OPI December 2014/January 2015 by OPI

Office Products International

Big Interview

ISSUE NO.2 4 5

The word in office.

magazine

Andrey Kudryashev, Co-owner/Development Director, Pragmatic p14 December 2014/January 2015

DECEMBER 2014/JANUARY 2015 WWW.OPI.NET

Robinson Young: FM category facilitator p30 Big box p20 Spicersâ&#x20AC;&#x2122; future under the SPOTlight Q3 cheer p10

Contents December 2014/January 2015

www.opi.net

News

Events

6 Round-up

34 ISSA/Interclean North America Review

Staples Exchange launched; Amazon ups B2B ante; Soennecken goes direct

10 Analysis

39 CORE Live Preview

Stock market boost for Office Depot and Staples

41 Paperworld Preview

Features

42 Climb of Life 2014

14 Ready to rouble

45 EDexpo Preview

Pragmatic’s Andrey Kudryashev is looking to provide added value despite the declining value of the Russian currency

46 Big Buyer Review 47 EOPA 2015 Shortlist

Category Analysis

20 In the limelight: SPOT Spicers is in the SPOTlight, as the ramifications of its new ownership structure begin to unravel

48 Facilities Management

With so many sub-categories, the FM sector offers a myriad of opportunities and challenges

24 Natural progression

Errebian: Striving to stay ahead of the curve in Italy

30 Category Facilitator As FM becomes more important in OP circles, UK-based Robinson Young is seeing the benefits

33 Learning the FM lesson

36 Paperworld Middle East Preview

Regulars 5 Editor’s comment 53 5 minutes with... Fabio Vitali

54 Final word

Kenny Sayes gives some useful FM success tips

Chris Whiting

“Spicers has a great deal of market share to win back through better support of its dealer partners. Therefore, its growth will outstrip OfficeTeam’s even with acquisitions. Working with dealers, helping them grow their business – that’s the key priority.”... For the full story, turn to page 20

This month’s cover is supplied by Pilot

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

Features & Production Editor Heike Dieckmann

Editor’s comment

+44 (0)20 7841 2950 heike.dieckmann@opi.net

News Editor Michelle Sturman +44 (0)20 7841 2942 michelle.sturman@opi.net

Sales and Marketing VP – Continental Europe, Middle East and Africa Ewan Dickson +44 (0)20 7841 2954 ewan.dickson@opi.net

VP – North America and UK Chris Turness +44 (0)20 7841 2953 chris.turness@opi.net

Director of Growth Services Jeremy Hughes +44 (0)7807 810617 jeremy.hughes@opi.net

Digital Manager India Pride +44 (0)20 7841 2959 india.pride@opi.net

Events Events Manager Lisa Haywood +44 (0)20 7841 2945 lisa.haywood@opi.net

Production and Finance Operations Manager Nicky Coulson Designer Charlotte Gerhardt +44 (0)20 7841 2943 charlotte.gerhardt@opi.net

Production Assistant Jack Francis +44 (0)20 7841 2950 jack.francis@opi.net

Accountant Dotun Olaniyan +44 (0)20 7841 2956 dotun.olaniyan@opi.net

Publishers CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net

Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net OPI is printed in the UK by

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

Going beyond OP Welcome to this Facilities Management (FM) special of OPI magazine which features expanded content on the increasingly important FM category. These types of specials are going to be a regular occurrence for us going forward as traditional OP resellers come under growing pressure to expand into other product areas – look out for more specials on Education (March), Breakroom (May), Furniture (July) and Jan/san (September) in 2015, as well as our regular supplements on Technology Solutions and Green Thinking. We’ve also tweaked the magazine layout this month as we – like many publishers – look to find the right balance between printed and “Adding the print and online online content. So, for Big Interview versions together, example, while this there is actually about 40% month’s Big Interview more content than before” (see page 14) may appear shorter than usual, there is a whole lot more available online on opi.net in our Big Interview Xtra – in fact, adding the print and online Big Interview versions together, there is actually about 40% more content than before. We’ll also be putting other exclusive content online, so don’t forget to make sure that your Digital or Premium OPI membership is up to date. Digital and Premium membership also gives you access to our revamped app – see www.opi. net/app – which provides smartphone and tablet users with another convenient way to access OPI content. It’s certainly been an ‘interesting’ past 12 months for our industry, no doubt about that, and all signs point to further rapid change and consolidation in 2015. Until then, I wish all of our readers a very happy end to 2014. Andy Braithwaite, Editor

Office Products International Ltd (OPI), 2nd Floor, 112 Clerkenwell Road, London, EC1M 5SA Tel: +44 (0)20 7841 2950 Fax: +44 (0)20 7841 2951

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News from opi.net Staples launches online supplier platform

Staples has launched Staples Exchange, a unified platform that enables suppliers to sell through all of its e-commerce channels. Staples Exchange is a single portal with multiple integration options enabling vendors to enrol with Staples sites such as Staples.com. In 2015, the portal will be rolled out for Staples Advantage, Staples Canada and Quill.com. Staples EVP of Global E-Commerce Faisal Masud told OPI that Exchange is open to both existing and new potential vendors. However, all potential vendors will be carefully vetted by Staples to ensure that only the most relevant products are offered to customers. Staples said Exchange would benefit customers by providing a larger product assortment, post-shipment order tracking and greater visibility into product inventory. Delivery of goods will continue to be a mix of direct shipping from Staples and from its third-party partners. “Staples is continually expanding its assortment through a curated selection, versus an open marketplace platform, and the Exchange platform will grow in importance as we keep increasing the number of items available on Staples.com,” said Masud.

Large Resellers 6

OPI Magazine | December 2014/January 2015

Large Resellers

New Amazon portal tackles B2B market In its latest bid to capture market share in the B2B market, Amazon recently launched Amazon for Business, an improved version of Amazon Supply. Amazon is promoting a varied portfolio, including office products, IT, MRO, food and beverage categories, on the For Business homepage that puts it in direct competition with OP dealers. Eamon Kelly, Research Associate/Partner at Cleveland Research told OPI that while he believes the launch of Amazon for Business could have a major impact in the long term, currently it should not be viewed as a significant threat to OP dealers. “Clearly Amazon is targeting the SMB customer of large resellers such as Staples, but it seems there are crucial elements currently unavailable to B2B customers such as order quantity discounts and unique pricing. Another big obstacle for Amazon is the lack of ability to compete with same-day deliveries,” he added. What Amazon has achieved, however, is more functionality and capabilities in Amazon for Business that will appeal to SMBs and gives the online giant its most compelling B2B offering to date. “Eventually, we believe Amazon Supply and For Business will merge once the fulfilment network is at the stage where Amazon can efficiently and cost-productively offer same/next-day delivery through its own distribution network,” noted Kelly.

Dealer Groups

Soennecken goes direct German dealer group Soennecken is now legally entitled to sell directly to B2C and B2B end consumers. In a recent extraordinary general meeting, held specifically with this planned change in the cooperative’s bylaws in mind, a resounding 84% of voting members gave their agreement to Soennecken’s proposition. Only 75% of ‘yes’ votes were needed to bring about this change. Chairman Dr Benedikt Erdmann was predictably relieved about the positive end of the process that began with talks at its 2013 AGM. He commented: “We now have the mandate to start

definite plans and preparations. We will think very carefully about the markets where a direct approach makes sense and how we approach this. What’s important is that we will continue to support our members in every way we can and we thank all our shareholding dealers, irrespective of which way they voted.” Specific plans as to how the direct sales arm of Soennecken will evolve and function are not available just yet, but the group is certainly hoping for new streams of revenue – especially from the online channel – as well as better market know-how, the latter of which it says it will pass on to its dealer members. Read more on this ‘hot topic’ in the German OP industry in the February issue of OPI.

Dealer group consolidation in Sweden As of 1 January 2015, dealer group NioFem will become part of independent dealer retail chain RKV, creating Sweden’s largest office supply dealer group. The addition of NioFem, which has ten members in 12 locations with revenues of around H25 million ($31 million), will boost Nordic Office Alliance member RKV to a H135 million group with 57 stores, 24 members and more than 600 employees. Michael Alfinson, Purchasing Director at RKV, told OPI that with bigger volumes, a larger share of the Swedish market and almost 60 outlets in the country, the group will remain focused on local service but also look to pitch for bigger tenders. “It also means we can provide better support and service than multinational large resellers. At the same time, we know this will be difficult, but in the future it will not just be a question of price,” he added.

Avery UK looks to adjacent markets for expansion At the beginning of November, Avery UK – a subsidiary of CCL Industries – announced it had acquired private UK company Label Connections. Under the Avery UK umbrella, Label Connections – which designs, manufactures and markets a range of pre-die cut pressure-sensitive labels in sheet form under the PCL brand – will remain trading under its own name using the PCL brand. Company directors Lesley and David Turner will continue to run the business reporting to Avery UK Managing Director Mark Cooper. Speaking to OPI, Cooper said that Avery UK was attracted to Label Connections as it had placed itself in a unique position within the professional printing market and offered a route to market within a segment that Avery didn’t have, such as direct access to the commercial printing industry. “We are increasingly looking at printing in the digital space and will be looking to build Label Connections and the PCL brand in the UK and expand into European markets and beyond,” he noted. According to Cooper, Avery UK is looking at adjacent markets and expects to be a lot more proactive under CCL in terms of acquisitions.

Mergers & Aquisitions

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News n Round-up

Mergers & Aquisitions

News n Analysis

Stock market cheer for big boxes Office Depot and Staples see significant share price rises after third quarter results

Wall

Street reacted positively to the third quarter results of the two largest global office resellers in November, sending both firms’ share prices soaring by around 30% following their respective earnings releases. Looking at the results a bit more closely though, and it is apparent that the reasons for these increases are by no means the same. Office Depot was the first to report its results at the beginning of November and – not for the first time this year – it beat earnings

to shrink, so finding life beyond office products will be important for Office Depot,” said Jefferies analyst Dan Binder in a client note. Depot CEO Roland Smith gave a bit more insight into how the company plans to eventually start growing again. He provided an update on Depot’s USP, but largely reiterated what he had said on the previous conference call about going after two specific

“Synergies buy time but won’t be sticky if the business continues to shrink” expectations and raised its outlook. This is what Janney analyst David Strasser calls a “beat and raise” trend, with Depot setting relatively conservative earnings goals only to come in ahead of those in its next quarterly results.

customer segments, with the aim of adding an extra $1 billion in sales. What was new was reference to serving these target segments via

e-commerce, an improved retail experience and a focus on small business customers that are part of these segments. It was revealed that a “store of the future” concept is expected to be unveiled in August or September next year. Smith also stressed that this USP will only be part of Depot’s growth strategy. He said that future growth would include moving into adjacent markets such as education, jan/san and print (hardly anything new there and mirroring what Staples and others have been doing for some time), and “exploring new business models”. What he meant by this last idea wasn’t specified, but he said that it could include “building, buying or

Office Depot and Staples Q3 side by side

Beating estimates The company’s new adjusted operating profit forecast for FY 2014 of $255-$265 million is some $40 million higher than previous market estimates, while next year’s guidance of $475 million is about 50% ahead of what the Street had been expecting. Depot also raised its expected total global cost savings forecast to $840 million by the end of 2016, up from the previous figure of $700 million, although this does now include the $90 million in savings that are expected from the recently announced European restructuring programme. Whether it is a deliberate ploy or not, one outcome of consistently beating quarterly earnings expectations has been to buy Depot time on Wall Street in terms of the need to start producing top-line growth. “Synergies buy time but won’t be sticky if the business continues

North American Retail • Sales: $1.72 billion (-7%) • Same-store sales: -3% • Operating profit: $79 million (+132%) • Operating margin: 4.6% (vs 1.9% in Q3 2013) North American Business Solutions Division • Sales: $1.52 billion (-1%) • Operating profit: $67 million (+34%) • Operating margin: 4.4% (vs 3.3% in Q3 2013) International • Sales: $797 million (-4%) • Operating profit: $10 million (+43%) • Operating margin: 1.3% (vs 0.8% in Q3 2013)

OPI Magazine | December 2014/January 2015

North American Stores & Online • Sales: $2.83 billion (-5.9%) • Same-store sales: -4% • Staples.com sales: +9.7% • Operating profit: $218 million (-23.5%) • Operating margin: 7.7% (vs 9.5% in Q3 2013) North American Commercial • Sales: $2.2 billion (+3.7%) • Operating profit: $159 million (flat) • Operating margin: 7.4% (vs 7.6% in Q3 2013) International • Sales: $970 million (-1%) • Operating profit: $6 million (+200%) • Operating margin: 0.6% (vs 0.2% in Q3 2013)

More on Depot’s European restructuring

Omnichannel success While challenges still remain at retail – where Staples has accelerated the number of store closings in 2014 from 140 to 170 – sales from the Staples.com website were up almost 10% year on year, partially due to omnichannel initiatives such as order online, pick up in-store – which now represents almost 10% of internet orders in the US – and in-store kiosks.

