Opi june 160 us (b) by OPI

twenty five year anniversary

The word in office.

magazine

Easy as ABC p33

Big Interview

Jaime Carb贸, CEO, ADVEO p16

June 2016

OP leaders on OPI Global Forum panel p6

p27 Staples & Depot go it alone

p22 The OP content marketing journey

Contents June 2016

www.opi.net

News

Events

6 Round-up

33 ABC Preview

Acquisition for Safco; Essendant digital chief leaves; Hamelin set to sell Canson

A look ahead at SP Richards’ ABC event in Washington DC in July

Category Analysis

9 News Analysis

EPIC gains momentum; dealer groups collaborate; Westcoast/ ADVEO deal

36 Traditional OP

A category that defies generalisation and where the challenges go hand in hand with plenty of opportunities

Features

40 Viscom

16 Size does NOT matter

The viscom category powers ahead, driven by changes in the way we work and live our lives

In his first-ever interview with OPI, ADVEO CEO Jaime Carbó explains why a smaller top line will be a good thing for the wholesaler and how it intends to eliminate the pain points for its customers...

Sponsored Profile

22 The OP content marketing journey

How are OP companies faring on their content marketing path? OPI finds out...

44 In focus

Highlands and Reckitt Benckiser on their recent deal in the UK

Regulars 5 Comment

27 Going it alone

What does the future hold for Staples and Office Depot now that their proposed merger has finally been abandoned?

46 The generation game

30 The art of zen

Julia Vorley

Chris Finn

49 5 minutes with...

Diversification has been a key ingredient of growth and success for UK dealer ZenOffice

50 Final word

Chris Leonard-Morgan

“A content marketing strategy is an excellent tool with which you can build your brand and differentiate yourself in a crowded marketplace. It’s a great way to build a long and deeper engagement with your customers, supporting your brand purpose and showing them that it’s not just about selling the product at a competitive price.”... For the full story, turn to page 22

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

Editor Heike Dieckmann

Comment

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

Deputy Editor Michelle Sturman

Don’t neglect core OP

+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 Marketing Manager Aurora Enghis +44 (0)20 7841 2959 aurora.enghis@opi.net

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

Production and Finance Studio Joel Mitchell +44 (0)20 7841 2943 joel.mitchell@opi.net

Operations & Production Eda Sismanoglu +44 (0)20 7841 2950 eda@opi.net

Finance Mark Wallis +44 (0)20 7841 2956 mark.wallis@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.

Phew! The Staples/Office Depot saga is finally over after the two companies abandoned their merger following the court’s decision on 10 May to grant the FTC its preliminary injunction. I say ‘over’, but is it really just a case of a new series beginning in this big-box soap opera? While the door has been closed on the Staples/Depot merger, it has raised more questions about what the future holds for each firm – especially Office Depot in general as a going concern – and how a potential sale of both their European Core office supplies […] are operations will pan out. actually doing pretty well Plenty more ink to be spilled and are more profitable on the subject, methinks… than a lot of these (such as in our Special adjacent categories Feature on page 27). With all the talk of moving ‘beyond office supplies’, there is possibly a tendency to take our eye off the ball on traditional stationery and office products. That would be a mistake because core office supplies – bar a couple of segments – are actually doing pretty well and are more profitable than a lot of these adjacent categories. A look at how the London Stationery Show has developed over the past few years, for example, points to a re-energising of the stationery category and it is interesting how B2B resellers can tap into some of these ‘prosumer’ trends such as adult colouring. Read more in our Traditional OP Category Analysis on page 36. Have a great month. Andy Braithwaite Editor-at-large

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

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News n Round-up

News from opi.net Acquisition for Safco Furniture manufacturer Safco Products has acquired Focal Upright Furniture. Focal Upright is an award-winning manufacturer of ergonomic office furniture – including leaning seats, standing desks and ergonomic accessories – and was established by industrial designer Martin Keen, founder of KEEN Footwear. Financial details of the deal were not disclosed, but following the acquisition Focal Upright products will continue to be marketed under its brand name while being added to the Safco Active Collection and sold through Safco’s distribution networks. Additionally, Focal Upright – which will continue to be based in Rhode Island – will sell corresponding Safco Active products on its brand website. Both companies will be displaying their products in Safco’s showroom at the NeoCon furniture show in Chicago on 13-15 June 2016.

Events

Sargent, Aiken and Carbó confirmed for OPI Global Forum 2016 Three of our industry’s leading CEOs – Staples’ Ron Sargent, Essendant chief Bob Aiken and ADVEO’s Jaime Carbó – have confirmed their participation on a ‘Power Panel’ at this year’s OPI Global Forum in Chicago. Senior executives in the business supplies industry will get the chance to hear their views on the industry and its future as OPI CEO Steve Hilleard puts them in the spotlight. There are still more panellists to be confirmed. Other Forum highlights include sessions on topics such as the transformation of retail and distribution, content marketing, industry merger and consolidation, reaching online customers, and growing margins. The invite-only conference will take place from 13-15 November at the Sofitel Chicago Water Tower Hotel. This year’s event will also feature a memorable celebration to mark OPI’s 25th anniversary.

Mergers & Acquisitions

ISSA/INTERCLEAN awards winners announced The winners of the Amsterdam Innovation Awards were revealed at the ISSA/INTERCLEAN show in the Dutch capital recently. 110 entries were received for the three product categories. The winners were: • Machines, accessories and components: Cleanfix – RA 660 NAVI Robot • Equipment/tools for cleaning, care and safety: Werner & Mertz Professional – Quick & Easy System • Management, training solutions and related products: Sealed Air Diversey Care – Augmented Reality: Suma Revoflow The overall winner of all three categories was presented to Sealed Air Diversey Care. In addition, the Visitors’ Choice Award went to Kärcher for its BR 40/22 floor cleaner.

Facilities Management 6

OPI Magazine | June 2016

Mergers & Acquisitions

Wholesalers

Esprinet makes Spanish move Italy-based Esprinet has said its acquisition of Vinzeo will make it the number one ICT distributor in Spain. The company revealed that it had agreed to buy Vinzeo – the fourth largest ICT player in Spain – from owner IBV in a 74 million ($84 million) deal. Madrid-based Vinzeo has distribution contracts with IT vendors such as HP, Samsung, Acer, Asus, Toshiba and Lenovo, and has also been distributing some Apple products for the past few years. It has annual sales of around 585 million which, added to Esprinet’s own sales in Spain of about 700 million, will put the combined company in the number one spot in the market ahead of global giants Ingram Micro and Tech Data.

Traditional OP

Hamelin set to sell Canson Hamelin is in exclusive negotiations with FILA after the Italy-based group made a binding offer to acquire the iconic Canson brand. Hamelin has owned Canson since 2007, but CEO Eric Joan said the sale of the brand tied in with the company’s strategic plan to focus on its core school and office supplies business and dedicate its resources to the development of its other two global brands, Oxford and Elba. Speaking to OPI, Joan said that Hamelin had “ambitious growth projects” for Oxford and Elba and that the brands, especially Oxford, had enjoyed organic growth in 2015, although he declined to specify any figures. We’ll have to see if these ‘projects’ translate into acquisitions once Hamelin has finalised the Canson sale. Negotiations can technically continue until the end of the year, although FILA says it expects an agreement to be reached by the end of October. The process also includes an information and consultation procedure involving the relevant employee representative organisations. Canson was founded in 1557 by the Montgolfier family and is based in the Ardèche region of France. With production facilities in France and converting and distribution centres in France, the US, China, Australia and Brazil, Canson products are available in over 120 countries and the brand has annual sales of more than 100 million ($112 million).

EVO sells Banner division EVO Group has sold its Banner Managed Communication (BMC) subsidiary to marketing and communications provider Adare. BMC is a distinct entity from the Banner corporate reseller business and has a separate head office in London. EVO said the sale was a “natural progression” that allows it to focus on its core markets and product portfolio. Together, BMC and Adare will become a £230 million ($330 million) group in the business communications and marketing sector with more than 1,000 staff. As it happens, Adare’s owners are Endless, the same private equity firm that owns EVO. It acquired Adare in April 2015 in a £60 million management buyout. At the time, it was stated that there were no plans to bring the BMC and Adare businesses together, but obviously things have changed since then. Financial details of the BMC sale were not disclosed.

Marketing and digital chief leaves Essendant Girisha Chandraraj has left OP wholesaler Essendant to take over as CEO of games retailer Marbles. Chandraraj joined Essendant in 2013 as Head of Digital and was named SVP Marketing and Chief Digital Officer as part of an organisational shake-up a year ago – a key role at Essendant given that “winning the shift to online” is one of the company’s top strategic priorities. He was also in charge of the CPO Commerce online B2C business. Essendant hasn’t yet released details of his successor, but told OPI that it is looking for someone in the same combined marketing/digital role. “We believe strongly in the combined marketing and digital structure that we implemented under [Girisha’s] leadership, as our resellers need the full range of marketing and digital solutions to compete in the marketplace today,” the company told OPI. “By bringing these solutions to market through one team, we are able to offer a seamless offering to our dealers. This approach is a key element of our value proposition [and] we will recruit a leader of this combined function who will continue our progress.” Girisha Chandraraj

People w w w.opi.net | OPI Magazine

news n Analysis

EPIC gaining momentum Positive signs are coming from the EPIC Business Essentials national accounts programme

Things

are looking up for EPIC Business Essentials, the joint venture between Independent Stationers’ (IS) National Accounts and TriMega’s Point Nationwide that was formed last year to help independent resellers better compete in the national and large regional accounts arena. EPIC Business Essentials Executive Director Kevin France admitted that 2015 was “a tough year” as the uncertainty surrounding the future of the US Communities contract ran into the second half of the year before the cooperative contracts organisation finally decided to pull out of the office supplies category.

