OPI November 2015 Type B by OPI

Office Products International ISSUE NO.2 5 4

The word in office.

magazine

Big Interview

ﾃ］gel Alverde Losada, CEO, Office Depot de Mexico p18

November 2015

NOVEMBER 2015 WWW.OPI.NET

p24 All about the money p50 Mike Maggio refutes death of OP OP industry mourns Mark Austen p14 What next for XPD dealers? p12

Contents November 2015

www.opi.net

News

33 Dealers descend on Bi-silque

6 Round-up

European viscom vendor reports impressive growth

Print-Rite sues Epson; Avery moves production to Mexico; SCA expands with US acquisition

12 News Analysis

34 EPIC 2015 Review

Third joint US dealer group convention gets thumbs up with record attendance

The demise of UK dealer group XPD; Staples/Depot deal drags on

38 Play your cards right

14 Tribute

Troy Harrison highlights the humble business card as an essential sales tool

OP industry pays tribute to independent dealer champion Mark Austen

Category Analysis

Features

40 Imaging Supplies

18 The Mexican Wave

The imaging supplies category remains an interesting one where opportunities still exist...

The Office Depot name is alive and kicking in Mexico, CEO Ángel Alverde Losada tells OPI

45 Business Machines

Demand for certain business machines may not be at its peak, but there’s plenty of scope left

24 It’s all about the money...

Regulars

Dynamic pricing might be all the rage, but getting it right is not easy – it’s about striking that fine balance

5 Comment

30 Luck of the Irish

Greg Welchans

After losing some government contracts, Irish dealer Codex has defied the odds and come back bigger and better

48 5 minutes with...

50 Final word Mike Maggio

It’s the famous rat race to the bottom in categories like ink, toner and paper versus margin build-up in your long tail. The more aggressively you compete in the head, the higher your mark-up needs to be in the long tail in order to sustain profitability. The overall category mix needs to remain in balance... For the full story, turn to page 24

This month’s cover is supplied by Fellowes w w w.opi.net | OPI Magazine

Comment

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

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

Deputy Editor Michelle Sturman

Turbulent times

+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 Designer Charlotte Gerhardt +44 (0)20 7841 2943 charlotte.gerhardt@opi.net

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

Accountant Jairo Paya +44 (0)20 7841 2956 jairo.paya@opi.net

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

Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net

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

One advantage of being part of a close-knit small team is the ability to adapt to the strengths of all your members and that is what we have just done here on the OPI editorial side, with myself, Heike and Michelle tweaking our roles going forward. I’ll be taking on an Editor-at-large role, focusing more on print and digital content creation – including news stories and One advantage of being analysis – and representing part of a close-knit small OPI at diverse industry team is the ability to events. Heike is assuming the adapt to the strengths role of Editor, coordinating all of all your members editorial and production for OPI as well as supplements and contract publishing activities such as show guides and show dailies. Michelle will take on the Deputy Editor role and be more involved in broader areas of editorial, planning, production and our digital proposition. I should be jumping for joy at that, but the mood at OPI has been somewhat tempered these past few weeks following the sudden death of Office Club Managing Director Mark Austen. Mark had opinions about most things in our industry and knew pretty much everything that was going on, and I will miss our regular chats. Turn to page 14 for our tribute to Mark. All in all, it’s been a bit of a turbulent month in the UK dealer group community, hasn’t it, with Mark’s passing, the winding up of XPD and the reacquisition of Integra by its members. 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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SCA expands AfH in News from opi.net North America Mergers & Acquisitions

Print-Rite sues Epson In a reversal of the usual legal proceedings between OEMs and remanufacturers, Chinese print consumables manufacturer Print-Rite has filed a lawsuit against Epson China. According to media reports, Print-Rite has instigated the proceedings over a patent related to certain inkjet cartridges sold in China under the Epson trademark. The papers, filed in China, aim to stop the alleged infringement by Epson and to seek damages from the OEM. According to a statement by Print-Rite, the company respects the intellectual property rights of companies and individuals and expects others to do the same. Replying to a request for comment from OPI, Epson said: “We have not received any notification about this matter and cannot comment further.”

IT & EOS

Newell Rubbermaid buys Elmer’s Newell Rubbermaid has acquired adhesives, arts and crafts, and office supplies firm Elmer’s Products. According to Newell, the $600 million deal – which closed 22 October – will strengthen its Writing segment by enabling it to leverage its brand building, design and innovation capabilities to accelerate Elmer’s growth. The acquisition will also deliver synergies in distribution, cross-selling and merchandising. Elmer’s sales for 2015 are projected to be around $240 million and the acquisition is expected to be accretive to both Newell’s profit and operating margin in 2016.

Mergers & Acquisitions 6 OPI Magazine | November 2015

Sweden-based tissue and packaging business SCA has acquired US-based Away-from-Home (AfH) tissue firm Wausau Paper. The deal, worth SEK4.2 billion ($513 million), will help strengthen SCA’s business in North America, the company said. Wausau Paper has approximately 900 employees – who will join SCA – and manufactures AfH towel and tissue products along with soap and dispensing systems. In addition, Wausau’s manufacturing capabilities enable it to produce towels and tissue entirely from recycled paper, which aids SCA’s efforts to create environmentally friendly products and extends its sustainability commitment. Following the acquisition, SCA said it will continue to honour Wausau’s existing customer contracts and programmes. For H1 2015, Wausau Paper reported sales of $175 million, EBITDA of $32 million and operating profit of $11 million. The deal is expected to close in Q1 2016.

Vendors

Partner programme details unveiled for HP Inc HP has released details of the new channel partner programme for the printing and personal systems division, HP Inc. The Partner First programme will build upon HP’s existing PartnerOne programme and, the company said, will help dealers “capture and capitalise on opportunities through customer-orientated, solutions-led sales”. Programme highlights include: Sales – HP is introducing Partner First Services that will enable partners to maximise business opportunities. Additionally, the HP Partner First programme tracks will be expanded including the introduction of a new Integration Track. Simplicity – HP Sales Central will provide one place for partner sales representatives to access everything needed to make and close a sale. The programme will also deploy best-in-class technology, tools and processes to provide partners with greater visibility into their performance. Speed – Partners will be provided with increased agility and responsiveness through new marketing tools designed to accelerate and simplify marketing campaign creation.

News ■ Round-up

Avery moves manufacturing BOSS challenges UK to Mexico government Associations

Avery owner CCL has revealed that it is to close a facility in the state of Mississippi and move its binder and label production to Mexico. CCL plans to close Avery’s manufacturing and distribution operations in Meridian, Mississippi, with label production consolidating into its existing facility in Tijuana, Mexico, by mid-2016 and binder manufacturing transferring to a new “low cost” factory in Guanajuato, also in Mexico. The transition of binder manufacturing to the new Mexican plant will be phased, said CCL, completing after the end of the back-to-school season in 2017. At the same time, a new state-of-the-art, main US Avery distribution centre will be opened in Dallas, providing “significantly improved” logistics to service key customers. The move out of Mississippi comes as part of a $35 million investment CCL is making at the Guanajuato location over the next three years. The construction of a new CCL Design plant – to service major global automotive OEM and Tier 1 customers located in Mexico – will start this quarter, as announced earlier this year. The binder manufacturing plant will then be built on 28 acres of land immediately adjacent to the existing property. The entire output of the binder facility will be exported to the US and Canada. In addition, the company will build a new coating operation to supply speciality proprietary materials across CCL Label and Avery locations in the US, Canada and Mexico. Output from these new operations will start in late 2016 and become fully operational by 2018. CCL said it expects to reduce annual costs for Avery by around $8 million from 2018 once the moves are complete.

Vendors 8

OPI Magazine | November 2015

The BOSS Federation is asking the UK government to address concerns regarding the business supplies industry. The association has published a briefing document called Priorities for Business Supplies 2015-17 which will be sent to government members on behalf of the OP industry. The document outlines five main priorities dealing with issues such as pre-packaged sales, access to funding, skills development, sustainable production and postal services. The booklet also provides solutions on how the government can help tackle each issue. BOSS said it would like to encourage members of the industry that have a relationship with a local government representative to let him/her know about the importance of the business supplies sector to the UK economy.

Sakumoto leaves HP OP division It has been confirmed that well-known VP and General Manager of HP US Supplies Steve Sakumoto has moved to manage a different sector within the company. Sakumoto, who has been involved in the HP office and business products industry for the past 15 years, is now VP and General Manager of HP Americas Graphics Solutions Business (GSB). Speaking to OPI, Sakumoto said GSB’s mission is to drive HP’s Printing Business beyond the traditional office printing market into the larger growth areas of commercial digital printing, publications, signage and display, labels, packaging, and eventually 3D parts printing. Replacing Sakumoto is Jon Wayne, a fellow HP executive with extensive printing Steve Sakumoto and PC sales experience.

People

news n Analysis

XPD wound up UK dealer group suffers swift demise following failure to rise from the ashes

another Spicers-aligned dealer group Superstat or Office Power, the dealer platform run by major Spicers’ customer Euroffice Group (which recently appointed former XPD Ltd executive Steve Robinson as Group Development Director).

Changing allegiances?

these times of accelerated industry consolidation, one area that has remained pretty much unscathed over the past few years has been the UK dealer group community. Until now, that is. XPD Ltd, the umbrella group founded in 1992 and which as recently as 2014 comprised three separate dealer groups with around 350 members and end-user sales of approximately £220 million ($340 million), initiated liquidation proceedings at the end of September following a meeting of creditors.

