OPI July/August 251 US by OPI

The word in office.

magazine

Big Interview

Nicolas Potier, Managing Director, JM Bruneau p14

July/August 2015

p20 What next for ADVEO? p46 Furnish the future The NAOPA 2015 winners p38

Leadership change at AOPD p26

Contents July/August 2015

www.opi.net 30 Amazon bites again

News

Amazon in Germany: OP threat?

6 Round-up

32 Creating spaces

GSA contract awarded; Doubt over Staples/Depot FTC approval?

The benefits of agile workspaces

8 News Analysis

34 The furniture fight

Features

Reviews

Spoiling for a price fight in the online office furniture market

Positive news from Spicers; Alan Ball returns to OP

36 ABC/NAOPA

14 On a direct line

A summary of ABC 2015 and the NAOPA – who came out on top?

JM Bruneau Managing Director Nicolas Potier explains why France’s leading direct reseller continues to take share in a declining market

42 NeoCon

A report from North America’s biggest commercial furniture event

20 What now for ADVEO? ADVEO’s new CEO has been charged with turning around the wholesaler’s loss-making Spanish business

Kentucky dealer Office Environment Company is staying on the cusp of workplace trends

Category Analysis OPI explores the latest trends in the office furniture world

Regulars

26 Leaving it to Mark

5 Editor’s comment

OPI talks to Mark Leazer, the future leader of AOPD

The Highlands Group teams up with R2 to better service dealers

French industry gathers in Monaco

46 Furnish the future

24 Best seat in the house

29 Collaboration for dealer growth

44 UFIPA

52 5 minutes with... Chris Scott

54 Final word Dennis Arnold

Another area ADVEO needs to focus on is category expansion: about

95% of sales come from IT/ EOS and traditional stationery. If the wholesaler wants to position

itself as a one-stop-shop for its B2B clients, then it needs to move more aggressively into other categories... For the full story, turn to page 20

This month’s cover is supplied by Shiny

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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 2941 events@opi.net

Production and Finance 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 Jairo Paya +44 (0)20 7841 2956 jairo.paya@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

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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.

Fantastic furniture Welcome to this first-ever Furniture Special issue of OPI. Actually, I’m not convinced that ‘furniture’ is the right word anymore; it’s so much more about workplace environments and covers a multitude of product groups. What’s clear, though, is that it is currently a buoyant sector: the recent NeoCon show in Chicago (see page 42) was a sell-out, specialist dealers are seeing sales soar and manufacturers are busy bringing out innovations to cater for evolving working habits We talk about the impact and more health-conscious of millennials at work, workplaces. and this is certainly We talk about the impact of something that is millennials at work, and this apparent in how modern is certainly something that workplaces are designed is apparent in how modern workplaces are designed and furnished and furnished, providing the flexibility that allows for collaborative and individual working in design-led and ergonomic surroundings. There’s also a bit of a Spicers theme this month. CEO of Spicers-OfficeTeam Jeff Whiteway provides an update on the wholesaler on page 8, while the following page details the return of former Spicers CEO Alan Ball to our industry. Meanwhile, our Hot Topic (see page 20) looks at the challenges facing ADVEO, the firm which includes Spicers’ former continental European operations. Congratulations to all the winners at this year’s North American Office Products Awards which were handed out at last month’s SP Richards ABC event in Las Vegas; there were certainly some interesting and innovative winners. Now it’s time to turn our attention to the next European Office Products Awards (EOPA) – March sounds a long way off, but things come around quickly and the call for entries is imminent. Turn to page 17 for more details on the EOPA categories. Andy Braithwaite Editor

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

@opinews

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Four more for Bunzl News from opi.net Mergers & Acquisitions

Sysco decision throws doubt on Staples/Depot deal In June, a US judge backed the Federal Trade Commission’s (FTC) move to block the proposed mega-merger between food distributors Sysco and US Foods, resulting in Sysco pulling out of the deal altogether. The FTC has shown its teeth in the Sysco/US Foods merger and sent a strong message that it is not afraid to block deals where it believes competition will be reduced. Naturally, parallels have been drawn between the Sysco/ US Food deal and the proposed acquisition by Staples of Office Depot, with the two largest national players coming together in their respective industries. Judge Amit Mehta said that the FTC had shown that there is “a reasonable probability that the proposed merger will substantially impair competition in the national customer and local broadline markets”. We will now have to wait a few months to see if the FTC views the office supplies channel in a similar light to the food distribution business (for more on this see News Analysis, OPI April 2015, page 13). However, the Staples/Office Depot deal has already been cleared by regulatory agencies in New Zealand and China. Antitrust clearance is still required from other agencies including those in Europe and the US. Meanwhile, the Australia Competition and Consumer Commission (ACCC) has delayed the announcement of any decision regarding the Staples acquisition of Depot. The ACCC had originally penned 9 July as the announcement date, but has requested more information from Staples and from Office Depot (which trades as OfficeMax in Australia). As a consequence, the timeline has been suspended and a new decision date will be announced in due course to allow both parties to provide the requested information.

Large Resellers

Erratum In OPI #250 on page 26, we misquoted Office Brands CEO Gavin Ward. His quote should have read: “The devaluation of the Australian dollar is causing a significant change in pricing in the market. I believe customers are aware of the fact that prices need to increase. But the important thing is that everybody does it and that we don’t have price collusion in Australia.” Our apologies for the original misquote.

OPI Magazine | July/August 2015

Distribution and outsourcing group Bunzl is to acquire four more businesses in the US, Colombia, Canada and France. Three of the businesses – Cordova Safety Products, Importadores Exportadores Solmaq and Ligne T – are extensions of the company’s existing safety businesses in the US, Colombia and France respectively. Tennessee-based Cordova is a US distributor of personal protection equipment (PPE), mostly own label. Sales for the year ended 30 September 2014 were $81 million. Bogota-based Solmaq supplies PPE and other industrial consumables to distributors, retailers and end users in Colombia. Sales for the year ended 31 December 2014 were COP54.8 billion ($22 million). Montauban-based Ligne T is a distributor of PPE, mostly workwear, supplying a variety of end users throughout south-west France. Annual sales ended August 2014 were L5.7 million ($6.4 million). The fourth acquisition is Calgary-based GF, a distributor of industrial packaging, warehouse supplies and equipment. Sales ended 31 December 2014 totalled C$81.4 million ($66 million).

Technology Solutions

SPR and ECi launch combined platform US wholesaler SP Richards (SPR) and technology provider ECi have partnered to integrate the SPR MyAnalyst program with ECi’s Acsellerate to form a sales and margin solution for independent resellers. The new platform will marry the MarketLink, BidPro and MyReports components of MyAnalyst with Acsellerate’s CRM, Profitability Manager and Business Reviews. SP Richards SVP of Marketing Jim O’Brien said the single platform will deliver the “best technology, consulting, training and support exclusively to Advantage dealers”.

Large Resellers

The US General Services Kris Colt Administration (GSA) has made the award on its OS3 Requisition channel contract, estimated to be worth $200 million a year. The Requisition contract is mainly aimed at Department of Defense customers and has been divided into a number of product categories, or CLINs: general office supplies, paper and toner/ink. There was good news for TriMega dealer Mono Machines. The California-based reseller was one of just two awardees on CLIN 1 for general office supplies. Mono Machines’ President Kris Colt told OPI that the company was “really excited” to be given an award and that it is now busy preparing for the launch of the contract on 3 August. GSA is introducing a new order processing system for this contract which means there will be a gradual onboarding of customers over a period of several months, but the contract is expected to be fully up to speed by the beginning of November. The awards on the Requisition channel contract are for a period of 12 months with up to four one-year extensions, giving a maximum period of five years.

Independent Resellers

Australian reseller Officeworks has opened a 3D centre in one of its Melbourne stores providing access to 3D products and services. The 3D Experience Centre features a range of 3D consumables and hardware, and offers customers the opportunity to either bring in an item to be printed in 3D or print directly from a 3D design file while in the store. The centre also offers a 3D scanning booth that enables customers to scan themselves and create a ‘mini-me’ 3D replica. Officeworks Head of Technology and Merchandise Toby Watson said that the centre’s aim was to educate consumers on the relevance and benefits that 3D printing can offer. He added that the facility would evolve with the needs of its customers.

News n Round-up

GSA names awardees on Officeworks opens $1 billion federal contract 3D experience store

news n Analysis

Spicers turns the corner SPOT Group CEO Jeff Whiteway reports on Spicers’ progress at the Superstat conference

a frank presentation at the recent Superstat annual conference, SPOT (Spicers/ OfficeTeam) Group CEO Jeff Whiteway reiterated Spicers’ commitment to the dealer channel and confirmed that the wholesaler was improving its operational performance. In a no-holds-barred talk, Whiteway thanked his predecessor Greg Michael, who had addressed the same audience a year earlier, apologising for the “mess” the wholesaler had caused within the office supplies channel. Whiteway – who became CEO of SPOT last August – explained that the honesty displayed by Michael was the start of a culture change at Spicers. Still, he admitted that 2014 had been “a disaster”, with Spicers running at an operating loss of almost £40 million ($62 million) in the 16 months to August 2014.

Perfect storm A number of key issues, which Spicers dealers and dealer groups will be painfully familiar with, resulted in a perfect storm. As everyone is well aware, the decision by owner Better Capital to move from the Sawston site to Smethwick – at a quarter of the size – in addition to moving stock over the December holiday period, caused havoc. In addition, staff were not trained on how to use the new inventory system and Whiteway admitted that “we lost control of the inventory”. Jeff Whiteway

While reiterating Better Capital’s commitment to the OP industry and SPOT – £110 million in investment is proof of this – Whiteway predicted that the private equity firm would not be the owner of SPOT within five years. “Does this affect the business? No, it doesn’t. Every time we change P/E houses, [it] hasn’t impacted the company at all,” he told Superstat delegates. For now, Better Capital will be pleased with Spicers’ current situation, which in Q1 2015 saw the wholesaler move back into profit. Admittedly, it’s not a huge surplus, but it heralds a more positive outlook for the wholesaler and shows the success of its ‘back-to-basics’ strategy. Keeping the company profitable is clearly Whiteway’s main priority, with the key to growth coming from increasing sales through its dealers. He also pointed out that he is not working in the dark with this, having the “advantage” of OfficeTeam being Spicers’ biggest customer. In order to achieve this increase in sales, Spicers will help dealers deliver a wider range of products to existing customers. Here, Whiteway referred to categories including breakroom, jan/san, furniture and technology: “What we want

to become is a one-stop shop for dealers. When a customer needs a product – whether it be a tennis racket, alcohol or a first aid kit – they can come to you.” That diversification is important, as currently 88% of Spicers’ sales are from traditional office products, clearly not in tune with the sales mix of the modern dealer.

Investment in talent Moving into new areas, however, is going to require investment in sales talent, in particular people who understand today’s technology. Whiteway didn’t rule out bringing in the required expertise in the form of acquisitions, but for now recruitment has been the way forward. In fact, two experts in facilities management recently joined Spicers, helping to infuse knowledge of the category into the wholesaler. Fielding questions from the audience about OfficeTeam potentially being a competitor to dealers, Whiteway reassured delegates that OfficeTeam would – within the confines of UK competition law – move away from a deal if it was found to be a dealer’s account. But he emphasised that dealers should be proactive and register the accounts with Spicers. The move back into profitability is certainly good news, not only for Better Capital and for Spicers, but for the wider UK OP industry, where two strong wholesalers are regarded as a key factor in achieving a healthy state of competition in the marketplace. Spicers isn’t out of the woods yet, but it appears to be on the right track; now it needs to keep its focus on getting the basics right and on a few key strategic growth initiatives.

Diversification is important, as currently 88% of Spicers’ sales are from traditional office products

Editor’s note: OPI appreciates Jeff Whiteway’s permission to report on his presentation, which was originally not intended for public consumption.

OPI Magazine | July/August 2015

Alan Ball returns to the OP industry

Former

Spicers CEO Alan Ball has made a return to the office products industry about a year after leaving the UK wholesaler. Ball set up his own firm – Graphite Business Management – at the end of last year and has been working on a number of non-office products-related initiatives, but has now re-entered the OP sphere with no less than three projects. Firstly, it was announced on 23 June that Ball had been named as Managing Director of Shoplet’s European operations. Ball was closely associated with bringing Shoplet to the UK three years ago and had developed a good relationship with the e-tailer’s founder and President Tony Ellison.