Year of transition The timing of that decision made it a challenge to move agencies onto other programmes, but EPIC was successful in switching some customers to its TCPN cooperative contract. Nevertheless, France said that with the establishment of EPIC and all that this involved, combined with the US Communities situation, 2015 was essentially “a year of transition”.

EPIC recently held its first regional meetings

That is all behind it now. The integration of the IS and Point Nationwide teams has been completed and the organisation recently finished its first series of regional meetings under the EPIC name. The five events – in Houston, Atlanta, Chicago, Washington (DC) and Los Angeles – were attended by more than 200 people representing over 100 dealerships, evenly split between IS and TriMega members.

Kevin France

More sales managers France told OPI that he was pleased with the demographics of the attendees, with a higher mix of sales managers and sales reps this time than he saw at previous IS National Accounts meetings. This meant that those out in the field, prospecting for and managing contracts, were able to take advantage of the best practice and educational seminars which

While France recognises that the EPIC model will not be suitable for every dealer and every type of contract, he firmly believes it offers a credible alternative to the big boxes, especially for larger regional accounts. The Staples/Office Depot merger uncertainties over the past 15 months have created a lot of “noise” in the marketplace, he noted,

“There are still months of opportunity for the independent dealer, even after the termination of the merger” included sessions on how to sell to the public sector, the healthcare vertical and the federal government, contract positioning and tendering strategies, and how to effectively use social media. There was also some good news from EPIC in May with the award of a five-year Enterprise Wide Agreement (with up to five additional one-year extensions) from the Integrated Contractor Purchasing Team (ICPT) whose members are contractors to the Department of Energy. France said winning this multimillion dollar contract “showcases the strength of the independent dealer channel, and our ability to offer the highest level of value to enterprise customers”. He also confirmed that there were other major contracts in the pipeline and that more awards would be finalised in the coming weeks and months – something to look out for.

and raised questions about big-box service levels. “There has been a lot of distraction and people are anxious to talk to us,” he said. “There are still months of opportunity for the independent dealer, even after the termination of the merger.” The onus now will be on France and his team to take share from the big boxes, something that may be more of a challenge after Office Depot promised to “aggressively” go after enterprise accounts in the next few months (see ‘Going it alone’, page 27). The ICPT contract was previously held by an AOPD member, so that recent win essentially represented a shift in share in the independent channel. What will be interesting to see is to what extent EPIC – and other independent dealers and groups – are able to make inroads into the Depot and Staples enterprise accounts stranglehold. w w w.opi.net | OPI Magazine

BPGI members in the UK and Australia announce licensing agreement

dealer group Integra and Australian counterpart Office Brands have announced a strategic alliance. It has kicked off with the signing of a five-year licensing agreement that enables Office Brands to used Integra’s Initiative Office Products brand as a registered trademark within Australia. This will potentially see the Initiative range becoming the group’s new own brand in the not-so-distant future. Both Integra and Office Brands are longstanding members of dealer group purchasing consortium BPGI (although the Australian group no longer participates in purchasing contracts following the creation of antipodean buying group OPANZ last year), and it is through this membership that their agreement

came about. Integra Managing Director Aidan McDonough told OPI that talks between the two groups had first started at a BPGI meeting in Lisbon last October and then progressed from there.

Supplier choice The licensing agreement allows each group to use its own suppliers, but McDonough said they would be exploring opportunities to share vendors going forward. An important aspect of the deal is Office Brands’ use of Integra’s Initiative brand marketing. “[The group] will have access to all of the collateral it needs to implement this as its new own brand – from brand guidelines, packaging and photography through to catalogue designs, promotional collateral and a consumer website,” explained McDonough. The two groups have made it clear that this licensing agreement is the first visible evidence of a collaboration that could result in other joint initiatives or the sharing of best practices and systems. “Office Brands has some fantastic

marketing and technology platforms and we are keen to learn how we can implement these in the UK and Ireland for our members,” confirmed McDonough. Office Brands CEO Gavin Ward, meanwhile, reiterated the importance of independent dealers working together to “future-proof the channel”. Many will share his sentiment that independents would benefit from greater national or international collaboration to share best practices and resources, and it will be interesting to see if any other initiatives develop from within BPGI or elsewhere.

Aidan McDonough

Westcoast to take on ADVEO EOS assets Pull-back on EOS is one part of ADVEO’s new business plan

this month’s Big Interview (see page 16), ADVEO CEO Jaime Carbó talks about the problems integrating the Adimpo EOS wholesaling business with Unipapel after the former was acquired in 2009, and the ongoing profitability issues in the EOS category. Now ADVEO looks to have solved its EOS problems after reaching an agreement with UK-based technology distributor Westcoast. Billed as a “partnership” in ADVEO’s press release, it appears that Westcoast will actually buy some of ADVEO’s former Adimpo assets, taking over its brand name, a distribution facility in the French city of Lyon, and stock. Westcoast will be responsible for ADVEO’s sale of EOS products in the

IT specialist, office superstore and retail channels – three segments that ADVEO has already called out for their low EOS margins and the tying up of cash in inventories. There is also a post-transaction agreement that will see ADVEO commit to purchasing EOS products through Westcoast.

Debt reduction Further details will no doubt become available once the deal closes, most likely by the end of June. Currently, there are still a number of employee works council and other regulatory approvals to be finalised. In 2009, Adimpo had sales of around €650 million ($730 million) and EBITDA margin of 3%. The assets in question for the Westcoast deal

– and it is not clear whether or not they relate to the whole of the former Adimpo business – account for sales of €300 million and EBITDA of €3 million, or EBITDA margin of 1%. ADVEO said the transaction would knock about €80 million off its debt, which currently stands at just under €300 million. Debt reduction is one key area of ADVEO’s business plan. It looks like a good move for both parties. ADVEO will focus on its one-stop shop concept, providing higher levels of service to independent resellers, while Westcoast will do what it does best – moving low-margin tech and EOS products efficiently and profitably – while growing its presence in continental Europe. w w w.opi.net | OPI Magazine

news n Analysis

Dealer groups collaborate on private label

News ■ And finally...

Comment This issue, OPI asked industry insiders for their views on the key trends, market demand and future opportunities in traditional OP. (To read more on the sector, read the Category Analysis on page 36) We see increasing demand for products that combine superior functionality – addressing and solving the needs and problems of customers – with a minimised impact on our environment. The traditional office products industry also has to adapt its communication to the new generation of millennials. At Trodat, this means a stronger focus on the development of web marketing materials such as product videos or 360° product shots, which we then share on our website and YouTube channel. Andrea Dörner, Assistant Product Manager, Trodat At helit we have decided to focus on and invest in categories like waste/facility management and display products. Both are traditional, paper-related categories and helit has built up, over the decades, a good position in both areas and is considered to be a very competent and innovative partner for the trade. Also, both categories have potential for hybrid solutions we are currently working on. Rolf Bonsack, Managing Director, helit Germany (Maped Group) I believe customers nowadays want convenience as well as perception. Convenience in terms of ordering day-to-day products in a simple and fast way in their own time; perception in terms of walking into a store and getting the ‘wow’ effect from products and their environment. Combining those two concepts in a smart way is key. Jean-Paul Wortman, Spokesperson, Rillstab Personalisation – a major USP we discovered some years ago for our products – still has enormous significance. Mass customisation is one of the major current trends as people want to show off their individuality. Specific designs or branding are what end users want; people want to be unique and own something unique. Sabine Mittermair, Marketing & Event Manager, Colop Technology is the overriding driver of change in this category. The move to a digital age is a major contributor to declines in established categories as, for example, mailing is replaced by email, filing is replaced by online storage, and viscom presentation products are replaced by Digital Light Processing technology. There are some categories that are in growth and they either complement digital products, like desktop accessories and ergonomics, or are products that are an extension of the buyer, such as pens and books. Andrew Stacey, Vendor & Product Director, VOW

OPI Magazine | June 2016

TWEET CHAT follow us on Twitter @OPInews, @andy_opi

@Phil_Pond Today I met Rebecca from @notonthehighst #LondonStationeryShow what a great speaker & an interesting business. Also a gr8 show a 2017 must! @SilvineOriginal The #LondonStationeryShow is on for #natstatweek. One of our stands from Birmingham c.1920 with hanging baskets! @FSIoffice “Either write something worth reading or do something worth writing.” #WednesdayWisdom #officesupplies @GetGarveys Who says that chalkboards are just for work or school – bring one home! #OfficeSupplies @GetConsumables The original cut and paste

$39 billion

Expected value of the stationery and cards market in Asia-Pacific by 2020

10.43 million

Number of colouring app downloads in the US (July 2015-March 2016)

10.48 million

Number of colouring books sold in the US (Jan 2015-March 2016)

#OfficeSupplies

opi.net poll results Was the FTC right to oppose the Staples/Office Depot merger?

