Brad O’Brien recounts an experience in a previous role and industry whereby insurers decided to decrease their risk in the industry due to several business failures, reducing credit limits while increasing excesses.

“This put enormous pressure on both the dealer group and its dealers, ultimately contributing to further company collapses, which was somewhat self-defeating. This challenge, however, fell on deaf ears when attempting to address it with the insurers,” he says.

COMMERCIALLY DRIVEN Mobbs is of the opinion that given the apparent perception of insurers of our market, the OP sector needs to get used to working on commercial terms, just as everyone used to before the credit insurance market grew. “I don’t think it will get much worse in terms of being able to secure credit insurance.

We’re back to sharing information and close business relationships, and not averse to discussing financial information with suppliers in an open and transparent way. This provides the confidence they need to offer the right credit limits.”

Obtaining credit insurance is generally an expensive and often necessary undertaking due to the current state of the industry. One train of thought is to branch out into a broader range of distribution channels and/or limit business to those players that provide a built-in insurance policy for credit risk. As Yardley points out: “I have always held the view that credit insurance is like an umbrella that gets taken away when the storm clouds gather – costly and not that useful when things get difficult!”

But the removal of credit insurance can be catastrophic too, opening up suppliers to increased risk and providing problems for resellers in terms of working capital and cashflow management. Maybe it’s time to sit down and talk seriously and openly about finance and credit again.

Who’s Who in OP? TOP 100

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To say it’s been an interesting year in our industry would be an understatement. From high-profile management changes at the top to channel shifts and company transformations, we’ve seen it all. The next eight pages will provide an insight into what has happened and the personalities it’s affected – by Heike Dieckmann

OO TOP OP F

ar from it being just a once-a-year occurrence, our annual Top 100 is a year-round evolving project that is fiercely debated and put together by the OPI editorial team, the OPI Advisory Committee and other industry experts. It’s what you may call a labour of love – and occasionally hate when protracted discussions don’t result in a unanimous consensus – so thank you all for the role you’ve played in this year’s deliberations.

decided to also put someone from Amazon in (the division that deals with OP). Whether we like it or not, this global giant has an impact on absolutely every single player in every channel in an ever growing number of countries.

Secondly, consolidation and/or the fact that operators go out of business, leaving openings for new and emerging players. HiTouch Business Services’s Michael Brown was a regular fixture in our Top 100 for years, but now he’s part of the Staples Inc stable that, predictably, is ‘covered’ by Sandy Douglas. We’ve also got a few ‘double acts’, such as Johann Pintarich and Patrick Lobsiger, and Mike Maggio and Mike Gentile due to a coming together of entities.

Thirdly, in certain companies that are undergoing severe strategic transformations, their leaders’

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Here’s to the personalities that are driving and affecting change in our industry, in the process ensuring that their companies will still be in this ‘who’s who’ in years to come

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Let’s start with some stats. This year, we have 19 new entries into our Top 100 – you can see the full list on page 33 with all newcomers highlighted. I haven’t diligently rifled through the past 18 years of this ‘who’s who’ in the business supplies industry, but I’m confident that we have never ever had this many new people.

It’s testament to three things in my view. Firstly, our industry continues to change at a rapid pace which, on a good note, brings in fresh blood and new faces. This is true especially as regards adjacent categories that we maybe historically haven’t covered, or relates to operators that are doing something special that is timely and important to customers and the industry as a whole. Jason Tillis from Imperial Dade is a good adjacency example.

On this note, it would be remiss of me not to mention Amazon. Amazon Business has been in our list for many years, but for the first time ever we

tenures can often be quite short-lived – Office Depot Europe’s Neil Maslen, who was earlier this year replaced by Raffael Reinhold, is a good example of this.

All of this is in addition to normal churn, retirements and so on. Only Dave Guernsey and George Gerardos have now been in every single Top 100 over the past 19 years – long may that continue.

It’s safe to say that our Top 100 will continue to evolve – maybe it won’t even be a top ‘100’ in the future. The criteria for making it into this list have been developing for many years already, taking into account geography, channel dominance in any given market, revenues of course, and sheer positive perseverance in the face of adversity.

So here’s to the personalities that are driving and affecting change in our industry, in the process ensuring that their companies will still be in this ‘who’s who’ in years to come.

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President, Essendant

Harry Dochelli was named President of Essendant following its acquisition by Staples owner Sycamore Partners in January. It was a transaction that has certainly changed industry dynamics in North America, bringing together Essendant (and its independent dealer customers) and the traditional big-box ‘enemy’ under the same umbrella.

Prior to the closing of the deal, there were predictions of a dealer exodus from Essendant, but Dochelli urged customers to adopt a ‘wait-and-see’ attitude and

big concern was data confidentiality, and Staples is clearly taking its commitments to the Federal Trade Commission-imposed firewall very seriously. Another worry was fair competition but, in one recent example, Essendant’s Vertical Markets Group has helped secure a place on the new State of Georgia office supplies contract that was previously only held by Staples.

Earlier this year, Dochelli promised some “quick wins” for dealers and,

Dochelli promised some “quick wins” for dealers and [...] Essendant invested in reducing the cost of goods for dealers free from the shackles of quarterly Wall Street earnings requirements, Essendant invested in reducing the cost of goods for dealers. Longer term, the goal is to tap into Staples’ supply chain, breadth of product assortment and purchasing power to make independent dealers more competitive.

A number of initiatives are already in development. These include: a project

NEW EW ENTRY TRY Y to improve service levels by making Staples-held inventory available to dealers; providing Essendant customers with access to Staples’ in-house strength in the promotional products and managed print categories; and tapping into Staples’ product sourcing and manufacturing scale to reduce lead times and lower product costs.

Alexandre Gagnon

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give the wholesaler a chance to show what its new relationship with Staples would bring to the table. Those mass exits did not materialise and Dochelli says that Essendant has “a strong pipeline” for 2020.

That is due in no small part to the level of trust that resellers are putting in Dochelli and his team to deliver on their post-acquisition promises. One

AMERICAS

TOP 100 Who’s Who in OP?

Harry Dochelli

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AMERICAS

VP, Amazon Business

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His international experience will stand him in good stead, as Amazon Business already serves more than half of the companies registered on the Fortune 100 in the US, the FTSE 100 in the UK and the Dax in Germany. Last year, it launched in several countries – Italy, Spain and France – taking the total to eight (Japan and India as well, in addition to the aforementioned ones).

Over the past year, the firm has divulged a number of plans to boost business customer numbers which, Amazon claims, are already in the millions worldwide. Not all strategies are currently available outside the US, but they include: spending $800 million to provide a free one-day shipping service for its Prime members; Guided Buying for small businesses wanting to connect with government buyers and improve compliance; free access to website tools from web hosting firm GoDaddy; and Amazon Day for Business whereby Prime members can choose a recurring day of the week to receive their deliveries.

October 2019

Another new entry to this year’s Top 100, Alexandre Gagnon has taken over from Prentis Wilson as VP for Amazon Business.

Gagnon has big boots to fill – Wilson took charge of Amazon’s B2B business in

2015 when it was transformed from the AmazonSupply platform into Amazon Business and created a $10 billion+ giant. To put that figure into perspective, a year after the relaunch, the platform had sales of $1 billion. If the current trajectory maintains its momentum, don’t be surprised if the next time Amazon reveals sales figures for the division, they easily top $15-$20 billion.

A natural choice to replace Wilson, Gagnon is no stranger to Amazon, having spent the past 15 years there in several roles. He started in the business in 2004 as a Music Buying Manager, working his way through the ranks, including supporting the launch of Amazon in Italy and Spain in 2010 and 2011, respectively.

As Technical Advisor, International Consumer, he relocated from France to Amazon’s headquarters in Seattle, Washington, in 2011. Just two years later, he was made Managing Director of Amazon Canada and Amazon Mexico and VP of the division another three years after that.

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Leo Meehan

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Who’s Who in OP? TOP 100

It’s been nothing short of a truly remarkable ten months for these two well-known OP personalities who have spearheaded and advanced the cause of independent dealers for many years.

In January 2019, the three leading dealer groups in the US – TriMega Purchasing Association under the leadership of Mike Maggio, Independent Suppliers Group (ISG) with Mike Gentile at the helm, and Pinnacle Affiliates under the chairmanship of Bruce Eaton – announced an intent to merge their organisations into one entity. It was the realisation of a long-held pipe dream by many which, the majority of channel partners agreed, had become a necessity in these challenging times. There were reasons why it didn’t happen for such a long time and, maybe because of these, the months that followed the initial announcement were marked by cautious negotiations that were kept under wraps until there was something definitive to say.

The result of all the talks was a new entity – keeping the name ISG – that became operational on 1 July. Headquartered in Rosemont, Illinois, it consists of approximately 530 shareholders and about 900 dealer members under what is now one vast independent dealer group umbrella. There’s also a comprehensive board of directors consisting of a total of 13 executives from the three former groups.

Scale is the ultimate objective of ISG – to achieve better programmes, lower cost and more complete interaction and collaboration between everyone in the US dealer community. This is against a backdrop of the ever-growing e-commerce or indeed Amazon threat and a US business products sector in a great state of flux.

There’s no doubt that the two Mikes still running ISG – Maggio as CEO and Gentile as President – will provide dealers with a sense of comfort and continuity in the coming months, as the specific benefits that each dealer can reap from this new-found scale become apparent.