Operational autonomy Ball is not an actual employee of Shoplet, but still has full, autonomous responsibility for growing the business in the UK and in Europe. Before expansion into continental Europe can be considered, however, a standalone infrastructure needs to be established and the company has to establish operational autonomy, having been registered at Spicers’ address near Cambridge, UK, since it was established at the start of 2013. An office has just been opened in the town of Chelmsford and the next thing on Ball’s list, he told OPI, is “to ensure that we have a robust supply chain of products and categories”. The Alan Ball Spicers contract will expire at the end of this year and Ball has made the UK wholesalers aware that he will be putting a new contract out to tender very shortly. On the prospect of working with Spicers, Ball said that this would not be an issue at all. “I want the best commercial deal for the business,” he said. “Whoever delivers that – and I

News n Analysis

A lot of balls in the air have confidence that it is sustainable – I’ll work with them.” Once this phase of the project has been completed, Ball will look at expanding product categories – based on the same, successful diversification model that the parent company in the US has been following in the past few years – and adding staff, including “proactive” sales staff. Shoplet enjoyed a good start to its life in the UK, with sales reaching about £5 million ($7.6 million) in its first year of trading. For a number of reasons, the sales run rate is not that high at the moment, so there is some business to win back and what Ball sees as an opportunity to grow fairly quickly. Once the UK business is performing well, Ball said he will turn to the continental European market. Nevertheless,

“I want the best commercial deal for the business” European expansion is more than just a vague plan. Ball confirmed that he knows exactly what he wants to do and has already identified partners that have not only the capacity to deliver the products, but also the range of products required. In terms of which specific European markets he has identified, Ball would not comment, but countries such as Germany and France are unlikely to be top of the list, OPI understands. He did say that he has identified markets that will provide the best return, and the plan would then be to have a phased roll-out. Another iron in Ball’s OP fire is the work he is doing with Stewart Superior. He has been retained as Strategic Development Director for the UK vendor’s US and European Operations. This follows a successful couple of months supporting

Stewart Superior’s ‘global reach local touch’ vision and helping to develop a partnership strategy that takes the focus away from the commoditisation of products. Listings have already been achieved in Europe and the US, and Stewart Superior Managing Director Geoff Betts called Ball “a breath of fresh air” in supporting the business.

Global contracts initiative Thirdly, and perhaps most interestingly, Ball is at the centre of a venture to establish a global, cross-border contracts network between vendors and resellers. He has registered a company called Global Office Contracts and – with support from partners in the US – is organising an event in Miami at the beginning of November this year to present the concept to around 20 resellers, mainly dealer groups and large dealers. Is this treading on the toes of organisations such as BPGI and EOSA? Find out more on opi.net. w w w.opi.net | OPI Magazine

OPI asked vendors, dealers and wholesalers where they are seeing growth in workplace solutions, and what the major trends are. Below are some of the responses. (For a full analysis of what’s happening in this vertical sector, read this issue’s Category Analysis on page 46) Within our category we’ve seen strong growth in soft seating and tables that create open and collaborative spaces within the office environment. These furniture solutions provide working teams with a more collaborative, casual setting in which to share ideas than the traditional conference room. Chad Johnson, Director of Brand, Communications and Content, HON End users are looking to install more informal spaces for people to work and hold meetings, so demand for pods with couches and comfortable seating is on the up. You’ll see meetings over tables using tablets, phones and even portable mini projectors. Matt Allaby, Furniture Business Development Manager, VOW Products that support collaboration, in an informal or formal setting, will continue to be very popular, as will products that effortlessly integrate different technologies into these settings. The world has turned its back on the cubicle farm. As the workforce evolves, the workplace needs to evolve with it. John Michael, General Manager, Business Interiors, Staples The trends toward decentralisation and flexibility have resulted in a greater emphasis on finding ways to encourage collaboration, learning and socialisation within the workplace. Thanks to mobile and space-saving technology, workstations are becoming significantly more compact. Glenn Moore, Director, Category Management, Essendant

News ■ And finally...

Comment

TWEET CHAT

50,000+ Number of visitors to NeoCon 2015

4.9 billion

@sgdouglass Is ‘work-life blur’ the new ‘work-life balance’? Certainly feels more accurate... #newrulesofwork #NeoCon2015 @Steelcase #Design is about solving problems and one of the biggest problems workers face today is distraction.

Number of connected “things” in use this year

$10 billion+

Online office furniture sales in the US in 2014

@Knoll_Inc 68% of the workforce has a chronic health condition; 88% if obesity is included. They lead to 75% of healthcare claims. #wellness #workplace @nathan5871 “I don’t wanna work, I wanna just pedal a bike all day...” #Neocon2015. No, you’re not hallucinating

89%

Percentage of businesses that will offer some kind of mobile working by 2020

SNAP SHOT The Listening Table, designed by the New York Times Research and Development Labs, hears and understands the conversations taking place around it. The streamlined table is equipped with microphones connected to thermal cameras so it can determine who said what. It also provides a summary of the meeting when it is finished.

Office work has become more flexible, more digital and, above all, more mobile. The workplace of the future must be set up in such a way that it works equally well in the traditional office, the home office, in the rented office or even while on the road. Simone Preis, Spokesperson, Soennecken Wireless infrastructure means workers can work anywhere and this increases power requirements in ancillary furniture such as side tables, lounge furniture and café areas. Incorporating flat screens in collaborative areas with mobile units and integrated into furniture pieces is becoming more popular. Sandi Jacobs, Secretary, Independent Office Products & Furniture Dealers Association (IOPFDA) On-desk power sockets and USB charge points are a key trend, helping employers to work towards more electronically-based working practices. Storage is less prominent and more shared/centralised. Chris Scott, Managing Director, DAMS International The focus is increasingly on touch-down, break-out spaces, integrating technology to increase the efficiency of people. It is also about creating areas that are better for communicating and collaborating within, which in turn can generate innovation and encourage socialising within the workplace. Phill Sutcliffe, Sales Director, ZenOffice Business Interiors & Exteriors

opi.net poll results Resellers, what are you seeing in sales of office furniture?

Growing strongly 28% Slightly growing or flat 47% Declining 14% We don’t sell 9% office furniture

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Big Interview | Nicolas Potier

On a direct line If the proposed merger of Staples and Office Depot goes through, that could have a big impact in France where their respective JPG and Viking businesses operate in the direct channel. However, the market leader is 60-year-old firm JM Bruneau, which could be set for a fresh lease of life under new private equity ownership

“I believe our taking share is the result of our continuous improvement strategy”

FRANCE’S

leading direct office supplies reseller JM Bruneau has recently come under new ownership in the form of Weinberg Capital Partners. Far from shaking up their investment, the new shareholders have kept faith in Managing Director Nicolas Potier and his management team to continue with their development strategy for the D300 million ($330 million) business. When Potier joined Bruneau in July 2010, he was new to the business products industry, having previously worked in technical sales and general management – both in France and abroad – for firms including Air Liquide, General Electric and Alcan Packaging. He has certainly made his mark on the industry and is currently Chairman of French trade association UFIPA (see page 44 for a report on UFIPA’s recent annual conference). OPI met up with Potier at the UFIPA conference in Monaco to find out what makes Bruneau tick… OPI: You were new to the OP industry when you joined Bruneau. Was it a culture shock? Nicolas Potier: Not really. Of course, there were aspects that were different, especially in terms of marketing. But when you are an integrated business like Bruneau with its logistics and its commercial side operating mainly from one facility, it’s not that much different from running a factory – it’s just a factory which prepares packages and delivers them to clients. I also discovered at Bruneau a small business mentality and a strong client-service culture which

OPI Magazine | July/August 2015

JM Bruneau | Big Interview

“We aim for a level of excellence with all our customer touch points”

were similar to what I had experienced when I was working in Turkey. This service mindset was engrained throughout the whole of Bruneau, and my goal has been to continue with this because I think it’s an extremely important aspect of the company. OPI: Looking at Bruneau’s recent history, how long had you been aware that the former owners [3Si, jointly owned by the Otto Group and the Mulliez family] wanted to sell the business? NP: The decision to sell Bruneau was made at the start of 2014, so everything happened relatively quickly. OPI: Did you sense – even before then – that there was any lack of desire to continue to invest in Bruneau? NP: No. The Mulliez family and the Otto Group have a strong B2C rather than a B2B culture, so it was natural that they didn’t view Bruneau as a strategic component. At the same time, I am lucky to run a company that is successful and healthy from a financial point of view, and there was no real urgency or financial need to sell. OPI: But that feeling of uncertainty can always have a negative impact on things like staff morale, etc. NP: The two shareholders of 3Si left us a lot of autonomy. The results were good and we were never limited in our ability to invest, with the possible exception of making acquisitions. But in terms of investments, over the past four or five years we have invested a lot in modernising the IT infrastructure, for example. And our performance was not affected in the slightest. OPI: Could you just remind us of Bruneau’s main business areas? NP: The Bruneau Group can be divided into four subsidiaries: Bruneau France, Bruneau Belgium, Bruneau Spain and Maxiburo, an e-commerce business that used to operate as OTTO Office in France. Combined, we have annual sales of around H300 million and about 750 employees, of whom about 600 are in France. Our headquarters and main distribution centre are located south of Paris in Les Ulis; this facility handles all orders for Bruneau France, Bruneau Belgium and Maxiburo. Spain

is a case apart because it has its stock and order processing in Barcelona. France represents about H230-H235 million in sales, followed by Belgium with about H55 million. Spain is a much smaller operation at about H15 million. We have a healthy operating performance and last year EBITDA was about H25 million. OPI: How have you been doing in 2015? NP: Group-wide our sales and operating results in the first half of the year are roughly flat versus last year. 2014 was a good year, admittedly, but we were expecting things to be a little better this year, although we are not seeing an uplift yet. That said, we continue to take market share because the market is declining overall. OPI: Are you actively chasing market share gains? NP: I believe our taking share is the result of our continuous improvement strategy and because we are constantly looking at making things better for the customer. If something is not right, even a small thing, we try to put it right straightaway. That’s something I personally keep a close eye on, and I put myself in the shoes of the client. I think this attention to detail is one of the reasons clients are attracted to us and why they remain loyal to us. OPI: Let’s look at your recent acquisition by Weinberg Capital Partners – for just under L100 million, I believe. NP: That is correct. The acquisition officially went through on 31 March. It was a reasonable price given our sales turnover and financial result. OPI: It sounds like a bargain at less than four times EBITDA… NP: That was the price. But it does allow us to look serenely at the future; to have the ability to grow and expand, and not to be suffocated by large debt. OPI: What is your main shareholder’s strategy? From what I have read, it’s pretty much a case of business as usual. NP: That’s right. Above all, they are financial investors, but with the unique position of knowing this industry very well from their time at PPR when it owned – and then sold – JPG and Guilbert. In fact, their industry insight is partly why Bruneau interested them – they could really see our potential.

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Big Interview | Nicolas Potier But the development of a strategic plan comes from the Bruneau management team and then it is approved (or not) by the shareholders – that is how it works. There is also a lot of informal contact with them which allows us to generate ideas, etc. OPI: So they must understand that office supplies is an industry that is experiencing numerous challenges. NP: They know that, of course. Above all, they know that in this evolving and consolidating industry – with the possibility of a very large consolidation between Office Depot and Staples – Bruneau is in an interesting position. So we will continue to be consistent in our strategy, which is based on a number of key fundamentals. OPI: What are these fundamentals? NP: First and foremost is our focus on the client, meaning that we aim for a level of excellence with all our customer touch points, whether that is via the internet, our catalogue, after sales, telesales, delivery or personal meetings with clients. That needs a stable, experienced team – which we have – and with the new investment we have a fairly long timeline to build on this solid foundation to help us win market share. We also recognise the need to be more competitive; we have been successful in reducing our costs and will continue to do so. If we look at our top line, what are the two things we look at most closely? Firstly, it’s expanding our range of products. We’ve been doing that for a number of years and now we have more than 30,000 SKUs. We don’t stock all of those – some are sent by direct shipment from manufacturers – but with all the IT improvements we have made, we now have the ability to sell far more products, and we will continue to develop this strategy. Another important area is to work with larger customers and not to limit ourselves to SMBs, which are our historical customer type. We want to develop these corporate clients – and we have some large ones already. One of our strengths is that, as well as office supplies, we have a large office furniture and office equipment offering. We also have a very competitive proposition with a range of services – moving, installation, etc – that are popular with larger clients. All of the above are ways of achieving internal growth. But, with the support of our new shareholder, we are definitely not ruling out external growth. That will depend on our resources and on how our short-term results enable us to work on acquisition opportunities.

OPI Magazine | July/August 2015

OPI: Are there any opportunities you are looking at? NP: There will be, I am sure. But we don’t have any predefined plans on that subject. OPI: Does the French market need to consolidate further? NP: When you look at the structural declines and the profitability of the market players, I think it will be necessary. But it will probably happen anyway with Office Depot and Staples. Will it need more than that? Perhaps. OPI: What would it mean for you if that merger happened? NP: We have our own strategy and will focus on what we do best. OPI: Do you think that the Viking [owned by Office Depot] and JPG [owned by Staples] businesses are as strong as they once were? NP: I don’t think that we are underestimating these two brands; they are both very strong players in the market. However, when these types of mergers take place, there is a tendency to look inwards – that’s normal. OPI: What’s your view on the recent acquisition of RP Diffusion? NP: We don’t rely on the wholesale channel, so I don’t have a strong opinion on that. I will say that I believe it’s a positive thing to have healthy operators in the channel, but Bruneau and Rouge Papier retailers are really in different markets and we hardly come across each other.