CEO Roland Smith provided more details of Depot’s growth strategy Staples played down the impact of customer acquisitions – although it said this was “strong” – instead focusing on its strategy of increasing share of wallet with customers in categories beyond office supplies and its new team-based selling

Non-core categories now represent about 40% of the NAC sales mix Other retail initiatives include trialling a store-in-store concept with Samsung, a similar project in the office furniture category and an expanded relationship with the US Postal Service in more than 500 stores. However, the highlight of Staples’ third quarter results was arguably the 4% increase in sales at its North American Commercial (NAC) division, which included growth of 5% in sales to contract customers.

model which has seen the addition of hundreds of category specialists over the past year. Sales of facilities and breakroom products at NAC saw top-line growth of more than 20% in the third quarter. Staples also reported double-digit growth in furniture, print, promotional items and technology products. These non-core categories now represent about 40% of the NAC sales mix.

In last month’s OPI (see News Analysis, page 14), we reported on Office Depot’s European restructuring programme. Since then, more details of specific actions have been revealed. These include: • the consolidation of two distribution centres in Germany, resulting in the closure of the Lanken warehouse near Hamburg • the closure of a Viking call centre in Nîmes, France, and the transfer of call centre operations to a third-party firm in Morocco • the closure of a warehouse in France Other changes, already underway before the latest restructuring plans were announced, include: • the restructuring of the Viking customer service and inside sales operations in the Benelux DACH (Germany, Austria and Switzerland) region, with the migration of functions to Depot’s own shared service centre in Romania and to a contact centre run by BPO firm C3 in Bulgaria • consolidation of facilities in the UK, including the closure in December of the warehouse and customer service operations in Northampton There was even some cheer for traditional products with stable sales of office supplies, ink, toner and paper, although CEO Ron Sargent confirmed he expected to see low single-digit declines to continue in paper-based office products.

Work still to be done

Staples has accelerated the number of store closings in 2014

Whether these encouraging third quarter results from Staples will translate into overall company growth in the short term remains to be seen. Neither Sargent nor North American Stores & Online President Demos Parneros would be drawn on that question, but the company appears to be heading in the right direction. For Office Depot, it is likely to be able to keep Wall Street happy for the next 12 months thanks to synergies and cost savings, and it has already said that it expects sales to keep falling next year. Then it will have to face up to the challenge of growing the top line. w w w.opi.net | OPI Magazine

News n Analysis

partnering” strategies depending on the opportunity. Later on in the call, CFO Steve Hare added that while acquisitions weren’t part of the current plan, funds are certainly available if required. While Staples has also been benefitting from cost reductions – with $200 million achieved so far this financial year as part of its $500 million annualised savings plan – its third quarter results were met with a degree of optimism as evidence appeared of positive results from its reinvention strategy.

Comment

$1 trillion

On OPI’s LinkedIn Networking Group page, CEO Steve Hilleard asked what UK dealers thought of OfficeTeam buying Buro Business Supplies. Below are a few of the comments.

The amount the global mobile payments industry will be worth by 2017

Bruce Davie, Group Commercial Director, ZenOffice I would be interested [to hear] whether this was a ‘distressed purchase’ to avoid a potential bad debt or whether it was part of a strategic plan. Regardless of which side of the wholesale market you sit on, resellers will be waiting to see whether SPOT or EVO put the needs of the independent first or whether building their own direct channel will take priority.

217,350

Richard Ingram, Finance Director, Buro Business Supplies Business supplies is a declining market and markets in decline consolidate to maintain profitability. There have been acquisitive companies in business supplies for years and the market is now genuinely consolidating. That is quite different. Our company, first Netstationers, then Office Canopy Group, now Buro, has a history of moving first and others have copied. Alex Bolwell, Business Builder, Project Manager and Marketeer I foresee more regional-based acquisitions from SPOT and EVO. I can also see bigger dealers looking around for smaller dealers to ensure they have the competitive edge and more market share.

News ■ And finally...

TWEET CHAT

@atxop Some people think paper is not dangerous. Okay, the paper itself isn’t, but watch out for that gravity. @Quillcom Singing the ABCs is correct length of time to wash your hands. True or False?

Number of 3D printer shipments expected in 2015

@XPDTelesales Stationery is not a boring industry, it can be dangerous... Each year ballpoint pens kill about 100 people.

26%

Percentage of UK workers that would work in a local coffee shop if offered flexible working

SNAP SHOT

Jeff Whiteway, CEO, SPOT Group OfficeTeam has historically been an acquirer of businesses: Buro is our 39th. Consolidation will happen in the market and, just as we had been in contact with Buro for over six years, other long-standing relationships will potentially lead to further deals. OfficeTeam has been seen as an exit for numerous dealers and I suspect our return to this strategy will be seen as a benefit to a dealer that seeks to leave the industry in the future or finds the ever-evolving market more appealing under the umbrella of a larger group. Simon Rogers, Group Operations Director, UOE The supply chain has too much duplicated cost within it, leading to inefficiencies and weaknesses especially in the area of e-commerce, which leaves resellers and wholesalers vulnerable to new entrants. Consolidation, if managed correctly, will lead to a better and stronger channel, which has to be good for both parties. Graeme Hargreaves, Commercial Director, Superstat Aggregating dealer business through common ownership is but one option. There are other cooperative methods established for independent-minded dealers to achieve benefit for all in the chain – the evolution of groups to manage more dealer services being an example of this. Both will have their place moving forward. For an in-depth look at the SPOT Group and Spicers in particular, turn to our Hot Topic on page 20.

Don’t forget to take part in the discussions on the OPI LinkedIn page

Will 2015 be the year that 3D printing goes mainstream in the OP channel? It certainly could be given the enthusiastic reception to Environmental Business Products’ ST3Di range of 3D printers and supplies on display at the ADVEO World Germany show in Munich at the beginning of December. Read more about the ADVEO World event in the February issue of OPI.

opi.net poll results Resellers...what is your biggest challenge selling FM products?

38%

Having sufficient product knowledge Sourcing the right products at the right price Connecting with the customer’s FM buyer

19%

12%

Credibility in this product segment

31%

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Big Interview | Andrey Kudryashev

Get ready to rouble

Russian reseller Pragmatic is bracing itself for another challenging period as the value of the country’s currency continues to slide

by Andy Braithwaite andy.braithwaite@opi.net

FINANCIAL

crises are nothing new for Russian entrepreneurs – think back to the debt crises of 1998 and 2008 – and it looks like another tough time ahead for the country’s economy as falling oil prices and sanctions imposed due to the conflict in Ukraine have led to a 40% drop in the value of the rouble to the dollar towards the end of 2014. Despite this less-than-rosy economic outlook, Andrey Kudryashev, co-owner and Development Director of Moscow-based Pragmatic – Staples’ strategic partner in Russia and a former Reseller of the Year winner at the European Office Products Awards – is refusing to get drawn into a price war, instead focusing on the added value that the firm’s business model can offer to its customers. OPI: Firstly, how did you get into the stationery/office products business? Andrey Kudryashev: In 1998, the financial crisis in Russia caused an unemployment wave to sweep through the country and I lost my job at a foreign technology company. The same year, on an MBA course, I became acquainted with my future business partner Mikhail Kravtsov. At the time he already had his business – he was the owner of the Pragmatic company which was distributing Fellowes and Atlanta products in Russia, and he invited me to develop the business. OPI: Can you provide a brief overview of Pragmatic and its development? AK: As far back as 1998, through talking to our suppliers, we were aware of the main

OPI Magazine | December 2014/January 2015

channels of sales for their goods in Europe and the US. We understood that in developed markets, apart from superstore networks and dealers, there was another interesting channel called contract stationery. In Russia at the time there was nothing similar in a pure form. There were resellers of stationery through shops; there were even companies that published product catalogues, but there weren’t any companies that built relationships with customers like a partner, on a long-term and mutually advantageous basis. We liked the idea and formulated its key points for ourselves: the need to sell, not through price lists, but through a catalogue, with an optimal range, attractive presentation of products and a good price offering. Furthermore, it was necessary to focus on the availability of products. After all, if a customer chose a picture in a catalogue, they had to receive exactly that item; and not in a day or week, but the next day. So we needed to have products already available at the time of order. All this was designed to develop a feeling of reliability, comfort and convenience from working with us – in other words, a feeling of a fully-fledged partnership. The next important point was specialisation. All resellers at the time worked on the principle of a universal seller, and by this I mean a personal account manager who totally served a customer: took orders, controlled shipments, answered all questions, etc. We went in a different direction. Personal account managers are still necessary, we said, but they have to concentrate on a global contact with a customer – on prospection, agreement of terms and conditions, the maintenance and development of relations – while technical matters have to be referred to a specialised department where individual competences can lead to more efficiency. Account managers can’t always be reached by phone, they can get sick, they might be

“[In] the economic crisis of 2008 […] we experienced a sales decline of about 30%”

Pragmatic | Big Interview dealing with another customer and, after all, managers can have so many customers that in practice they can’t phone around or visit all of them. Therefore we created the customer service department which undertook the operational relationship with a customer. The second important function of this department was to challenge the customer service stereotype which existed in the market at that time – that is, the larger a customer, the more attention is paid to it by the manager and, conversely, if a customer is small it might receive no attention at all. Irrespective of customer size, we decided to give them all equal levels of service in terms of quality. Such technological effectiveness of work processes together with the qualitative product proposal in the form of a catalogue were big differentiating factors which provided us with the opportunity to grow considerably. By 2005 we had already become the number two player in the Moscow market and today we maintain this position within the corporate services segment. OPI: In the past, we had news stories about the tremendous sales growth at Pragmatic – have you been able to maintain this growth? AK: The continuous growth of the company was halted by the economic crisis of 2008 and we experienced a sales decline of about 30%. But, just as in 1998, 2008 didn’t become a hindrance for

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Big Interview | Andrey Kudryashev our business and we continued to develop further. The annual turnover of the company in 2013 was RUB2.2 billion ($41 million), and in 2014 we expect to grow revenues to about RUB2.5 billion. OPI: How many employees do you have? AK: Pragmatic has more than 500 employees. OPI: How many sales reps do you have? AK: About 150, if we speak about those who work directly with end customers. All sales representatives are company staff members. OPI: How difficult is it to find, train and retain talented sales people? AK: It has always been difficult to find a really talented sales person and the situation hasn’t changed. The only thing that has changed over the past ten years is the cost of such employees for the company: it has multiplied several times over. OPI: Where are your headquarters and other locations? AK: The headquarters are in Moscow, from where all business process management is performed. Since 2006 we have also operated an office in St Petersburg. OPI: What is the ownership of Pragmatic and how has this changed over the years? AK: During the development of our company the ownership structure has not changed. It is owned by me and my partner Mikhail Kravtsov. OPI: How is your customer base split between large corporations, small and medium businesses, government customers, etc? AK: Today, large corporations make up 60% of our sales, which is a change from previous years when their share didn’t exceed 50%. But that is more to do with our own deficiencies in the SMB segment, which is something we are actively working on correcting. OPI: What have you been doing wrong in the SMB segment? AK: The main issue is the cost of working with such customers. As I already said, the cost of employing sales reps has increased dramatically, but we have not seen a proportional increase in labour productivity. Until now we have not found satisfactory solutions to this issue and we continue to work on it. OPI: How has the Russian OP/stationery market evolved over the past few years?

OPI Magazine | December 2014/January 2015

AK: Before the crisis of 2008 the market was growing very well. After 2008, consumer spending began to recover, but nevertheless couldn’t return completely to pre-crisis levels. There was a very large number of private labels, players like Metro appeared that started to have some impact and their presence became noticeable. Generally speaking, in Moscow there were not many fundamental changes; the main changes happened in the regions, where large federal wholesalers sprung up and began to take a dominant lead within the wholesale channel. OPI: Who do you view as your main competitors and what do you believe sets you apart from them? AK: There are many players in the Russian market today, but, frankly speaking, none of them are major competitors for us. Our main competitor at the moment is an inability on the part of customers to properly understand and put a value on their own costs. After all, the bulk of our potential customers are guided by the price of each specific product, but we offer a different approach: to value, not the actual price of a product, but the total cost of ownership of this product, taking into consideration logistics, accounting expenses and other hidden costs. As an example I would like to cite our contract with Sberbank of Russia, the largest financial institution in the country. At the time of the contract tender, our pricing proposal was 10% higher than that of our immediate competitor. However, when we began our collaboration and introduced all the services into the customer’s business (and this is thousands of offices), just on direct costs we managed to save the customer 40% of the annual contract

“The cost of employing sales reps has increased dramatically, but we have not seen a proportional increase in labour productivity”

Big Interview | Andrey Kudryashev amount (tens of millions of roubles) by unifying the product range. In addition, we decreased indirect costs by centralising deliveries and eliminating its warehouse buffer stock from three months’ stock to just one day’s – this saving alone was estimated by the customer to be another 30% of the annual contract cost! The same year, we won a Sberbank innovation award where the main assessment criterion was the achievement of maximum monetary efficiency in a project. In Sberbank’s case, we managed to explain our model and approach; however, in the mass market – where the customer is focused solely on the product price – that is by no means the case. However, we do have some cause for optimism. After all, in the present economic climate customers will increasingly ask themselves how they can spend less; but it might be more logical to do the contrary – more expensive and better quality products actually last longer and cost less in the longer term. So we have to educate customers on how they look at making savings. OPI: How has the market been affected by the crisis in Ukraine and sanctions against Russia? AK: The situation in Ukraine is a human tragedy and it is awful. If we look at how these events and the sanctions imposed against Russia have affected, or rather will affect, the office products market, some of the consequences have been the fall in the value of the rouble, changes in oil prices and a general decrease in business activity. That said, I think that the real impact of all these issues is still ahead of us. OPI: What concerns do you have about the Russian economy over the next 12-24 months? AK: The main problem is obvious: the decline in the rouble exchange rate against the US dollar. We already experienced it in 2008 and we know what to expect. It will lead to a decrease in customers’ purchasing power – they will concentrate only on essential products and there will be a move towards private label products and low-priced items. OPI: I assume most of your products are imported and have therefore become more expensive with the fall in the rouble. Has this meant you have had to raise your prices?