ISG members will have the opportunity to come together for the first time during the group’s Prevail 2019 event in early November (see Preview, page 50). On that stage, the two Mikes will no doubt delve deeper into ISG’s future plans and initiatives.

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Mike Maggio, CEO, Independent Suppliers Group Mike Gentile, President, Independent Suppliers Group

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CEO, WB Mason

Leo Meehan has led WB Mason for over 40 years. Under his stewardship, the company has become the second-largest, privately-owned office products operator in the US and one of the biggest in the world. The reseller is second in size only to Staples Inc since its acquisition by private equity firm Sycamore Partners.

Over the years, WB Mason has incrementally extended its reach across the country and now boasts around 70 locations, served by more about 4,000 employees. Under Meehan’s watchful eye, the business keeps its focus firmly on the 300,000 businesses it serves. Ensuring customer service remains paramount – the

company has more than 1,100 trucks, including OP, furniture and same-day delivery vehicles, along with coffee vans.

Over the past year or so, it has also introduced electric trucks. These innovative sustainable step vehicles have been deployed across the ‘Masonville’ region, covering the mid-Atlantic and northeast of the country.

Never afraid to do things his own way and always ahead of the curve, part of Mason’s success lies in Meehan’s ability to spot trends and his unwavering belief in the power of marketing. Last year, for example, the WB Mason brand was substantially boosted by supporting the American and National League Players of the Week via its long-standing sponsorship as the Official Office Products Supplier of Major League Baseball.

Offering the best customer experience is another of Meehan’s core strategies. The mega dealer recently signed a deal with e-commerce start-up GroupBy to deploy a B2B online buying platform. The partnership will drive an advanced buying experience for Mason’s distributors through custom catalogues, dynamic pricing models and fluid inventory levels.

On a personal note, Meehan and WB Mason partners Steve Greene and John Greene a number of years ago pledged $10 million towards the building of a new business school at Stonehill College in Massachusetts. A 1975 Stonehill alumnus, Meehan has been a member of its President’s Council and board of trustees for many years.

The Leo J Meehan School of Business opened in September in time for the 2019/2020 academic year.

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CEO, S.P. Richards

Andrew Beaumont

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Managing Director, Exertis Supplies UK B2B distributor Exertis Supplies promoted Andrew Beaumont to the position of Managing Director following Raj Advani’s relocation to Portugal on 1 April. In what was part of the company’s succession plan, Beaumont moved up from his Operations Director role, succeeding Advani who has taken on the role of Commercial Director. For his part, Advani will continue to travel throughout the UK and Europe developing vendor relationships, which remain key to the success of the distributor.

It’s no surprise that Beaumont has been described as the natural choice for the Managing Director position, as he knows the Exertis Supplies business well. He first joined the firm in 1998, when it was known as Advent Data, and led the finance team when the business was acquired by current Ireland-based parent company DCC in 2011. He joined the Myers Group in 2014 as Head of Finance, before returning to Exertis Supplies as Operations Director in 2017.

Says Beaumont: “Little has changed since I’ve taken over as Managing Director – we have a formula that the business has successfully followed for many years and I see no reason to change this. We are the same management team with the same vision – just different job titles. The change allows us to focus on our strengths and it is all part of the evolution of the company as we grow into new areas.”

Indeed, Exertis Supplies clearly has found a winning proposition, as highlighted when it received the Wholesaler of the Year accolade at the European Office Products Awards in March for the second time in three years. Judges rewarded the operator for doing very well exactly what it sets out to do – focus on low cost, speed of delivery and product range, as well maintain superb dealer and vendor connections and relationships. Adds Beaumont: “Our aim, as it always has been, is to ensure that we are the kind of business that both suppliers and customers want to deal with.”

October 2019

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We’re in the distribution business and that’s a pretty broad canvas for us to identify new product categories and customer channels

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The first thought that springs to mind when talking about Rick Toppin is the fire at S.P. Richards’ (SPR) headquarters and distribution centre in Atlanta, Georgia, that destroyed much of both facilities earlier this year.

At this year’s ABC event in San Diego, California, in August, Toppin paid tribute to both his staff and all of the wholesaler’s dealer and vendor partners for all their support and help during a hugely difficult period.

He also referred to the relocation to a new headquarters building which is being done in phases.

It’s expected, he said, that all HQ staff will be in the new offices by 1 November. SPR’s distribution centre, meanwhile, is being rebuilt a short distance away from the old one that burned down and should become operational later this year.

Toppin’s message and the theme of the ABC as a whole was ‘Stronger Together’. This is clearly what SPR is doing now – building very close relationships with its dealer and vendor partners in the aftermath of the thwarted merger with Essendant and focusing on the business after the distraction and uncertainties that this period brought with it.

Overall, Toppin has a very positive outlook, despite the many challenges, and is fully intent on turning them into opportunities: “We remain bullish on the industry within SPR. We’re in the distribution business and that’s a pretty broad canvas for us to identify new product categories and customer channels.”

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Rick Toppin

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Philippe Guillotin

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Managing Director, ADVEO France

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Steve Horne

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It’s been a long, hard road for ADVEO over the past 12 months.

After a potential deal with Staples Solutions fell through and the group’s financial backers in Spain threw in the towel, the parent company was forced to enter into insolvency proceedings which led to the demise of its subsidiaries in Germany, Iberia and Italy.

France has always been considered the jewel in the crown of ADVEO thanks to its established base of more than 500 resellers

that are members of its Calipage, Plein Ciel and Buro+ groups.

The French entity, along with Benelux, were saved when they were acquired by private equity firm Sandton Capital Partners in a drawn-out transaction that eventually closed at the end of June.

One of Managing Director Philippe Guillotin’s priorities this year was to ensure a return to ‘normal’ stock availability after some issues at the end of 2018 due to the wider group challenges. This was achieved thanks to a €5 million ($5.5 million) cash injection from Sandton and continued support from suppliers, and business has picked up again.

With the company now on stable financial ground, Guillotin – who is also coordinating the Benelux markets – is looking forward to being able to focus on strategic objectives. The go-to-market message is very clear: ADVEO wants to be a strong partner for independent dealers. To help achieve this, a new state-of-the-art 24,000 sq m (240,000 sq ft) distribution facility in Dammartin, north-east of Paris, will soon open. It is set to reach full capacity by mid-2020 after a carefully managed customer switchover process.

A recent market research study that ADVEO conducted with IFOP showed that end consumers’ number one need was a wide choice of products. Dammartin will enable ADVEO France to increase its SKU count by 50% to 30,000 as it broadens its product offering in adjacencies, expands its educational products assortment and moves into some new categories.

Guillotin is also pushing a strong sustainability message, something that has previously been lacking at ADVEO. The new central warehouse will be BREEAM certified and carbon neutral, and the wholesaler is planning to implement a number of ‘green’ initiatives, including low-carbon delivery solutions.

CEO, SPOT Group Before being appointed CEO of UK-based SPOT Group earlier this year – he’s been in the role now for about seven months – Steve Horne had a varied career in a number of industries and channels. This, he says, “prepared him well for the job in hand, allowed him to leverage all his previous experiences into one role and gave him the opportunity to change an industry by embracing what modern customers want”.

Horne started his career in manufacturing, working in both the rag trade and soft furnishings. He then moved to retail and into sales and operational positions at Lowndes Queensway and Wickes Building Supplies. At Wickes, he changed from sales into a supply chain role and was ultimately part of the team that sold Wickes to Travis Perkins for £950 million ($1.19 billion). Having stayed for two years on the Travis strategy board, he switched industries again, joining Unipart Automotive as Sales, Operations and Supply Chain Director. He left two years later to build Euro Car Parts from a £160 million to a £1.3 billion business. Before he started his role at SPOT Group, he was Group COO at Euro Car Parts.

As his various jobs illustrate, much of Horne’s career has been spent identifying opportunities, driving profitable growth and building value – organically and through M&A – all things that should stand him in good stead at the multilayered SPOT Group which is facing many industry-specific as well as macroeconomic challenges, both at a wholesale as well as a reseller level, ie from a Spicers and OfficeTeam perspective.

Since joining, Horne says SPOT has successfully reengineered its logistics infrastructure by rationalising and simplifying its supply chain. The management team has been restructured to give clearer focus and accountability. The group also completed the sale of its Oyez Professional Services and Waterlow Business Supplies legal and HR forms and software businesses, collectively known as OPS. For more on Horne and his vision for the SPOT Group, look out for our Big Interview in the November issue of OPI.

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CEO, Lyreco

Greg Liénard stepped up to the CEO role at Lyreco in July following the sudden departure of Hervé Milcent after four and a half years in charge. Liénard, of course, is no stranger to the group: he has been with Lyreco for more than 20 years, serving as HR Director, Manager of the mergers and acquisitions team and, for the past eight years, Managing Director of operations in the Asia-Pacific region.

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[Liénard] described Lyreco as a “sleeping beauty” that needs to be awakened to realise its full potential

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presented in September and Liénard is not ruling out further acquisitions that would provide greater expertise to Lyreco in other product categories.

Perhaps Lyreco will be more of a risk-taker under Liénard’s leadership. Since 2015, he has also acted as Innovation Director, and says this experience helped him learn a lot about the way start-ups think. He values the importance of Lyreco’s heritage, but also sees the need to evolve, change mindsets and test new concepts.