Rapid decline The decline in the group’s fortunes had been rapid over the past 18 months: membership had dwindled to less than 100 over that period, and co-founder and Managing Director David Langdown had left the business in May citing differences of opinion on strategic direction. Back in July, several weeks prior to the liquidation announcement, a new entity – XPD Group Ltd – was registered by former Company Secretary Philip Smith, presumably with a view to offering XPD dealers a new home in the event their group folded. Original XPD co-founder James Wilson was even drafted in as CEO of the new XPD Group to try and pick up the pieces of XPD’s demise. However, XPD Group never really got off the ground after wholesaler Spicers withdrew its support for what was ultimately regarded as a ‘phoenix’ company. Insolvency

OPI Magazine | November 2015

documents showed the folded company leaving debts of around £285,000 – £72,000 of which was with “trade and expense” creditors. OPI readers may remember a recent joint statement by Spicers and main competitor VOW outlining how they would share information on bad debtors to stop phoenix companies just being able to switch accounts. However, as XPD Ltd had enjoyed a solus supply agreement with Spicers, the wholesaler was naturally keen to retain the dealers’ business and proposed a number of alternatives, including joining

In a letter to dealers, Wilson left members in no doubt as to his preferred option. “My recommendation to you is that you join with your fellow members and collect under the umbrella of Superstat,” he wrote. “There you will maintain your independence. There you will be part of a dealer group that represents and defends its members strongly. There you will be a strong and positive force of what will be the largest group in the market.” Commenting on this, Superstat Managing Director Chris Collinson told OPI: “We are working closely with both XPD and Spicers to ensure that XPD dealers have continuity of marketing and pricing moving forward. “We know and understand they are loyal to their group and we have no desire to change their allegiances. XPD will be XPD, Superstat will be Superstat and all dealers will be able to remain part of the group they know and love.” Look out for further developments on this story on opi.net over the next few weeks.

“Join with your fellow members and collect under the umbrella of Superstat”

Integra bought by members In another key development in the UK dealer group community, the country’s largest group Integra has been reacquired by its members and has returned to a cooperative model. This transaction – which was closed on 16 October – brings to an end the short-lived ownership of the group by Hemel Holdings, a company set up by private investor William Good to acquire Integra at the end of June. Quite what happened in those three and a half months is unclear and, in any case, is being kept under wraps by non-disclosure agreements, but reading between the lines of Integra’s press release suggests concerns with the future direction of the group under Good’s ownership and his reasons for acquiring it in the first place. “This agreement sees the business […] focused on the needs of the independent dealer and the group’s industry partners, together with ensuring the long-term future of the group is protected,” Integra said in a press release. Integra Managing Director Aidan McDonough – who said the agreement was in Integra members’ best interests – and his team will no doubt be pleased that the stability of the group has been assured, and that they can now refocus all their energy on helping members grow their businesses.

European and US antitrust authorities both want more time to investigate the transaction

was previously expected that this issue of OPI would be the one that revealed the decision of the US Federal Trade Commission (FTC) regarding its investigation into Staples’ proposed acquisition of Office Depot, but it wasn’t to be. Firstly, on 25 September, the European Commission announced it had opened an “in-depth investigation” into the deal amidst concerns that the merger “raises serious doubts as to its compatibility with the internal market” and that “the takeover could lead to price increases and less choice”.

Competition issues Specifically, the Commission singled out the market for pan-European contracts and possible national competition issues in the Netherlands and Sweden. The Netherlands is an interesting choice because that is where the European headquarters of both resellers are located. There may be more issues with potential job losses in this market – and the need to provide safeguards and guarantees – rather than concerns on purely competitive grounds. Sweden is also an anomaly. Staples already has a strong position in the contract channel and OPI sources have indicated that a Staples/Depot combination would be six times larger than Lyreco in Sweden.

That in itself might not be a stumbling block – after all, apart from the presence of Lyreco there are strong local players such as RKV, Ocay, Wulff and Tingstad. However, Staples inherited the EMO wholesaling operation there from its acquisition of Corporate Express – selling mainly to bookstores and smaller retailers – and Depot is also involved in wholesaling activities. Combining these businesses might raise concerns in a market which lacks big national wholesaling alternatives. As we have said before, the presence of Lyreco in Europe to counteract a combined Staples/Depot should be enough to ensure that the acquisition ultimately receives European Commission approval. A few large corporations may be put out by not being able to play three pan-European resellers off each other, but that might not be a bad thing in terms of looking to achieve a state of price rationality amidst

It could certainly be viewed that way. If the FTC was after more time in order to build a stronger case for blocking the acquisition, why would Staples and Depot agree to the extension? In the press release that accompanied the October announcement, Staples CEO Ron Sargent said he was “pleased” to reach an agreement with the FTC. Why would he be ‘pleased’ in this case? He didn’t say he was ‘pleased’ in a press release following the European Commission’s decision…

Finding a solution This all may suggest that the parties are working together to find a solution which would satisfy the FTC. The issue of what a solution might involve has already been covered at length in the pages of OPI, but word on the street has it

Word on the street has it that Essendant has been involved in negotiations recently suggestions of “crazy” pricing for some contracts. Now the Commission has until 10 February 2016 to announce the decision of the second phase of its investigation, meaning that the whole acquisition would not be able to be finalised before then anyhow. While the respective investigations of the European Commission and the FTC are not linked or interdependent, what this has meant in the US is that the FTC does have a bit of a longer timeframe to play with, and on 12 October Staples and Office Depot announced they had reached an agreement with the FTC to extend the review period for the acquisition to 8 December. Is this delay a positive development towards an eventual approval of the deal?

that Essendant has been involved in negotiations recently. In fact, one analyst quizzed CEO Bob Aiken about this very subject during Essendant’s third quarter conference call in October, asking him whether Essendant might “serve as a remedy” in the acquisition – a veiled reference to possibly acquiring contract operations. Aiken responded that “we like our position as a wholesaler”, presumably ruling out an outright acquisition of assets by Essendant itself. However, Essendant’s strategy of being able to “leverage our capabilities” and “aligning with customers who are taking share in each channel we serve”, would seemingly not preclude the wholesaler from giving its backing to any customers that may or may not be involved in negotiations with the FTC. w w w.opi.net | OPI Magazine

News n Analysis

Staples/Depot deal drags on

Tribute

OP industry pays tribute to Mark Austen Renowned UK OP veteran Mark Austen passed away on 18 September 2015, aged 59

passionate and opinionated voice in the UK office supplies industry, Mark Austen was a prominent figure in the sector for over 30 years. A sales rep with Esselte in the 1980s, Austen co-founded dealer group Office Club in 1992 before taking over the sole ownership of the group a few years later. He then steered it to become one of the UK’s largest and most successful dealer groups. Austen was a regular face at many OPI events around the world and we very much appreciated his support, input and even constructive criticism over the years. A school teacher prior to joining the OP industry, Mark devoted much time to supporting schools in his (Watford) area and was also very active in his local football community.

Claude Ackermann, Chairman, BPGI In BPGI, Mark was both a committed and humorous colleague. Whatever the situation, he was always available with his helpful and supporting manner. Later as Chairman, he never tired in the battle for independent dealers. With his razor-sharp mind, he always supported the big idea of BPGI and what it could achieve for the independent community. With the death of Mark BPGI has lost one of its great figures, as has the independent dealer community, and we will miss him dearly.

Tim Beaumont, Managing Director, Nemo Mark Austen was one of the real characters in our industry and will be sadly missed. One of the first times I met Mark was at a BPGI meeting in Amsterdam. It was a boat trip with over 100 senior execs and suddenly the boat, which was a large cruiser, vied to the side of the river bank. Everyone looked to see what was happening. Had we hit something? Had the boat broken down? No, Mark was being dropped off – he was off shopping!

OPI Magazine | November 2015

Mark had a tenacious personality and was a very effective business manager. If he didn’t like you, he was guaranteed to let you know. I for one think that life is enriched by people like Mark – RIP.

Peter Duncan, Managing Director, Wiles Greenworld Mark started his adult life as a school teacher. In 1992, he formed Office Club and I was delighted to be a founding member. Mark was a football fan through his local club Watford and also a qualified referee. I do spot a theme: teacher, referee, boss of Office Club – Mark clearly liked to be in control. But his two abiding passions were dealers within the OP industry and, most of all, his family. While he tended to separate his work and private life, he did have a reputation for attending trade events by being the last to arrive and the first to depart, heading home to his family. He was a private man, quite aloof and often misunderstood, only showing the real Mark to a few. I consider myself honoured to be amongst those. I understood just how passionate he was about our industry:

always with integrity, honesty and generosity; always interested in and wanting to do his very best for those dealers he worked with. He was an innovator and leader of change, demonstrated entrepreneurship and innovation, and inspired me and fellow member companies to adapt, change and thrive. In short, a champion of the independent sector. I continue to be a member of Office Club and my business has been helped in so many ways over the years. There are many useful and valuable aids Office Club provides my business – things that often become taken for granted. Most of all I will miss Mark’s wise counsel, companionship and advice; I doubt a month would pass without us having a long telephone conversation, both opinionated but both infatuated with the OP industry and the part of the independent.

Greg Fish, EVP Purchasing, TriMega Mark was an engaging and warm person with a lively sense of humour that added a lighter side to his passion for the business.

Dave Guernsey, CEO, Guernsey Independents have lost a champion. Mark Austen was borderline irrational in his support for independents which, of course, appealed to my best hopes for family-owned OP dealers, especially my own. I found the practical side of me often debating what Mark saw as the upside for independents; debates that I was certain to lose as I invariably got caught up in Mark’s infectious passion and optimism. It’s very difficult to win a debate against someone who is intent on lifting you up. I worked with Mark both inside and, in later years, outside of BPGI. Our work together covered all aspects of supporting independent dealers on both sides of the Atlantic. My goal was programmes and services that had the dealer’s future modestly up and to the right. Mark’s goal had the independent dealer straight up and to the right. For him, dealers would own the world. Sadly, we can’t know the outcome but we do know that Mark was hard at work on it.

My sincere condolences to his wife Kim and his immediate and extended family. We may have lost a champion, but they’ve lost a husband, father, friend and more. By virtue of these many writings, I hope they know the high esteem our industry holds for Mark Austen. He will not only be sorely missed, but will be impossible to replace.