OPI Magazine | December 2014/January 2015

AK: Yes, naturally, we had to raise product prices. However, price increases are not the same as the rate of change of the rouble exchange rate – this is connected with a long logistics chain. Besides, we have customers with long-term contracts where prices are fixed, especially with the international customers through our Staples partnership. Here we are compelled to look for some compromise solutions. OPI: As you mention, you are Staples’ global contracts partner for the Russian market. What does this do in terms of your reputation in the market? AK: Staples isn’t such a well-known brand in the Russian market that it can seriously influence our work with local customers. However, with global customers our partnership undoubtedly works to our advantage: there are customers that we simply wouldn’t work with without the partnership with Staples. But where our partnership plays the biggest role, of course, is with suppliers. For them, our cooperation with Staples is the guarantor of the reliability and seriousness of our company. OPI: What have you been able to learn from Staples during this time? AK: For us, Staples is a global corporation which has extensive and unique experience. We consider it a source of knowledge and practical experience which, as far as possible, we try to emulate ourselves. It is difficult to pick out one particular thing as being the most significant in our partnership, but without a doubt, the fact that we have this cooperation with Staples is very important for us. OPI: When does this agreement with Staples expire? And do you expect to renew it? AK: From our point of view the partnership is developing successfully and we expect that it will continue for the mutual benefit of both parties. OPI: Where do you see yourself in five years’ time? AK: Of course, in the same business. I am sure we will overcome all of today’s challenges and continue to have a major impact on the market, taking a significant position on it.

Big Interview

Xtra

Read more from Andrey Kudryashev on opi.net, where he talks about subjects such as the Russian wholesaling market, product categories and private label. EXCLUSIVE content for OPI digital and premium members.

www.opi.net/AndreyKudryashevBI

Hot Topic | SPOT

In the limelight:

SPOT

Once the largest OP wholesaler in the UK, Spicers comes under the SPOTlight, as the ramifications – good and bad – of its new ownership structure are slowly beginning to shake out

by Heike Dieckmann heike.dieckmann@opi.net

ANYTHING

written about the situation surrounding the UK’s two main OP wholesalers might be redundant or downright wrong before the ink on the paper is dry. But it’s been months since the lives and fortunes of some of the UK industry’s players – from smallest dealers to large contract stationers, vendor partners to any of the wholesale operators – were turned upside down when the EVO and SPOT groups were created last July. And despite the fact that EVO didn’t become an approved entity until the end of October and that there continues to be a steady stream of news trickling through – earlier this month in the form of Spicers CEO Greg Michael departing after a very short tenure (see ‘The short goodbye’) – there are already plenty of questions asked, concerns voiced and issues raised. To address these, OPI has carried out a straw poll among a range of UK resellers and vendors in order to gauge reaction to the effect the creation of these two mighty groups will have on the industry and its specific players.

In this article, the focus is on the SPOT Group, the newly combined entity that came out of Spicers and OfficeTeam and that, from the outset, has raised more question marks than its counterpart EVO, not least due to the service issues that Spicers dealers have endured for many months now, resulting in a wholesale business that could still not be described – despite recent improvements – as up to scratch. In the first interim report published by SPOT owner Better Capital at the end of November, the venture capitalist said that the new group was off to an “encouraging start”, citing the “achievement of synergies and the harmonising of back-office functions”. It also talked about “several millions” of pounds in savings already achieved and

Given competitive pressures and concerns about ongoing relationships, it is understandable that the majority of people OPI spoke to wished to remain anonymous. As such, we approached SPOT Group CEO Jeff Whiteway with the main issues that arose from the creation of SPOT, and he gave some frank and free responses to our questions.

Question time OPI: Better Capital has been talking about these several million pounds of savings generated already – where do they come from? There’s been much debate about the level of staff layoffs at Spicers recently and the effect this has had on morale. Is that how some of these savings have been generated? Jeff Whiteway: There have indeed been several millions of pounds of savings achieved. There was considerable inefficiency within Spicers due to poor service levels. Expensive double and treble deliveries were all too common.

“OfficeTeam has already walked away from business due to being part of SPOT” “substantially more” expected in the next financial year. Harmony and encouragement are not words that ring particularly true when asking the aforementioned peers about their perception of SPOT or indeed the future of one of their industry’s main wholesalers.

OPI Magazine | December 2014/January 2015

Spicers also employed hundreds of temporary workers and expensive interim management while going through its troubles. As we have normalised the business, these costs have been removed. What is key is that we’ve refocused Spicers on its core business –

SPOT | Hot Topic wholesale – and we have maintained the sales force in this area. But we have also achieved savings through the removal of non-core activities, such as a direct sales team (MemoEtc) that were not aligned with support for dealers. On the issue of staff morale, working for a company that had serious cash issues and provided poor levels of service understandably and justifiably generated complaints from frustrated dealers and as such was not a great place to work. As recovery kicks in and we improve communication, this can only help make Spicers a much better place to work.

perception. Having spoken to numerous dealers, service levels have improved dramatically, though I still expect better in the future, especially from the Greenwich RDC. The inventory team has been strengthened – we have employed new permanent staff in inventory as this is such a key area for Spicers and replaced an interim manager with a highly-experienced Inventory Director – and with cash to spend on stock [the recent Better Capital £10 million/$16 million cash injection], availability has built nicely over the past few weeks and will continue to do so in the coming weeks.

OPI: What are service levels like at Spicers at the moment? JW: Our internal matrix is showing significant improvement, but the key measurement for me is customer

OPI: There remains concern about the ‘conflict of interest’ between OfficeTeam and Spicers dealers. That might not be a problem for every dealer, but

The short goodbye Regarded as something of a fix-it – not to mention a Jon Moulton (founder and Managing Partner of Better Capital) – man, Greg Michael’s tenure as Spicers CEO was short, if perhaps not sweet. And his departure comes as little surprise. Having taken on the role at the beginning of June 2014 after Alan Ball hung up his Spicers boots in an enforced hurry, Michael’s long-term staying power was always questionable once the wholesaler’s disastrous service issues were resolved. Greg Michael As it happened, he didn’t even last that particular distance, with the writing presumably on the wall soon after the Spicers/OfficeTeam merger. Yes, considerable improvements have been made in terms of those delivery problems, but there have been many casualties along the way, with the full fallout of dealer loyalty still to be seen. According to the official press statement, Michael will remain with Better Capital undertaking the execution of transformation plans with some of the company’s other businesses. Following the announcement made at the beginning of December, Whiteway commented: “From speculation and feedback I have received, this won’t come as a surprise to many and was an obvious and planned move, mutually agreed by all parties. It creates a similar structure to Vasanta, with a single Group CEO with group functions under focused group directors. The new line-up of the SPOT Group’s executive directors reads as follows: • • • • • •

Jeff Whiteway – Group CEO Andrew Mobbs – Group CFO Rick Jones – Group Operations Director Richard Ford – Spicers Sales Director Richard Morgan – OfficeTeam Sales Director Pippa Maynard – Group Company Secretary

Seeing this list of individuals, it’s no surprise that staff morale within the old Spicers camp had seemingly reached rock bottom. In addition to the redundancies that Whiteway alludes to in the Q&A, it’s less the case of new blood than OfficeTeam blood, with all but two of the directors having a long OfficeTeam employment history. The two remaining directors, meanwhile – Rick Jones and Richard Ford – have a total of 24 months of Spicers experience between them. Whether this OfficeTeam sweep will have the desired effect of experience, guidance and stability and appease those dealers that feel OfficeTeam is very much in the driving seat at SPOT, remains to be seen. Guidance and stability are certainly what Spicers needs: the wholesaler has gone through five different CEOs in nearly as many years – an unsettling total for even the most patient of customers.

both Spicers’ larger dealers and OfficeTeam go to some extent after the same customer segment – the mid market. How can that issue be resolved? JW: Yes, it was and to an extent still is a concern. I can only repeat that we have put guarantees of non-exchange of customer information, as well as legally-drafted non-compete clauses to Spicers supporters. OfficeTeam has already walked away from business due to being part of SPOT. But also, OfficeTeam has brought to Spicers a very different view on what good service should be and has undoubtedly accelerated the progress of the service improvements within the wholesaler. In my opinion, Spicers will be a better business as a result and will therefore be in a better position to service its dealer community. OPI: You previously said that 60% of the combined business is Spicers and only 40% OfficeTeam. Given the value of both companies and the fact that OfficeTeam is clearly interested in further acquisitions after the purchase already of Buro Business Supplies, would it be correct to assume that this ‘size’ balance is going to be tipped in OfficeTeam’s favour at some stage? JW: I don’t believe this will be the case. Spicers has a great deal of market share to win back through better support of its dealer partners. Therefore, its growth will outstrip OfficeTeam’s even with acquisitions. Working with dealers, helping them grow their business – that’s the key priority. OPI: Particularly smaller dealers are feeling sidelined (at VOW also) and not regarded as valued accounts. What’s your response to that? Realistically, does it make sense for those small dealers to get involved in the various dealer service models that the dealer groups and the likes of Euroffice offer, partly to have a louder voice with the wholesalers? JW: Dealer groups such as Superstat, XPD, Office Club, NEMO, Integra and the Office Power model do a great job w w w.opi.net | OPI Magazine

Hot Topic | SPOT for small dealers. Spicers maintains a dealer sales force that should be looking after all dealers. Clearly the attention they get will be subject to commercial constraints, as it is hard to justify a regular physical call on a dealer spending £5,000 a year. But even there, Spicers has a telesales department to provide contact. OPI: Still, there is concern among Spicers dealers – with OfficeTeam in the picture now – that they are second in the minds of the organisation that owns the SPOT Group, ie Better Capital, as the venture capitalist firm ultimately doesn’t care where the growth comes from, as long as there is growth. Is that a fair perception? JW: I don’t think so. We have removed Spicers from direct sales (at one point the wholesaler had 20 such sales people). Spicers is a strictly

Jeff Whiteway issues. VOW has picked up some of that business, but by no means all of it. Is there room for another full-line wholesaler? Exertis Gem and Beta Distribution have benefited, but are not like-for-like competitors at the moment. JW: The OP market certainly needs two strong wholesalers. Now Spicers is coming back to be an equal

“Spicers has a great deal of market share to win back through better support of its dealer partners” trade-only wholesaler and its success is dependent on helping all dealers grow – not just one large dealer. Better Capital did make mistakes in the past, but has shown its commitment to the OP industry in this significant investment in SPOT. And it’s very much hands-off given there is a team of industry experts now involved in driving the business – something that’s been lacking since the departure of Bill Armstrong. OPI: I hear that there’s a blanket cost-to-serve model being introduced to larger dealers that is proving ‘controversial’ – can you comment on that? JW: That’s wrong. Dealers have differing requirements and therefore different costs to serve. One model does not fit all. The Spicers culture is changing with much better levels of management information and control, so there is greater awareness of the cost effectiveness of the service model being adopted for each dealer. OPI: Spicers has lost a lot of business as a result of the service

competitor of VOW, I see this as a healthy market position that is unlikely to attract a new entrant as a full-line wholesaler. Competition between the two is certainly fierce and there isn’t a whole load of profit being made in the sector! The key is that both VOW and Spicers need to drive further efficiencies. OPI: There’s been no info about SPOT’s future HQ location. Where will it be and when will it happen? JW: SPOT is a holding company and doesn’t need an ‘ivory tower’ HQ. The key locations are those that service the dealer. The RDCs are based in London, Bristol, Birmingham, Manchester, Glasgow, Dublin and Belfast, with a key admin centre at Spicers’ location in Waterbeach which is being reduced in size, as it’s far too big currently.

What about EVO?

OPI: The vendor community is anxious to know what Spicers’ commitment is to brand versus private label. Are OfficeTeam and Spicers going to combine their private label volume? JW: Branded products are important to Spicers and the days of Spicers purely stocking what it wants have gone. Spicers will stock what is commercially apt and required by its dealers and their customers. There is a pleasingly strong demand for branded product so Spicers will service that need. Own brand is also important and the 5 Star brand is well positioned. However, in recent months stock availability has been truly appalling. This has been corrected with a greater depth of stock. To further aid this, OfficeTeam will move to sell 5 Star products on the slow-moving items helping strengthen the supply chain and improve availability further.

Challenges ahead Building Spicers business back up to something approaching its former glory must surely be, as Whiteway alludes to, one of the prime concerns of the SPOT senior management team and of Better Capital. How that is possible without further alienating dealers is difficult to see, especially with a management team that is so OfficeTeam-biased. Rumours abound that the wholesaler is still haemorrhaging dealers at a fast rate. That said, that is just what they are – rumours – with one major Spicers dealer, SET Office Supplies, which was expected to jump ship, indeed recently having signed up for another five years. The proof of the pudding, as they say, is in the eating, and OPI will keep you informed on further industry reaction as SPOT evolves into an investment that Better Capital will hope one day allows a profitable exit strategy.