Vaida Pacauskienė

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After relocating back to France from Singapore, the new CEO said his first priority would be to listen, travelling to all Lyreco’s subsidiaries to connect with local teams and to understand their key issues and opportunities. He doesn’t believe there are any major issues within the group, but described Lyreco as a “sleeping beauty” that needs to be awakened to realise its full potential.

Liénard recognises the good work done by Milcent to transform Lyreco into a modern, technology-enabled company. A project called Dare 3.0 started a few years ago by his predecessor is due to come to an end next month, but Liénard is not contemplating stopping this transformation process. Indeed, he wants to accelerate the strategy that has been put in place.

The roadmap for the integration of the Intersafe/Elacin acquisition in the personal protective equipment category was

TOP 100 Who’s Who in OP?

Greg Liénard

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Managing Director, Officeday

October 2019

Vaida Pacauskienė is Managing Director at Lithuanian reseller Officeday, which is part of the Sanitex Group. Having worked for the company for nearly two decades in various senior positions, Pacauskienė took on the top job in December 2018.

Officeday is the largest multichannel office and school supplies dealer in the Baltic region. With 18 retail stores across Lithuania, it also covers Estonia and Latvia with a combination of wholesale, retail and B2B contract operations. In 2018, it won the prestigious Reseller of the Year award (in the under €100 million category) at the European Office Products Awards ceremony in Amsterdam, Netherlands, testifying to its ongoing progress and achievements.

The company has seen a number of changes at senior management level over the past few years, but during that time has become a diversified and e-commerce-focused operator that is active in many categories outside the traditional OP and school supplies segments. These include workplace safety, gifts, promotional printing and IT solutions for the educational sector. It also supplies a wide range of food and vending machine products – from fresh fruit and healthy snacks through to frozen and refrigerated items. Plus, the business offers a plethora of solutions and services such as cleaning equipment, water station and coffee machine rental.

In Pacauskienė’s first year at the helm, she has overseen the establishment of the 2019 Future Office Supplies fair in Tallin, Estonia, an exhibition that showcased the latest office technologies and solutions. In another value-add service, Officeday also hosted the ‘Best Team’ contest for companies across the Baltic region, which proved a big success, so much so that the company hopes the contest will become a regular, annual event.

Officeday’s 2019 back-to-school season kicked off with the theme of ‘We help talents grow’, with the children of both Sanitex and Officeday employees invited to take part in a photoshoot to promote the campaign. All age groups were encouraged to think about their future dream professions and the school measures and equipment they would like to see implemented to help them develop their talents.

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Raffael Reinhold

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CEO, Office Depot Europe Raffael Reinhold was named CEO of Office Depot Europe in April of this year, succeeding Neil Maslen whose stint at the reseller, in the top spot certainly, was quite short-lived, lasting only just over a year.

Reinhold, an operating partner at parent company Aurelius, now combines the CEO position with his previous role of Chief Sales Officer for the Viking Direct channel. He took over that position in September 2018 – initially on an interim basis – following Oliver Klinck’s departure.

Before joining Aurelius in early 2017, Reinhold held senior management positions at retail and mail order operator KarstadtQuelle, and travel company Thomas Cook, both of which were owned/part-owned by what became now-defunct entity Arcandor.

Tasked with leading Office Depot Europe through its continued transformation, with a “strong focus on further growth, customer experience, e-commerce and technology”, Reinhold definitely has his work cut out and for now, there appear to be more questions than answers.

Competitor Staples Solutions has recently agreed to sell quite a few of its assets in Europe. It makes you wonder: will Depot Europe do the same in some measure to create a more streamlined operation? It still has retail outlets in Sweden and France. That said, France’s Managing Director Guillaume de Feydeau recently committed to its omnichannel strategy. Then there’s the once formidable Viking brand to throw into the mix. It will be interesting to see how Reinhold goes about creating a new and well-accepted identity after several years of cuts, changes and transformation.

On an unrelated note, Office Depot Europe earlier this year selected CommerceHub, a distributed commerce network specialising in drop-ship technology, to help expand its product assortment and create a more efficient supply chain for the company.

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CEO, Askul

After a tumultuous few months for Japanese reseller Askul that has included the company’s two largest shareholders ousting long-standing CEO Shoichiro Iwata and three external directors, all was quiet at the time of going to press.

Replacing Iwata is board member and new Top 100 entry Akira Yoshioka who, until his appointment as CEO in August, was COO of the reseller’s B2C LOHACO e-commerce joint venture with Yahoo! Japan – incidentally, also Askul’s largest shareholder (45%).

Interestingly, at the heart of the dispute was the failure of LOHACO to turn a profit, which has resulted in an ugly public spat between the two joint owners. Askul looked to exercise its right to insist that Yahoo! Japan sell its stake after the internet giant had demanded that the LOHACO division be sold, putting the blame for its mediocre performance squarely at Iwata’s feet.

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The rest of 2019 could turn out to be quite interesting for Askul and its new CEO

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For the year ended 30 May 2019, despite reporting double-digit sales growth at LOHACO, the division posted an operating loss of ¥9.2 billion ($85 million). While the reseller is expecting an improvement in its probability, it is likely to still make a loss of billions of yen for the current financial year.

Yahoo! teamed up with fellow investor Plus Corp to vote against the reappointment of Iwata at the beginning of August at the annual shareholder meeting, forcing his retirement from the company. All of this perhaps makes Yoshioka’s appointment somewhat of a surprise move considering he held the COO mantle at the e-commerce division from its launch in 2012. The 51-year-old has been with the reseller since 2001 and during this time has held several senior positions including General Manager and Executive Officer.

Accordingly, Askul and Yahoo! are still in discussion over their future relationship and the rest of 2019 could turn out to be quite interesting for Askul and its new CEO as the Yahoo! saga is not over yet.

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AMERICAS Jaime Alverde Losada CEO, Office Depot de Mexico José Mário Britto & Thiago Britto Chairman & Managing Director, Inforshop NEW Michael Buenzow Interim CEO, School Specialty NEW Harry Dochelli President, Essendant Sandy Douglas CEO, Staples Inc Tony Ellison CEO, Shoplet Sean Fleming CEO, DM Supplies Network NEW Alexandre Gagnon VP, Amazon Business Paulo Garcia Managing Director, Kalunga John Givens CEO, Source Office & Technology Dave Guernsey CEO, Guernsey Matthew Hebert CEO, Office Partners Bob Hodan President, Basics Office Products Kevin Johnson CEO, Warehouse Direct NEW Lauren Jones CEO, The Supply Room Mark Leazer Executive Director, AOPD Sid Lerman President, The Weeks Lerman Group DG MacPherson CEO, Grainger Mike Maggio & Mike Gentile CEO & President, Independent Suppliers Group Denis Mathieu CEO, Novexco Leo Meehan CEO, WB Mason NEW Mark Prybell Director OP and Business Electronics, Amazon Jennifer Smith CEO, Innovative Office Solutions Gerry Smith CEO, Office Depot NEW Jason Tillis President, Imperial Dade Rick Toppin CEO, S.P. Richards

ASIA NEW Xavier Etienne Managing Director, Lyreco Asia Shailesh Karwa & Sharad Dalmia Co-CEOs, Work Store Worawoot Ounjai CEO, COL NEW Akira Yoshioka CEO, Askul

AUSTRALASIA

Adriano Alessio General Manager, Gruppo In Ufficio NEW Andrew Beaumont Managing Director, Exertis Supplies Tim Beaumont Managing Director, Nemo Group Philip Becker Chairman/CEO, EOSA/Hedera Carlos & Rafael Benavides Managing Directors, Comercial del Sur Sergey Bobrikov General Director, Komus Udo Böttcher Managing Director, Böttcher Robert Brech Group Managing Director, Kaut-Bullinger Richard Coulson CEO, Complete Business Solutions Simon Drakeford CEO, EO Group Dr Benedikt Erdmann Chairman, Soennecken László Fehér Managing Director, Corwell George Gerardos CEO, Plaisio Gert Gerber Managing Director, Office Supplies Denmark Xavier Guichard CEO, Manutan NEW Philippe Guillotin Managing Director, ADVEO France Julie Hawley Managing Director, Office Friendly Steve Haworth CEO, EVO Group of Companies Barrie Hayes CEO, BPGI Joe Hemani Chairman, Westcoast José Hernández Sanchez General Manager, Carlin NEW Arthur & Simone Hindmarch Joint Managing Directors, Commercial Group NEW Steve Horne CEO, SPOT Group Danièle Kapel-Marcovici CEO, RAJA Group Martin Kelterborn CEO, Offix Group Alper Kisa Vice General Manager, Akoffice NEW Kypros Kyprianou Group CEO, Theo Phaphitis Retail Group NEW Greg Liénard CEO, Lyreco Aidan McDonough CEO, Integra Business Solutions NEW Patrick Murphy CEO, Codex Office Solutions Paul Musgrove Managing Director, Nectere Niklas Norström CEO, AllOffice Serban Oarzǎ CEO, RTC Proffice NEW Vaida Pacauskienė Managing Director, Officeday Bruno Peyroles CEO, Bureau Vallée Johann Pintarich & Patrick Lobsiger CEOs, OWIBA NEW Elina Pienimäki CEO, Wulff Group Nicolas Potier Managing Director, Bruneau Laurent Proy Managing Director, Groupe Alkor NEW Raffael Reinhold CEO, Office Depot Europe Ferdinando Rese President, Errebian Jörg Schaefers & Thomas Grzanna Joint Managing Directors, Büroring Richard Scharmann CEO, PBS Holding Hans Schmid President, Printus Dieter Schmidt Managing Director, Plate Jean-Yves Sebaoun Managing Director, Fiducial Office Solutions Stefan Sonesson CEO, RKV Miroslaw Szydlowski Managing Director, PBS Polska Arnold Theuws Managing Director, Quantore Igor Trifonov CEO, Samson Jan Van Belleghem Managing Director, Interaction Frank van Zanten CEO, Bunzl Thomas Veit Managing Director, soft-carrier Francesco Villa General Manager, Gruppo Buffetti Dmitry Vinogradov CEO, Merlion Michael Voll CEO, Despec Nordic Dolph Westerbos CEO, Staples Solutions Felix Zimmermann CEO, TAKKT