Yes 53% No 41% 6%

Don’t know

SNAP SHOT Bored with exam revision, two UK students had a ‘pen-off’ on Twitter as the pair fought over whose head could hold the most pens. The overall winner held 242 pens on her head. The posts went viral spawning a number of copycats and even featured on popular website Buzzfeed.

Big Interview | Jaime Carb贸

Size

does NOT matter Faced with a failed IT platform integration in Spain and its sales, profits and share price all heading south, pan-European wholesaler ADVEO turned to proven turnaround specialist Jaime Carb贸 last year to get the company back on track. OPI Editor-at-large Andy Braithwaite checks up on the progress so far

OPI Magazine | June 2016

ADVEO | Big Interview shown, it means that the one managing the numbers has to be accountable, and so on. There is a tendency in business to think that we are super marvellous and that we deserve to be well paid, but we are never ready to take responsibility for our failures and mistakes – that’s not my philosophy.

by Andy Braithwaite andy.braithwaite@opi.net

THE

tenure of Millán Álvarez-Miranda as ADVEO CEO came to a swift end in June 2015 following a difference of opinion with the wholesaler’s board on how to turn around its loss-making Spanish operations. The company wasted no time appointing Jaime Carbó as Álvarez-Miranda’s successor and he officially took on the role on 31 August. Coming from 800 million ($907 million) olive oil producer Deoleo, where he had overseen an organisational and financial restructuring, Carbó quickly made sweeping senior management changes and set to work on stabilising the situation in Spain. ADVEO’s first quarter results – released after this interview was conducted – point to progress, with a focus on generating profits as opposed to growing the top line at all costs. In fact, better profitability was one of the pillars of a new business plan that ADVEO revealed at the end of March and we are likely to see this pattern of declining sales continue. Not that this worries Carbó in the slightest, as he explains below…

OPI: Was IT the biggest underlying issue? JC: No doubt, IT was a problem, but there was, I would say, a previous strategic decision that was wrong. It’s easy to say afterwards, but when we bought Adimpo some years ago, one of the decisions was to merge Adimpo into Unipapel. Adimpo was a very specific kind of company, very focused on some products and channels, whereas Unipapel was essentially the sales organisation of a production unit that wanted to be a wholesaler. A wholesaler is not the sales organisation of a production unit; it’s a wholesaler and is very specific. So it was not a good idea to blend the people, cultures and systems of Adimpo with Unipapel. That was, I believe, an important mistake. OPI: And that had a knock-on effect over the years; even before this IT integration, Spain was showing declines? JC: Sure, because the consequence is that you lose focus and sharpness and are unable to be successful in a very specific channel. As you know, electronic office supplies (EOS) is a very difficult business: if you try to be as service oriented as we are in EOS you will not make a single euro. You have to be very sharp in order to achieve some margin because the levels of margin and the service requirements are very different.

OPI: Your appointment was announced last June. What attracted you to ADVEO and the business supplies industry? Jaime Carbó: Well, my first consideration was not for the company or the industry itself, but more a combination of the situation of the company and the shareholding. I have good relations with some of the shareholders and I have previously been involved in restructuring companies. ADVEO was clearly in need of restructuring. So they were the main reasons. OPI: How much of a turnaround job was it? JC: It was clear that the company urgently needed some changes, mostly focused on Spain. That was public knowledge; some press releases had already referred to the IT platform, the products, the new model, merging Adimpo into Unipapel and so on. So it was clear that there was something to be done. OPI: You’ve changed the whole of the senior management team since you’ve been there. Was that because you needed a fresh start and a fresh pair of eyes? JC: I would say that when an IT project does not work after 18 months, it means that the person in charge of IT is responsible; when the numbers show the picture that we have

“We were in the hands of consultants and that had some terrible consequences”

OPI: Putting the Adimpo integration issues aside, when you look at Spain and the IT problems over the past couple of years, what were the broad reasons for that? JC: I think there was one fundamental mistake, and that is we didn’t have internal ownership of the project; we were in the hands of consultants and that had some terrible consequences. You know, consultants are not really your advisors, they are there to make money and, to cut a long story short, there was a huge overspecification in the whole model. We were guilty in that we didn’t have people with the skills, personality or ability to challenge the consultants. And maybe the consultants were not loyal enough to us to offer a basic product without lots of added extras. In the end, the product just became so big and so complex that it never worked. w w w.opi.net | OPI Magazine

ADVEO | Big Interview OPI: Since you’ve come in what’s changed? JC: First, we made one important decision. The original idea was to deploy this platform in every country, starting with Spain. We decided not to do that. We have stabilised the platform in Spain; it was very costly but it’s working. It will be used in Spain only and we will not deploy it in our other markets. OPI: But would it not be preferable to have a single IT platform for the whole ? JC: There are simpler ways to do that. We could follow the advice of our consultants to have one single platform at a cost of 100 million, but we don’t have that money, and anyway we need to invest in many other things. So what we are going to do is deploy a different architecture that will deliver roughly the same system as having one single platform at, I would say, a third of the investment, a third of the risk of implementation and a third of the time required to implement. OPI: So that will be implemented in all the other markets? JC: Italy and Germany this year, and France next year. OPI: Turning to your new plan, I wrote an article recently where I said it was more of a business or financial plan, rather than a strategic plan. Would you agree with that assessment? JC: Yes, absolutely. We were careful with the words. It’s essentially a business plan with no changes or extensions to our strategy – that will come later on. First we wanted to show the potential of this company to improve its results and to

improve its service through, I would say, quite a heavy investment period. OPI: So, there will be two plans? JC: No, there will be two layers. Imagine that you are making a cake; first you bake the cake and then you put in the cream. We have the cake and the cream will be added in a few months’ time. OPI: What are your strategies for turning things around in Iberia? JC: The first thing we had to work on was team spirit. If you put all the IT, delivery and service issues together, it created a very low morale, so we needed to change that. We needed to create a new attitude, a new emotion – businesses are managed by people, so whether you are driving a forklift or managing the whole company, we are all important. That’s been a priority. Second is changing those things that were giving our clients – and vendors – pain. So we have invested, we have changed and we have pushed very hard to return to levels of service that are acceptable. Service is a very broad concept. It’s not only deliveries; it’s also making sure that invoices and discounts are properly booked, that collection of payments is done properly. All that had to be improved, and we have improved a lot. Third, of course, in any organisation from time to time you have to shake the tree, so we have done that. We had excess resources and we even had people that were not in the best frame of mind, so we have recently finished our social plan. That’s been very painful, especially for the people who are leaving, but I can tell you that the people who have been involved in this plan have taken it very seriously; it’s not fun at all to do that. And then going out into the street, pushing our sales people hard, visiting clients,

“Our geographical footprint is still quite limited, and there is room for expansion”

w w w.opi.net | OPI Magazine

ADVEO | Big Interview promising on deliveries; that’s the most important thing, because at the end of the day we sell – so that’s what we have to do. OPI: What are some of the strategies to winning back customer trust? JC: Focusing on what we do well. Are we the best wholesaler for electronic supplies in the IT specialist channel? No. Are we the best one-stop shop experience? Yes. Don’t try to be what you are not. We are good in the one-stop shop experience; we are very strong in breadth; we are very good in service. If you want to trade with a full truckload of electronic supplies from one warehouse to another, that is not our role. We will not be making money and we will not be doing well. OPI: So will this mean a shift in customer focus for ADVEO? JC: Of course, we have to focus on what we do well. OPI: Does that entail fewer retail and larger volume customers? JC: More service-oriented actions. People who request full service will pay and will be eager to receive that service. But people who want to trade full truckloads of paper – what do we get out of that? Nothing. OPI: That will mean an extra focus on things like the Calipage network and the CARIP buying platform for smaller and medium-sized dealers, I suppose? JC: Calipage is a very intelligent experience and I think we have to push it very hard. We may need more people who are experts in managing this kind of business, but it will be very important for us. CARIP is a wholesale business, but it’s a different approach to wholesaling. It’s something that works very well in France; it’s working properly in Spain and we have to deploy it in the rest of our markets. OPI: Your plan talks about ending or changing unprofitable, commercial relationships. What do you mean specifically by that? JC: Well, that is tied to something I said earlier. At the end of the day, there are some categories and some channels that when you combine them, you get something that is destroying value. Something that is destroying value means that consistently, month after month, probably for years, you never get a return on the capital you have invested into a project [see also News Analysis, page 11].