Spicers in particular and SPOT overall might have come in for a real grilling of late, but VOW too has had its challenges. For a brief industry verdict on EVO and the opportunities and challenges that this coming together of large reseller cum contract stationer cum wholesaler brings for all involved parties and the sector at large, go to opi.net to find out more. Also look out for the March issue of OPI for an in-depth analysis of EVO.

OPI Magazine | December 2014/January 2015

Dealer Spotlight | Errebian

A natural progression by Michelle Sturman michelle.sturman@opi.net

WHEN

Benito Rese founded Errebian in 1968, little did he know that in the 21st century, the company would have over 200 employees and 450 commission-based sales people. Now run by his son Ferdinando, Errebian remains one of Italy’s major contract stationers with sales of around H120 million ($149 million) in 2013. As a carbon paper sales agent in Rome for Milan-based reseller ASITE (a Corporate Express acquisition later on), Benito decided to go it alone. Armed with the funds he required, he approached a carbon paper factory in Turin for supplies and set up a small warehouse in the capital.

Building growth The company went from strength to strength under his guidance, mostly due to his ability to spot talented sales people and impart his skills in a short amount of time. Benito is a legend within Errebian; one story that is repeatedly told around the water cooler is that he was the first sales person to be chauffeur-driven to see clients – so he didn’t have to waste time finding a parking space. It is this drive and ambition that saw Errebian make its mark in the 1970s and become one of the largest public sector office product suppliers during a time when money was available in abundance. Public sector business was the cash cow for Errebian and saw the reseller grow rapidly reaching a peak of 600 sales people. This continued up until a major shift in the 1990s when public sector budgets were slashed and the tender process became increasingly tangled in red tape. “Although it helps to be based in Rome and we still do public sector business today, it now only represents 25-30% of our total

OPI Magazine | December 2014/January 2015

Errebian, one of Italy’s largest contract stationers, is striving to keep ahead of market trends and is arming its sales force with ever-evolving tools

Donato Colucci business,” says Errebian Business Unit Manager for Office Products, Donato Colucci. Sensing the impending change, Errebian began pursuing private sector business in earnest, which saw the company’s product catalogue increase dramatically as customer demands for new products grew. The company has always tried to be progressive, anticipate market needs and keep up Benito’s pioneering spirit, says Colucci. Even back in the 1990s, for example, Errebian was environmentally aware, printing catalogues on recycled paper: “It was very grey,” admits Colucci. Today, the company embraces eco-friendly sustainable development practices within its own business and offers a range of environmentally friendly products and services along with a ‘green’ catalogue. “Among the commitments we’ve made from a commercial point of view, we work with suppliers that are looking for and produce products and services with minimal environmental impact,” says Colucci. The office supplies business unit (including toner and ink consumables) is still the mainstay of the reseller’s business, making up 80% – H90 million ($112 million ) – in 2013 of all of Errebian’s sales although this figure has declined over the past few years. Not because

“Consumption is also changing from contract stationery to other channels, so there is a misconception that there is less paper being used”

Errebian | Dealer Spotlight Errebian Fact Box: Founded: 1968 Owner: Ferdinando Rese (son of founder Benito Rese) Annual sales: €120 million ($149 million) Employees: 200 plus 450 commission-based sales people Business model: B2B Geographical coverage: Italy

the demand for supplies is diminishing or Italy is suffering from the ‘paperless office syndrome’, explains Colucci, but simply because clients have less money to spend. “Consumption is also changing from contract stationery to other channels, so there is a misconception that there is less paper being used,” he adds. Over the past seven years, Errebian’s product portfolio has grown to over 18,000 SKUs, 50% of which are stocked in a warehouse in Rome with the rest drop-shipped to customers across Italy.

Branching out This growth was spurred on when the company seized a gap in the market for non-core office products. Errebian had always provided clients with customised items such as office chairs upon request, but did not actively chase that chunk of business as it “simply didn’t know how to”, says Colucci. As a consequence, business units were created and substantial investment made into each one, including a dedicated project manager and purchasing manager. Today, this side of the business consists of four business units: promotional items, furniture, safety, and hardware and software (including MPS). Colucci explains that, as the growth of these divisions has been organic, it has taken time, but the upshot is that the company now possesses the skills required to deal with any client request. “Each business unit works as a company in its own right while exploiting group synergies. This gives us enough flexibility to tackle sales opportunities and reach specialisation faster.” Errebian’s jan/san, safety and office products divisions are purely transactional businesses, whereas hardware and software

and furniture have evolved into consultancy and services. To be able to compete against office furniture specialists, Errebian now employs its own designer and the company opened a furniture showroom at its Rome headquarters in 2012. In an extension to the furniture display, Errebian now also offers suppliers the chance to exhibit office products in the showroom. Providing clients with the ability to showcase products is at the heart of this sales-based organisation. In 2000, the reseller launched its e-commerce platform ClickUfficio which initially was a separate division experimenting with digital transactions. In 2012, it was boosted by a new platform and is now an important part of the company’s constant and evolving development. The ClickUfficio site offers a wider range of products than Errebian with over 20,000 SKUs and covers the SOHO market, which the sales force does not. Colucci states that the platform is a great learning boot camp and also forces the reseller to keep pace with new technologies. A priority for Errebian is providing its sales force with tools designed to make not only their time and effort worthwhile, but also their customers’. The reseller launched a mobile app last year which has now been expanded into a full CRM system. The mobile app enables sales people to enter enquiries which are then fed to the back office in real time if necessary. “Timing is becoming ever more crucial and makes a huge difference to a sales person out in the field, so we are making sure the correct person is able to deal quickly and efficiently with an enquiry,” says Colucci. Moving forward, Errebian’s plan is to complete the ‘rebound’ process, becoming leaner and more efficient as margin contraction means less commission for sales people. “Our job is to find a way to make their time with the customer worthwhile,” says Colucci.

w w w.opi.net | OPI Magazine

Vendor Focus | Pilot

Unified, unique &

happy

At the forefront of everything Pilot does is its end userfacing approach, coupled with market-specific unique yet harmonised communications

Starting

in France back in 1993 when its very first television commercial was aired, writing instruments manufacturer Pilot Corporation has been very active across Europe in building its brand image directly in Ken Schoellhammer the hearts and minds of end users. After over 20 years, 2014 marked a renewed drive to pursue and amplify this strategic direction, in an increasingly harmonised way and on an ever-wider geographical European scope. Pilot is one the biggest marketing spenders in the industry and its investments reflect the brand’s passion and desire to make its products’ appeal directly to end users, both in the B2B and B2C market. OPI spoke to Ken Schoellhammer, Brand Manager at Pilot Corporation of Europe, to find out more about what the Pilot brand really stands for. OPI: Pilot has always been an advocate of big marketing and communication campaigns. Can you tell me a bit more? Ken Schoellhammer: Sure. In Europe, we have been very active in terms of communication aimed directly at end users for a long time. I guess we are so passionate about our products that we feel the urge to pass that on to everyone! I travel a lot across Europe to visit our subsidiaries and distributors, and I’m always amazed and delighted to see the enthusiasm everywhere. During the latest back-to-school season alone, we have been on TV in nearly ten countries – including our biggest markets of Germany, France, Italy and Spain, for example

OPI Magazine | December 2014/January 2015

– and been rolling out integrated ATL [above the line] and BTL [below the line] campaigns that directly addressed school children and their parents. These have had a tremendous effect on sales. Of course, with different markets come different trends and needs, but there should always be one Pilot brand. United we are stronger and unified when communicating across Europe, as well as more impactful in building our brand equity and image. I am totally confident that a unified brand is achievable, even on a continent with widely and wildly differing cultures. And handwriting is no exception. As Brand Manager for Europe, I work closely with all our subsidiaries and distributors so that the Pilot brand is conveyed in a unified, yet different, way each time. The TV commercial that we produced this year for the Pilot FriXion family of products, for example, was created in 13 different languages. So based on one core message, each country came up with various activities around that marketing campaign, enhancing its effects. I always keep a close eye on what’s happening locally, because you can learn so much from doing that. A great local initiative can directly inspire and lead to a pan-European campaign. Take the Scriber, for instance, a smartphone app developed by Pilot Pen France to make fun and colourful visual statements and share them. Collaborative exchanges – that’s exactly what we are trying to promote and what is at the heart of our regional headquarters’ mission: defining the overall framework, attractive and flexible enough for each countries to adapt and build on. Next we can learn from all these countries’ best practices, rethink and spread the message again.

Mark Knibbs, Sales & Marketing Director, Pilot Pen UK In a flat and declining market, Pilot Pen UK (PPUK) has continued to see market share and volume gains. This we attribute in no small part to the fully-integrated consumer-focused media campaign deployed across multiple channels and media formats, including a significant investment in social media over the year. Further recognition of this came when PPUK was recognised by the industry at the recent BOSS Awards 2014 as the winner of the Supplier Marketing Excellence category. We also received a Merit Award recognition for New initiative of the Year for #happywriting.

Pilot | Vendor Focus I’ve always felt something was missing in the good old ‘Think global, act local’ cliché with its top-down manner. What I think it should be is ‘Think global, act and leverage local’ in a constant back-and-forth manner. OPI: We’re seeing quite a lot about #happywriting in all of Pilot’s European communication at the moment. What’s that about? KS: #happywriting is, very simply, the way we celebrate every day the joy of handwriting. The term encapsulates our attitude as a writing instruments manufacturer. I believe all great brands need a global outlook that engage consumers beyond products; a view, so to speak, that they can share with consumers in order to become truly part of their daily lives. We celebrate handwriting at large, meaning sketching, doodling, drawing, scribbling, etc, because we believe that the pen and its ink, as extensions of our flesh and blood, can truly make us feel better, can contribute to our well-being, can make us feel happier. Hence the #happywriting keyword. OPI: Is this Pilot’s new slogan in Europe? KS: No, it isn’t. We regard it as much more comprehensive than just a corporate signature; it is a positive outlook on the world, a unique perspective on writing instruments that we are trying to convey across all touch points with our consumers, across channels, countries and products. Our parent company is of Japanese origin and Japanese companies are greatly concerned about the positive social impact they have. I am myself of both European and Japanese origin, so I too have this concern ingrained in the way I work. We at Pilot are naive enough to believe that our products and attitude can have a significant positive effect on people’s lives, be it at work or at home. OPI: Is #happywriting also a quest to make writing instruments attractive again? KS: Absolutely. We believe in the magic of handwriting and we want to convey this magic to all our audiences. In the process, we also want to find new kinds of magic together in a collaborative manner. Today, we have a total number of more than 350,000 Facebook fans. Our presence on

social networks also shows how we try to be a part of people’s daily lives, not with hard sells, but with quality conversations. However, I disagree with the word ‘again’ in your question because it implies that handwriting is doomed. The word ‘digitisation’ is often used in our industry to describe the menace that is supposedly looming over the future of our business. And that’s the general perception – the fear that handwriting might have become obsolete, or might be in the process of becoming obsolete. Yes, I have big dreams for the Pilot brand, but I am also professional enough to look at the hard evidence and the facts tell me that there’s no fading away of handwriting. Recent GfK data shows that the 2014 back-to-school market, ie sales of writing instruments for the three summer months in five large countries in the EU, has increased 5% in volume and 8% in value year on year. This year is no exception; it’s a trend we’ve seen for the past five years. [For an in-depth analysis of the writing instruments sector, look out for the February issue of OPI] The lesson is that we must be very careful in how we let certain perceptions cloud our judgement. Digitisation has created new habits, definitely. But these have not necessarily impacted handwriting the way we spontaneously think it has. I am still looking for evidence that we are the Kodak of the 21st century. I believe we’ll still be alive and kicking in 100 years! And that is because handwriting goes beyond the functional aspect of putting down a few words on paper. It teaches rhythm,

Jean Pierre Saputo, Deputy Managing Director, Pilot France Over the decades, Pilot has become one of the major players in the writing instruments sector, advocating innovation and advanced technology through its multiple communication campaigns. At a time when cursive writing is dematerialised and when exchanges are increasingly digitised (Twitter, Facebook, text messages, emails), Pilot wanted to shift this product discourse by incorporating a more emotional dimension that is closer to the end user. From this idea, #happywriting was created – an attitude and a positive vision of the world.

w w w.opi.net | OPI Magazine

Pilot | Vendor Focus energy, reasoning, dexterity, self-control. When learning to write at school, children actually practice a whole set of precious physical and cerebral skills. Handwriting is like a fingerprint; it expresses your unique personality; it is a mirror of yourself, of your mood and your self-confidence. Handwriting has the capacity to increase people’s well-being. All these benefits are precisely what we want to emphasise with our #happywriting communication. Our sector is far from declining. Otherwise, how do you explain the sales figures?

how often can you betray a consumer with an alluringly cheap, but deceitful product? Consumers are smart and savvy.