MIDDLE EAST/AFRICA Trevor Girnun Managing Director, Waltons Abdulrahman Ibrahim CEO, HPG Craig Noyle & Garry Mc Cluskey Directors, Inovocom

October 2019

Darren Fullerton President, Winc Sarah Hunter Managing Director, Officeworks Dominique Lyone CEO, Complete Office Supplies NEW Mike Nugent Managing Director, New Zealand Office Supplies Brad O’Brien CEO, Office Choice Pejman Okhovat CEO, Warehouse Stationery Grant Sheridan CEO, Office Products Depot Gavin Ward CEO, Office Brands Paul Yardley CEO, GNS Wholesale Stationers

EUROPE

TOP 100 Who’s Who in OP?

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The complete list of the Top 100 personalities in our industry, split into five geographic regions. A short write-up of all of them can be found on opi.net

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CATEGORY UPDATE

The mailroom and packaging category is constantly evolving as it adapts to new market realities – by David Holes

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ogistics firms and carriers nowadays are in a constant race to introduce new technologies that will have an impact throughout a shipment’s journey.

Innovations are plentiful and include unmanned aerial vehicles, crowd-sourced delivery, intelligent lockers and artificial intelligence.

All of these are likely to be transformational to the industry as operators seek to differentiate themselves, while keeping efficiency, sustainability and security front of mind.

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THE NEED TO RAISE THE BAR E-commerce continues its seismic impact on the logistics industry as consumers want increased value, choice and convenience. Shipping companies are under pressure to raise the bar and meet heightened customer expectations for faster, cheaper services and real-time visibility of their parcel’s progress using application program interfaces (APIs), apps and location tracking.

These demands are fuelling changes throughout a shipment’s entire journey – from office-based technologies to last mile logistics.

The structure and volume of what’s being shipped also continues to change. Parcel volumes are expected to surpass 100 billion globally in 2020. 94% of consumers now shop online and the frequency with which they do so is accelerating, with 35% of shoppers around the world making an online purchase at least once a week.

Geographically-speaking, China takes a major stake in this growing market, with volumes increasing 28% year on year. As other emerging nations such as India continue to increase in terms of e-commerce-related size, it’s expected

that they will also have a massive influence on parcel volumes.

In more mature western markets, the rise in subscription-box services is accelerating, with this type of commerce having moved on from a traditional focus on magazines and newspapers to now embracing everything from recipe food kits to cosmetics. In the UK, the Royal Mail forecasts that this segment will be worth £1 billion ($1.24 billion) in 2022, accounting for over 65 million shipments alone. In the US, meanwhile, 63% of millennials are either already signed up to a subscription service, or plan to do so within the next 12 months – the equivalent of over 45 million people.

Despite a rise in electronic communication, traditional mail remains a trusted and effective channel of choice, says Ryan Higginson, VP & UK/Republic of Ireland Country Leader of Global SMB Solutions at Pitney Bowes: “Consumers trust mail, its authenticity and tangibility. They value printed materials in an era of ‘fake news’, and mail remains one of the preferred channels for transactional communications.

“In a recent Pitney Bowes and CMO Council study, 85% of respondents agreed that their ideal communications channel is actually a blend of both digital and physical experiences – a preference expressed across all age groups.

Printed mail is considered an influential channel, with digitally-native brands like Google, Casper Mattresses and Dollar Shave Club all printing highly-creative pieces that are delivered directly into the hands of their consumers via traditional printed mail. As long as they’re mastering the art of personalisation, mailed print communications remain a strong, credible extension of a brand.”

[Consumers] value printed materials in an era of ‘fake news’, and mail remains one of the preferred channels for transactional communications

Avery’s UltraGrip labels

PRODUCT PROGRESS From a product perspective, Pitney Bowes’ main focus over the past year has been the development of its next-generation sending technology. Known as SendPro, it’s designed to make sending easy for the company’s clients, employing touchscreen Android interfaces and SaaS-based systems to help them select the best carrier service.

“We’ve all faced lots of different choices and price options when we’ve taken a parcel to the post office,” says Higginson. “SendPro removes this complexity and uses APIs to compare different carriers and services, so companies can quickly select the best-value option for them without leaving the office. It also provides tracking and analytics, which fits with the transparency and level of detail businesses need to make decisions, demonstrate ROI and drive value.

October 2019

MARKETPLACE MAELSTROM Fast and flexible delivery options like Amazon Prime or click-and-collect are boosting demand for all things shipping-related. Another new development which is providing support for products in this sector is the Royal Mail’s introduction of Parcel Postboxes to the UK earlier this year. These act like traditional letterboxes but have a larger opening and allow consumers to send parcels with pre-paid postage and online returns in the same way they do letters. They are proving especially popular with small businesses and e-commerce marketplace sellers.

A huge surge in micro businesses using platforms like Amazon Marketplace, Etsy, Depop or eBay, or indeed easy-to-use e-commerce software that they can incorporate in their own websites, is having a significant impact on the need for mailroom and postage supplies. Etsy alone has 31.7 million active buyers and 1.9 million active sellers. “That equates to a lot of mailroom and shipping products,” asserts Scurlock-Davies.

“Items such as Avery labels for parcels and packages, which are specially designed to suit large envelopes, parcels, mailing tubes and boxes, are in high demand.”

However, she adds, sector suppliers need to carefully consider the unique needs of this market.

“Due to the size and scale of their operation, smaller businesses may require lower order quantities or more affordable, flexible solutions when it comes to the shipping supplies they purchase. Sellers care a great deal about how their products are delivered and want their package and its contents to be well received. Therefore, there is a real opportunity for the industry to offer cost-effective mailroom solutions to help them with their shipping needs.”

She adds: “All of our shipping products and labels, for example, can be customised for free using our Design & Print online template software. This allows small operators to easily create professional-looking shipping labels in a cost-effective way using their own printer. Our most recent product innovation, the UltraGrip, helps them achieve this. Over time, printer pick-up and guide rollers can get old and worn causing misfeeds, but this new technology uses a 3D pattern of microdots that guarantees exact print alignment and a perfectly-gripped label sheet every time.”

CATEGORY UPDATE Mailroom & Packaging

THE GDPR EFFECT Although research shows that many consumers still prefer to receive important notices, bills and statements in printed form, the associated costs are higher. Organisations that are still sending large volumes of transactional mail are also at greater risk of falling foul of regulations such as the EU’s GDPR – they must make sure the right information is sent to the right individual at the correct address and in the expected timeframe.

Consequently, businesses are investing in specific mailing technologies that can provide a chain of custody, with associated analytics and tracking.

As Pippa Scurlock-Davies, Product Manager at Avery UK, explains: “It’s now well over a year since GDPR came into force. Before its introduction in May 2018, there was a lot of trepidation surrounding the effect it would have on companies that use direct mail. However, it seems that the industry has weathered these challenges, with many brands still using this form of marketing to reach their customers. This is continuing to help fuel demand for mailroom products.”

At Neopost, Product Manager Senel Sowerby agrees that GDPR will continue to have an ongoing influence on customer communications, with a boost in direct mail volumes influenced by the regulations. “GDPR requires unambiguous electronic consent and a culture of ‘opt-in’,” she explains. “Consequently, many businesses have witnessed a sudden reduction in the size of their email marketing lists. As companies can still reach customers and prospects with physical mail – provided there is legitimate interest, of course – they are placing a renewed focus on this channel.

This is an example of why organisations must continue to balance the pull/push factors between digital and physical mail and need ways to carefully manage both channels simultaneously.”

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Mailroom & Packaging CATEGORY UPDATE

Packaging supplier Sealed Air is also taking up the challenge in this area. “There’s increased demand for products that are more sustainable and have a smaller environmental footprint,” says Mirella Andriano, the company’s Portfolio Manager for EMEA. “Our focus is firmly on making efficient use of natural resources and reducing unnecessary waste without compromising protective performance. One example of this is the AirCap bubble, which combines long-lasting protection with thinner films. Our new Mail Lite protective mailers also provide a sustainable option for smaller shipments.

“As a company we have announced a bold sustainability and plastics pledge and are committed to supplying solutions that are 100% recyclable or reusable by 2025. Additionally, we are targeting the use of 50% recycled content across our entire range.”

“We also use data collected from SendPro to help us understand more about how clients use it – which features and options they employ most often, for example. This feeds back into our product development process, so we’re constantly refining the system to deliver the best customer experience.