Barrie Hayes, CEO, BPGI Some say he was a bit like Marmite, but once you got to know him better a clearer understanding of the varied character emerged. Colourful, yes. He would always have an opinion on everything, be extremely funny at times and have a passion for networking and knowing everything going on in the industry. Mark never really conformed to the stereotypes, but underneath that sometimes-controversial veneer was a person who was certainly very clever and smart, very supportive and someone I would deem a great family man where his loved ones were concerned. You could see in the whole process of what he did just how important Kim and his children were to him and whenever he could include them in his work environment, he would. In terms of BPGI, he was probably the greatest supporter and ambassador it could have, and his commitment to the collaboration of the independent dealer community was unquestionable. Not everyone would agree with his views, but I also found at times

that he was prepared to change his viewpoint after some reflection. He had a very funny side to his personality and that often played out well with the differing nationalities within the BPGI group. However, he also knew when it was important to be serious and certainly played an active role within the BPGI family. My sincerest thoughts go out to his family, staff and friends, and I hope that peace will come for them sometime soon. Even though they say time is a great healer, I suspect it will be a long time for that process to happen when such a character in life and this industry has sadly departed.

Mike James, Managing Director, Dundale Associates Having been responsible for bringing Mark into our industry (I can still remember the interview at The Sun public house in Hemel Hempstead – he was so nervous he smoked at least ten cigarettes!), I have watched his progress with both pride and admiration. We had many conversations in the 1980s about forming a dealer group, and Mark had the bravery and vision to create a totally inclusive group that has ensured the survival and growth of many dealers through some very tough years. He will be very much missed by our industry.

Jonathan Smith, VP of Sales Europe, Avery Mark and I learnt our trade in the 1980s with two of the big manufacturers – Esselte and 3M respectively. We then went in different directions in 1991/2 – me to Avery and Mark starting up Office Club. Of course, Office Club has gone from strength to strength since then, always with Mark at the helm. He was never afraid to try new initiatives and conscious that he needed to provide a point of difference to members at a time when there was a plethora of dealer groups springing up. I knew I could always call Mark when I wanted a straight and honest (and often unrepeatable) opinion on some aspect of business – and he would give it whatever the pros and cons for Office Club. w w w.opi.net | OPI Magazine

Tribute

He was a genuine leader and innovator and brought those qualities to BPGI. He had an absolute talent to make meetings and conferences both more enjoyable and more productive. Mark was a loyal and steadfast friend and colleague, and the independent dealer community has lost a real friend and champion. He leaves big shoes to fill and will be sincerely missed.

News ■ And finally...

Comment This month, OPI asked some of the key players in the imaging supplies industry what they thought the key trends impacting this sector are. Below are some of the answers. (For a full investigation of this industry segment, read this issue’s Imaging Supplies Category Analysis on page 40) There has been a change in how people access information – an increase in online storage and data sharing has meant that traditional ‘print and file’ is becoming less frequent – which has led to an overall decline in print. Toby Watson, Head of Technology, Officeworks With smarter and more connected devices, customers will come to expect security features as standard. Demanding clarity on how vendors protect customer information and documents will become commonplace. In the future, we may therefore see businesses rationalise the number of suppliers that are helping them manage their data and documents to minimise any potential information leaks. Francis Thornhill, Office Marketing Manager, Canon Europe The printing and print infrastructure of all-sized organisations is increasingly on the management agenda. There is quite rightly a primary objective of reducing costs. The initial focus is often on the purchase and running costs of equipment and consumables, but customers are now more receptive to taking a wider view. Processes and workflows, the way organisations actually work, is often an area where savings and efficiencies can be gained, and management are now more open to those conversations. Gary Downey, Marketing Director, Apogee Group

$14 billion Expected value of US office furniture consumption in 2016

496,475 Expected worldwide shipments of 3D printers in 2016

$1.13 trillion

Expected US B2B e-commerce sales in 2020

$2.5 million Expected amount spent per minute on new Internet of Things hardware in 2016

TWEET CHAT follow us on Twitter @OPInews, @andy_opi, @JackFrancis

@Staples You can never be too prepared for flu season #OfficeLife @collhughes2 @WBMasonCo Does the W.B. in your name stand for “who but”? I’ve always wanted to know. @WBMasonCo William Betts Mason, founded in 1898! @WBMasonCo @WestcottBrand: Tony the Tiger showed his support of Westcott at this year’s #WBMason show! #WestcottBrand #WhoBut

SNAP SHOT Epson gave visitors to New York’s Time Square a treat recently when it transformed part of the city’s famous tourist attraction into a venue with a giant, see-through tank for the US national synchronised swimming team. The 17,000 gallon (64,000 litre) tank featured cyan, magenta and yellow ‘ink’ and the athletes performed live to celebrate the launch of Epson’s new EcoTank printers.

A recent study showed that printing at home is becoming popular once more thanks to the advent of wi-fi printing, which has made it easy to print from anywhere in the house. Another major trend sees OEMs decreasing inkjet cartridge prices (along with reducing ink levels), making it much less attractive for the end user to purchase aftermarket ink solutions. OEMs are also bringing new models to market such as HP’s Instant Ink programme, or the EcoTank from Epson (see Snap Shot) in order to retain sales. Sophie Lansac, Marketing Director, Armor Group The most obvious trend we are witnessing in the imaging industry is supply chain automation. Using data assets and machine-to-machine connections to fully automate business processes, to make them repeatable and predicable and hence scalable, will result in tangible cost savings for everyone within the supply chain. The new competition is not for transactional business, but for channel-wide, multi-party interactions. Chris McFarlane, President/CEO, Printfleet

Don’t forget to take part in the discussions on the OPI LinkedIn page 16

OPI Magazine | November 2015

opi.net poll results How will the devaluation of the Chinese yuan affect your business?

Considerably 6.7%

A little 13.3%

Not at all 40% Not sure yet 40%

Big Interview | Ángel Alverde Losada

Riding the

Mexican wave The Office Depot name is alive and well in Mexico and looking to grow, says Office Depot de Mexico CEO Ángel Alverde Losada

Ángel

Alverde Losada took the helm at Office Depot de Mexico 20 years ago at the tender age of 30. Since then he has overseen constant progress at the company that has included widespread store openings, international expansion and regular acquisitions. After almost 20 years as a joint venture between Mexico’s Grupo Gigante and Office Depot in the US, Gigante took on sole ownership in 2013 in a $690 million deal. Since then, further acquisitions have been made in Mexico, Chile and the Caribbean, while earlier this year RadioShack’s Mexican operations were merged into the Office Depot de Mexico group. With all this going on, it was high time that OPI’s Andy Braithwaite reached out to Alverde Losada, and he was more than happy to respond to our questions. OPI: Firstly, can you give us a brief resumé of your career? Ángel Alverde Losada: I got a call inviting me to be part of the Office Depot de Mexico project in early 1994 before the company started. At that time, I had just completed an MBA and found myself trying to decide which career path to take: work for a large corporation or start my own business from scratch. My choice was to take the chance with Office Depot, and here I am now after more than 21 years being part of this exciting project. OPI: And can you summarise Office Depot de Mexico and its operations?

OPI Magazine | November 2015

Office Depot de Mexico | Big Interview ÁAL: Office Depot de Mexico is a multichannel, multinational company owned by Mexican Holding Grupo Gigante. We operate in nine countries: Mexico, Guatemala, Honduras, El Salvador, Costa Rica, Panama, Dominican Republic, Colombia and Chile. This includes 282 stores, warehouses, cross-docks and delivery centres operating under the Office Depot brand, and 25 under the Casa Marchand brand name, which is a Mexican stationery and school supplies wholesaler and retailer we acquired in 2014. In addition, we recently acquired RadioShack Mexico which has added another 247 stores, bringing us to a total of 554 locations in the region. We also provide a specialised B2B service through a number of other fully-owned companies. These include FESA, Papelera General and Ofixpres. OPI: What have your most recent financial results been in terms of company sales and EBITDA? ÁAL: I’m afraid that is confidential. OPI: OK, what about sales trends? ÁAL: We have seen an improvement in sales. Last year was a really tough one, and even though the exchange rate has been quite an issue in 2015, small businesses and consumers are now investing in mid-term and long-term goods including, of course, computers. OPI: How important is Office Depot de Mexico in the overall operations of Gigante? ÁAL: Office Depot de Mexico represents the largest part of the whole retail business of Grupo Gigante.

“We are making enormous efforts to keep growing in the everchallenging B2B market”

OPI: The price you paid to buy out Office Depot was significantly higher than the offer you had made a few years earlier. Are you happy with the price that you finally paid? ÁAL: I don’t usually make decisions based on my emotions, so the term ‘happy’ does not define the nature of the transaction. I do think it was a fair price and both parties considered it to be a win-win deal. OPI: You have a licensing agreement for the Office Depot brand name. Does Office Depot have a lot of brand equity in your markets, or could you envisage a rebranding to a more ‘local’ name? ÁAL: We have built the brand for over 20 years and it’s become more valuable year after year. This branding didn’t come from efforts made by the parent company in the US, so we are proud of what we have done so far, and we are planning to keep doing it. OPI: What contact or cooperation do you still have with the Office Depot parent company in the US? ÁAL: IT and branding are the most obvious areas of cooperation. OPI: What has been your strategy since taking full ownership of Office Depot de Mexico in 2013? ÁAL: Our strategy hasn’t changed at all; we have visualised a growing company since day one. There are two ways of growing: by acquiring already established businesses and by attracting more customers – we are focused on doing both.

OPI: Why did you decide to buy out Depot’s stake in your joint venture in 2013? ÁAL: Well, we wanted to keep expanding the business in the Latin American market.

OPI: You’ve made some acquisitions recently, both in Mexico and in other markets. What is your external growth strategy going forward and which markets are you looking at strengthening or entering? ÁAL: Right now, our focus is on consolidating businesses and creating synergies between companies and countries. Every market represents a different challenge and we have to make sure we understand the particular characteristics of each one to generate the most value we can.

OPI: Would this not have been possible under the joint venture? ÁAL: Yes, it would have been possible and it actually happened already. Under the joint venture we opened in Central America and Colombia, but having full control of the region allows us to make faster decisions.