I don’t care about being the largest player. Size is a tool, or can be a tool, to be profitable. If it doesn’t help you to be profitable, I don’t need to be big. It may sound too financial, but that is how we are paid. We are here to make money for our shareholders, to pay off our debt and to make our employees happy. OPI: I guess you’re talking about EOS here. Where do you see the traditional office products category going? It’s still your largest category in terms of profit. JC: There is no doubt that the consumption of paper and paper-related products is contracting and that digitisation is provoking some doubts about the future and growth prospects. What we have to do is to fight, achieve a balance and find new avenues for growth around concepts that are similar. It’s evident that mobility, working outside the office, working from home are all part of our environment now, not only traditional offices. People are working in different ways and are using different tools. Even offices require different products and services than before, so we have to provide support to this new working environment. OPI: How does your current product assortment reflect these changes? JC: That is what we’ll be extending. We’re working on the 2017 catalogue now and we’ll be giving different weight to new products. Of course, we won’t forget the ‘old’ paper or stationery categories – they are still very good businesses. But it is clear that we have to offer products that are more in tune with the new ways of working.

For more exclusive content from the interview with Jaime Carbó, including his thoughts on the wholesaler’s business model, logistics infrastructure and relationship with Amazon, please go to opi.net.

“It is clear that we have to offer products that are more in tune with the new ways of working”

OPI: Final question. Your predecessor talked about possible geographical expansion, even outside Europe. Is that on hold now? JC: I can safely say that we will not enter Latin America while I’m with the company! But it is true, our geographical footprint is still quite limited, and there is room for expansion. I’ve been in consolidating industries before, and if you do it properly it can be extremely profitable for the business. But our focus on the short term is on delivering on our business plan. . w w w.opi.net | OPI Magazine

Hot Topic | Content Marketing

In last month’s OPI independent strategist Bert van Loon explained the ‘why’ and ‘what’ and ‘how’ of content marketing. In this issue, we take a look at where the various players in our industry are on their journey

marketplace. It’s a great way to build a long and deeper engagement with your customers, supporting your brand purpose and showing them that it’s not just about selling the product at a competitive price. If you have quality and authoritative content, you can develop yourself to be front of mind during the customer’s shopping experience.” But, she explains, adding a note of caution: “When building a content marketing strategy, it’s absolutely crucial to take a few steps back and assess exactly what you’re trying to achieve. Is your goal to generate leads, create awareness or build authority? Setting those objectives will help you identify the strategy for your content marketing campaign that will help you achieve those goals.”

by Heike Dieckmann heike.dieckmann@opi.net

THE

notion that companies in the business supplies sector need to differentiate themselves through something other than just price is nothing new at all. Service, locality, contractual tie-ins (managed print services or other equipment hire/ maintenance deals are good examples) have all become part and parcel of the ‘value-add’ that customers like and resellers need. Yet when you look at the online shops or indeed the bricks-and-mortar shop windows of some of the biggest and best-known OP resellers, the words ‘discount’, ‘cashback’ and ‘sale’ accompanied by plenty of dollar, euro and other currency signs remain omnipresent. But changes are afoot. In between the discount notice and the latest cashback promise, you increasingly see little snippets of other information. A link to expert advice on the latest changes in tax and business on the Officeworks website, or a synopsis of the history of the pencil in a Euroffice blog are just two examples. This is where ‘marketing’ meets ‘content’, a powerful combination if you get it right. Alina Fisher, Senior Marketing Manager at EO Group (new group name for Euroffice), says: “A content marketing strategy is an excellent tool with which you can build your brand and differentiate yourself in a crowded

OPI Magazine | June 2016

Measure the results

“It’s absolutely critical to take a few steps back and assess exactly what you’re trying to achieve”

EO Group has invested in content marketing for about two years. And while it’s constantly evolving, the strategy predominantly focuses on developing its brands and driving customer loyalty. The most important aspect to get right, explains Fisher, is to set clear KPIs from the start and make sure all the correct tools – in the case of digital content marketing your platform, Google Analytics, email tracking and lead scoring technology – are in place so you can successfully measure your investment. “Once your KPIs are set and tools are in place,” she adds, “experiment with content and see what works for your audience. Whatever your goal, whether it’s local or national, make sure you invest.”

Content Marketing | Hot Topic Creating and deepening customer loyalty and responding to their ever-growing thirst for information is what drives Officeworks in Australia. Says Managing Director Mark Ward: “Our customers come to Officeworks for lots of different reasons, some to create a home office that gives them the tools to work or study, others to find office supply solutions for their business. Through content marketing, we can offer those customers different information

goals of B2B marketers, followed by lead nurturing and brand awareness (see chart, bottom left). All four are intrinsically linked and that is not surprising, especially in a commodity-driven industry like business supplies. Mike Anderson, Head of Marketing at Brother UK, is acutely aware of this. “To grow our business in line with Brother’s global profit strategy, we need to put increasing

“When you’ve got a channel-centric model [...], you’re not only highly reliant on your resellers to bring your message across, but you can also add real value” that helps them find the inspiration or details they want and this really adds value to them.” Content marketing for Officeworks is about providing educational, useful and inspiring content via articles and videos on its social media channels such as Facebook, Instagram, YouTube and LinkedIn, as well as the two content hubs on its website, called Work Wise and Work Style. “In addition,” Ward explains, “content marketing for Officeworks means providing detailed product information, images and videos for our 25,000+ products online so customers can find exactly what they are looking for in an online environment.” That’s an interesting fact. Where does product information stop and ‘proper’ content start? When OPI spoke to a number of companies in the industry about content marketing and its definition, it was interesting to hear that there indeed can be a blurring of lines between product content – think product videos, for example – and a comprehensive content marketing strategy. According to the Content Marketing Institute (CMI), lead generation and sales are the top two most important content marketing

B2B Content Marketing Goals 85%

Lead Generation

Source: Content Marketing Institute

Sales

84%

Lead Nuturing

78%

Brand Awareness Engagement

77%

76% 74%

Customer Retention / Loyalty Customer Evangelism / Creating Brand Advocates

61%

Upsell / Cross-sell

58%

Top Challenges for B2B Content Marketers Producing Engaging Content

60%

Measuring Content Effetiveness

57%

emphasis on the value side of the business, meaning our solutions and services,” he says. “In order to achieve that, we need a change in how end users perceive our brand and also in how Brother talks to its channel partners. “The best way of doing that isn’t necessarily through standard advertising or sales collateral. We need to establish a different type of conversation with our customers where we can talk about their pain points while adding a bit of warmth and colour to our brand. We have been doing this tentatively for the past 18 months, but for the next three years this is going to be at the heart of our digital marketing strategy. What we’re looking to achieve is to have better, more unique and targeted content that will really cement our solutions proposition.”

Reseller buy-in And while the end consumer is at the heart of this strategy, Anderson points to the importance of getting its reseller partners involved and on board. “When you’ve got a channel-centric model like Brother, you’re not only highly reliant on your resellers to bring your message across, but you can also add real value. It takes the discussion away from just a price debate to educating end consumers about our product, our solutions and our brand. What we’re doing is giving our resellers this bank of meaningful content that will then – hopefully – drive incremental revenues.” In Brother’s specific product category of technology hardware, its value-added resellers already understand the concept of selling services and solutions through MPS, for example, but this is not necessarily the case in other parts of the reseller community, so there’s definitely a bit of a leap into the unknown for those companies, especially independent dealers.

Bert van Loon

Content marketing: the science and the art Following his hugely popular keynote about content marketing at OPI’s European Forum in December 2015, independent strategist Bert van Loon will take the topic to OPI’s Global Forum in Chicago in November where he will talk about ‘Content marketing: the science and the art’. Content, van Loon says, is critical to cutting through in an oversaturated market. With practical case study illustrations, his session will consider: • how resellers need to keep focused on understanding how to help customers at exactly the time they need it • how manufacturers can support online players with rich content • how the independent dealer channel needs to work with wholesale and manufacturer partners to make unique content available • how to differentiate with content and tell a value-add story (more than price) • how to be seen among the thousands of search results and keep content updated For more information about OPI’s Global Forum, go to opi.net/GF2016.

w w w.opi.net | OPI Magazine

Hot Topic | Content Marketing

75%

93% Social Media Content - other than blogs

Webinars / Webcasts

66%

82% Case Studies

Case Studies

65%

White Papers

63%

Videos

62%

Research Reports

61%

In-person Events

eNewsletters

60%

Blogs

59%

Infographics

58%

Online Presentations

58%

Taking the leap That nervousness about taking the leap extends to a number of areas, explains Sian Haskell, Director of Marketing at UK dealer group Integra Office Solutions: “There’s no doubt that a successful content marketing strategy can enable independent dealers to gain buyers’ attention and influence their purchasing decision so they can become a trusted supplier. But there’s the obstacle of skill as well as resources for the small to medium-sized dealer to take on the marketing role in its entirety, keep up with new trends and technologies, and focus on what is needed. “Also, there is a confusing amount of marketing tools available. They offer much in the way of automation and workflow, but inevitably the more intuitive solutions are a big expense and require an immense amount of resource to manage the workflow.” Dealer groups like Integra can alleviate both those fear factors and it’s definitely worth bearing in mind for dealers that they can help develop and implement content marketing strategies with well-conceived email marketing, social content and website strategies. In terms of how companies are executing their strategies, the focus often – and both EO Group and Officeworks would confirm that – is on digital technologies, specifically social media. A 2016 B2B content marketing analysis conducted by CMI in North America shows which specific tools are used by B2B marketers as opposed to those that are considered to be most effective. The results, as the above chart shows, don’t tally hugely. Is that a concern? One of the reasons that social media ranks so highly on the usage side is no doubt down to cost. As independent strategist Bert van Loon says: “Compared to the other two main media forms – printed communication and in-person communication – digital is a flexible form that can be developed and distributed rapidly

OPI Magazine | June 2016

81% Blogs 81% eNewsletters 81% In-person Events 79% Articles on Your Website 79% Videos 76% Illustrations/Photos 71% White Papers 67% Infographics 66% Webinars/Webcasts 65% Online Presentations

Source: Content Marketing Institute

B2B Content Marketing Tactics Effectiveness Usage

and that offers unprecedented measurement possibilities. I’m always reluctant to add that it’s a non-expensive media form as well, as it takes a lot of effort to create and distribute digital content successfully, but the current cost of digital publishing has definitely lowered the entry barrier to the game. “In the OP industry I would expect that cross-media concepts that combine the traditional power of catalogues with the new potential of digital publishing can be developed rapidly. The essential extra element is to widen the communication scope from the transaction stage to the full buyer journey.”