Fresh thinking is having a big impact on our business.

In 2012, less than 5% of our revenues came from ‘new’ products whereas today they generate 20%.

Innovation is driving this industry and accelerating the speed of delivery.”

Mailroom specialist Neopost, on the other hand, has been concentrating on parcel lockers and their associated management solutions, as it sees this as a major growth area. “They’re suitable for a range of environments, from large corporate offices to shared workspaces and universities, as well as managed residential sites,” says Sowerby.

“Also, due to a number of incidents over the past year involving explosives and toxic substances, more organisations are seeking to implement mail-scanning equipment as a way to improve security. Many don’t realise how small a footprint such devices can take up, or the speed with which they can scan items, so it’s often a simple proposition to add an effective additional layer of defence against mail threats.”

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We’re listening to our customers, particularly when they tell us our packaging hasn’t worked – when their products were damaged, when the box used was too big, or just too hard to open

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PACKAGING PROMISES With the dramatic rise in parcel post has come the inevitable rise in the use of packaging material.

While this is good news for suppliers, it has raised environmental concerns regarding the resources this surge is consuming. Amazon is often in the firing line when it comes to criticism in this area. That said, a company spokesperson told OPI that the online giant is making huge strides in mitigating this problem and driving improvements in sustainability across its entire supply chain.

He says: “We’re listening to our customers, particularly when they tell us our packaging hasn’t worked – when their products were damaged, when the box used was too big, or just too hard to open. This informs our worldwide packaging team and allows us and our vendors to make improvements.

“We continue to pursue multi-year waste reduction initiatives and promote 100% recyclable material and, wherever possible, ship products in their own packages without additional boxes. We’re also seeking to eliminate hard plastic ‘clamshell’ cases and the plastic-coated wire ties commonly used in toy products.

“Over time, these initiatives have grown to include more than 1.2 million products and have eliminated more than 36,000 tonnes of excess packaging.

Additionally, Amazon works with manufacturers worldwide, helping them improve their sustainability.”

Sealed Air’s Mail Lite bubble mailing bags

AWARD-WINNING 3M In a separate development, 3M’s Stationery and Office Supplies Division has launched an ingenious new way to ship products. Called the Scotch Flex & Seal Shipping Roll, it was hailed as the Innovation of the Year at the recent North American Office Products Awards. It’s made from three layers of different plastics, including a middle cushioning layer to protect items during shipping and a tougher outside layer that is tear- and water-resistant. Users place the item on the sticky inner side, fold over enough material to encapsulate it and press the adhesive sides together to seal it up. According to 3M, using the packaging, users can reduce the time, materials and space required to ship products by 50%.

The mailroom and packaging sector is without a doubt a category that can be described as buoyant as well as innovative. Says Higginson: “As we head towards 2020, globalisation will have a huge influence on the market as carriers look to create new revenue streams by extending services overseas. E-commerce companies in particular will attempt to maximise the opportunities presented by emerging markets.

“Overall, this sector will continue to evolve in line with shifting consumer behaviours. Product development across the industry by default will accelerate to keep up with the pace.”

CATEGORY UPDATE

New ideas, products and markets are keeping the once traditional stamping sector relevant in an ever-changing world – by David Holes

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he stamping sector may not have a reputation for being the most dynamic category in the OP industry, but perennial demand for its products means that specialist suppliers are consistently managing to carve out healthy sales growth.

New product launches that incorporate the latest technological developments are also keeping the segment fresh, with innovative ideas widening its appeal across many different verticals.

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GLOBAL REACH Austrian stamp specialist Trodat states that while the category has previously suffered from the same influences seen throughout the traditional OP sector – specifically declining demand in mature western markets – sales over the past 12 months have actually been quite stable in this core region. Further afield, the company has also seen significant growth coming from emerging areas across Asia, Africa and South America.

“As such, we’re bucking the downward trend,” says CEO Roland Rier. “I predict an increase of over 5% in 2019 sales, compared with last year. The final figure will depend on currency fluctuations – crucial for an operator like us as we export more than 98% of our products – but it could be even higher. Our focus has been on self-inking devices for some time and that has brought us considerable success. I expect this to continue for many years to come.”

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BREXIT BONUS German metal stamp vendor Reiner has also had a positive year, with Brexit uncertainty providing an unexpected but welcome boost in sales. Expectation of the re-imposition of

border controls and customs checks has meant that various national authorities across Europe have been stocking up on the vendor’s stamps in preparation for an increase in bureaucracy.

Demand for products that include an integrated, automatic-numbering feature has been particularly strong. A publicity campaign at Paperworld in Frankfurt in January also helped increase sales of its speciality stamps.

Like Trodat, Reiner also relies heavily on its export market, with EU sales accounting for around 55% of the company’s handstamp revenues while the remainder comes from emerging markets across Africa, South America and the Middle East.

Brexit uncertainty [is] providing an unexpected but welcome boost in sales

Reiner’s new jetStamp

Stamping CATEGORY UPDATE www.opi.net 40

Director of Sales and Marketing Gerolf Heldmaier says that a major growth area for the company is in industrial marking devices, with strong uplift in its jetStamp family of electric stamps across Europe, Central America and Oceania.

INNOVATE OR DIE While traditional products still lie at the heart of the stamping sector, the need to innovate and keep the category relevant in today’s technologically advanced world is paramount for future success.

Developments at fellow Austrian manufacturer COLOP are a good example. In January, it launched its new electronic digital stamp – the e-mark. “It’s more than just a stamp, it’s a mobile marking device that offers almost unlimited possibilities. In our opinion, it’s the most exciting product in the stamping sector today,” says Franz Ratzenberger, Head of International Sales and Marketing. “In addition to creating tailor-made imprints that include address and automatic date/ time and numbering, users can also generate QR and barcodes – all in full colour. These are created on a PC, mobile phone or tablet using the free COLOP app. Imprint designs are wirelessly transferred to the e-mark device, which can then mark any absorbent surface – cardboard, wood, textiles and, of course, paper.”

He adds: “It’s ideally suited for the office, organisational and marketing environments, but is additionally aimed at users in logistics, architectural, finance, medical and hospital settings. We also see opportunities in the gastronomy and hotel industries. Of course, the e-mark is very useful for the private end user as well. It’s a new product, but the ongoing potential is enormous, and our hardware and software engineers will be continuously working on upgrades to make this a reality.”

With innovation in mind, in April Reiner launched the latest product in its jetStamp series – the 1025.

This new addition to the range offers several advantages, according to Heldmaier: “It can print characters up to a height of 25 mm (1 inch) using just a single ink cartridge – a unique feature across our industry worldwide. Other features include the ability to produce 1D and 2D barcodes, date, time, text, numbers or indeed graphics, such as international compliance marks or company logos.”

POCKET ROCKET At Trodat, market research revealed a requirement for a new pocket stamp, aimed at the increasingly mobile workforce and particularly those working in the healthcare, production and construction industries. They, the vendor says, were looking for a stamp that was small, could be carried with ease, used one-handedly and came with an easy, clean ink cartridge change.

The result was the new Pocket Printy which launched earlier this year. It comes in two different impression sizes, 38 x 14 mm and 47 x 18 mm and can be designed to customers’ specific requirements.

COLOP’s e-mark stamp

[The e-mark] is more than just a stamp, it’s a mobile marking device that offers almost unlimited possibilities

Trodat’s Pocket Printy

QUICK DRY In a separate development, Trodat has created an entirely new stamping solution. Known as dryteq, it’s a two-part product aimed at situations where speed is of the essence. The stamp itself is loaded with a special ink pad. Once an impression is made, a separate unit is placed over the print which, at the push of a button, dries the ink in less than half a second. It works on practically any surface, including metal, glass or plastic.

“We consider it a revolution in the stamping sector,” says Rier. “Currently we’re test-marketing the product in a few European countries, with a full rollout expected to follow shortly.”

Taiwan-based Shiny Stamp, meanwhile, has launched a solution aimed at independent stamping suppliers. Known as the Shiny Premier Stamp, manufacturing involves a ‘flash’ process which is more environmentally friendly than traditional laser cutting as the latter involves the production of waste debris and the use of chemicals to wash the product.

The flash machine itself comes in several variants and, says Shiny’s Deputy Executive Manager Jimmy Chen, requires a lower level of investment than the laser-engraving process: “Essentially, it offers an inexpensive start-up programme for independent dealers or larger businesses that will allow them to produce high-quality marking devices. The technique can be used to produce the largest flash stamps currently available in the industry. All types of stamps have an ergonomically-designed handle and water-resistant ink; production time is quick too. From start to finish, a flashed die can be made in less than five minutes, with the complete stamp produced and ready for use in under an hour.”

Some may view the stamping category as a slow-moving sector, but it’s clear that innovation is well and truly alive among its key players, with new products, new technologies and a broadening range of potential applications combining to keep it relevant and profitable.

ADVERTORIAL

Novus Dahle

WORKLIFE EXPERTS OPI speaks to Frank Indenkämpen and Malte Goldbeck about a year of exciting new product launches at Novus Dahle and why these so perfectly fit in with today’s trends and the company’s new slogan

N

ovus Dahle belongs to the emco Group, a medium-sized, €160 million ($176 million) family-owned German manufacturer that is active in several industries, office products being one of them.