OPI: Talking of the economy, has Pilot felt that pressure very intensely? KS: The crisis has affected manufacturers, no doubt, but lately it has been mostly in an indirect way. Mass market distributors, global office players and office equipment retailers – all these channels unfortunately have a habit of putting a further squeeze on manufacturers when they are themselves OPI: I guess their facing difficulties. success can at least in As a brand, and a leading part be attributed to brand at that, we are in the sales and marketing constant and relentless efforts of the industry’s discussions to convince leading players? these operators that the only KS: Definitely. As in way forward is to work hand many FMCG categories, in hand towards one goal: to commoditisation is a together increase constant threat. Even today, the category and many people in Europe believe create value. they should get pens for free Brands and distributors and for some a bunch of free need each other and can pencils from IKEA will do. So it achieve great things is the leading players’ role to together. Unfortunately, demonstrate the added value of when these resellers are under quality products, to constantly tremendous pressure to produce short-term innovate and come up with new value financial gains, monetising their in-store propositions. traffic and making the cost of going through Leading brands are doing a tremendous their channel ever higher is the short-term job, making full use of their respective solution they often opt for. It is a vicious circle, strengths. Some are enhancing their because in the process of monetising traffic, packaging and volume propositions while we they tend to forget what their core mission are more focused on products’ added value. should be – to sell products. But all of us brands are chief contributors to The long-term benefits of addressing end the industry’s value creation. Market figures users directly becomes even compelling, are even more encouraging if you factor in obvious and necessary given these that the European economy has been very manufacturer-distributor relationships. We will sluggish over the past few years. continue to increase our efforts to improve our It’s also interesting that, presence amongst the general public. according to GfK A brand is only as strong as what its Frank Schelkens, figures, retailers’ users say, feel and think about it. Managing Director, own brands and Pilot is no exception. Our efforts Pilot Belgium generally private will always revolve around #happywriting is communicating the label brands, their needs and desires and awareness that writing is fun, and that Pilot have been on we will continue to launch is more than writing. It’s a kind of lifestyle and a constant top-of-the-class products and as such we can influence people, decrease over reach out to them not just with the quality of our the past few with engaging writing instruments. In Belgium, we years. That marketing and communicate this in many ways – our means brands communications. branded cars, branded shirts, branded flashlights, writing pads – and all are winning, Our #happywriting Pilot communications are in the doesn’t it? concept is there #happywriting style in the There are a lot of to deliver on this country. low-quality products promise across on the market, but Europe.

Sandro Contini, Sales and Marketing Director, Pilot nykor (italy) It is true that #happywriting is a new concept and a big change from the communication of previous years. It is more user-friendly, less technical and it definitely rejuvenates the brand. Some of our customers, including retailers and distributors visiting our booth at the recent Big Buyer fair, were surprised, but the reception has been very positive overall. Even though it is very playful and colourful, #happywriting still conveys very well the superior quality and unique edge our products have. Plus, in a gloomy Italian economic environment, it brings a joyful mood to our everyday lives.

w w w.opi.net | OPI Magazine

Special Feature | FM Interview

Category

facilitator

FM has become an integral part of many OP players’ portfolio by now, often with the help of Robinson Young by Heike Dieckmann heike.dieckmann@opi.net

NOT

all OPI readers will be familiar with Robinson Young, so here’s a short scene setter: Robinson Young is a £50 million ($78 million) sales, marketing and distribution company specialising in non-food products. Founded by David Robinson in 1972, his son Michael took over as Managing Director in 1995 and has been running the UK-based company ever since. There are essentially two sides to the business. Robinson Young acts as a sales force for manufacturers that either don’t have their own sales team or are manufacturing in a part of the world that doesn’t give them easy access to the UK market. So, for example, the company operates on an exclusive basis as a distributor for companies like Victor Stationery, Masterlock and Velcro. Secondly, Robinson Young sources and trades products for its customers. And a lot of facilities management (FM) products fall into that category, as Robinson explains… OPI: Which of your four business divisions – stationery, household, catering and healthcare – are most relevant to the OP industry?

Michael Robinson

Michael Robinson: The two main drivers are FM products and adhesive tapes. Most of the FM items we sell to the OP channel fall in the Catering division that comprises cleaning products and also food preparation and presentation products. Adhesive tapes are in the Stationery division. Healthcare is the fastest growing area of the business while Household represents the largest part of the company, making up about 51% of total revenues. Within those divisions, we supply to wholesalers and cash-and-carry operators like Booker or Makro, and then to the large retailers like Sainsbury’s, Tesco and ASDA. OPI: Who are your OP customers? MR: We sell primarily through the main wholesalers such as Spicers (now part of SPOT) and VOW (now EVO), as well as the traditional contract stationers Office Team (SPOT), Banner (EVO) and Lyreco, along with multichannel operators like Staples and Office Depot and educational specialists including YPO, Findel and The Consortium.

OPI Magazine | December 2014/January 2015

We sell very little direct to dealers; only when they can’t get what they want through the wholesalers, and we certainly don’t sell to end consumers. That said, last summer, we started an experiment through field marketing agency Product Promotion Services (PPS) to see whether dealers would benefit from having some additional support and education at a face-to-face level to help them better understand the FM sector and the products we can supply. That education is often needed to point out the difference in the various products – vending cups versus water cups as an example – the opportunities that exist, areas to improve on, etc. But dealers would then source these products from VOW or Spicers. OPI: Has selling into the OP space changed much over the years? MR: It has. Supplying the sector really started in earnest about ten years ago for us, partly with our acquisition of Limpet Tapes in 2004 and partly when the OP market started to recognise the opportunity in FM products. Prior to that, the FM items we supplied were all through the grocery cash-and-carry operators and wholesalers, the likes of Bestway, Booker, Makro and so on. When OP players started to look beyond traditional stationery and at janitorial and catering products, we recognised an opportunity.

FM Interview | Special Feature OPI: Has the considerable ROBINSON YOUNG growth of the FM category meant that some operators have also found a direct CATERING & route to manufacturers? HOUSEHOLD DIVISION HEALTHCARE DIVISION STATIONERY DIVISION FOODSERVICE DIVISION MR: For some sub-categories that is true. But when you look Consumables & OTC healthcare & beauty Food preparation, at a lot of the products that Home, school & office disposables products presentation & hygiene we’re supplying, many of them come from the Far East or other parts of the world and it doesn’t Companies want their OP suppliers OPI: Where are the best necessarily make good economic to be one-stop shops for all their opportunities now? sense for the wholesalers – or contract business needs, partly because of MR: In product terms, it’s coffee and stationers – to buy them directly. the service aspect but also because water and their associated non-food Ultimately, we can provide a businesses are always looking for ‘accessories’. One of the biggest much better and more cost-effective more efficient ways of operating. growth spurts we’re seeing is in solution for resellers and wholesalers paper coffee cups. and that’s why our business has grown OPI: What are the challenges? What happens in society – and by and continues to grow. MR: Well, technology is having that I mean the coffee revolution a huge impact on how people in the UK – eventually moves into OPI: So how much of your overall buy. Take Black Friday or Cyber the B2B space. Everyone wants business comes from the coffee now and we supply OP channel now? millions of paper coffee MR: It’s around 11% of our cups – it’s one of our overall business. Revenues biggest selling lines into have been increasing year the OP sector. on year, but growth has certainly Monday. These marketing terms and Water is similar. We are told we accelerated over the last 4-5 years campaigns didn’t exist only a couple must drink more water because as office products players have been of years ago. Businesses need to not it’s good for us and that’s had a looking for non-traditional areas to only adapt to them in their overall real impact on sales. Over the last grow their business. operations, but they also constantly few years, we’ve seen a massive need to keep a lookout for where increase in the demand for low-cost OPI: What’s driving that growth the next development is coming disposable throwaway water cups. now? Are there specific trends? from. It’s a real challenge, given the MR: There are minor trends like phenomenal pace of change. OPI: On that commodity-item people being more diligent about The way Robinson Young markets note: how much of your business cleaning procedures, but what’s its products today is very different is private label? really driving FM in OP is service, the to how it was done only a few years MR: It’s significant overall, but I’d next-day delivery and the convenience ago. Social media is absolutely key rather not be specific. That said, in that office products suppliers can for us now. It may still be much more the FM arena that is aimed at the OP provide. That’s something that doesn’t important at the B2C end, but even channel, it’s actually very small. or certainly not long ago didn’t exist in if you’re a B2B operator, using social But it’s very big in our Household other industries and OP suppliers have media in your communication and division and it’s also growing a real USP here. brand marketing is vital and a lot of considerably in the Stationery division companies are still coming and that’s in line with what the OP to terms with that. channel in general is doing – just think We are not directly Q Connect and 5 Star for a start. supplying B2C consumers, but we represent some OPI: Do you believe the increasing brands, particularly in the move of OP resellers into adjacent household sector, that are categories will change the very prevalent in B2C and dynamic at Robinson Young? the most important way of MR: Not fundamentally, no. The marketing to consumers is move into FM has been going on for through social media. We a number of years and will continue work with those brands on to do so. And I believe Robinson their communication tools Young is well placed to help those OP and it’s irrelevant if the end resellers that want to join that move customer is sitting in an or indeed those that are already way office or at home. down the track.

“What’s really driving FM in the OP sector is service”

w w w.opi.net | OPI Magazine

Sayes Office Supply | Dealer Case Study

Learning the

lesson Kenny Sayes

Selling FM products is not rocket science, argues Kenny Sayes, but there is definitely something of a learning curve

products – principally in the janitorial and foodservice categories – have been an important part of the mix at Alexandria, Louisiana-based dealer Sayes Office Supply for the past five years. With about 2,200 FM SKUs available to customers, sales of these products are set to hit $4 million this year, representing about 30% of the company’s total sales. As a stocking dealer, it was important for Sayes to drive volume through its distribution facilities as demand for traditional office products continues its steady decline. “[FM] is allowing us to keep our doors open,” states Sayes Office Supply President Kenny Sayes. “Very seldom do I see orders go out that don’t include some cleaning and breakroom products.” Sayes says that dealers looking to be successful in the janitorial and foodservice areas should consider a number of factors:

Bring in an expert Sayes hired a recently-retired category professional who was able to train the dealer’s sales reps in how to sell jan/san products. “Quite often the jan/san people want to make it sound like rocket science to sell these products, but it’s not,” contends Sayes. “It’s an educational process for sure and

you have to overcome the sales reps’ ‘mental block’ about needing to sell certain household brands. But clients need a product to do a specific job and the brand is not usually relevant.” This category specialist now spends a good deal of his time on bid documents, where his product and pricing knowledge is an invaluable asset.

Establish strong ties with the right wholesaler reps As a stocking dealer, Sayes Office Supply is able to buy direct, but also uses specialised wholesalers such as United Stationers-owned Lagasse and other regional wholesaler or jan/san redistributors. “If you have a wholesaler rep who comes in and just wants to sell you something, that’s the wrong guy,” says Sayes. “You need to have a rep that understands the market and wants to work with you to build your business.” He also points to the relationship that his dealer group Independent Stationers has built with Bunzl-owned R3 Distribution and the commitment that R3 has given to provide rep support and assistance in the contract bidding process. However, he does have some concerns about the impact that the United Stationers integration of

Lagasse will have on pricing and on the relationships with the current Lagasse sales reps. “I am a huge supporter of United, but I do feel that the traditional OP wholesalers are not as competitive as the independent dealer needs them to be in the jan/san category. I don’t think we can be competitive doing wrap and label on products such as foil, chemicals and can liners.”

Use existing relationships While there is a valid argument to go ‘off carpet’ and build relationships with FM purchasers, Sayes believes that the existing front-office relationships that many traditional office resellers have – especially with small business customers – can be used to a dealer’s advantage. “When a company president’s personal assistant – who may be the office supplies and stationery buyer – goes into the back and asks the cleaner to give a dealer a chance on cleaning products, that carries a lot of weight,” reveals Sayes. “It’s also easier for us to get copies of invoices so we can learn how to price products.”

Push the service aspect Although Sayes sees his main competitors as being the likes of Sam’s Club, he says his dealership has taken a great deal of market share from traditional jan/san resellers, partly on the back of being able to offer superior service levels such as next-day delivery. “Customers become accustomed to this level of service and it’s a real selling point for us versus the longer delivery times of the traditional jan/san resellers,” notes Sayes. w w w.opi.net | OPI Magazine

Review | ISSA/Interclean North America 2014

Showing the value of clean The jan/san sector is sitting up and taking notice of the OP reseller channel

ISSA/INTERCLEAN

North America 2014 again succeeded in being the one week where key leaders and decision-makers in the commercial cleaning industry converged to find new opportunities and strengthen business connections. The exhibition, co-produced by worldwide cleaning industry association ISSA and its trade show partner Amsterdam RAI, attracted 14,123 registrants to the Orange County Convention Center in Orlando, Florida, from 4-7 November to view the newest products and services available from the show’s 685 exhibitors. There were some new kids on the block this year, with more than 800 organisations represented at ISSA/Interclean North America 2014 that hadn’t been at the 2013 event in Las Vegas. Many of these were from the office products sector as janitorial, foodservice and facilities supplies occupy a growing – and often very important – place in many traditional office resellers’ product portfolios now. According to ISSA, the top reasons for these new attendees going to Orlando were to access product lines, market intelligence and executive education they couldn’t find at any other industry event. And OPI played its part, too, helping to boost attendance on the traditionally-slow final day of the show by encouraging around 70 office resellers to sign up for an initiative called the Janitorial Solutions 101 Day and sponsoring a well-attended session run by Dave Frank titled 10 Trends Shaping the Cleaning Industry (see box, ‘Cleaning industry trends’). Office products resellers haven’t always been welcomed with open arms by certain players in the jan/san industry, and while there was some evidence of this uneasy relationship at ISSA/Interclean North

OPI Magazine | December 2014/January 2015

America 2014, there were also signs that jan/san manufacturers are sitting up and taking notice of the OP channel. Manufacturer competition in the cleaning segment is very stiff and vendors are aggressively looking for new channels to sell into, with the OP channel a prime candidate. The office products dealer has a world-class distribution and service proposition, is able to ship next day with no minimums, and can provide sophisticated online ordering and reporting to the end user at lightning-quick speeds. And the more market share the OP channel continues to take, the more the cleaning industry will pay attention.