OPI: Let’s talk about your retail operations. How many Office Depot stores do you have in Mexico and in other countries? ÁAL: Mexico, of course, is our biggest market and we have 265 stores here. Then we have a combined total of almost 50 stores in our

OPI: So your main focus is retail rather than B2B? ÁAL: We are mainly known for our stores by the end consumer, but we are making enormous efforts to keep growing in the ever-challenging B2B market. Our goal is to make it half and half.

w w w.opi.net | OPI Magazine

Big Interview | Ángel Alverde Losada other markets, including 12 in Colombia, nine in Guatemala and six in Costa Rica. OPI: How big is a typical Office Depot store, on average? ÁAL: The average size is 1,200 sq m (12,000 sq ft), with our largest stores about 1,600 sq m and our smallest stores 200 sq m. OPI: We’ve seen office supply retailers facing numerous challenges in the past few years, closing or downsizing stores, and changing their product assortment. What challenges are you facing in Mexico at retail level? ÁAL: The most important thing is that we need to stay attractive and relevant to customers. We need to hear them permanently and see what they want. Improvements we have made include constantly updating our assortment, merchandising product in an attractive way in stores, running appealing promotions, training our great staff, and generally providing a pleasant shopping experience. OPI: What opportunities do you still see to increase your market share in the retail channel? ÁAL: Positioning the stores as a one-stop shop for everything you need for the office – tech included – is one of them. OPI: Who are your main competitors? ÁAL: We compete with many different formats: specialists, department and convenience stores and, of course, online stores – we are all trying to make customers develop a certain loyalty to our concepts. OPI: Our readers will be familiar with OfficeMax – is that your main rival? How do you try and differentiate Office Depot from that particular competitor? ÁAL: We do not focus on any specific store or format. Our customers are used to buying in many different types of stores, online and offline, local or international. They are not loyal to only one store or marketplace, they are loyal to the concept that satisfies their needs and that best understands those particular needs. We are specialists around life at school and in the office and we do the best we can in those areas. At the end of the day customers always recognise a passion for service. Another area where we have done an outstanding job is in human resources and by hiring and retaining talent. People join us and they stay.

OPI Magazine | November 2015

In fact, we are number nine in Mexico among the top companies that people want to work for. This is the first step in the whole circle and I am really proud of the whole team. OPI: To what extent is the online channel becoming more important in Mexico (and your other markets)? ÁAL: Online is growing in Latin America at double-digit rates. Nevertheless, several studies have revealed that many Mexicans still mostly buy through traditional channels and through ‘mom and pop’ stores. OPI: What investments have you made in your e-commerce capabilities? ÁAL: I’m sorry, that is classified information. OPI: Is omnichannel something that is important to develop, such as order online and pick up in-store? ÁAL: Omnichannel is quite important, and I am certain that we have only reached ‘the tip of the iceberg’ right now. The near future will give us a much clearer idea of what omnichannel and the exploitation of big data really is. OPI: What investments have you already made in this area? ÁAL: We have created a new department in the company dedicated to e-commerce, and, of course, have made huge investments in IT. OPI: How important is the back-to-school period for you? ÁAL: It’s the most important season. OPI: So how successful was the most recent BTS season? ÁAL: It was a good season. Our product assortment was a great driver – the stores looked colourful and were well stocked. OPI: Where is your B2B focus: SMBs, government/public sector, large corporate accounts, etc? ÁAL: The main focus is SMBs, generally ranging from 10-100 employees.

“[Customers] are loyal to the concept that satisfies their needs and that best understands those particular needs”

Big Interview | Ángel Alverde Losada OPI: You don’t do any business with the public sector or large corporate accounts? ÁAL: Yes, we do, but in Mexico nine out of ten businesses are SMBs. OPI: How big is your B2B sales team? ÁAL: About 250 sales executives. OPI: Is it a traditional model with sales reps on the road visiting clients? ÁAL: That is correct. OPI: To what extent is the one-stop shop concept present in Mexico, and how are you expanding into other categories such as breakroom, cleaning, safety, etc? ÁAL: We see specialist stores being created in Mexico. People value time – it’s a

“We are growing cleaning, breakroom and safety in both space in the stores and in SKU count […] so we can offer a one-stop shop” non-renewable resource – and especially in big cities customers like it when a store fulfils all their needs. We are growing cleaning, breakroom and safety in both space in the stores and in SKU count. Our strategy is to continue stocking everything an office and a school need, and (of course) what office employees and students require so we can offer a one-stop shop for productivity. OPI: Does this mean that you are reducing shelf space of some of the more traditional products? ÁAL: Not really. Office and school supplies have not had significant shelf changes in the past 20 years. It is mostly technology that has evolved over time. OPI: How has the overall office supplies market been performing in Mexico? ÁAL: It keeps on growing; a large proportion of the population is teens or young adults, and in general they tend to consume more than kids. OPI: Are there any particular challenges the market is going through? ÁAL: In some products and categories piracy can become a problem. We do our best to offer a good price-quality ratio. We communicate to our customers the true value of buying original products and how it affects the virtuous circle.

OPI Magazine | November 2015

Another issue is that Mexico is quite a big country and logistics are still challenging for retail chains. OPI: What about the secular declines we are seeing in many markets, resulting in the demand for traditional office products falling. How is this phenomenon affecting the Mexican market? ÁAL: In general, those trends have not yet been reflected in Mexico. In some cases, when technology has caused a true substitution of a product line, some categories have been affected, such as paper trays or large filing drawers. OPI: Why was the RadioShack acquisition done through Office Depot de Mexico and not as a standalone transaction through the Gigante group? ÁAL: Mainly because we are able to generate the best synergies in areas such as IT, warehousing, logistics, marketing and, in particular, merchandising where we share some product categories. OPI: Do you see any synergies directly at store level? ÁAL: All of the synergies are from the back office. We will maintain the stores as they are now and keep their concepts consistent. OPI: In some ways, RadioShack and Office Depot compete with each other – so what was the rationale for this acquisition? ÁAL: RadioShack is more focused on entertainment while Office Depot concentrates on productivity. Office Depot sells predominantly on weekdays while RadioShack performs best during the weekend, so we don’t really see the two brands competing head on. OPI: Where do you want to take Office Depot de Mexico over the next five years? ÁAL: We want to double the size of the company in that time. OPI: And how do you envisage achieving that goal? ÁAL: By further consolidating, maximising opportunities, creating synergies and continually delivering a great experience to the customer. OPI: And where do you see yourself in five years’ time? ÁAL: I see myself listening to my team trying to find a way to keep the company growing more.

Hot Topic | Pricing

money It’s all about the money

money money

money

Asking

anybody in the OP community – or presumably any industry – about their company’s pricing strategies is like asking a woman above 25 about her age. Why do you want to know? Posing the same question to OP e-tailers is the equivalent of said woman asking: “Do I look fat in that dress?” Awkward silences, avoiding the subject or polite lies are not uncommon. Stereotypes aside, there are exceptions of course. And while the subject is no doubt delicate, it’s possible to get to some of the core issues without asking anybody to give away any company secrets.

Dynamic pricing Dynamic pricing, ie the strategy of changing online prices in response to real-time supply and demand, is not new, but it’s become ferocious in the fierce fight for the next order. And the business supplies sector is no different to, say, the airline industry, mass market operators like Amazon and Walmart, Chinese giant Alibaba or new US kid on the block, Jet.com. But successful dynamic pricing is a daily (see the opi.net poll results on page 27) and costly exercise, and benefitting from it – it’s supposed to boost profits by 25% on average – is far from easy. Says Euroffice Commercial Director Danny Berendsen: “It’s the famous rat race to the bottom in categories like ink, toner and paper versus margin

OPI Magazine | November 2015

Dynamic pricing is all well and good, but it’s a difficult concept to get right, as OPI’s Heike Dieckmann finds out build-up in your long tail. The more aggressively you compete in the head, the higher your mark-up needs to be in the long tail in order to sustain profitability. The overall category mix needs to remain in balance.” Striking that balance and at the same time competing on price is a

huge challenge, adds Berendsen. “It’s a daily battle for that new customer. We check the Google search engine results pages and the product listing ads (PLAs) to see who’s competing with us on price. So from that point of view it’s very important to reel the customer in with very competitive prices.

Pricing dynamics explained… OPI speaks to Onn Manelson, CEO at pricing intelligence software firm Marketyze about pricing issues, dynamics and challenges. Marketyze tracks and analyses the behaviour of hundreds of thousands of SKUs in a variety of industries. One of its verticals is the office supplies sector where Marketyze looks at pricing strategies of players including Staples, Office Depot, Shoplet and Betty Mills, and compares them to mass market operators like Amazon and Walmart.

Onn Manelson

OPI: What, in your opinion, are the core challenges for online players like Shoplet or Staples.com when it comes to pricing? Onn Manelson: It’s quite simple – keeping up with price leaders such as Amazon and Walmart or alternatively providing some kind of added value to consumers other than just price leadership. OPI: So what do these firms need to do to be effective price-wise? OM: To be effective, companies need to implement solutions that can help support their decision-making. In such a highly-competitive and volatile category – during March and April this year, Amazon updated its pricing 12 times per item (see also chart for an overview, page 25) – pricing needs to be reviewed very often. We recommended that companies look at their key value items (KVIs) on a day-to-day basis, if possible, and review their tail every other week. This will ensure that they are not surprised by shifts and changes in the market that can result in a high hit to revenues. This is even more critical during special promotion periods such as Black Friday/Cyber

Pricing | Hot Topic

Source: Marketyze

% Change

Online pricing behaviour – a snapshot

April 2015

March 2015

“Once we get customers via Google search – assuming they click through and are happy with what they see – we then have to build up the margin on that very aggressive price with other products in that order and then, of course, in the second, third, fourth order, and so on.”