The two components of Novus and Dahle – both long-established companies that date back to the 1940s and 1930s respectively – first came together in 2004 and since 2012 have been known as Novus Dahle.

With a broad and ever-growing range of products, the vendor first and foremost sees itself as a ‘WorklifeExpert’. Managing Director Frank Indenkämpen and Marketing Brand Manager Malte Goldbeck explain the firm’s new direction and highlight some of its recent innovations.

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OPI: Let’s start with a simple question: what products do Novus and Dahle stand for? They used to be completely different entities for many years. Is there still a strong distinction between the two?

Frank Indenkämpen: No, there absolutely isn’t.

We don’t typically refer to Novus and Dahle products per se, but instead see ourselves as WorklifeExperts – that was a big focus at Paperworld Frankfurt this year when we launched the new slogan. Essentially, we are solution providers in three broad segments: office supplies, office technology and office environment.

Office supplies comprise everything from staplers, hole punches, scissors, pencil sharpeners, letter trays and much more. Office technology, meanwhile, refers to shredders and

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cutting machines, but also DIY and industrial-focused heavy-duty punches and staplers. This, plus the office environment segment, which includes products like lighting, monitor arms and organisation systems, is where our main focus is now.

OPI: Where are your biggest markets?

FI: That depends a lot on the product. Generally speaking, we are very export-orientated. We’re doing very well in the US through Dahle North America.

In the Middle East, we’ve traditionally been strong with office supplies, but political unrest limited our progress for a while, although it’s ramping up again.

Latin America is also growing well again. We used to be prominent there, but in 1990 when Germany was unified as a country, we more or less stopped our activities in the region to focus on this huge market that was opening up in the former GDR. Overall, with Dahle we have an export share of 70% while for Novus it’s between 48-52%. It varies enormously though, as we have so many different product categories that are playing on different stages in different parts of the world.

OPI: So what’s new? Orgatec 2018 and Paperworld Frankfurt were big launchpads for you I believe.

Malte Goldbeck: I would highlight four ranges we have launched over the past year that we’re really focusing on: Novus Attenzia, re+new, Dahle ShredMATIC and clu. All these span the three segments Frank has mentioned – office supplies, office technology and office environment.

Let’s start with Attenzia Space, which is our lighting range that was introduced about a year ago. Available in four different versions, it has three light panels with a rotation of 270 degrees for direct or indirect illumination. The top product in this line is a light with state-of-the-art LED technology and human-centric lighting (HCL) – the latter is a technology that has become incredibly sophisticated and, importantly, is proven to improve the well-being of office staff as well as increasing their productivity.

OPI: Another range you mention is re+new…

FI: Yes, re+new is a line of products that is made of up to 95% recycled plastic. In cooperation with One Earth-One Ocean, we support a campaign to clean the waters of the world from plastic whereby we donate up to €1 to this initiative for every re+new stapler or hole punch we sell [for more on this campaign and Novus Dahle’s involvement in it, look out for OPI’s Green Thinking publication later this year].

Our re+new assortment succeeds a previous range of eco-friendly products which was made of bioplastic. The problem with bioplastic is that it’s difficult to certify. We didn’t want to be accused of ‘greenwashing’ – which absolutely we weren’t but it’s always a danger – so stepped away from that method and launched re+new at Paperworld this year.

To explain a bit more, re+new staplers and hole punches, for example, are made from old refrigerators whereby these are processed into recyclate by a certified recycling company.

Recyclates are plastics recycled from post-consumer waste, thereby closing the recycling loop.

Our ambition was to sell 30% more than we did with the previous bioplastic range which, incidentally, was also popular. We’ve already exceeded that target which is hugely encouraging.

We’ve submitted the first payment to One Earth-One Ocean and I’m pleased to say it was a five-digit number.

OPI: Another product you launched at Paperworld was the Dahle ShredMATIC. What’s special about that product in a category where the competition is considerable?

MG: You are right, the competition is fierce, but we believe that the ShredMATIC is the fastest auto-feed shredder on the market. The auto-feed function is also vital. People are so

FAST FACTS Founded: Novus – 1945; Dahle – 1930 Headquartered: Lingen, Germany Managing Director: Frank Indenkämpen Revenues: €50 million ($55 million) Staff: 350 Production sites: China, Czech Republic, Germany Salestocoverage: caption go here?

Globalto go here? caption caption to go here?

time-pressed nowadays and can’t stand by while their confidential documents are being destroyed.

The ShredMATIC has a compartment to put the papers in, you close it and the machine starts to shred without anybody being able to open the compartment unless they have the key.

FI: Capacity, speed and security were vital criteria for us when we developed this product. As you say, we introduced the ShredMATIC at Paperworld, with the promise that it will be available from September.

We’ve started shipping now and early feedback has been excellent.

OPI: The last product you mentioned is the Clu. FI: The Clu is a monitor support arm with gas spring technology that allows users to adjust the positioning of their screen in any way, even to an almost horizontal level if they wish to do so. This is particularly useful for people with varifocal glasses who often suffer from neck strain when they use standard-positioned monitors.

MG: Another special feature of the Clu is that it’s part of a modular system – our ‘More Space System’ product portfolio which also includes the Attenzia range. It means that everything can be combined with everything else, you can set up complete workstations and adapt and change them as you go.

ADVERTORIAL Novus Dahle

FI: We’ve had fantastic feedback on this range.

HCL of course has a certain price tag to it which not everybody is willing to pay. We have three different Attenzia models, a kind of good, better, best, so there’s something for everyone. When we launched the line, we were awarded a Red Dot design award which we’re very proud of.

OPI: Who’s your target customer?

MG: We broadly segment our customer base into two groups: office workers in any type of business, and professionals in creative environments, such as designers, architects or people in the DIY space.

FI: Customer and channel-specific marketing and sales support is hugely important today. I believe this is a steep learning curve for operators in our

Every product we make has to answer the question: does it make life at your desk easier?

October 2019

industry and a work in progress for many. We have to marry online with offline, provide content and imagery, all targeted at distinct audiences.

And when I say audiences, I don’t just mean the end consumer, but also the intermediate channel.

An Amazon is completely different from an independent dealer or a large contract stationer in what it requires in terms of content, type of pictures, promotional campaigns, etc.

And it’s always changing. As soon as you think you’re ahead, something else comes along and you have to start anew. Each Novus Dahle product is made to a very high standard, using intensive manufacturing processes and quality controls.

The key is to know your USP – your jewel as I call it. Our remit is to make work easier and we really live that slogan. Every product we make has to answer the question: does it make life at your desk easier? If the answer is “no”, we have failed in our mission.

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HOW TO...

In the second part of this How to… series, Marc Pinner questions the customer versus consumer marketing approach. And there’s only one answer, he asserts

The consumer

IS KING T

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he definition of marketing is, and will ultimately always be, “managing profitable customer relationships”. There are other definitions too, including “the promotion of products, services or ideas to meet customer requirements”. The essence is still the same: customers matter and should be a significant focus of any business. But what about the consumer focus? A consumer or end user is the one who consumes or uses the products that your customer buys. It begs the question: who should come first in our industry, the customer or the consumer?

Wherever you are in the food chain, from the raw material provider to the reseller, there is always a customer transaction. Brands have customers.

Wholesalers have customers. Resellers have customers. “The customer is king” is a popular phrase and a safe mantra to ensure your business focuses on delivering the right proposition to those that need and want your products or services. The customer, meanwhile, has the responsibility to qualify objectives, expectations, needs and wants to ensure suppliers deliver these.

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THE CONSUMER-FIRST IDEA Whatever you’re selling or marketing, taking a consumer-first approach is the way to really transform an existing and established operator.

Successful businesses often have a great balance of the right product with the right people with the right guiding principles. But markets move, the

environment changes and habits evolve. Companies that are agile and respond to this are well placed for future success. But being agile isn’t always enough.

They also need to place the consumer at the forefront of their strategy.

There’s a plethora of case studies of successful businesses in the 1990s that have not made it through to the noughties, and then those of the noughties not getting past 2010. Every year, we see business failures due to tougher competition, the wrong strategies – even though they may have been trying to be progressive in some way – or sometimes sticking to an underlying mantra of “this is the way we’ve always done it”. One could argue that the recent woes of Jaguar Land Rover, the darling of the UK and global automotive industry just three years ago, are not just due to tough market conditions, the political landscape and future regulations. They are also the result of loyal consumer apathy.

Creating a short, medium and long-term strategy, streamlining IT, moving premises – these are all well and good, but they are often internally-led activities.

Do they really put the consumer first alongside the desired efficiency gains?

The very fact that established businesses still exist is because they got it right once and then regularly thereafter. They may have had market tailwinds that favoured their product or approach, but eventually all good things get challenged.

Market headwinds are always there – threats outside the organisation such as competition and

the perennial need for innovation. Companies fail because they don’t adapt to the consumer or end user. We still need paper, pens and paperclips.

What is changing is the regularity of purchases and the places where we buy them.

Apple is often considered the highest profile brand in terms of putting the consumer first and always being ahead of the curve. The consumer experience is at the heart of everything – the purchasing experience, the product’s use, the aftercare… Every touchpoint in the organisation has a consumer philosophy running through it because at Apple, everything about that end user matters. It matters so much that many products are launched to consumers who don’t even know they need them yet. But they will soon and shortly afterwards they will wonder how they ever coped without them.