JM Bruneau Fact File Founded: 1955 by Jean-Marie Bruneau Main shareholder: Weinberg Capital Partners (since March 2015) Headquarters: Les Ulis, France Annual sales: D300m ($330m) Markets: France, Belgium, Spain Employees: approx. 750 SKUs: approx. 30,000 Parcels shipped: approx. 6 million/ year

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Enter or nominate online at www.opi.net/EOPA2016 Or email your nominations to awards@opi.net

Big Interview | Nicolas Potier “[The printed catalogue] is still a very important part of our sales process”

OPI: What’s your view of the market in France in general? NP: The declines we have seen recently are closely linked to the economic situation.

breakroom, snacks, cleaning products, facilities, etc. The latter account for about 15% – it’s our fastest-growing segment.

OPI: But not just that, surely? NP: No, but these declines have a lot to do with the economy and I’m hopeful that this will pick up soon. On the subject of structural declines, they are inevitable, but that’s why I’m pushing so much for innovation from manufacturers. They need to develop products for new ways of working, and to do that you really have to pay attention to how people work – what makes their lives easier, what helps them to work more efficiently and in better conditions. That means offering solutions around areas such as ergonomics, well-being and productivity. If manufacturers focus on that – perhaps with help from the resellers – we might manage to improve the financial performance of the industry as a whole. On the other hand, if we persist in selling products that don’t have a future in the workplace, then it will be a different matter.

OPI: Are you looking to expand into any other categories? NP: We have expanded our offer in IT and office technology – again by providing a lot of direct delivery from suppliers – and have added 7,000 SKUs in a very short space of time. We also have 2,000 SKUs just in the lighting category through a partnership with a lighting specialist. On a smaller scale, we have developed another partnership with a supplier that provides access to products for disabled people in public spaces – ramps, signage, etc – and that represents a few hundred more products. That’s certainly an interesting niche market, and we are looking to develop similar partnerships in other categories.

OPI: What are you seeing in some of these ‘traditional’ categories? NP: There has been a lot of talk about the demise of writing, for example: we don’t write anymore, so there is no need for pens, paper, erasers, etc. I don’t believe that is true. When we write, there’s an intellectual process that means we retain information better and we structure our thoughts differently. I’m sure studies will show that when we don’t write, we lose something intellectually. So in fact, the writing category is holding up well. Envelopes is a market that has been in structural decline for a number of years; print consumables are suffering at the moment; archiving is falling a bit and document storage is in decline. But these are being replaced by other products – tech items, for example – and there are other categories that are doing well, so I’m not overly worried because we have a balanced product portfolio. OPI: What do the different categories represent in the overall sales mix? NP: Core stationery, filing and document storage probably represent 40-45% of our sales; IT and print consumables between 15-20%; furniture 25%; then the rest is really

OPI Magazine | July/August 2015

OPI: Can you tell us about your private label offering? NP: We have a strong private label that represents just under 20% of our sales, and that level has remained relatively stable. It carries the Bruneau brand name, so we pay a lot of attention to quality and the brand positioning. It’s definitely not an ultra low-cost, basic range; we promote it as having a quality level that is as good as the national brands, but at a price point that is 20-30% lower. OPI: You’re known for your catalogue. Does the printed catalogue still have a future in your opinion? NP: We believe it does and it is still a very important part of our sales process. When you look at how the catalogue is used in an office, it is often passed around between colleagues, and people put sticky flags next to their favourite products. It's something that is still difficult to do online. On the other hand, we have invested a lot in our website to make it easy to use, with plenty of product information that is well structured and easy to find. That hasn’t been the case historically, because what happened traditionally was that direct resellers basically took what they had in their printed catalogues and copied it onto the web. It wasn’t very effective. We’ve come at that from the opposite angle; we’ve done a lot of work structuring all the product information for the website and then extracted from that – with a few tweaks – the things which work best in the catalogue.

JM Bruneau | Big Interview OPI: How do you motivate your staff? NP: First, we have a very strong management team, with experienced people, and they’ve been with us for a number of years. We don’t have a big turnover of staff, so we have people that really know their jobs very well. It’s true to say that our teams are proud to work for Bruneau and that’s very important; they are laser-focused on service.

“Amazon doesn’t currently meet the needs of professional buyers”

OPI: Everybody says that! NP: They do, but is it always true? To have that, you need staff who are proud of their brand, and that’s not the case with everyone. But I’m convinced people are genuinely proud to work for Bruneau. That said, we do have a system which is somewhat unique: a profit-sharing scheme based on the performance of the company and specific targets that can amount to up to three months worth of salary in a good year. It’s a real incentive and it’s for everyone, from warehouse pickers to management. OPI: How do you view Amazon as a competitor in the office channel?

NP: Amazon is certainly a presence in the market. They sell office supplies like they sell books and household electronics; it’s a very ‘generalist’ approach and can be attractive for certain kinds of clients for straightforward purchasing transactions. However, I believe we have several key advantages to our business model that set us apart. For example, the combination of the website and the catalogue; our client relationships and customised pricing; our marketing and promotional approach with a loyalty programme and other incentives; our delivery and installation services. These are not things that are easy to do purely online. There are also other aspects that are complicated online. For example, where there is one site to invoice and then delivery has to be made to several of the client's facilities – that’s not something Amazon can do in France today. Amazon doesn’t currently meet the needs of professional buyers. How that will evolve we don’t know, and we are watching with interest what the company is doing in the US with Amazon Business.

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Hot Topic | ADVEO

What now for

ADVEO?

ADVEO took many by surprise with its decision to terminate Millán Álvarez-Miranda’s contract in June. What lies ahead for the new CEO?

WHen

the axe fell on Millán Álvarez-Miranda’s tenure as CEO of pan-European wholesaler ADVEO at the beginning of June after six years in charge – a move that came as something of a surprise to industry insiders – it marked the end of an era in the transformation of the Spain-based company. When Álvarez-Miranda took over in 2009, the company was still known as Unipapel, its two main business activities were manufacturing and contract stationery (the latter through the Ofiservice joint venture with Lyreco) and it had sales of around D200 million ($220 million) derived largely from the Spanish market. Then followed the 2009 acquisitions of Spain-based IT consumables distributor Adimpo and its smaller cousin Nova Line, the sale of the Ofiservice stake to Lyreco in 2011 and the purchase of Spicers’ continental European operations at the start of 2012. The transformation to a pure wholesale model was completed in 2014 when

OPI Magazine | July/August 2015

the remaining manufacturing unit was sold off to Swiss private equity firm Springwater Capital. So where did it go wrong for Álvarez-Miranda? To be fair, ‘go wrong’ is probably a bit harsh and not wholly accurate. Following a strategic plan based on providing customised solutions for five different customer segments – service-driven dealers, traditional stationers, scale-driven resellers (such as Lyreco and Staples), retailers

this award was seen at the time as recognising a work in progress rather than the finished article. Nevertheless, it appears that the worsening situation in ADVEO’s home market of Spain was finally something that the board of directors could tolerate no longer.

The pain in Spain ADVEO Chairman Juan Antonio Hernández thanked Álvarez-Miranda for being “the architect” of the company’s business transformation, but pointed to differences in opinion over a turnaround strategy in Spain as to why the board had decided on a leadership change. The wholesaler

“I was quite surprised and a bit amused to hear that [ADVEO] might target Austria or Poland” and IT specialists – results, excluding Spain and Portugal, have been pretty solid despite pressures in ADVEO’s main product categories and some loss of share in the EOS category. In fact, the company’s transformation, integration efforts and results earned the wholesaler recognition at the 2015 European Office Products Awards, although

declined to specify what these differences were, but they may have been related to plans to further cuts in the loss-making Spanish business following what was described as the “catastrophic” implementation of a new technology platform. Sales in Spain dropped almost 30% to D183 million in 2014 – declines were similar at the start of 2015 –

ADVEO | Hot Topic From olive oil to office supplies ADVEO announced Jaime Carbó as its new CEO during its annual Jaime Carbó shareholders meeting on 26 June. It was less than three weeks after the dismissal of Millán Álvarez-Miranda, suggesting the board had already been seeking a replacement before his sudden departure. Carbó will officially start at ADVEO on 31 August. He joins the wholesaler from H800 million ($880 million) olive oil manufacturer Deoleo where he had been CEO for about four years. Prior to that he was Managing Director of Ebro Foods and previously held senior management positions at financial firms Socios Financieros and Corporación Financiera Alba and insulation manufacturer Uralita. While not coming from a B2B distribution background, Carbó did lead an organisational, industrial and financial restructuring at Deoleo and was clearly well thought of by investors CVC Capital Partners which acquired a significant stake in Deoleo during his spell in charge. Commenting on the appointment, ADVEO Chairman Juan Antonio Hernández said: “Jaime […] meets all the conditions needed to drive with success the new cycle that is starting in ADVEO Group, in which the priorities will be operational management, the digital transformation of the business and financial discipline in decision making. This new cycle requires new leadership in management.” He then spelled out what he expects from Carbó: “A new strategic plan will be put into practice in which the management priorities of the new CEO must be, in this order, the operational turnaround of the business in Spain, the transfer of business best practices within the organisation and the consolidation of our business model. “These three objectives must be supported by means of an integrated and best-in-class technological platform.” and the unit posted an EBITDA loss of D4.5 million (the pre-tax loss was nearer H10 million). Despite having an infrastructure geared towards sales of H350 million in the Spanish market, Hernández said there would be no more payroll reductions as the current negative situation was temporary, and that the country would return to growth once the new technology platform is fully operational, supposedly by the end of this year.

Behind schedule ADVEO is certainly not the first large organisation to feel the pain from a major ERP and technology integration. It is undertaking an ambitious project that includes SAP 6.0 ERP, e-commerce tools, online customer service, a comprehensive supply chain management solution and, ultimately, support for all aspects of the current business model and its future evolution. The project is currently a year and a half behind schedule and resulted in about H2 million in additional costs in 2014. The original plan was to begin rolling out the system in other countries in 2015, starting with Italy, but this has now been put on hold until the situation in Spain has “stabilised”, although

Hernández said the systems were now “under control and progressing at a good pace towards the operating efficiency set forth in the design”. He added: “We firmly believe that the service capacity provided by the new platform will let us recover [our] position in the Spanish market.” Delaying the system roll-out is no doubt a common-sense decision, as is the recent move to maintain two distribution facilities in Germany. ADVEO’s German market has ADVEO 2014 at a stuttered a bit over the past year with sales falling by around 6% in 2014 to H187 million, and service levels are understood to have suffered due – in part – to the proposed closure of the logistics centre in Winkelhaid, near Nuremberg, a decision which has now been reversed. Germany also looks like it will be the base for D expansion into other countries,

so having a strong, efficient and scalable distribution platform to grow from is important. Speaking at the end of June, Hernández said that ADVEO will look to make further acquisitions in Europe from next year, naming Austria and Poland as potential markets, both countries that border Germany and which could feasibly be serviced from Germany (as ADVEO’s Austrian customers currently are). It’s certainly something that caught the attention of Richard Scharmann, CEO of Austria-based wholesaler and reseller group PBS Holding, which also has significant operations in Poland. “I was quite surprised and a bit amused to hear that [ADVEO] might target Austria or Poland,” he told OPI. “In fact, there are not too many significant players in these countries beside PBS. As there are no ongoing discussions on a management level between ADVEO and PBS, I take their statement as a compliment.” Whether PBS would be a target for ADVEO remains to be seen, although given the need to focus on the IT system implementation in Spain – and then the rest of Europe – and on getting the Spanish business in order, it would seem unlikely that a major – and possibly disruptive – acquisition would be the way to go. More likely, then, one or more smaller, bolt-on deals.

glance

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ADVEO | Hot Topic Share slide Aside from the problems in Spain, the recent CEO change may also have been influenced by a slide in ADVEO’s share price in the past three months. Investors have been pulling back on ADVEO since it announced a delay in its annual results in early April and said that annual profits would be lower than previously forecast. The wholesaler’s share price has dropped by more than 50% since then.

ADVEO share price: 6 July 2014 – 6 July 2015

Source: FT.com

One element of ADVEO’s new strategic plan will be the sharing of best practices across the group, using France as a benchmark. France has certainly become the jewel in the crown of ADVEO: in 2014 it accounted for 44% of the group’s sales (H414 million) and about 60% of EBITDA (H21.6 million). The country has not been immune to the downturn in the EOS market – sales in France were actually down about 5% last year because of this – but it has been grabbing share in traditional office supplies, which rose 2% in 2014 in a market that fell by 3%. Good growth (6%) also came from its CARIP purchasing platform after nine new dealers were added last year, and new stores have also been added in the retail channel. At the heart of the success story at ADVEO France are its affiliated dealer networks Calipage, Plein Ciel and (since 2013) Buro+, with more than 500 members throughout France in both the retail and B2B spaces. These members account for about half of ADVEO’s sales in France and membership grew by some 30 new dealers last year. It’s a model which has had mixed success in other countries. The Benelux market has about 150 members of its Calipage and Office Deal brands, while Calipage has struggled to achieve any real scale in Germany and is understood to be losing share in Spain. The challenge is

to grow this type of franchised concept in other markets because it locks in sales and offers healthy margins.