There were […] signs that jan/san manufacturers are sitting up and taking notice of the OP channel

ISSA/Interclean dates for your diary • ISSA/Interclean Latin America 2015 25-27 February, Mexico City, Mexico • ISSA/Interclean Central & Eastern Europe 2015 22-24 April, Warsaw, Poland • ISSA/Interclean North America 2015 20-23 October, Las Vegas, USA • ISSA/Interclean Amsterdam 2016 10-13 May, Amsterdam, Netherlands

ISSA/Interclean North America 2014 | Review 2014 ISSA Innovation Award winners The winners of ISSA’s 2014 Innovation Award programme were announced at ISSA/Interclean North America. The five category winners were selected by eligible voters through an online selection process that took place in the three months leading up to the show. “The ISSA Innovation Award programme was a great success from the start with a lot of enthusiasm from participants and voters alike,” said ISSA Director of Sales Anthony Trombetta. “We congratulate the winning entries and look forward to featuring more new and exciting products in next year’s line-up.” The 2014 winners are as follows: Cleaning Agents 3M Commercial Solutions: Scotchgard Resilient Floor Protector Dispensers Tennant: Orbio os3 System Equipment Kärcher Commercial: BR 35/12 C Bp Services & Technology CleanTelligent Software: Bidding and Estimating Supplies Americo Manufacturing: Full Cycle Floor Pads

Cleaning industry trends Cleaning industry veteran and President of the American Institute for Cleaning Sciences Dave Frank presented an OPI-sponsored session at ISSA/Interclean North America 2014 on 10 Trends Shaping the Cleaning Industry. In a nutshell, here are the ten trends he identified: 1.

Upper management intervention

Higher levels of sophistication

Supply chain management

Budget cuts

Outsourcing

Analytics

Employee well-being

Quality standards

Instrumentation

10. Sustainability

w w w.opi.net | OPI Magazine

Event Preview | Paperworld Middle East 2015

Eastern promise Demand for stationery and paper products shows no sign of diminishing in the Middle East and the fifth Paperworld in the region looks set to be another important event

THE

fifth Paperworld Middle East show will take place from 2-4 March 2015 at the Dubai International Convention and Exhibition Centre in the United Arab Emirates (UAE). The 2014 event drew a record-breaking 6,429 visitors from 105 countries, with 271 exhibitors also representing the largest number in its history. But the 2015 show is likely to be even bigger with organisers predicting that numbers will swell by at least 10%. This is partly due to the Middle East’s fast-growing demand for paper, stationery and printing products which is rising by 5.7% year on year and much of this trade flows through the UAE. The region is clearly bucking the wider trends of the digital revolution with consumers still embracing the written word on paper with writing utensils, rather than on screen and with styluses. As Ahmed Pauwels, CEO of organisers Epoc Messe Frankfurt, explains: “Even with the advance of digital media and the shift to online communications, there’s still no better way to express the spirit of the written word than on paper. The demand for paper and stationery in

the Middle East and North Africa (MENA) region is still on the rise, as is demand for exhibition space at Paperworld Middle East.”

Global reach Both exhibitors and trade buyers see the event as crucial for reaching a number of different geographical markets. Sadi Baydu, Export Manager for Gurney Lastik, says: “Paperworld is the focal point of the regional paper market, presenting us with a gateway not only to the Middle East, but also to Asia and the countries of the Far East.” Omar Al Saqqaf, General Manager of Hoshan Pan Gulf/Clips Trading, adds: “This platform is so important for us to meet people from Africa and the vast number of countries in the Commonwealth of Independent States (CIS). This is the hub where you can find serious business.” The statistics back up this global theme. While most visitors to the 2014 event came from the Gulf countries and the Middle East for example, a sizeable 20% made the journey from Africa, Asia and the

Product categories on display in 2014 (by square metre) 69 52 16 11 Wrapping

7 7 5 3 3

Source: Epoc Messe Frankfurt

OPI Magazine | December 2014/January 2015

(%)

rest of the world. Additionally, a huge 87% of exhibitors came from outside the immediate region.

Real business In 2014, office supplies dominated the show with the largest amount of floor space devoted to this category (see chart). However, hot on its heels came school articles, showing the importance of this perennial group of products. Gifts and office paper trailed further behind, but still took up a significant amount of event space. Unsurprisingly, perhaps, the key reason exhibitors give for participating in the show is “to initiate new business relations”, while most visitors are there “to purchase and source products”. Importantly, following the 2014 event, 80% of exhibitors said they were satisfied that Paperworld had met their objectives, suggesting that plenty of deals were being done over the three days. That’s an interesting antidote to Paperworld in Germany where the order books are, by and large, left at the office these days. As Ali Haider, Managing Director of Capital Envelopes, is keen to point out: “Paperworld Middle East is an excellent platform to meet the biggest brands. Visitors are so focused, mostly decision-makers and here to do real business.” Look out for the February issue of OPI for an exclusive interview with Michael Dehn, Group Exhibitions Director of Epoc Messe Frankfurt.

CORE Live 2015 | Event Preview

United to the CORE

Greetings from Nas hville!

As United Stationers’ first national CORE Live event looms large, over 1,000 expected attendees can look forward to an action-packed few days in Nashville

DEPARTING

from the familiar is always an exciting as well as nerve-wrecking undertaking and converting United Stationers’ long-running Vision events to CORE showstoppers is no exception. But with plans well underway for a spectacular seminar line-up, an all-encompassing exhibition and plenty of networking opportunities, the first United Stationers/Lagasse national CORE Live event is set to go off with a bang at the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee, from 16-19 February. Themed as ‘Emerge 2015’, CORE Live will explore best practices and strategies for improving dealers’ digital presence, growing in new categories, improving sales force effectiveness and increasing understanding of the changing needs of the end user. All insights shared will be accompanied by recommended solutions, says United. The wholesaler adds that its ‘Seven Moves To Win’ theme, brought to life at its last Vision event in 2013, is still relevant to its audience, with key takeaways of CORE Live to be identified later on. As Diane Hund, VP of Marketing for United Stationers/Lagasse, explains: “We see markets and purchasing behaviours changing rapidly, and many trends affect how our customers need Jeremy Gutsche to plan for

their future. CORE Live focuses on equipping resellers to compete in the changing economy and provides the opportunity to interact with suppliers and resellers, nurturing a robust learning environment.”

Broad seminar line-up

• Jeremy Gutsche, described as “a United’s line-up of speakers will new breed of trend spotter” by The discuss an impressive 21 unique Guardian and an “intellectual can of topics in a broad range of seminar Red Bull” by Association Week, will sessions. These range from deliver a keynote address on what presentations on the always-present the future holds for business leaders. and growing importance of a sound • Chris Hodson, Associate and e-commerce set-up to a guide to Partner at Cleveland Research, an more effective brand building and independent equity research firm, the opportunities of specific product will provide insights on the industry categories – furniture, breakroom, from an investor’s perspective. safety and cleaning to name but a few. • James Sun, a proven entrepreneur These same product categories will who was a finalist on also feature heavily in Donald Trump’s The the accompanying Apprentice, will offer a Apprentice CORE Live keynote address on how Exhibition and small businesses can Trade Show that build loyalty and grow will include over in an increasingly global 160 leading market. suppliers • United’s CEO Cody Little Big Town of Phipps will address business essentials. attendees on the state of the industry No high-profile OP and provide an update on the event would be complete company’s strategic direction. without some equally Last but not least, there’s the high-profile keynote ever-important networking and speakers to get the brain much-needed winding down time. cells working and And who better to help attendees do the creative juices that at the home of the Grand Ole flowing. Here’s Opry than critically acclaimed country what’s in store at group Little Big Town at the end of the CORE Live: first full day of the event? w w w.opi.net | OPI Magazine

Paperworld 2015 | Event Preview

Different

strokes

Paperworld Frankfurt 2015 is shaping up to what could be a very interesting show with the addition of a number of new innovations such as the Paperworld Plaza and the Get Started hall

THE

2015 motto for Paperworld is ‘Always different’ and for its upcoming show (31 January to 3 February), organiser Messe Frankfurt has pulled out all the stops in an attempt to keep exhibitors and visitors satisfied. This is essential, as the show has suffered in recent times with the exit of a number of high-profile exhibitors along with declining visitor numbers. Now Messe Frankfurt has instigated a number of initiatives to entice more people back to the show (although visitor numbers still topped 40,000 last year). The first initiative is Paperworld Plaza – an agreement between Messe Frankfurt and two German trade associations Altenaer Kreis and PBS Industrieverband – that will see the associations’ members exhibit in a separate hall at Paperworld every two years. Companies that have already signed up to exhibit at the Plaza in Hall 3.1 include Durable, edding, Faber-Castell, tesa, Trodat and Staedtler. The Paperworld lecture area will also now be hosted in Hall 3.1 under the moniker Paperworld Plaza Academy, and this will offer an extensive programme of lectures including topics such as marketing, trends, trade and sales (and comprise a one-day conference organised jointly with OPI, see right). Moving from Hall 3.1 to make way for the Plaza, the Remanexpo has moved into the newly renovated Hall 6. Messe Frankfurt says improvements to the insulation and redesign of the building exterior have improved the climate inside the hall, making it a more suitable area for manufacturers to display their products. So far, vendors that have signed up for the Remanexpo include Armor, Static Control, Katun and OCP. A second initiative new to Paperworld 2015 – the ‘Get Started’ hall – will be dedicated to

Paperworld events • Trends 2015/16 Hall 6.1 C90 • Plaza Academy Hall 3.1 C60 • Mr Books & Mrs Paper Hall 5.1 B60 and B68 • Let’s Wrap Hall 4.0 C90 • Get Started Hall 5.1 B20

international start-ups wanting to showcase their company and products. The Get Started hall is aimed at companies from outside Germany and those that have never exhibited at an international trade fair. To encourage businesses to sign up, a fully-furnished and equipped stand will be offered at “favourable terms and conditions”, says Messe Frankfurt. Hall 5.1 is also intended to be a transitional stage for companies that can no longer take part in the area in Hall 6.1, sponsored by the Federal Ministry of Economics and Energy (BMWi), where participation of up-and-coming German firms is limited to two years. “The large number of registrations received to date confirms that we have paved the right way for a future-oriented platform for the sector,” says Cordelia von Gymnich, VP of Consumer Goods & Entertainment at Messe Frankfurt. Look out for an in-depth interview on Paperworld 2015 with Cordelia von Gymnich in the February 2015 issue of OPI.

OPI@Paperworld OPI has assisted Messe Frankfurt in coordinating a high-level one-day conference as part of the Paperworld Plaza Academy. Taking place on Monday 2 February, a series of presentations and panels is dedicated to helping OP executives manage a rapidly changing industry. The keynote address by Zukunftsinstitut Director Jeanette Huber will focus on future trends including the up-and-coming workforce, the benefits and challenges of working digitally and what an energising workplace looks and feels like. Other highlights include Office Depot’s Olaf DeBoer who will discuss customer-centric category management and procurement, and an illuminating panel discussion on responding to change in the business supplies industry with Euroffice CEO Simon Drakeford and Vasanta Group CEO Robert Baldrey. Closing keynote speaker, ADVEO CEO Millan Alvarez-Miranda, will provide his perspective on the OP distribution landscape, highlighting the key challenges and opportunities in a State of the Industry report.

w w w.opi.net | OPI Magazine

Review | Climb of Life 2014

Scaling new heights This year’s Climb of Life scaled new heights in every dimension, raising a record-breaking amount of over £100,000 ($159,000) for cancer research

FOR

the fifth year in a row, OPI joined over 110 members of the UK office supplies industry in the Climb of Life (COL) to raise funds for the Institute of Cancer Research (ICR – for more info, go to www.icr. ac.uk). Braving the cold and wet weather conditions in the Lake District in early November, a total of 11 teams climbed some of the highest, longest and toughest routes – many peaking at the top of High Street, one of the highest mountains in the Lakeland – in some very challenging terrain. The result was worth every boggy boot immersion and every four-limbed scramble – a fantastic fundraising total of £100,157 ($159,000).

consisting of Janet Bell, Steve Hilleard, India Pride and Heike Dieckmann, raised over £18,000 and would sincerely like to thank all its readers that supported the initiative . CEO Steve Hilleard said: “The OPI team is proud to have been involved in such a worthy cause, and to have been a significant contributor to the amazing overall sum raised. Having recently lost former colleagues to cancer, our commitment to efforts like the Climb of Life, and our partnership

Banerji, Team Leader for the Clinical Pharmacology & Trials team who, after the climb, gave an impassioned speech about the ICR’s recent research and the importance of these funds. He said: “The ICR’s mission is to make the discoveries that defeat cancer. Our aim is to create more and better drugs for cancer patients. We work on all drug targets for all cancer types, including challenging diseases such as children’s cancers, pancreatic, brain and lung cancers. “Our scientists and clinicians are working daily to make a real impact on the lives of people with cancer. We are only able to do this with the generous help of our loyal supporters. So we would like to thank all the COL participants, and all of their sponsors and supporters, for making a real difference in people’s lives.” The final word goes to Chapman: “From £60,000 [raised] five years ago, £100,000 did not seem a realistic target, but we have made it. Thanks to everyone that takes part with such amazing enthusiasm, from relatively small contributors to Vasanta and OPI that have helped to really raise the bar. The lesson has to be to never put a ceiling on your ambition.” The next Climb of Life will take place on 6 November 2015.