Apple’s marketing approach perfectly complements its innovation. The hardest part is frequently to convince buyers that they need to list a new product. Apple has a great direct-to-consumer (DTC) model – all that matters is the consumer and the trade must keep up and adapt accordingly.

For many established businesses and the traditional OP industry in particular, the [direct-to-consumer] question is often posed in a negative way […] It needn’t be a threat All brands have a duty to be ahead of the game, often ahead of their own customers in fact. A culture of delivering consumer benefits creates a culture of delivering customer and trade benefits. If manufacturer brands are inquisitive, adapt to end-users’ needs and present the opportunities that exist as insights and benefits to resellers and their customers, it will keep the market positive, aligned and hungry for growth.

In my mind, it’s a no-brainer: put the consumer ahead of the customer – always!

October 2019

MANAGING THE DTC CHALLENGE For many established businesses and the traditional OP industry in particular, the DTC question is often posed in a negative way. If brands go direct, what’s the purpose of the

middlemen? What value-add do they bring?

Is their value simply destroyed as brands go direct? It needn’t be a threat.

It would be foolish to assume that they can all co-exist. Markets are simply not that harmonious, especially in a dynamic and evolving world. The music industry, for example, has gone through a 180-degree change in recent years, with lots of noise and some fallouts.

But it’s booming today, with new channels and new ways of consuming and buying music.

And everybody has gained, most certainly the consumer. The OP industry has plenty to gain too. The ride might get a little bumpy, but our sector will emerge stronger, bigger and better.

While DTC in some organisations is a new sales channel, it is also a diversion of marketing spend towards a very direct consumer relationship. This is important and the future lifeblood of many brands. With DTC, brands can speak to and engage with loyal, difficult or potential consumers like never before. In the past, these relationships rarely existed – occasional contact used to be made through a sales promotion or a loyalty scheme, but these would be one-off experiences. Brands would often set up consumer panels as well, gaining qualitative or quantitative insights. This now feels very secondary and old-fashioned compared to today’s opportunities.

Brands need to connect with their consumers and DTC is precisely one way of doing that. They need to understand long-term habits, update, innovate and build trust. Who wins? Everyone does. Consumers get their future needs met.

And they will continue to buy from whatever reseller they bought from before if that business is doing everything it’s supposed to, ie offering a relevant and convenient value proposition. The insights gained by brands through DTC will also help their customers – again, the resellers – with effective ranging, pricing and marketing. DTC is an opportunity for the entire industry – it only becomes a threat if it’s ignored or mishandled.

HOW TO... Customer vs Consumer

Marc Pinner is a marketing consultant who adds value and improves an organisation’s marketing performance. He has spent many years in global leadership positions, developing businesses, modelling and executing strategy, and creating and managing change.

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ADVERTORIAL

has added a fun and refreshing nuance to a dying category in both the B2B as well as B2C channels.

In total, more than 150 new SKUs have been introduced over the past two years and significant further development is timetabled.

Launching outstanding ECO filing products into the market is a major focus for the vendor in the second half of this year.

always A FRESH APPROACH –

U

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K office products manufacturer Rapesco has been reinventing itself over the past three years and accelerated its rapid expansion.

With a steady stream of innovative new products, a strong multilingual team, upgraded internal infrastructure and leading digital content, the brand continues to grow its relevance through creativity and a fresh approach to traditional categories. In the process, it’s posted impressive growth while increasing reseller margins as well as creating opportunities from shrinking traditional office supplies categories.

Well known for its top-quality stapling and punching products, Rapesco has in recent years added to its portfolio by developing its ECO range that uses a high level of recycled plastic. What’s really unique here is the white finish of the line which now comprises more than 30 items. The manufacturer points out that, while recycled, ECO products still carry an industry-leading guarantee of 25 years, highlighting the fact that there’s been no compromise on quality or performance.

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AMBITIOUS PLANS Rapesco’s strategy is to be the number one in each of the categories it operates in. As such, its USB-powered staplers and pencil sharpeners, filing and scissor families typically come out top in keyword searches and have quickly gained relevance across Europe.

Indeed, taking commodity items and injecting them with creativity and innovation is a key differentiator for Rapesco. A perfect example of this is the emoji foldback clip range, which

WHOLESALE SUPPORT Rapesco is enjoying excellent wholesale support across Europe. German wholesaler soft-carrier, for instance, now carries a wide range by the vendor, offering more than 250 SKUs. As soft-carrier’s Managing Director Thomas Veit says: “Rapesco’s strategy is a little different from what we are seeing from others. We are delighted to work closely with this fast-growing business and take advantage of the unique consumer-led products it is offering.”

Rapesco’s International Business Manager Alex Bonarius is equally pleased with the progress the vendor is making: “We have begun trading with many of the key resellers in Europe. Our team of bilingual account managers have seized the opportunity and made this a smooth process, with their emphasis on relationships and a thorough understanding of the areas that will drive growth for our customers.”

Internally, significant upgrades have also been made. The head office in the UK, just outside London, has been completely refreshed to create a comfortable space for its growing team. The introduction of a large new social workspace, for example, allows employees to work wherever they feel most comfortable. In addition, substantial investments have been made to transition our systems, using Oracle as the central platform, thereby enabling Rapesco to meet growing customer logistical demands.

The Japanese principles of Kaizen – the idea of continuous incremental improvements – lie at the very heart of Rapesco Dealers and wholesalers, meanwhile, have been able to take advantage of the considerable digital content on offer. Strong imagery to engage the consumer, as well as videos and carefully compiled written content across several languages, have all proven vital in achieving rapid growth with online customers. The seamless onboarding process of new clients and support for those increasing Rapesco listings have been key in the vendor’s success.

KAIZEN PHILOSOPHY The Japanese principles of Kaizen – the idea of continuous incremental improvements – lie at the very heart of Rapesco. Company owner and CEO David James vehemently drives this ethos of change and improvement in every aspect of the vendor’s operations, and invests heavily in the business and its global infrastructure to efficiently manage distribution.

COMING SOON... ...OPI’s annual Green Thinking supplement which will be published this autumn Featuring: - Interviews and opinions - Legislative news - Sustainability best practices - CSR initiatives - Product category updates

CONTACT

September 2019

GREEN THINKING 2019

For all editorial enquiries contact: michelle.sturman@opi.net For all advertising enquiries contact: 57 chris.turness@opi.net

EVENT

GLOBAL FORUM PREVIEW

DEALING with

the ISSUES H

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aving the time to discuss the burning issues of the day with industry peers in a confidential setting is a vital aspect of present and future business planning. This is exactly what the eighth OPI Global Forum provides.

Held once again at the Sofitel Chicago Magnificent Mile – this year from 17-19 November – this invitation-only event will tackle the biggest challenges in the business supplies sector today and explore the various dynamics and potential solutions. It also offers a unique occasion for senior executives from the various channels to come together and share strategic business insights.

While the majority of delegates come from all corners of North America, as the ‘global’ name suggests, there is also an international contingent in attendance, providing a truly unique perspective on worldwide business affairs in our industry.

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INSIDER KNOWLEDGE Chaired this year by OPI CEO Steve Hilleard, the broad areas of discussion for the 2019 event will revolve around sustainability and the future of the office, both of which encompass a multitude of important subjects that are already affecting the business supplies sector.

With decades of insider knowledge, Hilleard will open proceedings with a brief overview of our sector. He says: “It would be an understatement to say that it’s been a very eventful ten months since we convened for the OPI Global Forum in 2018. This year’s eclectic gathering will certainly have a lot to discuss – all, as ever, obeying strict Chatham House rules.”

Hilleard adds: “No other event brings together such a comprehensive audience of industry leaders and I anticipate a hugely varied and on-point couple of days.”

Topics at the 2019 conference will look at Customer 4.0, for instance: who exactly are the office supplies customers of today? And how are US consumers being impacted by tariffs and trade wars, among many other factors.

The rapidly-changing dynamics of the workplace will be examined through several talks that explore the launch of 5G, the full integration of a sustainability strategy into your business, and successfully bringing the next generation on board – and retaining it.

Away from the larger plenary sessions, a wide variety of small roundtable meetings will offer plenty of time for debating a range of topics in more hands-on detail with peers.

No other event brings together such a comprehensive audience of industry leaders

MARK THE DATE The OPI Global Forum takes place from 17-19 November 2019 at the Sofitel Chicago Magnificent Mile, Chicago, US.

PANEL HIGHLIGHTS OPI forums always aim to include some of the big hitters in our industry. This year, there are two major highlights on the agenda. One is the Keynote Panel where ACCO Brands CEO Boris Elisman, S.P. Richards EVP Chad Lee, ISG CEO Mike Maggio, Rogards Office Plus President Tonya Horn, Office Depot SVP Bryan Wight, and Fellowes Brands VP of Sales Beth Wright will discuss the state of the industry, channel disruption, sector consolidation, and the impact of the Staples/Essendant merger on the first conference day. Further inside knowledge of that latter deal will be revealed as Hilleard conducts an interview with Staples Inc CEO Sandy Douglas on stage on day two.

One of the key benefits of attending the OPI Global Forum is the rare opportunity for delegates to engage in high-level networking with peers in an intimate setting. The event is carefully constructed to allow for plenty of time to catch up with friends and colleagues formally as well as over a drink or two.