The need to diversify Another area ADVEO needs to focus on is category expansion: about 95% of sales comes from IT/ EOS and traditional stationery. If the wholesaler wants to position itself as a one-stop-shop for its B2B clients, then it needs to move more

technology platform up and running as it should is the first hurdle to overcome, but by no means the last. After all, sales in Spain have been falling in the double digits for some time, even before these ERP issues. Growth through acquisitions would definitely be an option here, perhaps in the franchise space, and there is a need to invest in the service-driven dealer customer segment. Something else perhaps worth noting is that, despite its pan-European presence, ADVEO is still very much a Spanish company at heart. It has its Spanish heritage, Spanish shareholders, a board of directors comprising Spanish nationals and, once more, a Spanish CEO. You can see why there is such an attachment to Spain and a desire to turn things around there. Bringing some new faces onto the board who can provide a more European perspective on the wholesaling channel would seem a logical step. An interesting recent comment from the ADVEO Chairman was the suggestion that the wholesaler might look at adopting a marketplace-style B2B platform along the lines of Amazon. That would certainly be a departure from the current

We have seen a growing trend for hybrid models, especially in Europe aggressively into other categories such as cleaning, facilities supplies and packaging. Progress has been made in these areas, but they still only represent a fraction of the product mix. However, top of the to-do list for new CEO Jaime Carbó is sorting out the situation in Spain. Getting the

ADVEO France channel mix 2014

business model, but maybe that is what ADVEO needs in the long run. While it has taken steps over the past few years to consolidate its pure wholesaling model, we have seen a growing trend for hybrid models, especially in Europe. The UK wholesaling scene, of course, has been shaken up by the creation of the EVO and SPOT groups; PBS continues to develop its wholesaling/reseller model; and players such as Quantore have been successfully developing the direct channel alongside wholesaling and dealer group businesses. The appointment of Millán Álvarez-Miranda in 2009 heralded a major shift in the company’s business model; perhaps in a few years’ time we’ll be saying that about the arrival of Jaime Carbó as well. w w w.opi.net | OPI Magazine

Dealer Spotlight | Office Environment Company

Best seat in the house With an impressive and long heritage, independent dealer Office Environment Company is still going strong and currently riding the wave of huge interest in workspace trends

“If a picture says a thousand words, a showroom says a million!”

Office Environment Company Fact Box Founded: 1907 Headquarters: Louisville, Kentucky Co-owner/ President: Tricia Burke Staff: 27 First-call wholesaler: Essendant Dealer group: TriMega Geographical coverage: US Business model: 95% stockless; stocks 100 SKUs

by Michelle Sturman michelle.sturman@opi.net

business, there are always ups and downs, but it takes strong leadership and grim determination to still be in business after more than 100 years, and this is exactly what sets Kentucky-based Office Environment Company apart. Founded in 1907 as Office Equipment Company, the William Kelly family has been part of the business since 1919. The independent Louisville dealer was known as Clarence R Smith Company between 1926-1935, and from 1934, the family has owned and operated it. Today, Office Environment Company is still in the hands of the family and is now run by the third generation. Tricia Burke is President and focuses on new business development, while brother Kelly Burke is Chairman; between them they run the day-to-day operations, while three other siblings sit on the board. Currently, the dealer operates with 27 employees, a number which has been slightly reduced over the past few years as its fortunes fell in line with the global economic slowdown. However, as the US economy has picked up, Burke says they are working to grow and expand the company. To this end, investment is once again being made in its workforce. The latest recruit,

OPI Magazine | July/August 2015

Dave Redmond, is now VP of Sales and has a solid record in the OP industry, including District Sales Manager at OfficeMax. Sales for Office Environment Company in 2014 reached $7.4 million, 80% of which were furniture-related. The second biggest category for the dealer was traditional OP, followed by technology. But it is definitely furniture where the company excels.

Furniture focus While furniture makes up the majority of sales, the company’s furniture services offering, which includes things such as space planning and design, CAD, project management, intermarket coordination, leasing and delivery installation, is approaching 10% of the overall business. The transition to a workspace solutions provider started in 1983 when Office Environment Company became a Haworth dealer. The dealer made Preferred status in 1996, a rank it holds to this day. In 1997, the company’s office retail store was closed and its furniture space expanded. Since then, the dealer hasn’t looked back and is currently benefitting from the resurgence in office refurbishments and an increase in new office space that requires top-to-toe workplace environment solutions. “We have experienced the ebb and flow of our furniture business where, due to the economy, companies did not invest in FF&E (furniture, fixtures and equipment). The good news is that our local business climate is improving and FF&E investment is moving forward,” says Tricia Burke.

Office Environment Company | Dealer Spotlight Showroom marketing Just before the global economic meltdown in 2008, the furniture showroom was renovated into a 16,000 sq ft (1,600 sq m) space that today showcases the latest workspace designs, predominantly featuring Haworth. The firm also carries over 60 other furniture brands, including Safco, Humanscale, JSI, Global, Eurotech, Fire King and HON. The showroom has become the company’s key marketing tool and is continually invested in – from displays, lighting, accessories and furniture – to spark workspace ideas in its clients. Burke says the ability for customers to “touch and feel” has made all the difference. “If a picture says a thousand words, a showroom says a million!” she adds. Office Environment Company, one of only two Haworth dealers in Kentucky, concentrates its efforts on the greater Louisville area – including southern Indiana – serving a wide range of clients. Being a Woman Business Enterprise (WBE) has undoubtedly helped gain inroads into vertical sectors such as healthcare, education and government. As a representative of furniture manufacturers including Haworth, Humanscale, Mayline and Jasper Seating, the company is also able to sell on the General Services Administration (GSA) schedule. In the public sector, the business also services local and state governments through its Kentucky State Contract and the US Communities Purchasing Alliance. As the company has moved beyond simply supplying office furniture to providing bespoke workspace solutions, one challenge is that it can sometimes be a matter of years between the start and end of a project, says Burke. “Patience and persistence are needed when working with office furniture,” she adds. While the healthcare, education, manufacturing, insurance and non-profit industries – dealing with companies such as GE Appliances, PNC and the University of Louisville – are part of its “wheelhouse”,

Louisville, Kentucky

Workspace trends Office Environment Company President Tricia Burke offers her take on current trends in the area of workspace and furniture: “The trends this year are firstly the agile workplace (people not assigned to a particular location), whereby the workplace must be more flexible to meet the different needs of the various personality types and roles within a company. “Secondly, there is an emphasis on health with the mantra ‘sitting is the new smoking’. The best practice here is to stand for 15 minutes every hour and use sit-to-stand workstations, treadmill desks and highly ergonomic desks – this year at NeoCon was definitely the year of the sit-to-stand desk. “In addition, there were numerous examples of tables and lounge pieces that are built to provide both comfort and power multiple digital devices. One of the major NeoCon trends for 2015 was less rigidity in the workspace, which goes hand-in-hand with the desire for more flexibility.” (For a full review of NeoCon 2015, see page 42) Office Environment Company hasn’t sat on its laurels and is continuously looking for new and flourishing industries, such as the bourbon industry. “The popularity and growth of the bourbon industry, targeting new distilleries (Angel’s Envy, Kentucky Peerless) and servicing well-established companies (Jim Beam, Maker’s Mark, as well as Brown-Forman, a company that is committed to buying from a WBE), has been a focus over the past three years,” says Burke.

“Patience and persistence are needed when working with office furniture”

Passing on knowledge Staying at the top of the game requires knowledge of the latest trends and information, which Office Environment Company has access to through its Haworth affiliation. Burke fully recognises its importance, not just for her own employees, but for the wider business community. The company not only hosts an annual Workplace Solutions event showcasing the latest innovations in furniture and office products, but also holds accredited Continuing Education Unit (CEU) meetings; a recent one detailed the new phenomenon of ‘sit-to-stand’ in the workplace. As Burke explains: “We have offered CEUs for the architect and design community for the past several years that emphasise new trends and future possibilities in the workspace. Our CEUs have been successful because they position us as experts and guides and fulfil our consultative mission, demonstrating we are more than just office furniture sales people.”

Tricia Burke

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Special Feature | AOPD

Leaving it

to Mark

As industry veteran Bud Mundt steps down from his Executive Director role at AOPD, Mark Leazer from FSIoffice will fill his shoes. And these are big boots to fill at a time of tremendous industry change. Heike Dieckmann speaks to Leazer about his plans and aspirations… OPI: What will be your first priority when you start working alongside Bud Mundt at AOPD in October? Mark Leazer: The absolute first priority will be to achieve a smooth transition of leadership. The official transition will be in January 2016, but my time with Bud and the AOPD staff will increase somewhat in Q4 of this year. AOPD will be in the midst of a number of important projects, but the main focus will be on the run-up to our joint annual one-to-one meeting with the TriMega Contract Forum dealers and the DPCG Catalog Review. We are all very excited about this combined effort and are already working hard with these groups to insure a successful launch. We feel this is a very important step for independent dealers to be better stewards of their and their business partners’ time and of resource investment in meetings. OPI: What about more medium and long-term plans in terms of the future direction of AOPD? ML: We plan to strengthen our relationships with our dealers, other dealer groups as shown in our work with the American Purchasing Mark Leazer Alliance

OPI Magazine | Julu/August 2015

(APA), and with our manufacturer business partners. However, the purpose of anything we undertake will be to grow market share in national and regional accounts of all types – commercial, government, healthcare, etc. This has been AOPD’s mission since its creation in 1978. We are having sustained success with our AOPD contract business growth as

Something that concerns me greatly coming from a stocking dealer environment is a potential ‘arms race’ in delivery urgency. Will same-day delivery become the new normal in the near term? Does it need to be? How will independent dealers manage the investment needed for that? That leads me to the last issue – appropriate capital investment. I’m talking about technology,

“Something that concerns me [...] coming from a stocking dealer environment is a potential ‘arms race’ in delivery urgency. Will same-day delivery become the new normal?” evidenced by 22% growth in 2014, and 12% year to date in 2015. OPI: What are the most important issues for independents right now? ML: They actually are more numerous than most dealers would care to admit. Keeping up with technology is the obvious one and that will only become more challenging with time. E-content control and management is another. Sales commission models that properly motivate sales representatives and are affordable to ownership is a third point.

distribution, sales, marketing, web, mobile, dealer acquisition, you name it. Money doesn’t grow on trees for dealers. Their margin for error is much slimmer than that of publicly-traded competitors. Smart investment is critical. No investment is suicide. OPI: So are dealers addressing these issues? ML: Some are, some aren’t. This is very similar to the early 1990s and the advent of the big boxes, but the order of magnitude is greater and the pace of change is quicker. Some that did all the right things then may do the wrong things or not enough of the right things this time round. OPI: What’s your take on the potential Staples/Office Depot merger? How will it benefit and/or

AOPD | Special Feature threaten independent dealers if it goes ahead? ML: My take is that the merger will ultimately be approved and that independent dealers which are correctly positioned will benefit. At one point earlier this century, there were six big box players in our space. A consummated Staples/ Depot/OfficeMax will take that to one. That is actually quite incredible! I always thought that it would get down to two players like it did in the home improvement industry, but one is good by me because, simply put, there would be fewer national players with which to compete in the commercial space. AOPD and FSIoffice are already fielding calls from companies that are giving us a look and that were content to fill their bid lists with only the big three before. OPI: Would it also mean that independents get a bigger slice of the government cake? ML: Our feeling is that this will open up opportunities for the independent dealer community (IDC) with commercial and government sector business. Staples and Depot have owned the cooperative contract business until the past several years when dealer groups began to win and succeed with co-op contracts of their own, including Independent Stationers’ US Communities, PointNationwide’s TCPN and AOPD’s NCPA. The key is my earlier comment that dealers must be correctly positioned and that the dealer groups step up to provide their members with the platforms to succeed with these new

Bud Mundt and Mark Leazer when the leadership transition was announced. There simply aren’t enough resources for that to continue. So the opportunities, I believe, will be there, but if we aren’t all properly positioned, as it were, we as independents could easily miss it. OPI: What will be your role in the American Purchasing Alliance? ML: I am currently a representative of AOPD along with Pat Crowley of Innovative Office Solutions on the APA board of directors. When I become AOPD Executive Director, I will serve as an ex-officio, non-voting director of APA. OPI: What about your own company, FSIoffice – how is that progressing? ML: FSIoffice is making a nice comeback from the economic downturn. We are back to healthy

“AOPD and FSIoffice are already fielding calls from companies that [...] were content to fill their bid lists with only the big three before” opportunities. This includes the wholesalers too. Frankly, this will most likely require more cooperation amongst the groups and other industry players to efficiently use the resources available. We don’t need to continue to do the same things multiple times.

growth mode again, double digits overall for 2014 and at 15% year to date through April of this year. Our furniture business was up a whopping 29% last year, so signs are there that the economy in our markets is improving and FSI is well positioned to turn that into sales growth.

