Opi october 263 us (b) by OPI

twenty five year anniversary

Office Products International

twenty five year anniversary

Big Interview

Connecting the

business products world

ISSUE NO.2 63

Aidan McDonough, CEO, Integra Business Solutions p16

October 2016

OctObEr 2016 www.OPI.NEt

TOP Whoâ&#x20AC;&#x2122;s made IOO the cut? p26

The burning issues in OP p22 HP disrupts copier market p9 E-com drives the mailroom p40

Contents October 2016

TOP IOO

www.opi.net

News

Events

6 Round-up

47 EPIC 2016

This year’s EPIC show, co-hosted by TriMega and Independent Stationers, is expected to be bigger and better than ever

PBS Network enters the UK; City of Hope fundraising record; Staples opens Workbar locations

9 News Analysis

49 OPI Global Forum

HP Inc’s disruptive move; Amazon Dash hits Europe with OP brands

Senior industry executives are gearing up for this high-level strategy forum. The event also features a special OPI 25th anniversary celebration

Features

16 In the thick of it

After a difficult couple of years, UK dealer group Integra Business Solutions is back on track with its new cooperative status. And CEO Aidan McDonough is upbeat and raring to go, with many new initiatives available to dealer members

22 The burning issues

What industry issues are keeping OP business leaders awake at night? OPI asks around…

26 Top 100

Category Analysis 38 Stamping

Innovation is key to a fresh sense of optimism in the stamping sector

40 Mailroom & Packaging

16 40

50 Where are they now? Ed Walper

52 5 minutes with...

44 The whole package

Alex Dunn

As e-commerce becomes more important, so increases the need for the appropriate packaging of goods, says Germany’s tesa

burning

issues

Regulars 5 Comment

It’s that time again for our OPI Top 100 list. We take a look at a small selection of top performers and new entries this year

The

E-commerce and technological advances are creating new opportunities in the mailroom and packaging sector

54 Final word Alina Fisher

“Technology-wise [Amazon] are way ahead of any of us, and they’re going to move fast. The dealers that are thinking about resiliency and the fact they’ve been around for 50 years or more and no one is going to knock them off – they had better have a game plan on how to do battle with Amazon, otherwise they’ll be in big trouble. And even if they do have a game plan and intend to do something, they had better do it quickly...” For the full story, turn to page 22

w w w.opi.net | OPI Magazine

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

Editor Heike Dieckmann

Comment

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

Deputy Editor Michelle Sturman

Final word

+44 (0)20 7841 2942 michelle.sturman@opi.net

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

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

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

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

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

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

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

Finance Kelly Hilleard +44 (0)20 7841 2956 kelly.hilleard@opi.net

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

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

OPI is printed in the UK by

The carrier sheet is printed on Satimat Silk paper, which is produced on pulp manufactured wood obtained from recognised responsible forests and at an FSC® certified mill. It is polywrapped in recycleable plastic that will biodegrade within six months.

CBP0009242909111341

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.

A couple of things in the media regarding Amazon Business caught my eye in the days prior to penning this comment. Firstly, court documents from the Staples/Office Depot trial earlier this year confirmed that Amazon Business is well and truly gunning for Staples and Grainger in the B2B supplies space – but I guess we kind of knew that already, didn’t we? But a second piece of news shows just how high Jeff Bezos is aiming. He has only gone and lured the US government’s top procurement officer to take on the newly-created role of Global Chief, Public Sector at Amazon Business. I can guarantee that That is some coup is the last comment I and, to me, is a sign that will make on this page Amazon Business is there about the Staples/Office or thereabouts with its Depot transaction suite of procurement tools and services needed to handle sophisticated federal government customers – and, therefore, private sector enterprise customers too. If that’s the case, isn’t it ironic that Amazon not being able to compete in the near term against Staples and Office Depot with large customers was a key reason why the merger was overruled? Anyway, I can guarantee that is the last comment I will make on this page about the Staples/Office Depot transaction. Just how can I be so confident about that statement? Well, over the past couple of years, I’ve talked a lot about the need to change, and now it’s my turn. I will be leaving OPI later this month after more than eight memorable years to begin a new chapter in my career. Wishing you all the best, 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