Crossing boundaries Pilot Pen in Europe is a good example of a company that is crossing all media boundaries, creating the so-called ‘phygital’ experience. Its strategy, says Ken Schoellhammer, European Brand Manager of Pilot, may not necessarily fall under a content marketing umbrella, but rather its all-encompassing Happywriting World View message. Nevertheless, there’s no doubt that Pilot has nurtured a very close relationship with its end consumers for a long time and that is paying off in terms of brand awareness and subsequent lead generation. Schoellhammer gives a very specific example of end users being so engaged with a brand – and this is particularly impressive in our industry – that they influence resellers stocking the product. “Two years ago our partner in Croatia ran a big TV campaign that we had created for our European audiences. As the result of that campaign we had many end users asking for and demanding Pilot products from a variety of stores. Local retailers, which didn’t stock our products at the time, quickly realised that they were missing out on a lot of potential sales and really wasting an opportunity.” The power of content-loaded branding!

“In the OP industry [...] cross-media concepts that combine the traditional power of catalogues with the new potential of digital publishing can be developed rapidly”

Staples/Office Depot | Special Feature What next for Staples and Office Depot after they abandon their merger?

Going it alone by Andy Braithwaite andy.braithwaite@opi.net

THE

15-month saga of Staples trying to acquire Office Depot finally came to an end in the middle of May as US District Court Judge Emmet Sullivan granted the Federal Trade Commission (FTC) a preliminary injunction preventing the two global office supplies resellers from consummating their merger. While the injunction itself didn’t officially end the transaction, Staples and Depot had already said beforehand that they would abandon the deal if faced with the prospect of a further, drawn-out legal battle with the FTC – and they duly announced the termination of their merger agreement following Judge Sullivan’s decision. In last month’s OPI, we said that the preliminary injunction decision was “in the balance” after the Staples legal team had decided to rest its case without calling any witnesses. Doubts had been raised about the FTC’s definition of the relevant product market and over its handling of a written declaration from Amazon Business. Staples had accused the FTC of “gerrymandering” the relevant market to suit its own needs by not including ink and toner in the group of products, and by focusing on a relatively small number of large enterprise customers. It also appeared that Amazon Business was closer to entering the enterprise accounts market than the FTC wanted people to believe.

“The evidence presented during the hearing fell short of establishing that Amazon Business is likely to restore lost competition in the B2B space in a timely and sufficient manner”

Nevertheless, all the FTC had to demonstrate was that there was a “reasonable probability” that Staples’ acquisition of Office Depot was anticompetitive and “likely to reduce competition in the B2B contract space for office supplies”. For a number of reasons (see opi.net for a closer look at the court ruling), the judge dismissed Staples’ market definition arguments and the likelihood of Amazon Business being a serious player in the contract space.

Amazon threat downplayed “[The] defendants’ response relies in large part on the prospect that Amazon Business will replace any competition lost because of the merger,” the court ruling stated. “Although Amazon Business may transform how some businesses purchase office supplies, the evidence presented during the hearing fell short of establishing that Amazon Business is likely to restore lost competition in the B2B space in a timely and sufficient manner.” The decision not to call any witnesses may also have come back to bite Staples: the judge commented that by taking this course of action, the defendants had “not met their burden” of showing that any proposed remedy “would negate any anticompetitive effects of the merger”. So what’s next for Staples and Office Depot? In her opening remarks at the preliminary injunction hearing, Staples’ legal counsel Diane Sullivan had likened the companies to “two penguins on a melting iceberg”. Since the termination of the merger agreement, both resellers have outlined plans to prove that her statement was more than courtroom rhetoric. w w w.opi.net | OPI Magazine

Special Feature | Staples/Office Depot

Renewed focus for Staples

Depot needs to be bold

Staples was first out of the blocks with its business priorities, providing details of a new strategic plan on the same day the preliminary injunction hearing outcome was announced. CEO Ron Sargent added more colour to the plan – known internally as Staples 20/20 – during the firm’s first quarter conference call the following week. The plan is based on four key areas: winning with mid-market customers; narrowing the company’s focus on North America; reducing costs and driving efficiencies; and returning cash to shareholders. Some of the more noteworthy aspects include:

Office Depot CEO Roland Smith has promised “bold new actions” at the company after the Staples deal fell through, saying that the status quo was “not an option”. Unlike Staples, which has already outlined specific goals, a Depot conference call with Smith and CFO Stephen Hare was a bit light on detail. Management consulting firm Bain has been hired to conduct an in-depth strategic review of the business and that should be completed in the next month or two. Areas it is looking at include Depot’s capital structure and maximising shareholder returns. What we do know, though, is that – like Staples – Depot is considering options for its European business. This follows the divestment process that began as part of the European Commission’s approval of the Staples/Depot merger. Smith confirmed that Depot would “evaluate the merits” of continuing this process, although Hare added that it was “too early to tell” if a sale would go ahead.

Looking to divest its European business Staples is exploring strategic alternatives for Europe after years of losses or very low profits. Contacts have already been made with potential buyers over the past few months following the Office Depot divestment commitment to the European Commission, and meetings are due to take place as you read this. Sargent declined to specify to OPI whether these potential buyers included industry players or were limited to private equity firms.

A new mid-market push Mid-market customers (companies with 10-200 employees) have been targeted before, but this is a serious move by Staples in North America. More than 1,000 new sales reps will be taken on and the reseller has promised acquisitions of B2B service providers and companies specialising in categories beyond office supplies (BOSS). Sargent told OPI that these acquisitions could either be strategic (ie large) or bolt-on additions. He didn’t specify a timeframe, but presumably

OPI Magazine | June 2016

the process is underway and we won’t have to wait too long until the first deal is announced. BOSS categories include jan/ san, breakroom, furniture, promotional items, and copy and print, so successful dealers specialising in these areas will most likely be the targets.

More private label Staples’ own brand products already represented 28% of total sales (or around $6 billion) at the end of 2015. This is set to grow even further with a renewed private label drive, both in core and BOSS categories, so manufacturers can expect some interesting talks during the next set of line reviews.

A delivery drive Sargent promised a “dramatic change in the profile of Staples”, with non-retail/delivery sales growing to 80% of company sales versus 60% today. That does not mean Staples is turning its back on retail; in fact, Sargent said that omnichannel – which includes stores – was an important competitive advantage. However, a further 50 stores will be closed over the course of this year, and with the average length of leases in the US now down to about three and a half years, there is certainly more flexibility to close, relocate or downsize stores. It is likely the trend will continue towards smaller stores stocking a narrower range of essential items and offering more services such as copy and print and shipping, not unlike FedEx Office (the old Kinko’s). We can probably also expect more store pick-up options and same-day delivery choices in certain areas as Staples ups its omnichannel capabilities and looks for points of differentiation.

Aggressive bidding We know that Office Depot’s contract business has been negatively impacted by the Staples situation over the past year or so. One of Depot’s answers to win back business has been to hire sales “hunters” to its US sales force, and Smith promised that they would “bid aggressively” to take back market share. It is possible, therefore, that there could be some disruption in contract pricing levels, although Staples CEO Ron Sargent appeared to rule out a price war when he said that there was no room to lower enterprise account pricing further. Smith also talked about the “store of the future”, shipping from stores, Depot’s unique selling proposition, growing the cleaning and breakroom business, focusing on small business customers, etc, but none of this is really new, and certainly not something that will likely halt declines or excite investors. As such, it remains to be seen what these “bold” actions turn out to be. It has been suggested that Depot will be sold off or broken up, but it is in a strong financial position with plenty of cash on hand. Therefore, it is not impossible that it could look to make a game-changing acquisition – we should know more at the end of July when Smith is expected to provide details of the Bain review. Roland Smith: promising “bold new actions”

Dealer Spotlight | ZenOffice

zen The art of

It’s not every business that can grow during a global recession, but UK dealer ZenOffice managed to do just that. And its growth path continues on an upward trajectory

by Michelle Sturman michelle.sturman@opi.net

Branching out

WHERE

many dealers have seen a reversal in fortunes over the past few years, this is certainly not the case for UK-based dealer ZenOffice. Founded by current Group CEO Les Kerr in 1989, the business experienced many ups and downs during its first two decades. Ironically, as the 2008 global economic crisis tightened its grip on the business supplies industry, ZenOffice saw the start of an exciting growth spurt in 2009, one that continues to this day. In 2009, the reseller was a £4 million ($5.8 million) business. In 2011, ZenOffice took a majority stake in Interior Partner Limited, and then in 2012 the company entered into a managed print services (MPS) partnership with Xerox when it was awarded concessionaire status for Manchester.