Bigger basket size The size of the shopping basket and the repeat order pattern are perhaps the core differences between B2B and B2C, and as such between operators

The above graphs show price updates of two of the main US mass market/online operators – Amazon and Walmart – in the March/April 2015 period and the two biggest OP players, Staples and Office Depot. Both Amazon and Walmart display considerably more updates. Overall, Amazon changed prices on 90.78% of its total office supplies assortment during that period, compared to 90.47% for Walmart, 26.98% for Office Depot and only 14.52% for Staples. like Amazon and Walmart compared to Shoplet and Euroffice. Amazon, for instance, fulfils a very specific need, says Berendsen, but it’s predominantly about a one product check-out, whereas OP operators sell the complete basket around that product category: “It’s comparable to doing your weekly

Monday when retailers may need to make several price adjustments during the day. Companies need to have a well-planned strategy for pricing which includes how they want to be positioned by category and item. As a general best practice, it’s important to be very competitive on KVIs where shoppers are likely to compare their pricing, and less so on accessories and more unique items that not many companies carry. OPI: What’s more important for companies in the OP space – long-term strategic or short-term opportunistic pricing? OM: For a retailer to have successful pricing, strategic planning needs to be done both for the short and long term. Long-term planning is the basis of a healthy strategy, but as the industry is constantly changing, short-term pricing needs to get attention as well in order to not miss out on opportunities that may arise. Short-term pricing is also critical during events and special times of the year. For example, back-to-school is a period when short-term pricing is extremely important and can make or break a financial year. Other verticals have their own specific events during which they need to be especially on the ball and responsive. OPI: How much of a consideration should Amazon be when it comes to devising pricing strategies, given that OP companies are predominantly addressing the B2B customer? OM: Amazon is an important consideration and worry among office

grocery shopping on Saturday at the megastore (Euroffice) and buying your milk on a Thursday evening at the local shop (Amazon).” That’s not to say that the OP players don’t pay close attention to Amazon’s activities for all manner of competitive reasons. Many, including Euroffice and Shoplet, for

supplies resellers. Amazon has already shown that it’s serious about getting into the B2B space in general and specifically in OP. Therefore retailers need to closely monitor what Amazon is doing. From our pricing trends reports we have seen that in all verticals Amazon is by far the leader in terms of dynamic pricing and number of price updates per time period. OPI: What does pricing in various product categories depend on – what are the main considerations? OM: The main considerations depend on the nature of the category products – total market sales, essentials/non-essential goods, profit margins in category, contribution of category to total company revenues – as well as on the number of retail competitors, the number of manufacturers, the time of year, etc. OPI: Realistically, how able are independents to compete with online-only players as far as pricing is concerned? OM: It’s tough for independent dealers to compete on price. Online players can be much more dynamic, as they don’t have to physically update prices on shelves. This creates a lot of strain on price and profit for independent dealers. What’s more, they need to take into account costs that online players don’t need to consider. Price leadership needs to be based on volume, like with Walmart and Amazon. Independent dealers need to create differentiation in ways that online players can’t, such as personal advice, etc.

w w w.opi.net | OPI Magazine

Pricing | Hot Topic

opi.net poll results How often do resellers adjust their online pricing?

Several times a day

5.9%

Daily Weekly

23.5% 23.5%

Monthly

5.9%

Annually Ad hoc

41.2%

example, are trading on Amazon’s marketplace as well of course, and are keenly aware of the pricing pressures that exist. Indeed, says Douglas Nash, CEO of Mobilegear, a niche OP website founded in 2013 that specifically targets the mobile workforce: “Amazon and Google Shopping should be the first stop for any pricing exercise. What is the ‘exact’ – and don’t forget to factor in shipping costs and sales tax policies – equivalent product price being sold on the ‘open’ market?”

The right price He adds: “Once you have established that price, decide the following: a) we need to match it no matter what; b) we need to be within X% of that price; and c) we can’t compete with these guys, so we will price it at a level we can live with from a margin perspective. A good portfolio of products has all of these pricing strategies well executed and is tied to the overall brand of the reseller. “For Mobilegear.com, we have a set of products where we must

be matching the Amazon/Google Shopping prices, but other items fall into the other two buckets. The more unique the product and brand, the more we can ‘set’ the price.” The beauty of this dynamic approach is online players’ ability to react quickly to trends in the market and/or supplier promotions. But therein also lies a challenge, certainly if you go further down the supply chain, as Nash explains: “We have to constantly make sure that we have an effective and impactful way of capturing and communicating all supplier or wholesaler or even our own promotions. “Being able to make price/promo changes to the website and then communicating those promotions or price changes to our appropriate audience is a huge challenge. The complexity lies in the number of suppliers and wholesalers trying to promote, the different types of promotions and the timing of the promotions. “In the tech world, for example, major OEM suppliers will run significant promotions for a very short period of time, launch them whenever they see fit and then require proof of performance in order to support the promotions. Being able

a SKU-based approach to shopping can be a full-time job. And while it may yield cost/price savings, in the long run, it is too hard and time-consuming to execute. Hence there is an ‘earned trust’ that becomes part of the relationship. “Because these B2B customers have an ongoing need for service and supplies, they will attribute a value to it that is acceptable to them, as long as you stay within a certain percentage – say 10% – of what’s available on the open market.”

Added value This, ultimately, is the same situation that independent dealers find themselves in. Independents, as a general rule, simply cannot compete with their large reseller counterparts – on or offline – on price alone. Their differentiating factors are service and relationships. The online proposition is altogether different and if, like Shoplet, Euroffice or Mobilegear, you wholly depend on that channel, it’s crucial to get it right – there’s no escape route. Says Berendsen: “We don’t have that relationship with the customer and are mostly a transactional business.

“It’s a daily battle and acting fast is key online. We are all fishing in the same pond, and the one who has the best bait wins” to quickly set up the promotions, communicate them out and then track them is not easy, especially if there are a lot of suppliers and wholesalers trying to promote.” Back on the customer side, aside from price, the issue of convenience should also not be underestimated, particularly in a B2B environment. This is not convenience in the sense of next or same-day delivery, it’s more a question of trust in your chosen reseller partner. Nash explains: “Buyers of office supplies in a B2B environment recognise that

Traditional dealers tend to compete on customer annual requirements – they don’t compete on price alone. “For us, pricing and content are the main drivers behind conversion. As such, we constantly need to be aware of what our competitors are doing from a pricing and promotion point of view. It is a daily battle and acting fast is key online. We are all fishing in the same pond, and the one who has the best bait wins.” In the next issue, OPI will be looking at e-content and the progress that’s being made in that regard by members of the OP community. w w w.opi.net | OPI Magazine

SPONSORED BY

Bi-silque | Special Feature

Dealers descend

on Bi-silque

Impressive North American growth for the European viscom manufacturer

wholesaler Essendant and some of its leading dealers were in Portugal at the end of September to visit the headquarters and manufacturing facilities of visual communications (viscom) vendor Bi-silque. In addition to Essendant merchandising staff, about 20 dealers made the journey, including Garvey’s, Greenwood, Stephens and WB Mason. The trip was organised as part of an Essendant ‘Destination Portugal’ incentive that also involved a number of other leading manufacturers, including International Paper, Fellowes and Newell Rubbermaid. Bi-silque took things a step further by organising a tour of its facilities and hosting a very enjoyable social programme in the beautiful city of Porto. “Essendant and its top dealers have played an important role in the fast-growing North American division of Bi-silque/MasterVision over the past few years, and we were thrilled to be able to host them at our facilities,” said Chief Commercial Officer Beth Wright.

its key milestones, the latest product innovations and growth strategies. She urged dealers to think outside the box and grow their viscom sales – despite the digitisation of the workplace, it’s a category that is seeing 7-9% growth in the US and there are great opportunities for dealers to cross-sell to their existing clients at attractive margins. There then followed an informative tour of Bi-silque’s 75,000 sq m (750,000 sq ft) production facilities, with the US dealers witnessing at first hand how the company vertically integrates its manufacturing processes and uses factory waste to produce energy for the site. The timing of the visit also coincided with the completion of a major expansion project at Bi-silque’s HQ. A spacious showroom has been built in order to more effectively present the full range of products and

North American success North America has certainly been a success story for Bi-silque since it started up operations there eight years ago. Market share gains led to an impressive 52% increase in sales in 2014, and 2015 will be strong again. Wright gave the visitors an overview of the Bi-silque business,

Bi-silque CEO André Vasconcelos with Beth Wright

the company now has an upgraded new product development zone. The US visitors were certainly impressed with the facilities and by the way that Bi-silque has been expanding into new categories. These include education, where the vendor now has a genuine furniture and display solution, and interactive whiteboards and tables, a major area of investment for Bi-silque.

Good impression Bryan VanAlstine, Regional Manager at WB Mason, said: “Our visit to Bi-silque’s global headquarters was impressive. The aspect that stood out was the fact that it’s a fast-growing, family-owned company. The pride that everyone had in the business and the quality of products it’s producing could not go unnoticed.” The visit also provided an opportunity to meet Michael George, the recently-appointed Strategic Account Manager at the MasterVision division in the US. Based out of Bi-silque’s US HQ in Florida, George already has a firm understanding of the industry after spells with Paper Magic and ES Robbins. w w w.opi.net | OPI Magazine

Event Review | EPIC 2015

Record attendance at the 2015 Independent Stationers/TriMega joint convention

An event of

proportions THE

third Independent Stationers and TriMega EPIC joint convention in Las Vegas at the beginning of October was arguably the best yet. There was a record attendance with more than 400 dealerships and 150 supplier partners represented, meaning more than 1,400 people descended on The Cosmopolitan in Las Vegas. The hotel itself is one of the better venues for this type of event as all sessions, seminars, networking functions and meals took place within a short distance of each other. The event officially kicked off with a Welcome Party sponsored by Smead on the evening of 6 October, but many delegates had already arrived beforehand to participate in the pre-show social programme. This included golf and dune buggying and the EPIC sales boot camp, the latter a comprehensive and intensive one-day workshop focused on closing sales deals. The first full day of EPIC was packed with individual group meetings and a joint seminar programme that covered a wide range of topics such as digital marketing, dealer best practices, sales excellence, jan/san, furniture, the federal and healthcare markets, and even how to sell your business! The fact that the seminar programme took place before the vendor expo was a deliberate change to previous formats in order to maximise attendance. “We changed it this year on purpose so that everybody would still be here and it’s made a huge difference,” TriMega President Mike Maggio told OPI at the show. “The [Evening of Intrigue] party was phenomenal and the word I’ve gotten is that all of the seminars were well attended and well thought of.”