Some of the growth has also been achieved through broadening our category offering. Just like everyone else, we have greatly expanded our efforts in cleaning and breakroom solutions, coffee and beverage, print services, etc. However, I must say our supplies segment is also growing nicely again, primarily due to market share gains. Even our copy paper sales are up significantly, an encouraging metric in the face of a declining category. OPI: Will you still be involved in FSI from October or indeed from next January? ML: No. I will end my 30-year employment with FSIoffice on 1 January 2016, so active daily involvement will cease then. Having said that, I will still be married to one of the owners and have a daughter who is a heavily-involved, full-time employee and owner, so I am sure there will still be plenty of spirited family discussion about FSI and the industry in general! A nice thing about this transition is that I will still be working on projects and issues that interest and impact FSI, an important and active AOPD member dealer. And frankly, what is important and impactful to AOPD is usually important and impactful to FSI and vice versa, as is the case with most, if not all, AOPD member dealers. w w w.opi.net | OPI Magazine

R2/BPG | Feature

Collaboration

for dealer growth WHAT

(L-R) THG CEO Bob O’Gara, Luke Chapman and Steve Hilleard

started off as collaborative exchanges over a year ago has now been firmly cemented and finalised: The Highlands Group (THG), the largest manufacturer rep group in the US, Canada and the UK, has partnered with Resourcing Revenue (R2) to offer R2 services to dealers throughout North America and Europe. Steve Hilleard, OPI’s CEO, co-founded R2 with Mark Hampton, a senior OP executive based in the US. Luke

Chapman, Founder and CEO of The Business Performance Group (BPG) and Partner in parent company THG, and Hilleard talk about the benefits that this partnership has for independents and the OP community at large.

OPI: What is the overall aim of this collaborative agreement? Luke Chapman: Helping dealers in the US, Canada and Europe recruit more efficiently and market more effectively. This was the goal Mark and Steve had when they started R2 a year ago. At THG, we had been talking about adding services to our portfolio of products for some time, and R2 is now part of a suite of services our representatives can offer to the dealer community. All of these services are focused on dealer health.

OPI: How will R2 and, more importantly, independent dealers benefit from this collaborative arrangement? Steve Hilleard: R2 is now in a better position to take its offerings to market due to THG’s robust sales and marketing engine that can really execute our service proposition. As Luke alluded to, one of our core USPs is our recruitment expertise.

OPI: So what is each party bringing to the table? LC: In a nutshell, THG is focused on field sales. The sales reps work with dealers and are out there helping them implement the solutions we as a company offer. THG is building broader awareness in the dealer community about the advantages they can gain by using R2’s tools. In a number of cases we expect to use R2 to create more targeted marketing campaigns through BPG telemarketing. OPI: What are you hoping to ultimately achieve? LC: Effectively working together means we can get deeper into the dealer community and into the market as a whole. THG is really moving into services and solutions, rather than just products. Services that make the dealer more successful will lead to higher product sales so the synergy is clear. Leveraging THG resources to bring R2 to the dealer community makes perfect sense. It will raise our overall service proposition, for the benefit of all channel partners – it’s as simple as that.

For more information, contact The Business Performance Group 817 W. Peachtree Street, NW, Suite 450, Atlanta, GA 30308, USA www.thebpgroupus.com | info@thebpgroupus.com

OPI: What specifically are you providing? SH: Three of the four components of the R2 portfolio focus on connecting category-specific, experienced talent with dealers that want to grow legacy categories or expand into new ones. One of them is R2 Search. When a dealer wants to get assertive and proactive about finding talent in a given geography with category-specific experience – say in jan/san or MPS – we identify that talent and then let the dealer handle what they do best: recruit, screen and hire. R2 Match provides match-making between jobseekers and dealers. R2 Prospect is a little like R2 Search, but instead of finding people to hire, we help dealers find specific named decision-makers at targeted businesses to market to, engage and acquire – it’s highly targeted marketing. OPI: Do you feel there’s a natural crossover between your services? SH: Definitely. It’s slightly overlapping, but hugely complementary, particularly for BPG’s lead-generation campaigns. w w w.opi.net | OPI Magazine

Research | Amazon Germany

Amazon bites again! Germany is still a traditional market in many ways, but Amazon has reached a high penetration in the country – and the OP sector is taking the bait

Last

19%

year, Martin Wilde Associates (MWA) and OPI published Swimming with Piranha, a research report based on a survey of 800 end-user B2B OP buyers in the US and the UK. It investigated a wide range of issues, including what kinds of businesses have used Amazon to buy OP in the past 12 months; what types of office products are being bought from Amazon; and which OP supply channels have lost out to Amazon. So successful was this research and so significant the results, that in early 2015 MWA carried out a similar study among 415 B2B OP buyers in Germany. The report based on this survey – entitled Swimming with Piranha in Germany – has now been published, and once again makes for some surprising and challenging reading.

most likely to do so. Additionally, the survey found that the age of 65% the respondent was a significant factor in driving the use of Amazon to purchase OP. The OP channels that are most likely to have lost out to Amazon’s advancement in Germany inevitably tended to vary according to the size and type of organisation. But overall, it was the national OP resellers, such as the mail order firms and contract stationers, which appear to have lost the most business to Amazon.

14%

Another interesting finding was that Amazon customers tend to be very enthusiastic about the company. When asked to indicate the disadvantages of buying OP from Amazon, few could find anything negative to report about their experiences of the company. Conversely, when asked to highlight the advantages of buying OP from Amazon, respondents were full of

Figure 1 shows that, in Germany, 34% of OP buyers interviewed had purchased core OP (traditional stationery, office paper, EOS and office furniture) from Amazon in the past 12 months, with the majority – 19% – buying both from Amazon and Amazon marketplace traders Fig while 14% bought from Amazon only. While this penetration is generally less than what MWA found in the US (57%) and UK (45%) studies, it is nevertheless significant. What was once again evident from the research was that a significant number of OP buyers in all sizes and types of companies had bought core OP from Amazon in ■ Yes, definitely Germany, although ■ Yes, probably those in the mid-sized ■ Probably not ■ Definitely not and service industry ■ Don’t know/refused categories were the

OPI Magazine | July/August 2015

2: Interest in buying all OP items from Amazon Germany 7% 10%

30%

21% 33% Source: MWA

■ Yes – both Amazon & Amazon marketplace ■ Yes – Amazon only ■ Yes – Amazon marketplace only ■ No ■ Don’t know Source: MWA

praise, particularly concerning the e-tailer’s low prices and wide product range.

The road ahead Several of the questions covered in the research investigated the respondents’ vision of the future of their OP purchasing, and it was clear that many expected it to not only switch further towards online sourcing, but also to a greater use of Amazon (although this varies by company size and respondent age). Indeed, as Figure 2 shows, when asked whether – in principle – they believed that it was possible for Amazon to be used for all of their OP purchases, a significant share (31%) of respondents stated that they could, in theory, envision this scenario, although only 10% said that it was ‘definitely’ possible. Again, there were some variations here by size of company and age of respondent. In summary, to date Amazon has achieved a stronger overall penetration of the OP user base in Germany than perhaps many would have expected, and the research predicts that its future share of the market is only going to increase further. As a result, the findings of this important research study have a relevance and urgency for all types of OP distributor and manufacturer serving the German market. To order your copy, visit www.opi. net/piranha-de

Few [companies] could find anything negative to report about their experiences of [Amazon]

The bite radius

Fig 1: Core OP purchasing from Amazon in Germany

Special Feature | Agile Workspaces

Creating spaces IT

is no great secret that the way we work today has fundamentally changed. Workers are no longer tied to a desk from 9-5, but are mobile and able to work anywhere there’s internet access. Add into the mix a generation – millennials, who are fast becoming the largest generation in the workforce – used to collaborative workspaces and mobile working, in addition to a growing preference for flexible working, and it’s clear the role of the office has to evolve alongside. “Technology and millennials are not the only drivers of workplace trends,” says Spaces Managing Director Martijn Roordink, who adds it’s also about sustainability and the ‘sharing’ economy. This has had a dramatic effect on the way offices are being designed and the type of furniture used, as businesses seek to create a more social working environment designed to foster closer collaboration between employees. As a consequence, there has been a move away from the office cubicle and even the open plan scenario to a more agile workspace. But what is an agile workspace?

Agility in design The agile workspace in the 21st century takes the idea of the open plan office, but goes far beyond that. It can include collaborative work areas, quiet areas, meeting places, restaurants and personal storage spaces, all designed to be flexible to accommodate mobile and home workers (see also ‘The

OPI Magazine | July/August 2015

Recent workplace trends have revealed that agile workspace environments are becoming increasingly popular, but what exactly are they? OPI investigates…

agile office’, right, and ‘The Spaces concept’, page 33). It is not to be confused with flexible working, however, which refers to a way of working that suits an employee’s needs such as working from home or flexible working hours. “Our work is now a transitional activity and working hours have fundamentally changed over the past decade,” says James Morton, Managing Director of UK-based independent dealer MBM Omega. In June 2014, for example, legislation was passed in the UK to allow employees to request flexible working, and it has become part of a broader movement that has prompted the increased desire for agile workspaces. However, says Morton, this has created new challenges for organisations: “How do they support flexibility, increase productivity,

“It’s about flexible spaces that support more dynamic working and drive performance among teams”

The agile office… • • • • •

enhances collaboration to encourage interaction and integrates the use of technology engages and helps retain staff by allowing choice over where and how they work creates brand and culture by having design spaces that reinforce the brand to both internal staff and external visitors supports health and welfare with the use of products that cater for sitting, perching or lounging during different periods of the day optimises property through efficient space planning and can lower costs Source: MBM Omega and The Senator Group

Agile Workspaces | Special Feature encourage collaboration, make their space work more efficiently and make work a destination?” It can also create challenges for office furniture dealers, as the stakes have risen to much more than just simply supplying clients with a traditional desk or chair. MBM Omega, for example, in conjunction with key partner, furniture manufacturer The Senator Group, consults with clients from their design brief covering fit-out, all the way through to interiors. But, Morton warns, agile workspaces aren’t just about having the best-looking offices. “It’s about flexible spaces that support more dynamic working and drive performance among teams,” he says. A number of companies such as Trimble and Condeco offer space-planning tools that help businesses understand how space is utilised and make adjustments accordingly. In addition, employees are provided access – online or through an app – to schedule their desired office destination for the duration and purpose required. Trimble Global Business Development Manager Joe Harris says workspaces are, on average, unoccupied 49% of the time. However, with flexible working, space planning and an agile workspace environment, this can be reversed and rise to 90% occupation. “Free seating equals free thinking and agile working not only reduces space, but encourages more utilisation of tools and collaboration,” he says. Of course, the changing space requires a rethinking of furniture requirements, which are now leaning more and more towards the trend in workplace health and wellness (ergonomic furniture, for example), in addition to the desire for furniture integrated with wireless technology. While the workplace is changing rapidly, Morton says the jury is still out as to which working model will take priority and whether there is a ‘one-size-fits-all’ solution.

The Spaces concept Netherlands-based workspace company Spaces is getting ready to launch its first London office in September. OPI went along to see how the “professional, lifestyle-driven working environment” concept works. The London office is the first outside Amsterdam, with plans to open additional offices in the UK capital as well as others in New York, Melbourne, Sydney and Rotterdam in the upcoming months. Spaces offers open, private and collaborative workspaces, along with an in-house coffee shop. The office, based over four floors, is thoroughly modern, beautifully designed and incorporates the latest in furniture design, including pods, bespoke collaboration tables, individual offices, booths and meeting rooms. Spaces Managing Director Martijn Roordink told OPI that its hospitality services and the communal areas are absolutely key to the uniqueness of the workspace. Staff are on hand to help members with support services such as mail and print, ICT, secretarial services and teleconferencing. “Our operational management is trained to deliver exactly what our clients need. We liken it to a one-day hotel experience, except Spaces carries it on for a much longer time period,” he says. Spaces is aimed at “established start-ups”, such as boutique lawyers and consultancy firms, along with the Uber and LinkedIn companies of this world. “We have such a diversity of businesses and this is what makes Spaces so special – the entire environment lends itself to collaboration and co-creation,” states Roordink. He calls Spaces the “retail-concept of work” and says it’s a professional environment where members are part of a community, with access to a programme of business and networking events to help make collaborative connections and create new opportunities. According to research undertaken this year by Spaces, a quarter of the companies that use its facilities – in areas such as media, HR and law – collaborate with each other. Indeed, Spaces has already seen 30 mergers from its 750 member companies.

w w w.opi.net | OPI Magazine

Research | Marketyze

The furniture fight

Online pricing comparison and market research firm Marketyze has released its latest report analysing data from large US-based resellers and their pricing strategies in office furniture

With

the online office furniture market worth over $10 billion in the US alone and showing a promising growth spurt, it is no wonder that the largest resellers are locked in a battle to gain their share of the market. The latest Marketyze report followed Amazon, Office Depot, Staples and Walmart and their price positioning and behaviour in the office furniture sector. The report investigates over 500 available office furniture products from these resellers and over 800 from pure e-tailers Betty Mills, Shoplet, OfficeSupply.com and, again, Amazon, over the months of March and April 2015.