OPI Magazine | June 2016

That year sales leapt up to £8 million. “From that point on, with further diversification of our core activity, we haven’t looked back,” says Managing Director Bruce Davie. 2015 saw ZenOffice post its sixth consecutive year of growth with sales topping £14 million, the majority of which was organically driven. Profit margins, which have been steady for several years, remain in excess of 30%.

“As long as we continue to have a relevant offering that customers want to buy, growth won’t be a problem”

ZenOffice clearly ventured out into new categories such as MPS and furniture at exactly the right time. Five years ago, over 75% of its business was derived from office supplies, with the rest made up from print and furniture. Today, office supplies represent less than 50% of the mix, while the other half comprises full interior fit-outs, MPS, print and promotional products, workwear and personal protection equipment, mail fulfilment, and exhibition and signage. “While volumes remain relatively flat in business supplies, we are experiencing significant growth in every other sector, typically between 40-60%,” explains Davie. He says the decline in traditional paper-based office products “doesn’t faze us in the slightest”, as all that’s really changed is what’s in the basket, not the value a customer

ZenOffice | Dealer Spotlight has to offer. “As long as we continue to have a relevant offering that customers want to buy, growth won’t be a problem,” he adds. Over the years, ZenOffice has grown in part due to acquisitions – the most recent being Baron Stationers in October 2014 – which remain an important part of the company’s strategic plan. While there are normally two or three ’irons in the fire’ at any one time, a deal will only be closed if it’s a proper fit for the business. “With our differentiated model, this might be a business supplies dealer, but it could also be another MPS provider or a workwear company. It gives us great scope for the future,” Davie explains. For now, the focus on developing expertise outside traditional OP has left the reseller with few competitors that offer the same breadth of range. But to ensure success in providing solutions – as opposed to just products – for customers, ZenOffice embarked on a journey with UK-based performance management and training firm Performance 1st. The two companies have worked in tandem for the past three years to develop a detailed sales training programme that is keenly focused on solution selling. Davie says the programme has helped to change the company’s whole mindset towards how it sells, and the benefits are feeding through to the bottom line.

Staying stockless Staying true to its stockless dealer model, ZenOffice keeps some core paper and envelope lines, customer-stocked print and furniture brought in specifically for an upcoming job, but that’s it. The company sees little value in holding stock unless it can be turned around within a month, and despite the well-known woes of its first-call wholesaler Spicers, has stood by their relationship for almost 30 years. However, having been a member of various UK dealer groups over the years, including NEMO and Office Star (XPD), in 2013 ZenOffice decided that no group had an offering that catered for the needs of its business model, so it has remained independent since then. ZenOffice has thoroughly embraced digital technologies. Having revamped its suite of websites at the end of last year, there has been a 10% increase

ZenOffice fact box Founded: 1989 HQ: Chadderton (Greater Manchester), UK Managing Director: Bruce Davie Geographical coverage: UK Employees: 80 First-call wholesaler: Spicers Business model: Stockless B2B

in online sales to 30%, with the additional benefit of freeing up more time for its teams to focus on research and gaining new customer acquisitions. The company has also increased its presence on social media, in particular LinkedIn and Twitter. Davie explains that LinkedIn enables ZenOffice to leverage its networks and enhance its corporate reach – its followers have increased 136% over the past 12 months. “Our profile and published information, including rich video content and thought leadership, reflects our broad range of services, and this can then be accessed to enable cross-selling opportunities,” he says. He adds that Twitter is used in a similar way to build meaningful connections with its audience, while at the same time raising brand awareness and the profile of ZenOffice. Over the past year, its Twitter followers have increased 41%.

Limitless opportunities Gazing into the crystal ball, Davie predicts that consolidation and differentiation will continue, with smaller dealers unable to keep up and moving out of the channel. As for ZenOffice, at its current site it has the capacity to grow sales to £30-£40 million before running out of space. Its core business is expected to grow to £17 million this year, with all the business units combined topping £20 million. The £20 million figure is testament to the success of the business – this milestone was the aim of its five-year strategy; impressively, this will now be achieved in just three years. “We have a great team in a great location offering a range of services and solutions that customers want to buy. The sky is the limit and we are going for it!” says Davie. This is evidenced in ZenOffice recently winning Xerox Gold Partner of the Year 2016 as well as The One Oldham Business Awards 2016 Business of the Year, in the over £10 million turnover category.

w w w.opi.net | OPI Magazine

Event Preview | Advantage Business Conference

Easy as ABC In a time of constant change, SP Richards’ Advantage Business Conference is a welcome staple for its independent dealer customers where they can listen, learn and laugh with their peers. This year’s event: Washington DC, 20-24 July

Evolution

or revolution is the theme of SP Richards’ 18th Advantage Business Conference (ABC). That in itself is interesting and strangely appropriate against the backdrop of the event’s location – the political powerhouse of Washington DC – and the fact that the US public will decide later on this year who its next President will be. Evolution or revolution indeed! Politics aside – though for those readers attending the ABC, don’t miss the chance to visit where all the action will happen in November on Capitol Hill and at the White House – the 2016 agenda strongly builds on last year’s core message that encouraged independents to innovate, embrace creativity and build motivated teams.

Some of the main talking points of last year’s event in and out of the seminar rooms – the most prominent topic being the protracted ‘will they/ won’t they’ Staples/Office Depot saga

to meet the challenges ahead is Lisa Bodell, a globally recognised futurist and expert on innovation. In an audience-engaging keynote address Bodell will show dealers how

“Whether you want to continue your gradual evolution, or make dramatic moves in new directions, ABC 2016 offers resources, knowledge and tools to help you succeed” – have shifted gears now (see ‘Going it alone’, page 27). There’s still plenty to speculate about, however. The biggest elephant in the room in the shape of Amazon Business, for example, appears to be growing ever bigger. Kick-starting the event and offering plenty of food for thought on how

to become world-class innovators while provoking fresh thinking around what’s possible and helping them solve problems with simple, easy-to-use tools. As Sandra Williams, Director of Dealer Training and Development, says: “Whether you want to continue w w w.opi.net | OPI Magazine

Event Preview | Advantage Business Conference your gradual evolution, or make independents are facing in terms dramatic moves in of the commodity products they new directions, are selling, optimising their sales ABC 2016 offers force, etc. resources, knowledge New features and tools Adjacent sectors outside to help you traditional office supplies have succeed.” long become a necessity rather than The a nice-to-have for dealers and two opportunities categories that continue to show in the incredible growth and profitability business – facility & breakroom supplies and 21 July Bodell supplies space furniture – will be showcased in Keynote by Lisa are definitely keeping particular at this year’s ABC, with up with the challenges, and it is the special educational tracks as well as a ABC’s remit to inform and educate new presence on the Expo floor. dealers on how to maximise them. Another new feature this year are Whether in the shape of keynotes, the so-called MeetUps – part workshops and seminars of the event’s overall aim or indeed by showing to offer unrivalled attendees all the many networking and varied product opportunities – innovations that will whereby delegates be part of the Business can meet with Solutions Expo, this like-minded peers year’s programme to talk about is wider reaching shared interests, than ever while also specific topics or addressing some of challenges or just 21 July Business Solutions the recurring themes that enjoy a drink together. Expo

• Cleaning and Breakroom • Core Office Products • Furniture • Technology

SP Richards’ ABC will once again host the North American Office Products Awards (NAOPA), the most recognised awards in the North American OP industry. This year’s NAOPA, organised by OPI, are once again split into two categories – the vendor and the dealer awards. The vendor awards include entries for the best product in the following sectors:

OPI Magazine | June 2016

There’s also the overall Product Innovation of the Year and the People’s Choice award. All these product-related awards will be announced on 21 July, the first full day of the ABC which also coincides with the Business Solutions Expo. The dealer awards, meanwhile – always a highlight of the ABC – will be presented during the gala evening on the last night of the event. As in the past, these will include the coveted Professional of the Year and the Industry Achievement awards.

This year’s ABC will be held at the fabulo us Gaylord National Re sort & Convention Ce nter in Washington DC, right on the Potomac river

The ABC wouldn’t be the ABC without recognising outstanding achievements in a number of categories, be they product or people-related. That’s where OPI comes in with its North American Office Products Awards (NAOPA), which are being organised jointly with SP Richards for the seventh time this year. For more information 22 & 23 July on the NAOPA, Seminars and Works hops see below.”