OPI Magazine | November 2015

“We were very careful about the type of seminars because we didn’t want to just have more of the same,” added Independent Stationers CEO Mike Gentile. “So we put on some seminars with more dealer interaction, fewer ‘hired hands’ in terms of speakers and spent a lot time trying to educate the dealers on EPIC Business Essentials and what we’re trying to do.” EPIC Business Essentials (EBE) is the new joint venture the two dealer groups have formed to compete more effectively in the large regional account space and was one of the

EPIC Business Essentials […] was one of the main talking points

Independent Stationers honours Nimmo Independent Stationers introduced a new award at EPIC 2015 to honour the memory of the late Bob Nimmo. Nimmo, Independent Stationers’ Member Relations Representative, sadly passed away in March this year after many years of dedicated service to the dealer group and the industry as a whole. In memory and recognition of Nimmo, and to epitomise the ideals he believed in, Independent Stationers introduced this new Bob Nimmo dealer award which is called Driven to Success. The name of the award actually comes from the title of a book that Nimmo had written for new drivers, based on his many years as a ‘road warrior’. Nominees for this award – who must be Independent Stationers shareholders – had to demonstrate a high level of commitment to and participation in the group’s programmes, their local communities and the independent dealer channel as a whole. Six shareholders were nominated for the award, with the inaugural Driven to Success honour going to South Dakota dealer Office Peeps. Well done to Office Peeps, and also Office Peeps receives the inaugural to IS for honouring the memory of one Driven to Success award of the industry’s ‘good guys’.

EPIC 2015 | Event Review

First Hike for Hope a great success Kudos to TriMega EVP of Marketing Michael Morris for organising the inaugural Hike for Hope the day after EPIC in support of City of Hope and the fight against cancer. While many were still in their beds recovering from the previous night’s festivities, about 30 brave souls – including a certain OPI hack – ventured out into the beautiful Red Rock Canyon area near Las Vegas to take part in one of three hikes, each aimed at a different level of walker. The five-hour ‘advanced’ hike to a viewpoint called Turtlehead Peak was perhaps more challenging than many had anticipated. It involved a fair amount of scrambling over loose rocks on hands and knees up steep inclines, but all those who started out made it to the top and back again in one piece. In total, about $7,000 was raised for City of Hope and Morris has already said that he plans to organise another Hike for Hope at EPIC 2016 in Nashville.

main talking points at the show – both seminars to present this initiative were packed out and the EBE team had more than 100 one-to-one meetings scheduled with dealers at the EPIC vendor expo. Another big talking point was the possible merger of Staples and Office Depot. Cleveland Research’s Eamon Kelly hosted a well-attended seminar on the subject. The session certainly highlighted the differences of opinion as to whether the deal will go through or not, but the overriding feeling was that, whatever the outcome, there will be a huge window of opportunity for the independent dealer channel (IDC) as the big boxes focus on internal issues. Day two of EPIC began with the convention’s General Session which was underpinned by the theme of ‘BIG Collaboration’ as Independent Stationers and TriMega take cooperation in the IDC to a new level.

There will be a huge window of opportunity for the independent dealer channel

Not only did Kevin France – who is heading EBE – take to the stage to present EBE to the audience, but Gentile and Maggio revealed a new e-content initiative to help dealers compete more effectively online. This will include dealers offering a wider range of items and being able to bring products to market more quickly. Essendant was EPIC’s main sponsor this year and new CEO Bob Aiken made a brief address to delegates in order to introduce himself to the wider IDC. He then stayed on the Essendant booth during the expo chatting to dealers, which was certainly appreciated. Keynote speaker Peter Sheahan was impressive and had a message that resonated with the audience: don’t try to compete on volume and price, but focus on your strengths and be the best in your niche area. The expo itself was busy and foot traffic strong throughout the day – definitely one of the better conference trade shows that OPI has attended – while dealer engagement and interest was high. There was also a strong turnout for the EPIC finale, billed as ‘Game Night’, which featured a prize-drawing reception, and fun and games with the ‘Minute to Win It’ contest, with one lucky dealer taking away $5,000 in cash. All in all, EPIC 2015 was a resounding success and proved that the IDC can work together to further the greater independent reseller cause.

EPIC heading to Nashville in 2016

EPIC 2016 will take place at the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee, a bit later in the year than normal, from 1-3 November. Interestingly, the event will be co-located with ECi’s 2016 Connect conference, which takes place at the same venue from 2-4 November. This is another move to help alleviate the trade show calendar for dealers, suppliers and other industry stakeholders. The word “co-located” should be stressed – this is not the two events merging, but two separate events which overlap by one day to help participants cut down on travel expenses and time commitments.

w w w.opi.net | OPI Magazine

Feature | Sales Tools

Play your

cards right Sales expert Troy Harrison highlights the importance of the humble business card as an essential sales tool

SaleS

people spend a lot of time talking about ‘sales tools’. More to the point, many sales people spend a lot of time complaining and whining about the lack of sales tools (or the lack of perceived quality of our sales tools) that our boss provides us. When we talk about this, we’re talking about brochures, pretty folders, PowerPoint presentations and other fluff such as coloured lights and brass bands that sales people hope will sell for them. The truth is that all the brochures, sell sheets and presentations in the world are at best a distant third in the ranking of your sales tools. Numero uno is YOU. And that’s far ahead of any of the others. But let’s talk about sales tool number two. This is far behind YOU in importance, but far ahead of number three. You should have it with you at all times. It’s the lowly business card. How do we make it something that really works as a sales tool? First of all, let’s remind ourselves of why we use business cards: Business cards identify us: A business card is a very quick way to ‘place us’ in the business world. On a

OPI Magazine | November 2015

very small piece of heavy paper, we convey who we are, what we do and for whom we do it. We also let people know how to get hold of us. Go to a networking event and you’ll meet a bunch of people. You’ll also collect a bunch of business cards. You may forget the faces – but the cards remind you of the people. Business cards are the best leave-behind: Sales people love ‘leave-behinds’, those fancy brochures and packets that are supposed to remind our customers of why they should buy from us. About four out of every five of those brochures are in the trash before you make it out of the parking lot – BUT your business card is saved and

do what you say you can do. And in sales, credibility is our main asset.

Make it work It’s pretty easy to see that business cards are vital to a sales person’s personality, but there are some easy ways to go right and wrong with them. Quality, quality and more quality: This speaks to credibility. A quality business card is a good business card. Quality means nice, heavy card stock, sharp printing and nice layout. Hand out a card made with some of those stock templates that come with Microsoft products, printed on cheap detachable cards that they sell at the office supply store, and you immediately lack credibility. A good business card from a reputable printer only costs $100 or so per 1,000. If that is too much to spend in order to protect your image, get out of sales. And by the

“If [$100] is too much to spend in order to protect your image, get out of sales” filed. That means your business card is usually your only meaningful leave-behind. It’s also why you shouldn’t attach your card to stuff that’s likely to be thrown away. Business cards give us credibility: Business cards establish you as a legitimate businessperson. They begin the process of establishing that you are what you say you are, and can

way, if your company supplies you with cheap, flimsy cards it’s still on you to get nice ones. It’s your career. Distinctive is good, up to a point: One sales author I respect believes in the distinctive business card. His is a large coin. It’s distinctive and his philosophy is that people remember it (and you) and take care of it. I liked that philosophy for a long time.

Sales Tools | Feature The trouble is, I lost his coin card. Since it wouldn’t fit with the rest of my card files, it ended up as part of the ‘stuff’ that rolled around my top desk drawer. Apparently, at some point it became part of the stuff that I cleaned out of my desk. The moral of the story? Distinctive is good, but remember what your customer is going to do with your card. My best advice is to stay within the same size as other cards. Be clear: The design of your card should reflect what you do. For instance, a card with an elaborate design and a riot of colours would be perfect for a printer or graphic designer, but a disaster for a financial planner. Make sure the design of your card conveys the image you want it to communicate. Include appropriate information: Have you ever pulled out a card and tried to figure out exactly what the

Troy Harrison

person (or company) does? Me too. So many companies have vague or similar names and that can make it hard to place you in the business world (and that, remember, is one of our objectives). If yours is like that, include a bullet point or tag line somewhere that says what you do for a living.

Make it easy to contact you: In a recent online poll of Kansas City Small Business Monthly readers, over 60% of respondents indicated that email is their favourite means of communication (over methods including telephone and face-to-face contact). Yet about one third of the business cards I see have no email address on them. Why not? If you’re worried about spam, it’s too late. You’re probably getting it, regardless of your business card design. Whether you know it or not, your business card is far more important than any brochure or presentation tool – in fact, in many cases, it’s all you have. Make it a good one. Troy Harrison is the author of ‘Sell Like You Mean It!’ and a speaker, consultant and sales navigator. He helps firms build more profitable and productive sales forces with his sales training and methodologies.

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Category Analysis | Imaging Supplies

Printing

THE

imaging supplies industry is under pressure from several different directions. Growth continues to be a struggle, and reducing print volumes and margin erosion are causing problems. Add in the threat from counterfeit products and it’s obvious there are major challenges to overcome. As Monte White, VP of Product Marketing at Distribution Management in the US, observes: “Many in the industry are accustomed to organic growth and when this slows or goes flat as it has, it leads to discounting and programme

Minimal growth, declining margins and channel attrition are unwelcome trends affecting the imaging supplies sector. But do opportunities still exist? And these issues not only affect the OEMs. Vincent Van Dijk from the European Toner & Inkjet Remanufacturers Association (ETIRA) talks about similar matters affecting the remanufacturing industry: “The reduction in printing and the persistent pressure on price are the main problems. As users cut back on printouts, we all suffer from lower sales volumes. And that creates a

“Printing volumes are slipping by up to 3% per year and will, at best, stabilise rather than grow” rationalisation, putting pressure on those that don’t add value.” Francis Thornhill, Office Marketing Manager at Canon Europe, adds: “We see working practices evolving rapidly as customers adopt new technologies and seek greater efficiencies. Businesses are very aware of the administrative burden that printing can have on their organisation and many have started streamlining processes by implementing digital information technologies.”