business products world

opi.net/ linkedin

@opinews

facebook.com/ opimagazine

opi.net/ app

w w w.opi.net | OPI Magazine

News ■ Round-up

News from opi.net

Large Resellers

Associations

Another record-breaking year for City of Hope fundraising The National Business Products Industry (NBPI) group has once again raised the bar in terms of its fundraising effort for the City of Hope cancer research centre and clinic. At September’s Spirit of Life Gala evening at the Navy Pier in Chicago, the NBPI presented a cheque for an incredible $14.3 million to City of Hope, meaning that it was another record-breaking fundraising year. Congratulations to Essendant’s Joe Templet – who, as the 2016 Spirit of Life Honouree, spearheaded the fundraising campaign – and to all those who contributed to this year’s amazing result. There was a thoughtful touch from 3M at the event – the manufacturer unveiled a giant 11 ft (3.3 m) portrait of Templet made out of Post-it notes as he collected his Spirit of Life award. The 2017 City of Hope Spirit of Life Honouree for the NBPI is Steve Schultz, President and COO of North America at GOJO Industries.

Joe Templet

Staples opens ﬁrst Workbar locations The first Workbar co-working areas located in Staples’ US retail stores are up and running. Staples announced the partnership with Workbar back in April and three stores in the Greater Boston area have now integrated Workbar workplaces. Each of the 2,500-3,500 sq ft (250-350 sq m) custom-designed facilities feature a mix of high-end workspaces, conference rooms, private phone rooms, fast and secure wi-fi and printers. Workbar at Staples membership costs $130 per month and includes use of a single Workbar at a Staples location and two days’ access to the 15 other Workbar Network locations throughout Greater Boston. Membership also includes two hours of reservable room access. For an extra $100, members can purchase an additional ten hours of reservable room access.

PBS Network conﬁrms UK market entry Germany-based e-commerce and data specialist PBS Network has confirmed its entry into the UK in a joint venture with Highlands’ European subsidiary. OPI understands that Highlands had been in talks with PBS Network since the beginning of 2016 about bringing the German firm’s PBSeasy portfolio of solutions into the UK office products channel. PBS Network was started in 1996 by four German office supplies manufacturers as a not-for-profit company, and is now firmly established as the de facto data service provider in continental Europe. Its PBSeasy product portfolio has expanded to cover four categories: marketplace, data, EDI and mobile. Leading the UK joint venture is Reuben Bradshaw, an experienced industry executive who has worked for Spicers, OfficeTeam, Office Depot and, most recently, Whittaker Office Solutions. Reuben Bradshaw

Technology Solutions 6

OPI Magazine | October 2016

Mergers & Acquisitions

Dacris buys imaging supplies reseller Romanian office supplies dealer Dacris has acquired B2B ink and toner specialist Echo Plus. The acquisition – for which financial details were not disclosed – was finalised on 17 August following shareholder approval. Echo Plus was founded ten years ago as a family project and now has a portfolio of over 2,000 customers. Based in the city of Timisoara, it operates two warehouses, one in its home town and the other in the capital, Bucharest. Dacris shareholder Dan Fati said that Echo Plus’ telesales business model aligned well with Dacris’ commercial structure, adding that the deal would build on the quality and the value Dacris Dan Fati delivers to its customers.