This year, introduced by popular demand, OPI has added the Young Executive of the Year award, which will also be announced during the final evening of the ABC. Look out for the next issue of OPI to see this year’s shortlist and to find out how to get involved in the People’s Choice award. More information can also be found on opi.net/naopa2016.

Jim Hebert wins Industry Achievement in 2015

Category Analysis | Traditional OP

The current state of the traditional OP market is like the curate’s egg – good in parts

by David Holes

THE

consensus around traditional OP is always that it’s a category in decline, but that broad statement doesn’t really reflect the whole truth. In fact, when OPI talked to the key players in this product segment about their outlook for the category, their responses painted a very mixed picture. Some see a declining industry with areas of patchy growth, whereas others still see a market ripe with opportunities. While acknowledging the bad – the decline – John Ringlein, President of US-based Victor Technology, nevertheless remains hugely optimistic and focuses on the opportunities: “Traditional office products is a category in decline, but our strategy is to take advantage as our competitors devote less attention to diminishing sub-categories. Sporadically, one drops out of the race and our market share goes up – we plan on being the last branded supplier standing.”

OPI Magazine | June 2016

Also, and very importantly, adds Jean-Paul Wortman from Dutch-manufacturer Rillstab, there’s still a need for traditional OP: “We market display books, flipcharts, labels and writing cases and the future is looking bright. Obviously we still need to innovate, but every year we are continually surprised that we need to manufacture more and more.”

Good in parts Looking at the global picture, this is a sector that is defying generalisation, with all the different sub-categories showing contrasting performances, and other macro-economic factors also coming into play. “This market was down 3% by volume in 2015, but we’re seeing a marked difference between established products,” explains Andrew Stacey, Vendor and Product Director at UK wholesaler VOW. “Sales of products such as filing, envelopes and labels are falling around 3% each year, but more dynamic categories like writing instruments and desktop accessories are growing by 5%. It’s important that we don’t ‘tar’ all traditional products as in decline as clearly this isn’t correct.”

In Germany, Rolf Bonsack, Managing Director at helit, sees a different scenario playing out, helped by a burgeoning workforce: “Yes, this market continues to decline 2-3% per annum as digital end users now need fewer analogue products. But here in Germany, there’s a counter-effect due to a continually growing number of office workers who still need traditional office supplies – this helps minimise the impact.” Global geopolitics and capricious worldwide economics means it’s never been so difficult to make accurate forecasts: “Conditions change so fast,” explains Sabine Mittermair, Marketing and Event Manager at Austrian stamp specialist Colop. “Exports have been boosted by the – albeit volatile – value of the dollar, but difficulties in Russia have had an adverse effect. Business is good in central Europe and Asia, but the South American economy has slowed. Looking ahead, we are now seeing plenty of untapped potential in Africa. Flexibility from our sales team is crucial for seizing every opportunity as it develops.” Unsurprisingly perhaps, a consistent theme mentioned by those OPI spoke to was the need to

Traditional OP | Category Analysis

constantly innovate if the industry is to counteract the more negative trends affecting the traditional OP sector. “Differentiation is key,” says Bonsack. “Products need to be desirable to end consumers. Our job is to make them more attractive, and develop more customised, individualised product solutions.” Identifying and understanding your end users is vital for businesses to stay ahead of the game. That includes potential buyers too. “Before we

“This trend works well for suppliers,” he explains, “because buyers like them to change these combinations frequently. Products that add something different will always add value providing we get a clear message to the market – not always an easy task.” Focusing on the product rather than on the price has paid off for Victor Technology, as Ringlein explains: “In the past five years, we’ve launched many traditional products, but rather than compete on price, we went in the other direction and targeted the high end of the category, launching them in multiple colours to appeal to people’s individual tastes. Our volume per SKU is low, but over the entire collection business is great. “Providing this broad collection has led to growth within declining segments. The collection fuels demand – when a single item is purchased

“It’s important that we don’t ‘tar’ all traditional products as in decline as clearly this isn’t correct” launched our latest Printer we held discussions with the main market representatives, conducted in-depth market research and surveyed our target audience to understand what they really want,” explains Mittermair. “Based on the insights gained we then introduced specific innovative technical features to the product.” Falk Butterwegge, Head of Office Supply, Stationery & Online for International Sales at tesa in Germany, agrees that it’s essential to stimulate interest and demand by regularly launching new innovations. “Customisation plays a major role in this segment; people want fashionable products as long as prices stay reasonable.” However, he adds: “Never forget that functionality is always the most important asset.” Going back to the much-needed customisation in this category, the demand for products that say something about their owners is a significant growth driver. VOW’s Stacey believes this has resulted in colour combinations making big inroads into categories once dominated by blacks and greys:

and the customer then sees the full range of products in the brochure, they’ll often buy additional pieces to complement the original purchase.”

Country of origin The importance of brand and provenance in this category should also not be underestimated as it still says much about a product’s perceived quality. Ada Ma, Brand Manager at Japan-based CARL Mfg, elaborates on this particular point: “Competition is severe due to the huge influx of brands from China. To counteract this, CARL decided to focus its marketing on the fact that our products are ‘Made in Japan’, highlighting that Japanese goods embody high quality and reliability. We’ve also turned our company logo red to match the Japanese flag and incorporated the word ‘Tokyo’ within it – to help differentiate our products from Chinese imports.” Colop’s Mittermair in Austria agrees that a product’s country of origin still matters: “There’s significant demand for high-quality

products that bear the hallmark ‘Made in Europe’, as this distinguishes them from cheap, Asian imports of dubious quality,” she says. “To have your company’s headquarters and production in Europe is seen as proof of quality, building on Europe’s excellent reputation for high standards.”

Millennial market Like in many other categories – furniture, ergonomics and technology to name but a few – tapping into the millennial market is another tactic that can mitigate the effects of declining traditional OP sales. “This generation is tremendously important to us,” says Butterwegge. “Our latest brand-awareness campaign had to ensure we met customers at all relevant touch points – traditional or digital. A digital campaign is mandatory these days specifically for targeting millennials successfully, as the way they gather information differs significantly from traditional customers.” Bonsack agrees that employing ‘old-fashioned’ techniques won’t wash with this generation, certainly not when it comes to traditional products: “The millennial generation can only be reached by using social media; they are locked into it every day and we have to place our marketing campaigns where they are connected and communicating.” He’s not alone in that view. Facebook is now firmly embedded in all the corporate processes of Colop, with press releases and marketing High impact: helit’s Colours range

w w w.opi.net | OPI Magazine

Category Analysis | Traditional OP Amazon’s Dash Button campaigns always accompanied by activities on this platform. The company also places Facebook ads to promote products, one advantage being that specific groups can be targeted. It’s a new avenue to the customer Mittermair admits, but the results so far have been very positive.

Technology in tradition There is always the next step, of course, and Rillstab’s Wortman cites the Amazon Dash Button as an interesting development: “Just one click on these wifi-enabled devices and specific products are delivered next day. Why don’t we look at using them in the OP industry?” he asks. Embracing technology, not just for marketing and selling, but

incorporating it within core OP products to reinvigorate flagging sub-categories, is another approach: “There’s definitely potential for hybrid analogue/digital products,” says Bonsack. “The challenge is to

another colour or size they can turn to the pillar and order it for delivery to the shop or home. This concept attracts customers to your shop, but additionally provides them with an unlimited assortment of products.”

“If we share our thoughts and ideas with wholesalers, manufacturers, buyers and sellers in a genuine and open way, we can achieve so much more than working alone” come up with great, simple ideas and to put them in place.” Wortman adds: “I’m convinced there’s potential in traditional/digital crossover products, but technology can help in other ways too. In the Netherlands, ‘information pillars’ are increasingly being installed in stationery shops – connected via the internet to the wholesaler’s warehouse. The shop presents the basic products, but if customers want

He ends with a clarion call to join forces across the industry: “We all face the same problems and frustrations, so why don’t we help each other? We need to collaborate to fortify. If we share our thoughts and ideas with wholesalers, manufacturers, buyers and sellers in a genuine and open way, we can achieve so much more than working alone. Why don’t we put together an international think tank to look into it?” Anyone agree?

Stationery – alive and kicking The London Stationery Show took place 26-27 April in London, UK, and was deemed a resounding success. It was the biggest event to date since it launched six years ago, with visitors able to browse over 150 stands featuring more than 400 brands and suppliers of the latest writing and paper products. Show Director Chris Leonard-Morgan said: “Writing and paper products have a universal appeal which complements different types of product mix, and can be found in pretty much every retail channel and type of store there is.” One of the major themes of this year’s show – unsurprisingly – was adult colouring, evidenced by the overwhelming amount of stand space given over to the trend. Exhibitors that OPI caught up with over the course of the event were thoroughly embracing the trend that’s driving sales in a number of categories including, naturally, writing instruments.