OPI Magazine | November 2015

continuous race to the bottom in terms of sales price.” Tony Speed, Business Development Executive at The Recycling Factory in the UK, concurs: “The OEMs have defended their space by lowering prices, squeezing margins for the whole channel. Hopefully OEM legal action against those that infringe intellectual property will level the playing field.” Sophie Lansac, Director of Marketing and Communications at French remanufacturer Armor Office

Printing, sees declining print demand as the key issue: “Printing volumes are slipping by up to 3% per year and will, at best, stabilise rather than grow. The rise of paperless contracts and statements, particularly in the banking and insurance industries, is having a noticeable effect.”

Opportunity knocks However, at aftermarket supplier Clover Technologies Group, Luke Goldberg, Global SVP Sales and Marketing, is more optimistic: “Print is in a modest decline of 2-3% per year, but it’s still an $80 billion+ global consumables market. Growth possibilities exist – there’s still ample opportunity in the high-end colour sector, for example. “Instead of fighting for the scraps of the 10% aftermarket we already inhabit, we’re looking to expand into the 90% of the market currently dominated by the OEMs.” He adds: “There are also alternative growth segments such as 3D printing we intend to explore. Another area with major potential is industrial, or grand format, printing

Imaging Supplies | Category Analysis MPS penetration of office environment print volumes Prints (billion)

Prints (billion)

Source: InfoTrends

USA

Company size where growth is explosive and consumables usage enormous.” Amy Lu, Marketing Manager at China-based remanufacturer Ninestar, agrees that the negatives are overhyped: “We’ve been discussing the decline in printing for ten years, but the consumables market keeps growing. The opportunities, particularly in the high-end sector, are huge and offer great possibilities going forward.” Printing from mobile devices could also give a substantial boost to the industry. Data from imaging supplies research company InfoTrends suggests that in the US alone mobile printing could generate an extra 135 billion inkjet prints per year, roughly doubling the current volume. However, it’s presently a long way from reaching that potential.

Inkjet or laser? Ten years ago, inkjet and laser printers held very different positions in the market. Inkjets provided good-quality colour prints at an affordable price, whereas lasers offered high speeds and volumes for the black and white text-heavy documents required in an office environment. Though more expensive to buy, they were much cheaper to run. But these lines between inkjet and laser stereotypes are blurring. Fast inkjets capable of keeping up with office demands now exist, while the workhorse laser printers have spawned a new generation that offer print quality comparable with their inkjet counterparts. They’ve also become small enough for a home

UK, France & Germany

Company size office. As Thornhill says: “Businesses now have more choice than ever when it comes to selecting the right printer for their needs.” White agrees with that notion, but also strikes a cautionary note: “Business ink is growing, but not as much as participating OEMs would like. Laser technology still represents

the lion’s share of printing in the SMB markets we serve.” Goldberg takes a similar line: “Lasers still dominate the business world. However, new business inkjets from HP and Epson are gaining ground in the SOHO market. Eventually inkjets could challenge lasers in the SME segment too, but currently their cartridge and paper capacities can’t compete.” Also he adds: “Dealers make money on parts and servicing components, but these aren’t yet available for inkjets – they’re essentially disposable. As such, dealers don’t have a vested interest and will continue to place laser printers in offices to make money on services.” As businesses search for tangible ways to reduce their printing costs, increase operating efficiencies and control their carbon footprint, they’re looking at the potential benefits of Managed Print Services (MPS).

Fighting fraud OPI spoke to Allen Westerfield, President of the Imaging Supplies Coalition (ISC), a non-profit trade association for OEMs of consumable imaging supplies and equipment, about its ongoing battle against illegal operators in the sector. OPI: Typically, what does the ISC do? Allen Westerfield: The ISC works closely with US Customs and Border Protection and the Electronics Center for Excellence and Expertise (CEE) to provide education and market intelligence. This has resulted in a significant increase in seizures Allen Westerfield and forfeiture of infringing products. The ISC coordinates visits from the Electronics CEE to member facilities to review cartridge development and manufacturing processes, and travels to several major ports each year to conduct training on intellectual property rights. This approach will continue to produce positive results in mitigating the flow of illegitimate goods. OPI: What are the challenges around the rise of cloned and counterfeit cartridges? AW: The two main challenges involve the internet and patent infringement. The increasing importance of the internet as a marketing and distribution channel continues to cause problems. Counterfeiters now use express mail and air freight to import products into the US, making them more difficult for customs officials to detect. In addition to working closely with customs, brand owners engage with the major e-commerce sites to mitigate this activity and educate the consumer. OEMs are continuing to enforce their patent rights and General Exclusion Orders (GEOs) have been granted in the US that prohibit the importation of cloned cartridges which infringe patents. Companies and resellers that ignore a GEO can face penalties, seizures and fines. OPI: What other cases are you currently involved with? AW: The ISC has filed an amicus, or friend of the court, brief with the US Court of Appeals. This supports Lexmark in an ongoing case against Impression Products over the patent exhaustion legal doctrine. The ISC strongly encourages the court to uphold existing case law that allows patent owners to prevent re-importation of their patented products into the US, if their goods were actually intended for sale abroad.

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Category Analysis | Imaging Supplies Thornhill explains: “MPS is becoming a vehicle for identifying and adding value to organisations in a structured way. The fastest-growing area is the SME market, as mobile, cloud and security services previously exclusive to large firms become available to smaller companies, creating new opportunities for suppliers to sell consultancy to these businesses.” At MPS provider Printfleet President and CEO Chris McFarlane says: “Technology trends such as big data, the cloud and predictive analytics have fuelled demand for more flexible service offerings. Businesses willing to embrace MPS have the opportunity to stay ahead of the competition, enabling just-in-time supplies, proactive service and analysis of the valuable data gathered from their print devices and systems.” Goldberg sees MPS as benefitting the remanufacturing industry too: “MPS is a huge part of our growth. Virtually every OEM is now participating in MPS, adopting a brand-agnostic approach. When OEMs go to a dealer with a mixed fleet, they will service all the devices. Their own will get OEM products, while others will be serviced with remanufactured cartridges. So now OEMs become potential customers because they’re using our products too. “There’s serious potential in the MPS channel, especially with extended-yield cartridges that offer 40-100% more capacity than OEMs. Companies only offering

OEM products will have a hard time competing with that.” Lu agrees: “The development of MPS is a big opportunity for a remanufacturer like us. Service providers have to deal with many different brands of printer, so need the compatible cartridges we supply. It can only improve demand.” White has seen Distribution Management’s MPS business growing fast, but believes customers need to adopt a caveat emptor approach before taking the plunge: “There

“Some OEMs understand that we aren’t actually a threat to their business, but complement it” are dramatic differences between programmes that truly manage the environment through automated processes, compared with those that develop manual processes and simply call it managed print. Buyers need to beware of what they’re signing up for.”

Calling a truce? The war between OEMs and the remanufacturing industry has been raging for years, but it seems there may be a whiff of détente in the air. As ETIRA’s Van Dijk remarks: “Some OEMs understand that we aren’t actually a threat to their business, but complement it. Remanufacturers need OEM empties for their existence and it’s good to see a few OEMs recently acknowledge that our industry has a right to exist too. The main threats for them are the patent-infringing cartridges from Southeast Asia, which

Newly-made compatibles vs reman vs refill vs OEM share of units consumed

Source: InfoTrends

Black & white toner cartridges

North America

Europe

Latin America

Asia

OPI Magazine | November 2015

Colour toner cartridges

North America

Europe

are sold at prices up to 95% less – no wonder quality issues arise. “Many OEMs now focus their intellectual property enforcement activity only on these clones. Unfortunately, a few still take legal action against remanufacturing companies. That’s wrong; it’s a legitimate practice, environmentally friendly, and the products at only 20-25% less expensive than the originals are no real threat. It’s strange that one OEM champions its sustainability prowess, yet vigorously

Latin America

Asia

Inkjet cartridges

North America

Europe

Latin America

Asia

attacks any company that wants to reuse its cartridges and save 45-60% on CO2 emissions.” Speed agrees that it’s counterfeiting that presents the real problem: “The online marketplace is awash with counterfeits and this transfers into other areas of the supply chain, ultimately driving down the market price. This then devalues and undermines the difference between OEM, genuine remanufactured alternatives and counterfeit products in the eyes of the consumer.” Goldberg focuses on the environmental impact of counterfeits: “They fly in the face of the green credentials of our industry. Everything we make, we collect and keep out of landfills, saving natural resources and recycling. But a new compatible offers no collection or recycling programme.” McFarlane sees counterfeits as less of an issue for MPS providers: “MPS software can only read the metrics from cartridges matched to OEM specifications. Without this you cannot adequately manage the print device – why opt for an MPS solution if you’re going to use counterfeit cartridges which aren’t compatible?” As he summarises: “Playing a key role in an industry that will, with virtual certainty, involve less print in the future is interesting. To remain competitive in this sector where only the strong – or perhaps the dynamic – survive, companies must be willing to transform the way they approach an increasingly complex environment.”

Business Machines | Category Analysis

Rise of the machines Traditional business machines are feeling the heat from technological shifts. Is there still a place for them in today’s workplace?

THE

office environment has changed beyond recognition over the past decade as technological advances have swept all before them. The rise of electronic media and consequent drop-off in print means that the emphasis on products that deal with paper is on the wane. Consequently, the best days for binders, laminators, shredders and scanners are now behind them.

Shred of evidence Or are they? Sue Simkiss, Key Account Manager at HSM UK, begs to differ: “Until the day when the infamous ‘paperless office’ finally arrives, there will always be a need for a document shredder. The shift from paper to electronic media just means consumers are looking for a different type of shredder, one that can deal with optical discs or memory sticks, or destroy hard drives in-house to ensure data protection compliance. For the foreseeable

future we just need to focus on helping our customers ensure data is destroyed in the correct manner. “The office shredder market for HSM is buoyant, with autofeed shredders our biggest growth area. It’s all about time management – shredding data on-site at source is always the safest option, so the new autofeeds with their lock-and-go function via USB save time, yet still ensure your documents are secure.” Brenda Zingsheim, Director of the Office Products Category at US wholesaler Essendant, remains more sceptical: “Some of the biggest challenges in the shredder category are tied to the decline in paper and the impact of offsite shredding services. Although we still see some growth in the category, it’s strongly on the commercial side of the business, rather than the personal shredder side. We actually see an opportunity for dealers here: as devices with enhanced capabilities are launched, the

opportunity to help businesses manage their shredding services in-house improves.” Market research tends to back up Essendant’s view. Data from Gfk in the UK shows the market is relatively flat, with only autofeed shredders showing any growth year on year. Data from The NPD group in the US tells a similar tale – the shredder market is worth $152.2 million annually, but has stagnated, with zero growth over the past 12 months. At Rexel Shredders, European Product Manager Matt Evans believes innovation is required to stand out: “Consumers are looking for anti-jam technology – models that can sense when a potential jam is about to occur and alert the user. Long term, we believe there is huge growth potential in autofeed models as people understand their benefits and switch. The ability to stack up to 750 sheets in the chamber, shut the lid and walk away saves time and increases productivity. There’s a price premium, but it’s one users are prepared to pay.”