Amazon price advantage The report reveals why Amazon is making such inroads into the office furniture market – it offered the most competitive pricing throughout the reporting period, beating hybrid retailers/e-tailers to the lowest prices on over half the products studied. A closer inspection of the data reveals how Amazon achieves this – the company made price changes to around 94% of its office furniture products during the two-month timeframe, with an average of 20 changes per item.

E-tailer challenge: Amazon, Betty Mills, OfficeSupply.com, Shoplet – 812 products: Average price behaviour over time

In a case of trying to keep up with the neighbours, Walmart changed prices on 80% of all its available products, but with far fewer changes per product than Amazon. In contrast, Office Depot and Staples’ average price tracked roughly the same over the reporting period, with Depot coming out the most expensive overall, followed closely by Staples. To put this into perspective, with regards to the highest average price,

OPI Magazine | July/August 2015

E-tail battle Amazon faces much stiffer competition from the e-tailers. And in this space, it did not have the lowest average pricing over the reporting period. This fell to Betty Mills, which also took the lead for the

In almost 12% of products, there was a gap of more than 100% in price between the cheapest and the most expensive both Staples and Office Depot came in at $378 whereas Amazon’s was $310. From the start of March to the

Clash of the titans: Amazon, Office Depot, Staples, Walmart – 514 products: Average price behaviour over time

end of April, all the resellers, with the exception of Office Depot, dropped prices, with Walmart dropping prices the most on average by almost $17.

cheapest pricing (56% of the time) with almost no price changes. During the two-month reporting period, OfficeSupply.com increased its prices over 1,800 times, but only decreased them just over 300 times. Amazon, on the other hand, was the only company to decrease its prices more than increase them. Meanwhile, Shoplet’s average price started the reporting period at $287 and then rose to over $340. To download the full Marketyze Office Furniture report, visit: http://go.marketyze.com/ get-officefurniture-industry-reportmay2015-opi

Event Review | NAOPA 2015 Jim O’Brien

ABC

ignites WITH

temperatures soaring to over 115ºF (46ºC) in the hot Nevada sun, inside the phenomenal MGM Grand in Las Vegas the atmosphere started off much cooler thanks to the efficient air conditioning during SP Richards’ (SPR) 17th Advantage Business Conference (ABC), held from 21-25 June. But over several days of seminars, workshops and networking, plus of course, ‘viewing the future’ in the shape of vendors’ latest innovations, many a delegate began to feel the heat. As Jim O’Brien, the wholesaler’s SVP of Marketing, stated in his opening address, there have been several companies in the past that had a good idea but failed to really ‘ignite’ – the theme of this year’s conference – and ultimately paid the price. Cue Value America, Daisytek, CompUSA, or indeed, as keynote speaker Jeremy Gutsche later referred to, Kodak, Blackberry and Blockbuster, to name but a few. Somewhere along the way, these firms took the wrong path and made the wrong decisions. What’s important, said O’Brien, is “to be ready and to be prepared for the unexpected”.

Working together Working together in every way possible is one way to be prepared, he added, especially as merger and consolidation activity continues apace, among independents as well as – of course – the big boxes. And all that activity can present real opportunities and needn’t be a negative, as long as – again – dealers are prepared and, urges O’Brien, “we keep all that business in the independent community”.

OPI Magazine | July/August 2015

Expect the unexpected… and be prepared to change – that was one of the core messages from this year’s ABC in Las Vegas Collaboration as well as trust were core themes at the ABC, talked about in some detail by both CEO Wayne Beacham and the final keynote speaker Simon Sinek during the general session on the last day of the event. But what makes a good leader, Sinek asked? It’s a question that

Over the course of the event, many of the broad topics covered in the general sessions – the need to expand into and gain expertise in adjacent categories, to develop people skills and embrace technology trends and platforms – were explored in more detail during the extensive seminar and workshop line-up.

“Good leaders will sacrifice themselves for the good of their staff. If they do, strange things will happen” cropped up several times, a sign perhaps of challenging times when leaders are in high demand. Sinek explained his theory in a scientific, considered – and very funny – manner, although his answer is quite simple: “The cost of leadership is self-interest. Good leaders will sacrifice themselves for the good of their staff. If they do, strange things will happen as employees will look after themselves and morale will soar.” Sinek’s analysis clearly struck a chord with the audience, as he finished his presentation to a rousing standing ovation. Colette Carlson, who the day before spoke about women in leadership, had another answer, but it wasn’t so very different. “Thoughts, words and actions all aligning together – that is what you need to do to become a good leader. Nobody is going to follow you if you don’t walk the walk.”

Different from 2014, the popular Business Solutions Expo this time returned on the last day of the event. And here too it was obvious how important new categories are to the industry, with plenty of space given over to sectors including technology, furniture, education and facilities and breakroom solutions.

Where next? After plenty of award-giving on the day (read on for details of all the NAOPA winners) and the final night’s entertainment programme, all there was left to say for O’Brien was the time and place of next year’s Advantage Business Conference. ABC 2016 will be held at the Gaylord National Resort & Convention Center in Washington (DC) from 20-24 July 2016.

Event Review | NAOPA 2015

And the gong goes to... This year’s North American Office Products Awards (NAOPA), held again as part of SP Richards’ ABC event, saw both familiar and perhaps lesser-known companies scoop trophies for a truly eclectic mix of products Best Product – Core Office Products

WINNER

3M Post-it Dry Erase Surface

While the concept of a whiteboard on a roll has been tried before, the judges felt that 3M’s attention to detail, its marketing prowess and the Post-it name will see this product flying off dealers’ shelves. The Post-it Dry Erase Surface allows users to easily transform any material – a wall, glass, steel, wood or even old chalk boards – into a pristine, dry-erase board. It requires no tools – just unroll, peel and stick. The education vertical is a key market for 3M, said Lawrence Lynott, VP of US Operations (right, with Vonnie Provinzino, middle): “We’ve had great feedback from educators about how the product enhances the classroom environment. This is a great opportunity for us to further increase awareness as, essentially, the product works on any flat surface.”

Best Product – Furniture

Mayline Keep Modular Wall System The Keep Modular Wall System from Mayline is a mid-market modular wall solution, competitively priced, attractive and highly functional. The judges loved its flexibility and two-sided access along with multiple component options and unlimited number of freestanding sections. Rod Ganiard (second from left), VP of Sales at Mayline, commented: “We knew we had some tough competition, so are very happy to win this award. The system is suitable – and quickly reconfigurable – for any open office environment where people want to divide spaces non-permanently. It also provides storage as well as potential meeting spaces in, say, breakrooms or reception areas.”

WINNER

OPI Magazine | July/August 2015

NAOPA 2015 | Event Review Paris Corporation Weego Jump Starter Battery+

Best Product – Technology

WINNER

Starts your car engine, charges your phone and tablet, fits in your pocket – that’s a convincing tagline for a product in today’s fast-paced world. And Paris Corporation clearly captured the imagination with the Weego Jump Starter Battery+. It was the standout product in the Technology category in terms of innovation, one of the judges said, while another referred to it as being “cool and innovative”. Not aimed directly at the office channel, but at all demographics, National Account Manager Randy Garrett (left, with Peter Leon, middle), said: “Our end users are firms with a delivery fleet, car dealers or, of course, first responders like the police, fire and ambulance services.” Given our ever-evolving workforce, the product’s audience is only going to get bigger. Well done to Paris!

Best Product – Cleaning & Breakroom

WINNER

Newell Rubbermaid Executive Quick Cart

The Executive Quick Cart brings a new element of style and sophistication to the Rubbermaid Commercial family of cart products. The judges felt it was a compelling and contemporary take on the usual unsightly janitorial carts and is a welcome innovation to a mature and neglected category. National Account Manager Nate Hohenstein (pictured with Victoria Henderson, right), said: “This award reinforces for us that we are leading through innovation with products like our Executive Quick Cart line. This is another way our end users, dealers and distributors confirm that our strategy is correct for the channel.” Well done to Newell Rubbermaid for making cleaning sexy as well as executive!

ITW Pro Brands Sertun Rechargeable Sanitizer Indicator Towels

Product Innovation of the Year

Addressing the threat of cross-contamination, Sertun Rechargeable Sanitizer Indicator Towels work as the towels change colour when saturated in the sanitiser solution. The colour indicates when there’s not sufficient sanitiser in the towel and it needs to be replaced. Since its launch about a year ago, Sertun has typically been used in the foodservice industry. Rich Bucher, Director of Strategic Accounts (right, with Andy Brolin, middle), was delighted about the exposure now gained with the NAOPA: “The office channel offers great potential for us. Anyone who has a cafeteria or a breakroom benefits from this brand new and patented technology.”

WINNER

w w w.opi.net | OPI Magazine

NAOPA 2015 | Event Review 3M Post-it Dry Erase Surface

People’s Choice

WINNER

3M scooped a second trophy on the day with the much-anticipated People’s Choice award, for its hugely popular Post-it Dry Erase Surface. The award was handed out during the final night evening entertainment programme of the ABC. It’s the first time since the inception of the People’s Choice in 2012 that OPI readers and ABC delegates agreed entirely with the NAOPA judges and voted for a product that also won an award in one of the five vendor categories. The initial People’s Choice shortlist of 20 had been narrowed down to six finalists when voting recommenced in the evening and Gala Dinner attendees had the chance to cast their final vote. Congratulations to 3M for capturing everybody’s imagination with a truly versatile product.

Professional of the Year

John Givens

WINNER

This coveted award was introduced by Michael Morris, EVP of Marketing at TriMega (pictured right), and the prize went to John Givens (middle), CEO of Source Office & Technology (SourceOT). Givens was described by Morris as one of the most energetic ambassadors of our industry and a real trailblazer, always willing to go the extra mile for his business and his family. Over the past year, he has orchestrated the acquisition of a contract furniture dealer, positioning SourceOT as a full-line commercial and contract source for a wide variety of product and service categories. An emotional Givens said: “Knowing the calibre and professionalism of so many great leaders in the North American dealer community makes this award all the more meaningful, so I’d like to say a heartfelt ‘thank you’.”

Industry Achievement Award

Jim Hebert The final and perhaps most eagerly awaited award of the night – Industry Achievement – went to Office Partners owner and CEO Jim Hebert after an emotional tribute given by his son Matthew, who is Marketing Manager and Dealer Development at the buying group. Matthew described his father as a “friend of the vendor”. With a long previous career in OP, he started Office Partners 17 years ago. Matthew said: “He had no members/ dealers and no promise of sales. But, with the trust and support of the vendor community, he had programmes.” Office Partners has grown membership to over 600 locations in the US, including some of the largest dealers in the industry. For more on Office Partners and Hebert’s reaction to the award, look out for our Big Interview in September OPI.

WINNER

w w w.opi.net | OPI Magazine

Event Review | NeoCon

NeoConvergence vergence The movers and shakers of the commercial interiors industry converged on NeoCon 2015 in June to witness the latest designs and innovations in this burgeoning sector

RECORD

crowds attended the three-day show from 15-17 June at the Merchandise Mart in Chicago, US, to experience the annual NeoCon expo, billed as the furniture event that brings together the right people, the best products and the most innovative ideas.

NeoConnections NeoCon – this year celebrating its 47th anniversary – is North America’s largest design exposition and conference for commercial interiors. Attendance was up 6%, with over 50,000 furniture and design professionals gaining access to around 100 seminars, forums and keynote speakers. In addition, more than 700 exhibitors from around the world represented a variety of industries, all gathered to showcase their latest products and innovations aimed at a corporate, hospitality, healthcare, retail, institutional and residential interiors audience. Beyond capturing the current trends, the 2015 conference programme specifically aimed to explore what’s coming next in the workplace, with a focus on how furniture and interior design impacts on culture, health and wellness and productivity. Keynote speeches backed

OPI Magazine | July/August 2015

up this future-gazing philosophy. Presenters included international designers and broadcasters such as Patricia Urquiola, Martin Lesjak and Anastasija Sugic, known for their forward-thinking ideas on furniture, technology, lighting and industrial design. They shared their vision on the way we will all live and work as the century unfolds.

NeoContent One significant theme running across NeoCon’s multiple floors was the desire to get office workers

Additionally, many companies are increasingly adopting standing meetings because they get people out of their seats and keep them more attentive. Another advantage is that these meetings tend to be shorter and more productive. The office furniture industry is supporting this trend by introducing taller conference tables designed with this in mind.

One significant theme […] was the desire to get office workers on their feet on their feet. The sit-stand desk was ubiquitous as evidence suggests that a sedentary work life is detrimental to both health and productivity. CP Furniture’s ‘Workflow’ design showed a different slant on this concept with a split-level table that means you can sit or stand without needing to adjust its height.