For more information about the OPI Global Forum, visit opi.net/GF2019. If you would like to attend the event, please contact Chris Exner at chris.exner@opi.net.

EVENT

A time to PREVAIL PREVAIL PREVIEW

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hen the curtain fell on the 2018 EPIC show in New Orleans, many in the US business supplies community thought they had most likely visited the last buying group meeting involving both Independent Suppliers Group (ISG) and TriMega members. For few could have predicted the events of recent months that saw the merger between ISG, TriMega and Pinnacle, a move that has resulted in the Prevail 2019 show.

Taking place next month – from 4-6 November – at the Westin Indianapolis Hotel, Indiana, Prevail can perhaps best be described as a sort of EPIC-plus. The event will open on 4 November, with committee meetings and a purchasing clinic run by ISG consultant Grady Taylor and VP of Purchasing Tom Hoffmann. The latter will provide insight into increasing margins and buying more efficiently for dealers.

In addition to the official welcome reception, the first evening will also include the City of Hope fundraiser which this year is a little different – it will feature a dunk tank and half a dozen industry luminaries comprising ISG’s Mike Gentile, Tom Ashburn and Grady Taylor, as well as Jack Reagan from S.P. Richards (SPR), Joe Templet from Essendant and OPI’s very own Steve Hilleard.

At $20 for three throws, delegates will almost certainly be queuing round the block – all to raise money for a good cause, of course.

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FIRST FULL ISG MEMBERSHIP MEETING The next day will see the first full meeting of the new ISG membership, initially with suppliers also welcome and then just for members. Those meetings are followed by a packed seminar programme with three different hour-long timeslots offering presentations from the likes of ISG’s EVP of Sales and Marketing Charles Forman, its Facility Supply Channel Director Frank Hoard, Director

Prevail can perhaps best be described as a sort of EPIC-plus

MARK THE DATE Prevail takes place from 4-6 November 2019 in Indianapolis, US. For further information, visit prevail2019.cvent.com.

of Membership Development Tom Ashburn and Director of Technology and Managed Services Brian Stevenson. Also presenting will be familiar faces such as Method in Motion’s Marisa Pensa, NOPA’s Mike Tucker, K Coaching’s Krista Moore and Fortune Web Marketing’s Jennifer Rae Stine.

After the seminars, the action moves over the road to the Indiana Convention Center for the trade show where dealers will be able to see the latest innovations from the vendor community. They can also benefit from a raft of show specials as well as be in with a chance to win $5,000 as part of the ‘Tickets to Treasure’ promotion. Attendees can further ‘earn’ raffle tickets by having meaningful conversations with participating exhibitors on the show floor.

The day concludes with the prize drawing reception and party, sponsored by SPR, which will take place at the nearby Indiana State Museum.

In addition to more networking opportunities for dealers, they can win a host of goodies from the raffle and of course see the culmination of the ‘Tickets to Treasure’ promotion where one lucky winner will walk away with $5,000.

5 MINUTES WITH...

Thomas Lang

CAREER Q&A

What scares you?

I recently spent a week sailing in the Azores, Portugal. We took scientific samples of the proportion of microplastics in the Atlantic Ocean. What we found was really scary…

Optimist or pessimist?

Optimist.

Favourite author?

I like the novels of Martin Suter, a Swiss author. He worked as a creative director before becoming a professional writer.

What would you cook for a dinner party?

I’m Swiss, so obviously – fondue!

Thomas Lang, OWIBA

Early bird or night owl?

Night owl.

What do you think are you particularly good at?

Connecting with people.

Your favourite gadget?

My Garmin Fenix 3 watch – to check if I’m allowed to eat a dessert or not.

If you could meet someone famous, who would it be?

I would have loved to accompany and be around Barack Obama when he was President of the United States.

What’s your favourite cuisine?

Italian.

Best way to spend the weekend?

It sounds predictable, but definitely spending time with family and friends.

www.opi.net

Your childhood ambitions?

To be the conductor of an orchestra or a journalist.

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Do you have any famous ancestors?

Josef Munziger, a Swiss politician who was elected to the Swiss Federal Council, was part of my family. It’s quite a while ago though – he was born in 1791.

Describe your current job.

I am Head of Category Management and member of the board for Office World and iba, now combined into OWIBA. We are a B2B-focused multichannel reseller of business supplies in Switzerland with 19 retail stores and two online shops. Since 2017, we’ve been member of Austria’s MTH Retail Group.

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

I would quite like to have my own company.

Best moment in your career?

That’s easy – winning the Reseller of the Year award at the European Office Products Awards in 2017.

The industry operator that you most admire?

I admire the superb growth and online excellence of Böttcher.

This reseller has the ability to look at our industry from a different perspective and understand the needs of our customers incredibly well.

What are you most proud of?

The team I work with at OWIBA. If you could change one thing about the industry, what would it be?

Natural and steady market growth every year would be excellent.

NEW CATEGORY

2O

Sustainability Award

FINAL CALL

FOR ENTRIES

DO YOUR ACHIEVEMENTS DESERVE TO BE RECOGNISED BY OUR INDUSTRY? If you’re doing something great, make sure you enter the 19th annual European Office Products Awards (EOPA).

CATEGORIES

Entries and nominations are now being accepted in the following categories: l Product of the Year l Reseller of the Year

WINNING AN AWARD CAN MAKE A REAL DIFFERENCE TO YOUR BUSINESS HOW TO ENTER Download the Call for Entries brochure on www.opi.net/EOPA2020 or email awards@opi.net for more information.

You can enter as many categories as you wish and it’s free to take part.

l

revenues under €100 million

revenues over €100 million l Vendor of the Year l Wholesaler of the Year l

l Marketing Campaign of the Year l Video of the Year l Initiative of the Year l NEW Sustainability Award l Young Executive of the Year l Professional of the Year l Industry Achievement

The closing date for entries is 25 October 2019.

For more information visit www.opi.net/EOPA2020 or email awards@opi.net

FINAL WORD

SOCIAL SPACES

in the modern office

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xperts often talk about the future of the workplace, with many speculating on the changes that will be prompted by advances in technology; some even predict an end to the office environment altogether.

In reality, however, while home and flexible working may now be more popular – and more possible – than ever before, they are solutions that only suit some employers and some employees, some of the time.

Face-to-face communication and effective collaboration remain pivotal to the success of most businesses. As such, people still need to come together and the place to typically do that is in an office. The question is, what will this environment look like in years to come?

It’s worth remembering that, both as colleagues and human beings, we are social creatures. Most of the reason for being in the office five days a week may be to get a job done and pay the mortgage, but at least some of the rationale for more than ten million people in the UK working in an office is that the environment provides social interaction on a daily basis. And that interaction is just as valuable to employers as it is to staff, lifting – hopefully – the mood and productivity of personnel, as well as giving them an opportunity to problem-solve together, discuss tasks and develop as a team.

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ENHANCING THE WORKSPACE So rather than debating whether we need offices per se, most of the smart research and investment is being ploughed into enhancing that social interaction in the workplace and building on collaborative workspaces to make the whole environment more engaging and communal. There’s also an emphasis on making it more fun and homely, based on the philosophy that employees who like their work setting and enjoy being there will be more productive and better at their job.

Workplaces are now seeing a larger proportion of space dedicated to socialising and encouraging employees to meet and work away from their desks. Agile working is becoming increasingly popular due to the positive impact businesses are seeing on their employees as a result of it. Businesses that offer collaborative, informal and social spaces are becoming the ones where employees report the highest sense of pride, enjoyment and productivity.

Breakout and office dining areas are typically good for helping staff engage

and share ideas more readily, with people often feeling more relaxed and comfortable than in more formal meeting rooms.

A casual chat over lunch can spark an idea. Bumping into a colleague on the way to the coffee machine may lead to collaboration. This is why more businesses are moving away from the ‘how many bodies can we fit into the space’ mentality towards multi-purpose rooms, breakout areas and socialising spaces.

While not every company is ready for slides and swings or dedicated games zones in the office, of course, designing a workplace with spaces that employees can use as informal work areas, meeting places, chill-out areas and breakout zones is fundamental to creating a progressive and people-friendly office. Combining upholstered soft seating with bistro-style tables, chairs and benches is one way of creating modern offices with these collaborative workspaces.

Chris Scott, Managing Director, Dams Furniture

Rather than debating whether we need offices per se, most of the smart research and investment is being ploughed into enhancing […] social interaction in the workplace COMPLEMENTARY STYLES Over the past few years, standalone, private offices have increasingly been replaced with open plan layouts that aim to reduce costs and boost collaboration between employees and different departments. More than 70% of all UK office staff now work in such open plan environments. Complementing this type of setting with pockets of informal meeting spaces, relaxed dining areas and telephone nooks will then allow employees to move away from their desks to carry out tasks in a specifically-tailored environment should they wish to do so.

Workers across all sectors and generations are now demanding a stimulating experience from the office, not just a place to work. Home comforts are also becoming more prevalent to make them feel better and create a flexible, multi-purpose space. With the average worker spending the majority of their waking hours in an office, it makes more sense than ever for there to be an overlap between the work, social and home environments.

NEXT ISSUE Big Interview Steve Horne, CEO, SPOT Group Hot Topic The ink and toner market Category Update l MRO/PPE/Safety l Imaging Supplies/ Print/MPS