“Our scientists and clinicians are working daily to make a real impact on the lives of people with cancer”

Record total Everyone who took part in COL – climbers, organisers and the myriad of support staff – was amazed by the final total, jumping nearly £20,000 from last year’s record achievement of £81,000. Every team member worked hard to raise that bit more this year and the combined total was something of a (very pleasant) shock, even for event organiser Graeme Chapman MBE, who said: “I was amazed that we had reached £100,000. I didn’t believe my calculator, so checked it three times!” Vasanta were once again the top corporate fundraiser raising a total of £25,000. Its support of the event involved the whole Vasanta board that travelled to the Lake District to join COL. The OPI team meanwhile,

with City of Hope, remain steadfast and we are extremely grateful to all those individuals and companies who dug deep once again this year to support our passion.” As in the last seven years, the beneficiary of the funds – the ICR – played a very hands-on role, with four members of the ICR joining the climb. Among them was Dr Udai

OPI Magazine | December 2014/January 2015

EDexpo & CAMEX 2015 | Event Preview

Expand your business to the education market EDUCATION

and office products dealers are invited to expand their customer base at the world’s largest educational products trade show: EDexpo and Campus Market Expo (CAMEX), taking place from 22-24 February in Atlanta, Georgia. The combination of these two co-located events brings together 1,000+ exhibitors showcasing the latest products for students, from pre-school to college. In addition to office product dealers, attendees include college stores, educational supply stores, and toy, gift, and speciality stores representing more than 3,000 potential buyers. See top-selling products to expand your core business, including those from 3M, ACCO, Avery, C-Line, Dallas Pen, Pacon, Pentel of America, Sanford Brands, Stanley-Bostitch and Zebra Pen, to name just a few. US dealer group Independent Stationers (IS) is once again bringing its National Education Conference to the event. As IS dealers expand their presence in the education market as a result of being awarded the US Communities office and school products contracts, they’ll be exposed to the best gathering of professionals in this industry at EDexpo and CAMEX.

Top IS dealers Exhibitors will have the opportunity to see the top IS dealers that are allocating significant resources to the education vertical market, while dealers can learn about the emerging trends and product solutions available for today’s learning environments. OP dealers will find money-saving specials throughout the exhibition floor that will more than pay for their trip to Atlanta. CAMEX and EDexpo exhibitors offer low minimums and show specials to help dealers experiment with new product categories. The New Product and Hot Stuff showcases offer an opportunity to preview hundreds of the following season’s innovations. Explore speciality areas on the exhibit floor such as a

OPI is once again International Media Sponsor at the largest trade show in North America for the youth market, from preschool to college age Makerspace, the ConTEXT Pavilion for content and related technology providers, and the EDventure Launch Pad where digital resources are packaged with the hands-on products children need to make learning fun. With the addition of purchasing influencers – such as principals and curriculum directors – on the EDexpo side, new audiences will be in attendance. These decision-makers and school/ district administrators will be able to see, touch and engage with products in a vibrant 3D catalogue. In addition, teacher bloggers will be exploring the exhibit halls looking for the next hot products and raising awareness and demand for innovative products sold through dealer and retail channels. The EDexpo Leadership Institute, powered by Staff Development for Educators, is projected to draw 300 principals, administrators and curriculum directors who will take part in education sessions held in classrooms directly on the exhibition floor. In breaks scheduled throughout the two-day event, these purchasing educators will be visiting the exhibition and learning more about the benefits of buying through dealers. Meet fellow dealers and buyers from throughout the US and around the world to learn from their experiences. Whether you are new to the industry or a seasoned professional, there is no better place to find connections and advice you can use to increase your existing base of school and college customers beyond the administrative office. Discover new profit centres and find resources for every aspect of success in the educational products marketplace at EDexpo and CAMEX.

Office products dealers can shop the combined EDexpo and CAMEX exhibit floor for free by registering at www.camex-edexpo.com using the promo code TSCE-15

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Review | Big Buyer

On the

way up Italy’s Big Buyer show revealed a positive attitude towards the OP industry moving forward as the show recorded its highest-ever attendance

THE

19th Big Buyer exhibition, which took place from 26-28 November in Bologna, Italy, may have been a damp squib weather-wise, but inside the hall the mood was surprisingly bright. With over 200 exhibitors at this year’s show – including a number of international exhibitors from as far afield as Thailand, China, Japan, Spain, Portugal and the UK – visitors to the 2014 exhibition reached their highest number yet at over 7,000. The majority of vendors, wholesalers and resellers OPI spoke to during the course of the show were generally optimistic about the Italian market; many felt that the OP industry had already hit rock bottom and was now clawing its way back up again. 2014 seemed to be a time of consolidating market share and strategies for stability, with 2015 already shaping up to be the year the industry starts becoming aggressive again. Figures from the Italian trade association AIFU stated that the country’s B2B office supplies market was relatively stable, with overall sales for the nine months to the end of September down about 1.9%.

Ups and downs AIFU President Adriano Alessio told OPI that the consumables market had the biggest fall in sales with a 12% drop while compatibles fell 4%. On the upside, office furniture grew 10% and stationery was up 4%. He added that a worrying trend was the increase in grey

OPI Magazine | December 2014/January 2015

market products that were “starting to destroy the ethics of the market”. There were a number of major talking points during the show, the main focus being the economic situation in Italy. The use of digital technology was another issue much discussed by show attendees, particularly after AIFU’s presentation on e-commerce and the OP industry. A presentation given by Valentina Pontiggia, Senior Researcher of E-Commerce at the Polytechnic University of Milan School of Management revealed some interesting issues, including a major problem with the lack of product supply – not customer demand – holding back the increase in e-commerce, and a lack of traditional retailers not using an e-commerce platform. It was pointed out that Italy currently imports more than it exports online. The overriding message was that Italian dealers must enter the e-commerce market sooner rather than later. One suggestion was for resellers to buy the expertise rather than invest in the technology themselves. Big Buyer organiser Edinova said the 2014 show was the “best ever” and the growing presence of exhibitors and visitors from abroad was one of its distinctive features. For next year’s 20th anniversary show, marketing of the event both locally and internationally will be stepped up considerably, with the organiser confirming that many exhibitors have already signed up to attend Big Buyer 2015.

Visitors to the 2014 exhibition reached their highest number yet at over 7,000 Big Buyer numbers Total visitors: 7,127 • Wholesalers: 1,740 • Office suppliers: 2,327 • Large-scale retail trade buyers 206 • Retailers: 1,946 • Foreign buyers: 908

EOPA 2015 | Preview

EOPA shortlist announced

The finalists for the coveted European Office Products Awards 2015 have been revealed

OPI

is pleased to announce the shortlist for the 2015 European Office Products Awards (EOPA). An independent panel of industry executives gathered near Munich in early December faced with the challenge of whittling down the large number of high-quality entries into a list of finalists. Finally, after several hours of intense debate and discussion, the judges agreed on the final shortlist that you can read below. The EOPA 2015 winners will be announced in Amsterdam on Wednesday 4 March 2015 during a special presentation dinner that is taking place as part of OPI’s Partnership 2015 event. The dinner is open to anyone, not just attendees of the Partnership event. The EOPA dinner is viewed as one of the must-attend events in the European OP calendar. For more information and to book your place, please visit: www.opi.net/eopa2015

Last year’s winners

EOPA 2015 Shortlist Traditional Product of the Year ACCO Brands: Nobo Prestige Whiteboards COLOP: The Printer Hamelin: Oxford SOS Notes Uploadable Notebooks Legamaster International: Custom Printed Whiteboards FM Product of the Year CEP Office Solutions: Take A Break Range Decosense: Office Deco Collection Nestlé Professional: Nescafé Azera 500g Technology Product of the Year Brother International Europe: PT-P750W CEP Office Solutions: Ice Blue Desk Lamp Esselte Leitz: Leitz Icon Smart Labelling System Fellowes: AutoMax 300c and 500c Shredders Jalema: JalemaBox Marketing Initiative Avery UK: Creating a social connection with consumers 3M Europe: Post-it Super Sticky Notes MAKE IT HAPPEN Western Europe Integrated Campaign Fellowes: ‘Getting The Nation Working Well’ Ergonomics Awareness Campaign 2014 Nestlé Professional: Nescafé Azera Workplace Launch United Managed Office Services: United Vantage Programme

Wholesaler of the Year ADVEO JGBM VOW Dealer Group of the Year Calipage (ADVEO) NEMO Office Friendly Dealer Association Office Power Vendor of the Year 3M ACCO BIC Clover Technologies Group Fellowes

OPI Partnership 2015 is an invitation-only event that brings together senior executives from the reseller and vendor communities for a series of high-level, strategic discussions. It will take place from 3-5 March in Amsterdam, Netherlands. For more information about OPI Partnership 2015 and on how you can be considered for an invitation, please visit: www.opi.net/ partnership2015

Reseller of the Year Amazon Coolblue Lyreco RTC Proffice Professional of the Year No shortlist – winner to be announced on the night Industry Achievement No shortlist – winner to be announced on the night

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Category Analysis | Facilities Management

Facilities Management:

IN IT TO WIN IT

The FM sector is a broad church, but drill down into the individual categories and there are some interesting sub-plots and exciting opportunities

by David Holes

THE

facilities management (FM) sector is vast and covers pretty much every product companies need to keep their premises running. As Debbie Nice, Head of Facilities Supplies at UK wholesaler VOW, says: “The good thing about FM is it’s fuelled by a need, not a want. This sector is a major focus area for VOW and we expect to see massive growth over the next five years.” The data doesn’t lie. UK figures from GfK show that the FM category is growing rapidly. Its Office Total Store Report (see chart on page 52) shows that B2B growth rates by value are up by 11.6% over the past 12 months, with some of the sub-categories showing stellar rises – catering products overall are up 14.2%, but the star of the show is personal

protection equipment (PPE) which posted a staggering 86% increase in sales. Leanne Whittaker, GfK Senior Account Manager – Retail World, says: “The FM category is performing well, with many B2B retailers and resellers moving into this area. Year-on-year figures indicate that the majority of FM sub-categories are growing. Two of the top performers are catering and PPE due, we believe, to OP sellers putting more focus on these areas so they can fulfil all business needs.”

Gaining confidence Other wholesalers are also reacting accordingly to this opportunity. At United Stationers in the US, Mark Pelletier, Director of Field Support for Cleaning and Breakroom, says: “Our resellers – the traditional OP dealers – are gaining confidence and momentum in capturing FM business. Most of the growth is coming from small to medium-sized businesses with ten to 100 employees.”

OPI Magazine | December 2014/January 2015

SP Richards (SPR) also reports strong sales in many FM areas. Chris Whiting, VP of Facility & Breakroom Solutions, comments: “I see huge untapped potential in this sector. The OP channel only has about 11% of the overall FM market opportunity. The categories that performed best in 2014 are soaps and sanitisers – supercharged by the Ebola scare – paper towels and tissues, bin liners, cleaning tools and chemicals. Breakroom also continues to be a strong growth area and SPR is expanding its range here.” Manufacturers of FM products are equally bullish. German adhesives specialist tesa has seen a strong interest in its double-sided tape products, including its new Powerbond Ultra Strong. As Falk Butterwegge, Head of Office Supply, Stationery & Online and International Sales Consumer & Craftsmen, points out: “The FM market is becoming more interesting for OP retailers. The main reason is that they can drive their sales with only limited cannibalisation of their existing traditional office supply range.” Bill Marsh, Regional Manager at Reckitt Benckiser, a manufacturer of health and

Facilities Management | Category Analysis hygiene products, agrees that this sector is gaining a lot of momentum within the office channel. He says: “At some point I expect it to level off, but not anytime soon. At the start of this wave, many simply took orders for supplies as their customers asked for them, but we’re now seeing a shift to selling complete cleaning and breakroom solutions.” At Vectair Systems, a UK-based manufacturer of washroom technology, Managing Director Paul Wonnacott has seen a substantial rise in opportunities abroad, particularly in places like the United Arab Emirates and Qatar where there’s been significant real estate and infrastructure investment. He adds: “In the UK, sectors such as hospitality and healthcare, where hygiene is very important and venues like holiday parks and activity centres that are being judged by their levels of cleanliness, have all led to an increase in opportunities for us as a hygiene supplier.” Dealer diversification into FM is often regarded as an essential survival move. Noel Huebner, Director of Marketing, Alternate Channels at Soundview Paper, warns: “Slowed market demand for core office products is fuelling the urgency for expansion into FM. If dealers choose not to embrace it, they will either be sold or go out of business.”