Scanning ahead Tim Brosnihan, Product Manager of Document Scanning Solutions at Canon Europe, sees great opportunities in his area of expertise: “In a world of superfast downloads, online transactions and 24/7 access, instant information w w w.opi.net | OPI Magazine

Category Analysis | Business Machines customers expect instant attention and efficient service. If a business has lengthy processes for simple tasks, customers are put off and can be driven elsewhere. “Consequently, organisations are increasingly using small desktop scanners, moving document capture processes from the back office to consumer-facing environments. High street banks, for example, that need to validate their customers’ identity would previously have taken ID to the back office to capture it. This made some individuals feel uncomfortable as they handed over confidential documents to staff to make photocopies. Now, the same process takes place at the service desk, building trust as no personal documents leave the eyes of the customer. Staff are also able to complete the data input quicker.” Luke Jennings, Technology Product Manager at UK wholesaler VOW, has seen this upsurge in scanner usage in some other types of business: “Scanning has been a growth area for us in the past 12 months, with particular uptake in the healthcare and legal sectors.The introduction of high-speed business scanners has resulted in mass uptake across the market in general as businesses move away from a traditional paper office, allowing paper-heavy businesses to digitally archive huge amounts of information.” But, he adds, the future is in mobile scanning: “These handheld devices can be carried by individuals on the road allowing them to instantly scan documents and have them appear on their laptops or tablets for future use. This is an area where we’ll see further growth, particularly with those that also include wireless connectivity for easy linking to other forms of portable technology.”

Another business machine that refuses to lay down and die, despite the onslaught from new technology, is the laminator. As Zingsheim explains: “Lamination has not been affected as much by the paper decline or the rise of electronic media. Consumers continue to use lamination in a variety of ways and it’s widely used in many different channels such as Renz’s HT 330 P laminator education, medical, food service and leisure, either to preserve or protect documents or for presentation and visual aid. Lamination supplies account for over 75% of the market and machines 25%. While lamination is a mature category, suppliers continue to enhance features

increasingly cheap and poorly manufactured machines and this has left customers frustrated. Thankfully, although our products sit at the very top end of the market, our customers are willing to pay extra money for a quality item.”

In a bind Market data for binding machines also looks positive in the US, with The NPD Group showing a sales uplift of 11% by volume (8% in dollars) so far this year. However, figures in the UK look less impressive, with GfK showing a year-on-year decline in the business channel, although B2C sales remain stronger. As Dawes says: “Binding machine sales are static as this is old presentation technology. More and more businesses are now presenting information on tablets and then sending copies electronically.” Zingsheim agrees that the category has been impacted by the switch to electronic presentations. “Sales are flat or slightly down,” she reports. “However, there is still demand for formal presentations. The technologies have become easier to use and can generate professional-looking materials with a differentiated look, allowing production to stay in-house.” The market is changing, no doubt, with plastic comb binders being phased out in favour of the more professional impression achieved from wire binding machines. However, as Pooley explains: “There will always be competing products and technologies, but there’s no reason why the tablet and a bound document cannot work in conjunction with each other. Presentation is of the upmost importance to all companies regardless of size.

“Professional-looking documents that are sent to a prospective client can be the difference between winning a new contract or not”

OPI Magazine | November 2015

and benefits, shortening start-up and warming times, improving anti-jamming performance, and developing better pouches.” And the market data is pretty impressive in the US, with The NPD Group reporting a 17% increase in sales of laminating products over the first nine months in 2015. In the UK, Nathan Dawes, Hardware Product Manager at VOW, also reports that lamination sales are performing well, with many smaller businesses and retail outlets now printing their own signage in-house. But, says Daniel Pooley, Rexel’s Auto+ 300M shredder International Marketing Manager at manufacturer Professional-looking Renz in Germany, a flood of budget documents that are sent to a machines coming onto the market prospective client can be the has been causing problems. “The difference between winning a new sector has become saturated with contract or not.”

Your OPI

5 minutes with...

Greg Welchans, President/CMO, Distribution Management/Supplies Network

Your first full-time job. Pouring concrete. The worst job you’ve ever had. Working for my father in a rock-crushing plant. If you weren’t doing your present job, what job would you like to be doing? I’d be a fly-fishing guide. The best moment in your career. Joining Distribution Management. The industry figure you most admire. Founder of Miller Business Systems, Jim Miller – he brought me into this industry. Your best piece of advice to a colleague. Watch whose ass you’re kicking because tomorrow you might have to kiss it – Mike Roell, formerly of United Stationers. Your greatest strength. Building industry relationships. Your favourite office product. The HP OfficeJet ProX printer line.

I don’t like unsuspected, business-related surprises If you could invite two famous people for dinner, who would they be and why would you invite them? Steve Jobs and Bill Gates. Amazing visionaries and innovators. Can you imagine the debate? Things that make you angry. I don’t like unsuspected, business-related surprises. My team is keenly aware of this! If you had to sing at a karaoke next weekend, which song would you choose and why? I Love This Bar by Toby Keith. The best book you’ve read in the last 12 months. Killing Patton by Bill O’Reilly and Martin Dugard. Which character from a film or TV series do you think most resembles you? Raylan Givens from Justified. Raylan is an unconventional, but highly dedicated US Deputy Marshal who gets things done.

Your favourite event on the OP circuit and why. City of Hope’s Spirit of Life Gala. It’s a great cause and I applaud our industry for coming together in support. What do you think will be the biggest issue affecting the OP industry over the next five years? General attrition in the consumption of office products due to technology shifts. What business/management book would you recommend as essential reading? Good to Great by Jim Collins. It’s been around a while, but it’s still my favourite. The first record you bought? Destroyer by KISS. Your favourite movie. Gladiator – because he’s the Gladiator. Your favourite holiday destination. Mackinac Island, Michigan.

OPI Magazine | November 2015

The most memorable travel experience you’ve had while in the OP industry. The trip to the FIFA World Cup in Brazil in 2014, hosted by HP.

Your OPI

Final word Your industry, your opinions

Mike Maggio, President, TriMega Purchasing Association

A response to Ralph Barnett AFTER

reading OPI’s October edition of the Final Word (‘RIP the office products industry, c 1900-2015’ , written by Ralph Barnett), I felt compelled to offer a response to his eulogy of our industry. I also could not help but to be reminded of the Mark Twain quote: “Reports of my death have been greatly exaggerated”. So I respectfully disagree, Mr Barnett. Sure, the office products industry looks very different than it did 115 years ago, but it is far from dead. I have had the unique opportunity, and frankly the privilege, to call this industry home for over 37 years. During that time I have been fortunate to have met, worked for and with, some of the smartest entrepreneurs and business executives that have worked in any industry. Today, as President of the largest buying group in North America, I continue to have the privilege of working in the industry that I love, alongside some of the most resourceful and resilient individuals I have ever encountered. Big deal, you might say, as I suspect my feelings about the people in this industry may not be all that different from the perspective and experience of anyone reading this column. But ultimately, in my view, the point is simple: the industry is changing. In the years I have been involved in it that has always been a true statement because business, demographics and North America are constantly changing. That is what makes both our industry and our countries great. Our industry, instead of withering and dying, has adapted and changed as necessary to remain vital and vibrant. The outstanding entrepreneurs, business owners and supplier executives that I work with today are adaptive, creative and persistent. They focus on the important things that make a business successful – their customers and their communities – and are creative and passionate about both. They come in all sizes and ages, but they have one thing in common: they are the best at what can be done in their respective areas and have continued to find ways to grow and prosper. Not one of these people would tell you they sell office supplies today; they sell business essentials, which means they sell the products, services and, most importantly, solutions that today’s changing businesses

need to operate efficiently and effectively. Crucially, they are willing to redefine that term almost daily. As workplaces and their customers’ needs evolve, they respond, retool and evolve with them. That is the mark of a successful entrepreneur and business leader, and I am happy to say our industry has many such folks in it today. Do we have fewer independent dealers today than we had five or ten years ago? Of course we do. The very nature of business and how it is conducted has changed significantly in the past 30 years – why would anyone expect our industry to be any different? However, the professionals that make up our industry today are just as savvy, and will be just as successful as any that have come before them. I agree with Ralph that the superstore concept is dead. That being said, our industry is as alive and as vibrant as ever. Today’s progressive independent dealers are injecting new, young talent into their organisations, they embrace technology, and they are excelling at going beyond office supplies, gaining market share from the national players as a result. Regardless of how it is defined, I am confident that the independent dealer channel will continue to command significant market share and will be an important supplier to businesses. That belief is not out of some nostalgic feeling based on my history in the channel. To the contrary, it is based on working closely with the independent dealer and key suppliers of today. I encourage anyone who thinks they understand the channel and its permutations to meet and talk with a cross section of today’s business leaders. I am confident they will come away impressed with the energy and creativity that exists today in our channel, and will clearly understand that we are not dead, but alive and well – and thriving!

“Our industry, instead of withering and dying, has adapted and changed as necessary to remain vital and vibrant”

OPI Magazine | November 2015

Want the Final Word? Email editorial@opi.net

IN THE NEXT ISSUE • Big Interview with Jeff Whiteway, Group CEO of SpicersOfﬁceTeam (SPOT) Group • FM Special – an in-depth look at this booming category