Smart furniture incorporating charging points to accommodate the plethora of portable tech we now use was also a hot theme. Canadian company ChargeSpot showcased its smart wireless charging solution which, once installed underneath a desk or table, creates a wireless charging zone on the top surface. The office pod was much in evidence. This concept, epitomised by Steelcase’s Brody WorkLounge (see picture, page 43), aims to create a quiet pocket of privacy, away from the hubbub of the open-plan office and looks likely to become mainstream in the office of the future. Another growing category is office lounge furniture, designed to elicit feelings of home and encourage off-the-cuff, informal meetings in a relaxed setting as an alternative

NeoCon | Event Review to the formal desk and chair. The new Sylvi modular lounge collection from izzy+ is a prime example and claims to offer “residential-like comfort, while holding its own under the wear-and-tear pressures of the corporate world”.

NeoConversations OPI spoke to several key exhibitors and attendees to get their first-hand feedback of the event and any key themes they noticed. Kristen Dixon, VP of Business Development at MooreCo, was impressed by attendance levels: “We exhibit at NeoCon every year. It’s an important event for us, but this was the first time in years that the

At OP and furniture reseller Storey Kenworthy, VP of Sales and Design Jennifer Peterson, said: “The big focus this year was the concentration on the vignettes and how products are actually used, instead of the usual huge launch of a specific product. Walking through displays from the major office furniture manufacturers such as Allsteel, I was struck by their attempts to show an actual implementation or snapshot of how a real office could function.

“Furniture manufacturers are designing for and embracing the millennial generation more than ever” event was completely sold out for space. It was great to see the show so busy and this seems to reflect the recovering economy. From a product perspective, there were several foam seating designs, like the ones from Sixinch, that I found amazing.” John Michael, VP and General Manager, Business Interiors at Staples, also found the event well attended: “NeoCon 2015 was jam-packed with exhibitors, attendees and speaking sessions, reflecting the overall health of the industry. One obvious trend I spotted is the shift toward ‘I’ spaces and away from collaborative ‘we’ spaces, with furniture designed to provide more focused individual work settings in the open environment. “The expanded Global showroom was particularly impressive, demonstrating Global’s desire to move up the market in the contract arena. One additional thing I noticed was that the major manufacturers still have some work to do in designing products truly tailored to the healthcare industry.”

“From a design perspective, thinking about how to use cutting-edge products has a broader appeal to me than just focusing on the latest individual product. “A lot of manufacturers also showcased their ideas on how a balance between personal space and open collaborative work areas could be achieved, and how technology could support these functions and interactions.” When quizzed about what she particularly gets out of the event, Peterson admitted that having attended NeoCon for 15

Steelcase’s Brody WorkLounge

years, she now sees it less as an individual learning event and more as a way of educating her staff and clients on new trends in design and the overall usage of products. “I use it to gauge what I want to bring back to our office and implement in our showrooms,” she noted. “This helps my staff learn about integrating new products into their designs and aids our interaction with clients as we walk them through concepts and designs laid out on our showroom floors.” Bryce Stuckenschneider, Director of Marketing at GMi Companies, said that the event was successful for them and that the group has seen a significant increase in interest since the show: “Perhaps the most apparent trend was that furniture manufacturers are designing for and embracing the millennial generation more than ever. “Numerous products and collections are now designed for a generation that is on the go, tech-savvy and creative. There’s an expectation that this generation must think outside the box. Furniture design is now complementing this and allowing these employees to actually live outside the box.” When asked specifically how GMi benefits from the show, he added: “NeoCon is the place where we open the doors of our design laboratory and share our vision of how people are going to work in the future, exhibiting both current products and prototype ideas. The feedback we get from dealers, designers and other manufacturers is invaluable. We’ll certainly be back next year.” At Essendant, Glenn Moore, Director of Category Product Management, agreed: “NeoCon is a unique event that allows us to be part of a global network of manufacturers and design professionals gathering and sharing ideas, exploring trends and, most importantly, learning from each other.” w w w.opi.net | OPI Magazine

Event Review | UFIPA Conference 2015

Encouraging cooperation UFIPA is looking for greater vendor and reseller collaboration

BRinging

the vendor and reseller channels together to drive innovation and add value to the office products industry in France is a major focus for trade association UFIPA. “Our mission is to make our industry thrive and improve performance from an economic viewpoint,” said UFIPA Chairman Nicolas Potier during the recent UFIPA conference in Monaco. “In order to achieve that, we need manufacturers and resellers to come together to highlight product innovations that will help our business customers become more productive.” After devoting much time and resources to what has become the Sustainable Office European Association (SOfEA), UFIPA will now concentrate on educating and informing its members through regular meetings, seminars, etc.

Taking a step back Such educational seminars – which typically form a major part of conference programmes – are not really the ordre du jour at UFIPA’s annual gathering. At the request of members, the event has been reduced to one day, a large portion of which this year was devoted to the presentations of two keynote speakers, well-known French economist Jean-Marc Daniel and philosopher Raphaël Enthoven. “ We want to give delegates the opportunity to take a step back and reflect on wider issues outside their everyday work, and hopefully everyone will have taken away something new,” said Potier.

OPI Magazine | July/August 2015

There was some industry-specific input, however. Following Potier’s opening address, SOfEA Chairman Stéphane Hamelin gave an update on the project, confirming that the first product certifications are due to be available in March 2016. He was followed by French market consultant Didier Damerval, who gave his traditional state Nicolas Potier of the industry presentation, forecasting overall market growth of around 1% this year. However, that figure hides discrepancies between the consumer and business markets. While consumer sales – including back-to-school – are expected to be up by about 1%, the B2B sector is forecast to decrease by about 0.5%. B2C outperformed B2B in France in 2014 and this trend is expected to continue as consumer confidence remains relatively high. Damerval highlighted the close correlation between consumer confidence and sales of stationery products, with

selling channel was down even further at 4%. Declines in print consumables and IT/EOS supplies are being partially offset by new sectors such as cleaning and hygiene, while categories such as writing instruments are holding up pretty well.

Amazon interest Delegates were interested to learn about the impact of Amazon on the office supplies sector, but these figures are not available. Damerval called for vendors to provide data that would enable him to add in Amazon as a separate sales channel, but there was some doubt as to whether this would be feasible. In all, about 350 delegates attended the conference. This high number was partly due to the presence of fellow trade association EBEN – comprising IT, and copy and print resellers – which held its own annual conference at the same time. There was a shared general session in the afternoon and gala dinner in the evening. It was interesting that UFIPA and EBEN resellers generally viewed themselves as serving totally different segments of the market – a sort of ‘us and them’ mentality – but there is clearly an overlap between

“We need manufacturers and resellers to come together to highlight product innovations” discretionary items such as arts and crafts expected to do well. On the B2B side, superstores continue to outperform other channels – in the first half of 2015, superstore sales grew 2.5% year on year, while those of independent dealers declined 2% and the distance

the two groups, and some form of market consolidation between the service-oriented IT and print resellers and the product-focused supplies resellers would appear to make sense in the longer term. Nicolas Potier is this month’s Big Interview – see page 14.

Category Analysis | Furniture

Furnish the future Shifting work patterns and the need for a flexible workspace are forcing a rethink on the way an office is furnished. OPI talks to the key players about the latest trends in this sector

by David Holes

the modern office morphs itself to accommodate new ways of working, the furniture manufacturing industry is developing novel designs and solutions to help achieve this. Today’s office workers require a variety of workspaces to do their jobs properly. Sitting at the same desk for hours each day is a thing of the past. Employees now need multiple spaces for their multiple tasks: a quiet, heads-down area for solitary work, flexible meeting spots for two or three people, and larger gathering places where teams can collaborate on group projects. John Michael, VP and General Manager of Business Interiors at Staples, emphasises this: “There’s been a significant shift towards customised workplaces, with spaces based on specific tasks as

OPI Magazine | July/August 2015

customers adapt to meet the needs of their changing workforce and accommodate the different types of work their employees do throughout the day. “It’s more about providing the right space than providing owned space.” At German furniture manufacturer Wilkhahn, Head of International Communications Burkhard Remmers confirms this trend: “Companies are increasingly introducing non-territorial workplaces, and furniture solutions are adapting to the needs of the task, rather than the needs of the individual.

In parallel with new working practices, rising property prices are having a profound impact on the number of workers that companies are trying to squeeze into their buildings. According to the Business and Institution Furniture Manufacturers’ Association (BIFMA), the amount of space afforded to an average office worker in the US has fallen by a third, from 225 sq ft (21 sq m) in 2010 to a record minimum of 150 sq ft (14 sq m) today.

The big squeeze As companies shoehorn smaller desks into ever-decreasing spaces, furniture manufacturers and resellers are having to think creatively to accommodate this. Phill Sutcliffe, Sales Director at ZenOffice Business Interiors & Exteriors, explains the impact this

“The traditional workstation is becoming an anachronism and furniture must accommodate [a] more flexible workspace” “The rise of activity-based workspaces and associated loss of the personalised workplace means companies sometimes try to compensate by enriching communal areas,” he adds.

is having: “Many companies are expanding but can’t move premises, so they’re looking to maximise existing space. The overall trend is to get as many people into a space as possible by ‘bench desking’.

Furniture | Category Analysis “This style facilitates hot desking, with plug-and-play technology a desirable option. Smaller desks can also be used due to the rise of flat panel screens with a smaller footprint. Personal storage is being discouraged at desks, which means some central storage solution is needed.” At UK manufacturer and wholesaler DAMS International, Managing Director Chris Scott echoes this theme: “Hot desking and agile working now characterise the workplace. The traditional workstation is becoming an anachronism, and furniture must accommodate this more flexible workspace. Linear desking solutions are replacing the cumbersome curved workstations, changing office layouts, saving space and making best use of the office footprint.” Matt Allaby, Furniture Business Development Manager at UK wholesaler VOW, agrees: “Bench systems are replacing the larger radial workstations and wave desks. These are much more suited to flat screen monitors, tablets and laptops, and are key to increasing headcount without the need for extra office space.”

Collaborative space The rise of the open office has taken hold as companies endeavour to encourage collaborative working, but it has brought its own challenges. Sandi Jacobs, Secretary of the Independent Office Products & Furniture Dealers Association (IOPFDA), explains: “The open work environment has allowed

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Out of office Furniture manufacturers and resellers are experiencing success in alternative locations outside the traditional office environment. The healthcare market is one area of growth mentioned by John Michael, VP and General Manager of Business Interiors at Staples: “Patient experience, outcomes and staff considerations are now factored into the furniture-purchasing process while looking to enhance the overall environment. This means providing more than just a bed, and producing John Michael a more welcoming space that can enhance patient satisfaction and even accelerate healing.” Glenn Moore, Director of Category Product Management at Essendant, has also found opportunities in the healthcare sector referring, for instance, to the provision of bariatric [obesity treatment] reception furniture that meets the needs of an increasing number of patients, and upholstery and finishes that are bleach-cleanable for hygiene reasons. HON’s furniture products for healthcare environments, meanwhile, are specifically designed to provide a calming influence in the waiting area and enhance the therapeutic needs in treatment rooms. At ZenOffice, Sales Director Phill Sutcliffe confirms that healthcare establishments now also want to create more colourful and attractive areas for visitors and patients in a drive to make them less clinical, more homely and user friendly. He adds that educational academies competing to attract the brightest students have furniture design in mind as well: “They want classrooms and break-out areas to be modern, funky and exciting Phill Sutcliffe places, with the latest technology available at the press of a button. Financial services operating in a highly competitive market are also designing their customer-facing areas to reflect a professional, go-getting business that shows they’re ahead of the game.” DAMS International’s recent acquisition of Morris Contract Furniture has given it access to markets in the leisure, student accommodation and education sectors as well as key-worker apartments and hotels. “This has given us significant insights into new dominant trends which are helping to inform our product development,” says Managing Director Chris Scott.

for increased collaboration and shrinking real-estate footprints, but presents a challenge as focus work is not as easy in this open environment. Consequently, we’re seeing libraries, quiet areas and focus rooms being incorporated into designs to address workers’ needs.” Glenn Moore, the US: 1993-2014 Director of Category Product Management at Essendant, concurs: “While open office spaces offer cost benefits for employers, they allow employees to become distracted, challenging their productivity 2010 2005 when it comes

to focus work. We’re seeing an increased use of alternative spaces, where employees can seclude themselves, not only to rejuvenate, but also to better absorb and process information.” This tension between the needs of different types of work has to be kept in equilibrium. At The HON Company, Director of Brand, Communications and Content Brad Johnson acknowledges this challenge: “You need to find a balance between ‘I’ space for head-down work, and ‘we’ space for open, collaborative environments. While there’s still a need for private offices, we are seeing a shift towards communal areas and the perception of privacy created by translucent panels and dividers.” Scott agrees: “These workplace trends have accelerated demand for solutions that create segmented areas of space – acoustic wall and

Source: BIFMA w w w.opi.net | OPI Magazine

Furniture | Category Analysis ceiling panels, mobile dividing screens and high-backed seating – that are key to making the open office work.” There’s also a desire for more informal spaces to work and hold meetings, and increased demand for acoustic pods with sofas and comfortable seating. “We’re seeing increased growth in modular furniture systems that provide this mix of flexibility and privacy,” says Allaby, adding: “Hot desks without pedestals are growing in popularity to accommodate flexible working practices and provide temporary spaces for mobile workers.” More progressive companies are now deliberately designing informal gathering spaces. Barbara Armstrong, Dean at the School of Arts and Design,

health, many employers are making great strides in introducing a wellness benefit, such as incorporating sit-to-stand workstations, height-adjustable tables, and chairs that encourage better posture – all healthier alternatives to the traditional workstation.” He adds: “There’s a growing attention to products that encourage physical wellness and a sense of well-being, with a focus on holistic ergonomics promoting fitness, comfort and safety. Furniture that encourages movement is being incorporated, together with an emphasis on natural elements such as light, living walls, water and plants.” Michael has also noted this trend at Staples, with sales of sit-stand desks building up a head of steam as

“There’s a growing attention to products that encourage physical wellness and a sense of well-being” Mount Mary University in Milwaukee, Wisconsin, stresses the importance: “You need impromptu spaces where you cross paths, intentionally or unintentionally. I know a company that ordered the slowest elevators possible and put the staircase next to them. There’s real benefit in people walking around and talking to each other. Businesses are missing an opportunity to build relationships with staff, and create bonds, pride and camaraderie with design.”