Expertise is key However, Rob Abrahams, European Purchasing Director at ADVEO, believes it’s not an area you can enter into blindly. He says: “I think there’s a significant opportunity in the FM market, but there’s a severe lack of expertise and understanding in the sector. This needs to be acquired (perhaps through a business acquisition) and those that do will stand a much better chance of success. "Some product areas such as PPE are very technical and care is needed when recommending products and carrying out the risk assessment. Training in these areas is absolutely critical.” SPR’s Whiting agrees: “If dealers want to get deep into the FM category, they cannot do it with the same processes that they use for traditional OP. This is a more hands-on, problem-solving business that

rewards those that get beyond just selling by price. Progressive dealers are hiring specialists and acquiring local distributors with the expertise and customer base to really put them square in the business. Leveraging their wholesaler for help and attending as many training sessions as possible is also critical to success.”

Safety net A key category singled out by many as being increasingly important centres on workplace wellness, safety and personal protection. As United’s Pelletier explains: “The consumer is more aware and concerned about workplace wellness than ever before. Plus the high cost of absenteeism and the need to clean, disinfect and sanitise public and private areas in the workplace is increasingly apparent. As soon as the news mentions the cold or flu season or the outbreak of a virus, we see a

corresponding sales lift in these types of product.” The seasonality of certain types of cleaning products was also mentioned by Reckitt Benckiser’s Marsh: “We look at the calendar and see three distinct seasons that drive a lot of activity – cold and flu, spring cleaning and back to school. But these seasons are not unique to us and our resellers need to understand the value of being prepared for them.” Whiting also mentions safety as a sector with big potential: “We’ve done a deep-dive into the safety marketplace and believe there’s an exciting opportunity to become a major player in this space. It’s growing by 4-6% a year driven by more workplace regulation and the high concern of expensive safety-related lawsuits if workers are injured. The dealer reps really need to get 'off carpet' and find the right decision-makers. We recently trained 1,000 reps in 18 cities

May require batteries Both manufacturers and resellers are reporting a rising demand for batteries and battery-powered products. GfK data shows that UK sales of torches, for example, have risen by a staggering 67.2% in the year to date. Kim Olson, Division Vice President of Industrial Government at battery manufacturer Rayovac, confirms the trend: “Rayovac has tripled its sales to the OP channel in the past five years. OP resellers are demanding batteries and torches more and more. As they look to new markets for growth, they are capitalising on the new business these channels bring them.” P&G has recently announced plans to divest its Duracell battery business to Warren Buffett’s Berkshire Hathaway. The transition is likely to happen in the second half of 2015, but until then P&G remains fully committed to driving the Duracell business. And Marcus Kallweit, Channel Leader Office Supply Europe at P&G, is optimistic: “The battery market is seeing stable growth of 2-3% globally and Duracell is the market leader with about 37% share by value and growing. Launching better-performing battery technologies has created new sources of income. “We are also seeing greater market penetration of battery-powered devices as demand for personal portable power increases. We expect that the rise of wearable technology and devices such as exercise and activity monitors, as well as home healthcare devices, will increase sales by more than 60% over the next five years.” It’s the emerging markets that are generally driving growth with their burgeoning and increasingly affluent populations. The average developed-market home has 25 battery-operated devices while the average emerging-market home has seven, but that number is growing fast. Alkaline batteries represent 85% of the market in Western Europe, and now that most technology products have their own custom-made batteries integrated into the device, lithium ion batteries have largely become irrelevant, with less than 1% market share.

w w w.opi.net | OPI Magazine

Facilities Management | Category Analysis to ensure they feel more comfortable about penetrating deeper into their accounts and making the most of these safety opportunities.” Fear of pathogenic microbes is also having an impact on this sector, adds Whiting: “Adjacent to pure safety is employee protection from viruses such as Ebola. This has placed a premium on hand, body and face protection.” He wasn’t the only one to mention the tragic Ebola outbreak in West Africa. Walter Johnsen, CEO of Acme United, explains: “Acme was one of the first companies to donate products to West Africa. We shipped over 150,000 respiratory masks to Liberia and other companies followed with gloves and gowns. At home, the Ebola situation has focused awareness that businesses need to be prepared.” A recent US Occupational Safety & Health Administration guideline recommended that employers select PPE that will protect against the Ebola virus and others hazards, and sales of spill clean-up kits and protective clothing are soaring. Containment kits for blood-borne pathogens are also in high demand at airports and among first responders such as the police, firemen and emergency medical technicians.

Catering

And the wider first aid market is huge, Johnsen points out, as there are 10.5 million buildings used for business in the US and first aid provision is a requirement in most of them. Parallel opportunities such as fire-suppression equipment also exist CEP's new Take A Break range – there are currently 6,000 fire extinguisher dealers in the vibrant market for those companies US alone. that are nimble enough to benefit. Drill down further into the GfK The green agenda is also mentioned sales data and there are some by Karen Harrison, Group Marketing intriguing facts. VOW’s Nice gives Manager at AF International, an example: “This was a massive specialist in PC, workstation and year for fans and water products multimedia cleaning products: “We’ll thanks to the lovely summer. The EU be launching the AF Sprayduster also passed legislation that altered Zero at Paperworld. It’s truly a vacuum cleaner ratings which meant ‘world’s first’ for those who no longer we’ve seen significant improvements want to buy spray cleaners that are to our range as manufacturers highly flammable and bad for the updated their machines to comply.” environment.” Legislative changes are having other effects too. In California, a law Food for thought has been passed to ban traditional Feeding your workforce is another plastic bin liners. United has seen a key area. Bill Baker, President of corresponding surge in demand for OfficeSnax, explains: “I believe biodegradable bags, Pelletier explains: the breakroom is more important “Government is changing the than ever. As companies are asking mandate on what suppliers can claim employees to work more hours is biodegradable at critical times, they need to be and compostable. providing more. That’s where our UK sector sales performance Any bag now range of food, snacks and beverages (Oct 2013-Oct 2014) entering the solid comes in. We’ve been growing for 13 waste stream must years and this year we’ll be reporting completely degrade record sales.” within 12 months. CEP Office Solutions in France That presents an also believes it has found a niche opportunity for in the office catering market with a those that are quick new range. Cédrik Longin, Managing to react.” Director, says: “We’ve been in the FM A number of other market for two years and breakroom states, meanwhile, represents a fast-growing category. have passed laws However, there’s no current solution requiring all for easily organising coffee and tea state facilities to breaks in meetings. Our Take A Break provide only ‘green’ range, to be officially unveiled at products – no Paperworld, will make meetings more disinfecting cleaners pleasant by providing attendees with or antibacterial all they need to create their drink of soaps, for example, choice all in one place.” are allowed. This The FM sector may be huge, again has provided but there are certainly exciting a surge in demand opportunities within it for those for compliant FM with the foresight and expertise to Janitorial Mailroom & Office PPE Safety & Warehouse Environment Security products and a grab them.

Source: Office Total Store Report, GfK

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Your OPI

5 minutes with... Fabio Vitali, Central Marketing Manager, Sofidel - Papernet

Describe what you do in less than 20 words. My marketing team try to support sales, inventing new products, ways and tools to increase sales and profit. Your first full-time job. I was marketing assistant for Hewlett Packard carrying out research into Italian hospitals… I interviewed some 50 senior managers… I was so naive, but passionate! I kept this, I hope. The worst job you’ve ever had. Any job is a good one, especially in such difficult times. I was barman in the UK where I learnt English. There I met my wife. I think she thought she couldn’t understand me because of my English… by the time she realised that it wasn’t a language problem, it was too late! Your favourite event on the OP circuit and why? I really like OPI Partnership. It’s a great opportunity to conduct business at a high level. What do you think has been the best innovation in the OP industry in the last two years? I am not an expert and I might sound old-fashioned but I believe Post-it notes were a great innovation and still are! Despite the arrival of digital notes, Post-it are a preferred choice. They are still resisting progress. Your favourite office product. I am a pen fanatic: blue, red, black… just some of the 100 on my desk. Also my notebooks which are essential for meetings.

“I am a pen fanatic: blue, red, black… just some of the 100 on my desk”

What do you like best about the OP industry? It is a dynamic, fast moving and evolving market. The idea of interacting with lots of different small offices is like a picture with millions of different colours – you look at it trying to find a common meaning. What business/management book would you recommend as essential reading? The New Rules of Green Marketing: Strategies, Tools, and Inspiration for Sustainable Branding by Jacquelyn Ottman. It is a good opportunity to consider things from another point of view. It may not be as fresh as it was when it was first published, but it’s still relevant. The first record you bought? I still remember it very well. It was Joshua Tree by U2 for H6 ($7.50) in vinyl. I heard it on the radio, but I couldn’t identify who was singing. So I went in the shop and I had to whistle it… so embarrassing. No Shazam at that time! Any pets? No. Fortunately I don’t, but I have a daughter and sometimes there isn’t a big difference! How would you like to be remembered? It would be enough to be remembered, honestly, and possibly in a good way! I would love people to smile and have a nice, funny moment when they remember me.

What do you think will be the biggest single factor/ issue affecting the OP industry over the next five years? The decrease in copy paper decrease is something the OP industry is facing every day. OP distributors need to move from copy paper to other categories ie tissue and breakroom products. This challenge together with the use of e-commerce is key for success. The biggest change that has taken place in the industry since your career began. Definitely communication. Not only in term of quantity and speed, but also quality. Nowadays your promises must be true and made tangible if you don’t want to be kicked out of the market in a second.

If you weren’t doing your present job, what job would you like to be doing? I like talking to people, acting, and cooking. So maybe a chef or something related to the theatre. www.opi.net | OPI Magazine

Your OPI

Final word Your industry, your opinions

Chris Whiting, VP Cleaning & Breakroom Supplies, SP Richards

Prepare to be proactive

2014, SP Richards successfully onboarded two strategic and promising new companies in the facilities and breakroom category, allowing us to sharpen our focus and build more capability. These investments position us well for the future and have added a high level of excitement as we build on these strong platforms. One of our key initiatives for 2014 was to help dealer sales reps (DSR) build confidence and become more equipped to move ‘off carpet’ in their existing end-user accounts into the profit centres such as the janitor’s closet and the supply room. By doing so, they can identify new opportunities that may be missing today to sell products such as buckets, ladders, mops, can liners and tools. This initiative manifested itself in the form of our OnPoint training series. Over the course of four months, we conducted sessions in 18 cities for approximately 1,000 DSRs. Following the conclusion of the training, all dealers and our strategic vendors have seen a very positive return on investment of time and resources, demonstrated by strong sales growth among participating independent dealers. The success of OnPoint was due in large part to the leadership of the Business Development Managers (BDMs) who are another integral part of our strategy. These specialised BDMs are able to go arm in arm with the DSRs into qualified accounts and add another layer of confidence.

According to the Occupational Safety and Health Administration, the ‘fatal four’ workplace injuries are falls, being struck by an object, electrocutions and caught in/between an object or objects. Approximately 468 workers’ lives in the US would be saved every year by eliminating the fatal four. Our primary focus in the safety category will be PPE (personal protection and equipment). This includes products for hand, eye, ear, head and body. Nitrile and latex protective gloves are a major part of this business, and we are well positioned with the growing Genuine Joe glove portfolio and the competitive advantage obtained with the acquisition of Impact Products. We are very committed to giving office products dealers the ability to increase their market share in facilities and breakroom versus traditional jan/san distributors by extending the competitive advantages such as e-commerce capability, smaller units of measure and true next-day delivery. In summary, remember that the importance of venturing off carpet is critical to your success, and start planning for a strong focus on the up-and-coming safety category. There will be more information and opportunities in the coming months, so prepare to be proactive rather than reactive in 2015. The safety category is an important direction for the future and will be the next strategic initiative to help dealers win in the marketplace. On a side note, it was great seeing familiar faces from the OP space at the 2014 ISSA Interclean trade show in Orlando. Be sure to include the National Safety Council Congress & Expo at the Georgia World Congress Center in Atlanta from 28-30 September 2015 in your calendar to help build your understanding of the safety business. Good luck in the New Year!

“We are very committed to giving office products dealers the ability to increase their market share in facilities and breakroom versus traditional jan/san distributors”

The next big opportunity Our most recent focus and the next big opportunity is currently a $10 billion category that is projected to grow between 4-6% annually over the next five years: safety. This category growth trend is due to increasingly stringent regulations and litigious concerns behind protecting employees from injury, and the new United Nations Globally Harmonized System of Classification and Labeling of Chemicals (aka GHS) which chemical manufacturers, importers, distributors and employers in the US will have to be compliant with by June 2015. Currently, dealers are taking a reactive approach to the safety category. In 2015, we are pivoting to a more proactive approach by taking advantage of expertise and economies of scale provided by leveraging several Genuine Parts’ subsidiaries in order to emerge as the category leader.

OPI Magazine | December 2014/January 2015

Want the final word? Email editorial@opi.net or write to OPI, Diamond House, 36-38 Hatton Garden, London, EC1N 8EB, UK

IN THE NEXT ISSUE • Big Interview with PBS Holding’s Richard Scharmann • A close look at the changes taking place at leading German dealer group Soennecken

Office Products International

Big Interview

ISSUE NO.2 4 5

The word in office.

magazine

Andrey Kudryashev, Co-owner/Development Director, Pragmatic p14 December 2014/January 2015

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Robinson Young: FM category facilitator p30 Big box p20 Spicersâ&#x20AC;&#x2122; future under the SPOTlight Q3 cheer p10