Following the trends Two seminars that focused on stationery trends provided plenty of food for thought. Rebecca Saunders, Head of Development at online retailer notonthehighstreet.com, delivered the keynote speech. She pointed to some interesting trends and the growing impact of the home and fashion on stationery:

OPI Magazine | June 2016

• Metallic colours in the homeware market result in rose gold colours, particularly for foiling, on stationery. • A backlash against gender stereotypes result in monochrome interiors and office desk accessories. • Witty, motivational and tongue-in-cheek clothing slogans move to notebooks and pencil cases. • Marble, natural stone and concrete textures result in sophisticated looks for notebooks. But while stationery is an evolving market and trends should be followed, they should always be translated into what’s appropriate for specific customers, Saunders urged.

The seasons ahead Phil Pond, Trends Analyst for Scarlet Opus, gave an in-depth presentation on upcoming trends for the winter 2016 and spring/ summer 2017 seasons and beyond. The main design trend for the coming Christmas season, he explained, is ‘heathland’, whereby designers explore ‘made by nature’ concepts. This look is already found in the workplace, including the Google office in London and housing cooperation HSB’s office in Stockholm.

The core theme of spring/summer 2017, meanwhile, is ‘tribe’ – all about women in terms of being more influential, political and better educated. In the workplace specifically, this concept aligns closely with the agile workspace trend. In addition, Pond said, technology has enabled the growth of ‘bleasure’ – mixing business with pleasure. With that in mind, stationery needs to be adapted to travel, with items such as miniature notebooks and waterproof stationery and writing products, for example. Next year’s London Stationery Show will take place from 25-26 April 2017.

Category Analysis | Visual Communications Driving force

The visual communications sector continues to power ahead, driven by changes in the way we work, learn and live our lives

by David Holes

KEY

players in the visual communications (viscom) category are reporting another stellar year, with sales of interactive display products, panels and boards showing robust growth. Importantly, they’re hugely positive about the rest of the decade too. “The market in this sector has historically been strong and it looks like it’s going to continue right on that track,” Kristen Hamer, VP of Business Development at Balt MooreCo, explains. Things are looking equally promising in the Netherlands. “Annual sales in 2015 again showed huge growth figures and we expect the same for 2016 and the next couple of years,” reports Bob Hanemaaijer, Sales

OPI Magazine | June 2016

& Marketing Director at Dutch viscom mounting specialist NewStar. The strongest markets are still in the US, UK, Germany and France, according to Beth Wright, Chief Commercial Officer at Bi-silque: “We’re are now seeing great growth in the Nordic countries too. Overall sales continue to grow in double digits each year – for 2016 our target is for a further 27% increase. We see 95% of our total sales come from this sector’s products or viscom-related furniture and installations.” 2015 was a great year to be in the visual communications space, says Jim Harter, VP of Sales at GMi Companies. The company saw sales increases on all of its dry-erase surfaces, particularly glass and powder-coated steel.

There are some key factors that are driving sales. To start with, the way that the workplace and work processes are changing means that more creative, flexible workspaces are required and this is magnifying the need for display boards and interactive products. Secondly, there’s a general shift away from traditional OP consumables such as pen and paper and a trend towards collaborative tools including whiteboards that can be used for planning, brainstorming and visually engaging multiple team members. The third factor is sustainability and the desire to minimise carbon footprint and maximise the recycling of materials. Bi-silque’s line of Earth-It products, which are made from recycled waste materials, has tapped into this latter trend. In fact, the increased global focus on creating a more sustainable workplace is growing sales in this range at over 25% each year for the company, says Wright.

Plenty of potential Despite the fact that viscom is already a booming category, there’s still more untapped potential, as Scott Bowers, Director of Product at GMi Companies, explains: “Thinking about the tools that work within an ever-evolving workspace is constantly challenging us to reimagine the value and solutions we provide. “Millennials are changing the way the workspace is designed overall and businesses are changing their

“The customer journey and selling process is much more sophisticated in the viscom category – whereas in the past a brochure would do the job, marketing now needs to be much more targeted and specific to different media” “Consumer confidence is high right now,” he adds. “Projects that were put on hold a few years ago are starting to come to fruition and turning into action. We are overwhelmed with quote requests for projects that require a quick turnaround.”

processes to accommodate these new workers. They are more social and talk visually, and firms are refreshing their workspaces to appeal to this workforce because there is a lot of competition for their knowledge and expertise. The spaces have to be cool and we have to

Category Analysis | Visual Communications include that cool-factor in our viscom products. They don’t just have to work well, they also need to function as design statements.” It’s not just the office environment that is driving sales, however. There are a number of other vertical markets outside the traditional office workspace that offer potential, including industrial, education and healthcare settings. Bi-silque has developed over 400 new SKUs over the past year that are specifically aimed at assisting resellers to take advantage of these opportunities – its expanded range of robust signage and ultra-bright safety noticeboards designed for use in an industrial or factory setting is a good example. NewStar’s Hanemaaijer is fully on board with the concept of exploring more than just the office space. He says: “In healthcare, education and other sectors we are seeing a rapidly increasing demand for large format displays. The changes in education are particularly noticeable now that virtually every school and university has gone digital, with interactive projectors, displays and whiteboards.” With those added vertical markets also come new requirements and customer demands. There has been an upsurge in the use of multi-purpose rooms in both the healthcare and school sectors, for instance, and these require the provision of mobile products. GMi’s Bowers elaborates: “Boards on the wall are still popular, but dry erase surfaces that are not permanent fixtures are

SMART Technologies’ kapp whiteboard

OPI Magazine | June 2016

gaining momentum and they are also being added as functional ‘design’ elements. Open collaboration spaces are also more prevalent and they require products that are flexible and adaptable to different needs. “Overall, there is a much more immediate need for viscom products than we have ever seen previously. Experimenting with different technologies such as 3D printing means we can now swiftly respond to on-demand processing and customisation to very precise customer specifications.”

Viscom trends Back in the office, a number of viscom experts OPI spoke to highlight several trends affecting the sector right now. These include: •

•

The use of dual monitors on people’s desks is increasingly common; as such, the desk mounts and stands that can accommodate them are popular and in high demand. Large format displays up to 100” (254 cm) in size are becoming more affordable driving uptake. Bigger computer monitors – several manufacturers have recently launched very large 40” (102 cm) displays. Ergonomic desk mounts for laptops and tablets: with more people working simultaneously on both pieces of hardware, demand for mounts that can hold them in the best position are on the rise.

•

Glass boards continue to sell well: their sophisticated looks combined with their writeability make them very attractive in a modern office environment. Large, flat boards that can act as a dual projection and writing surface are popular. Retro-style blackboards for use with old-school chalk markers – perhaps surprisingly – still appeal across all markets.

“There is a much more immediate need for viscom products than we have ever seen previously” Hanemaaijer specifically mentions the SMART kapp – a digital whiteboard that allows users to save whatever is written on it to a smartphone or tablet – as the next product likely to make a breakthrough.

Marketing challenges It’s clear that there’s no shortage of innovation in this category, but GMi’s Harter admits that getting your marketing message right can be difficult: “People are using their phones to research products, even if they don’t necessarily buy that way. But communicating to a smartphone audience about products that ideally require people to touch and feel them presents a tough challenge. The customer journey and selling process is much more sophisticated in the viscom category – whereas in the past a brochure would do the job, marketing now needs to be much more targeted and specific to different media.” Indeed, concludes Bi-silque’s Wright: “Visual communication is a trend in itself. In 2016 and beyond we will see rapid developments in the ways people are able to communicate, collaborate and interact through visuals, driven in the main by the ever-increasing pace of life and the consumers’ permanent desire to make tasks quicker and easier.”

Also incorporating OPI’s 25th anniversary party

Sunday 13 November - Tuesday 15 November

“

The Sofitel Chicago Water Tower, Chicago, IL Book now at www.opi.net/gf2016

Absolutely the best event of all the previous Global Forums. Content was right on, engaging and timely. Networking great. Attendees great. Venue great. Only downside was the writer’s cramp from all the notes I took

Programme A comprehensive programme featuring high-quality speakers and a professional moderator will stimulate thought and debate. There will also be plenty of networking opportunities, allowing you to spend quality time with fellow business products leaders, and dealers, from all over the world.

Dave Guernsey, CEO, Guernsey

Past Forum attendees

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3M, ACCO, Acme United, Avery, BPGI, Brother, Buffetti, Clover Technologies, Colop, Complete Office Supplies, Corwell, CPD, DC Mayorista, Domtar, ECi, EOSA, Esselte, Essendant, EO Group, EVO Group, Fellowes, FSIoffice, Ghent, Gould Paper, Guernsey, Highlands, HiTouch Business Services, HP, HSM, iba, IBM, Independent Stationers, Integra, Interaction, ISSA, Lyreco, Midwest Resource Group, Miller’s Office Products, Novexco, Office 1 Superstore, Office Brands, Office Choice, Office Depot, Office Friendly, Officeworks, PBS Holding, PEG, Pilot Pen, Pinnacle Associates, Plaisio, PrintFleet, Printus, Pukka Pads, Really Useful Products, Scandinavian Office, Shoplet, Smead, Source Office & Technology, Spicers, SP Richards, Staples, Superstat, Supplies Network, JM Smucker, TriMega, Victor Technology, Warehouse Direct, WW Grainger, Waltons, Wist Office Products, Xerox, Zebra Pen