Think healthy Experts from the British Journal of Sports Medicine now advise that office workers stand for at least two hours a day as breaking up long periods of sitting with activity is considered advantageous to health. Workers whose jobs are predominantly desk-based should eventually progress to a total of four hours standing, they recommend. The movement against a sedentary work life is encouraging an increasing number of companies to install furniture solutions designed to get people on their feet and moving about. Essendant’s Moore has seen this effect: “With an increasing focus on

more employers realise the impact their work environment has on the wellness and productivity of staff. At Germany-based dealer group Soennecken, spokesperson Simone Preis refers to decision makers focusing more on their employees and on designing a work environment that’s comfortable and welcoming: “Companies are now investing in ergonomic products having seen how helpful these are. Office design is increasingly at the forefront of their thinking, not just desks and chairs, but encompassing lighting and acoustic design too.” Companies are using the prospect of a greener, healthier office to attract and retain top talent in a highly

competitive market. Michelle Moore, SVP at the International WELL Building Institute, points out that investment in the office environment is money well spent: “Productivity lost because of poor air or bad lighting isn’t valued highly enough. Common sense and medical science clearly point in this healthier direction.”

Brand reflection BIFMA’s Jacobs also notices businesses using office furniture to reflect their unique company brand and culture: “We’re seeing office spaces that have varied vignettes outside of the workstation areas, together with a focus on the use of natural materials. The use of wood and living plant walls are increasing, coupled with a desire to maximise access to natural light. “More and more companies are now using height-adjustable tables, team areas with mobile storage and screens that allow the users to manipulate their space to meet ever-changing needs. Clients are asking us to achieve the residential and hospitality look and we’re purchasing more accessories and unique products to create a ‘curated space’.” Scott, meanwhile, is seeing high demand for bistro-style furniture for use in social and kitchen areas which helps employers create a clear demarcation between work and non-work areas within the office environment. He also predicts a significant trend for bright colours: “We’ve just fulfilled a seating order for bright orange chairs and see ‘vibrants’ as a key style trend.” Away from the office, the tendency towards home working has had an impact on the market, but opinions are split on the level of its effect and the direction it will take in the future. w w w.opi.net | OPI Magazine

Furniture | Category Analysis

Science fact Like all aspects of life, advances in science and technology are influencing the furniture sector. Glenn Moore, Director of Category Product Management at Essendant, believes the effect has been huge: “Technology has impacted every aspect of the office furniture business – from how customers buy, resellers sell, and employees work. It drives innovation and can be the catalyst for existing product categories to take off, such as the current rise of smart furniture featuring wireless charging points and built-in USB ports.” Indeed, the office will become increasingly designed around the digital world, says Simone Preis, spokesperson at Soennecken. She elaborates: “E-screens, smart boards and video telephony will soon be a feature in all workplaces. Furniture and technology will become one and a new generation of curved screens will find their way into the office. “Inductive energy transmission (wireless charging) will be a standard feature of furniture design in 2-3 years’ time. Plus, OLED screens will be a gathering force in the office world; applied to windows and walls, they can regulate light conditions and promote creativity as the digital whiteboard transforms into digital wallpaper.” Away from electronics, new materials are also influencing the sector, according to Bryce Stuckenschneider, Director of Marketing at GMi Companies: “Architects, designers and dealers are specifying more glass than ever before and it’s our fastest-growing product category. “New materials such as powder-coated metal and high-end plastics are where we’re seeing the most willingness to change in the industry. People want to create, communicate and collaborate wherever they are and our customers aren’t discriminating based on the surface, but rather on the design and application.” He continues: “But while people love the high-tech products we sell, we’ve seen no decrease in demand for low-tech products. If anything, technology has placed an even greater emphasis on the need for a low-tech tool to help teams explain, create and brainstorm. There’s still a need to roll up your sleeves with a blank canvas in front of you and try to pitch an idea using nothing more than a marker pen. We don’t anticipate this will go away.” Michael says: “The increase in telecommuting hasn’t had a dramatic impact on the furniture market yet, but at some point it probably will. More employees working from home without the benefit of ergonomic guidelines in their home office set-up could potentially lead to health and wellness issues. “As a result, we’ll probably see more opportunities in this market in the next few years.”

Moore sees a more immediate opportunity: “There are two factors colliding in the home office market – the need for commercial furniture quality and durability, plus the unique space and design needs for home decor. Office furniture is designed for the scale of an office and the durability needs of heavy usage. Furniture designed for the home office may be size-appropriate, but it lacks the sturdiness necessary

for everyday use. Consequently, there’s an opportunity to develop commercial-grade furniture that works like it’s in the office, but looks like it belongs in a home.” Indeed, many offices are trying to become more like home, HON’s Johnson remarks: “With more people working remotely, we’re noticing a blend of the traditional office styling with more of a domestic aesthetic. Mixed materials, footed cabinets and panels combined with flexible seating are all contributing to a sense of ‘home’ within the modern office.” Jacobs actually believes that the working-from-home trend is slowing, with people gravitating back to the office. “Workers want the sense of community and connection that a workspace provides. This is a strong trend with the younger generations and is influencing the real estate and design decisions of our clients as they attempt to draw workers back to the office. The spaces that are now being created provide a campus, community feel for workers that allows them to work in a variety of spaces throughout the day.”

Plenty of potential The combination of recovering economies, the need to refurbish the workplace, and strong technological and design trends is proving a potent cocktail for sales growth in the sector at large. VOW is reporting 15.9% year-on-year growth in the UK while DAMS achieved growth of 25% in 2014 and is likely to repeat that this year. In the US, Jacobs says sales are up by 20% over 2014: “We see things remaining strong throughout 2016, with the largest challenge being speed. Business moves so quickly today that traditional lead times aren’t meeting our clients’ timing requirements.” US independent dealer Storey Kenworthy says that furniture sales in 2014 were up an astonishing 100% on its previous best year. BIFMA, meanwhile, is projecting an overall 8.1% growth in the industry in 2015, rising to 12.9% in 2016. The furniture sector is an exciting and dynamic market to be in and, economic stability permitting, future prospects look excellent. w w w.opi.net | OPI Magazine

Your OPI

5 minutes with... Chris Scott, Managing Director, DAMS International

Describe what you do in less than 20 words. We design and manufacture DAMS office furniture and operate as a wholesaler serving the OP dealer market. Your first full-time job. Delivering office furniture. The most memorable travel experience you’ve had while in the OP industry? Many years ago, I decided to explore China as a possible sourcing option for office furniture. During the three weeks I was there I saw the most beautiful unspoiled countryside of central China, and the food was a real experience. I loved every minute of it. The best moment in your career. The biggest highlight was truly life changing. While attending ORGATEC in Cologne many years ago, we held a party for customers and suppliers. That’s where I met the woman who was to become my beautiful wife and the mother of our two fantastic sons!

“I’m not into executive cars. Motorbikes on the other hand…”

The best concert you have ever been to? This won’t win me any cool hipster points, but Dr Hook has to be the best memory. The best book you’ve read in the past 12 months? I’ve just started reading Mike Tyson’s autobiography. I can’t put it down. What sports team do you support and why? Liverpool FC is in my blood and, as Managing Director of a Liverpool-based company, it’s the Reds all the way for me. Any pets. A crazy Hungarian Vizla called Kayah. Have you ever done anything dangerous or daring? During my teenage years I was a real adrenaline junkie – the more dangerous, the better.

Your favourite event on the OP circuit and why. I see ORGATEC as the leading European office furniture exhibition. The innovation and design are cutting edge. Your favourite office product. The Herman Miller Aeron chair – it was revolutionary for the seating industry and it’s still popular now. What do you like best about the OP industry? It sounds clichéd, but the people are great and that’s probably the reason why so many of us have stayed involved in the industry for such a long time. Things you don’t like spending money on. I’m not into executive cars. Motorbikes on the other hand… Your first vehicle. A red Honda CR50cc monkey bike for my 5th birthday – I’ve been hooked on bikes ever since. Things that make you angry. Rude people that don’t listen and think they know it all – it makes my blood boil!

OPI Magazine | July/August 2015

If you had one day to live, what would you do? I’d hire out an amusement park for the day for the exclusive use of friends and family.

Your OPI

Final word Your industry, your opinions Dennis Arnold, VP of Furniture, SP Richards

Opportunities abound WE

have seen continuous and moderate growth in the furniture category from the beginning of 2010 until mid-year of 2014. In Q3 of 2014, we saw a significant and accelerating double-digit growth trend that has continued through the first half of 2015. Growth is across the board with all furniture brands seeing strong gains, but our Lorell proprietary brand continues to reflect a significant proportion of that sales increase trend. While a vigorous, globally-sourced import programme is an important component of Lorell, over half of the product is actually sourced in the US from 21 of our top branded furniture vendors. The new programmes and support services we have added for our dealers are just a few factors contributing to the positive growth in the furniture category at SP Richards (SPR). Among these is the Lorell Diamond Dealer Program. We have found that one size simply does not fit all dealers, so we have developed the capability to respond to their varying needs.

Shifting design trends From a design and layout perspective, there has been a shift from the traditional cubicle to a more collaborative workspace. In some instances, there has been a move to eliminate panels entirely. That said, several studies have already established that completely open collaborative work areas often resulted in more noise and less efficiency. So what we are seeing now is more of a blend, with panel heights coming down to desk height and glass panels being added to maintain the open look while creating some sound buffer. Even in facilities where the general work spaces remain unchanged, many companies are adding collaborative work areas and conference rooms. Sit-stand desks and tables are one of the hottest furniture categories today, as part of the collaborative work design movement. This trend is further exacerbated by media coverage that highlights the dangers of sitting all day. As recently as two years ago, there were only a few manufacturers making electric height-adjustable work surfaces. During this year’s catalogue process, practically every manufacturer presented a version of this. The good news for the consumer is that with the increased competition, prices are coming down and we expect them to be 20-30% lower next year. Interestingly, we are seeing over half of overall sales being generated from new height-adjustable bases being retrofitted to the customer’s existing desk or work surfaces to achieve adjustable height capability. We have expanded the healthcare and educational section in our FurnitureAdvantage catalogue and in 2016 we will be adding a healthcare section to the general line catalogue and the stocking programme. Maybe other categories are posting higher growth rates, but opportunities abound in furniture too.

“Maybe other categories are posting higher growth rates, but opportunities abound in furniture too”

Broader furniture range OP dealers have always worked with the key business accounts in their community on the office product needs they have, but in recent years we have seen more and more dealers engaging these customers in other categories such as furniture, and facilities and breakroom. As part of the increased focus on furniture opportunities, we as a wholesaler needed to be able to supply a broader selection of products. In addition to the over 4,000 furniture SKUs in stock available for next-day delivery, we added access to an additional 11,000 furniture items that are available to be delivered in 10-14 business days. The key to this was simplicity and these 11,000 SKUs have one factory-direct discount and are delivered with their standard SPR delivery. In January of this year, we completed the acquisition of JAL Furniture, a regional furniture wholesaler in the north-east US. With this addition of furniture-only customer service and furniture-only sales people, along with the furniture-only daytime deliveries on SPR furniture trucks, we now have the ability to service furniture-only dealers, or those that predominantly sell furniture in the north-east. Using the JAL acquisition as a base, we will be expanding this programme across the country.

OPI Magazine | July/August 2015

Want the Final Word? Email editorial@opi.net

IN THE NEXT ISSUE • Big Interview with Jim Hebert, CEO of Ofﬁce Partners • Jan/san Special – OPI takes another look at this booming category that is becoming so important to OP resellers. Look out for interviews, analysis, special features and more