Clover CEO comments on sale rumours OPI spoke to Clover Holdings CEO Jim Cerkleski following recent reports that the company’s private equity owners were looking to sell their stake. Cerkleski told OPI that an article by Reuters claiming the company was exploring a sale was “misconstrued” and that, as it has done for the past 16 years, Clover was “evaluating additional investment partners”. He confirmed that the company had been talking to capital partners – as it regularly does – as it looks for financial sources to fund further growth, investments and acquisitions. OPI spoke to Cerkleski as he was returning to Chicago after a visit to Clover’s Mexican facility in Mexicali. This site has just been expanded with the addition of a new building. He also confirmed the commitment to the former MSE facility in Van Nuys, California, where the lease was recently renewed until the end of 2019. Jim Cerkleski Other investments include a major new project in Vietnam as part of the growth plans of the Clover Wireless division. The Reuters story about Clover came at the same time as a market rumour that aftermarket manufacturer Katun had been acquired by the Chinese Print-Rite group’s North American subsidiary. This forced Katun to issue a statement declaring that the rumour was “categorically false”.

IT & EOS w w w.opi.net | OPI Magazine

news n Analysis

HP Inc’s disruptive move HP Inc is looking to disrupt the A3 copier market after agreeing to acquire Samsung’s global print business

Confirming

market rumours, HP Inc has announced that it will acquire Samsung’s printer business in a $1.05 billion deal. HP says the rationale behind the acquisition is to disrupt the $55 billion copier industry by combining Samsung’s A3 multifunction printer (MFP) technology with HP’s own PageWide inkjet devices. “PageWide is unmatched in some applications, but we’ve always said that laser is better in other applications,” HP Inc CEO Dion Weisler told analysts during a hastily-arranged conference call following the news. “[This transaction will give us] an unrivalled value proposition.” HP said the copier market is a segment that “hasn’t innovated in decades” and further stated: “Copiers

Samsung is a relatively new entrant into the print market, and has annual printer sales of around $1.8 billion. Interestingly, the vast majority of that revenue is in the A4 laser space, not in the A3 market that HP is looking to disrupt. However, Weisler said this was an “acquisition for the future”, focusing on Samsung’s investments in A3 over the past few years, and the 6,500+ patents and 1,300 researchers and engineers that HP will also acquire.

Light years apart “Samsung’s machines are much less complicated [than traditional copiers] and they are light years [apart] in costs to service,” he claimed, adding that it would mean more reliable devices for customers and better margins for HP’s partners. Samsung will spin off its printing business – which includes a

“Samsung’s machines are much less complicated [than traditional copiers] and they are light years [apart] in costs to service” are outdated, complicated machines with dozens of replaceable parts requiring inefficient service and maintenance agreements. “Customers are frequently frustrated with the number of visits needed to keep copier machines functioning. Today, HP is investing to disrupt this category by replacing copiers with superior MFP technology.”

production base in China, 6,000 employees and 50 sales offices around the world – into a separate company as of 1 November 2016. However, the deal is not expected to close for another 12 months pending all the necessary regulatory approvals. In the meantime, HP Inc and Samsung’s printer unit will continue to operate as separate companies except for a commercial agreement that allows HP to market Samsung technology under the HP brand. In fact, HP released several new MFP A3 copiers that use Samsung technology at a launch event in Boston, Massachusetts, the day the acquisition announcement was made. It shows that the companies have already been working closely together for at least the past year or so.

HP Inc CEO Dion Weisler

‘Coopetition’ with Canon The move to acquire Samsung’s printer business has raised questions about HP’s long-standing relationship with Canon in the laser printer segment, where HP has used Canon technology under licence. Both HP and Canon were at pains to emphasise that the Samsung deal will not harm their relations. “We’ve been the closest of partners in laser and fierce competitors in inkjet,” said Weisler, adding that this ‘coopetition’ type of relationship would continue. “This is all about the A3 copier market,” he reiterated. In fact, the move will benefit Canon to some extent, with Samsung’s A4 laser printers to be rebranded as HP (except in Korea) and to transition onto the Canon technology platform when the transaction closes. Nevertheless, print industry insiders have already alluded to “a shift in power” in the HP/Canon relationship, with HP having much more leverage once it acquires the Samsung proprietary laser technology. And despite the positive spin that Canon and HP are putting out, the fact that HP will be able to benefit from an integrated laser solution after it acquires Samsung, does put the long-term future of their relationship very much in doubt – especially as they will now be fierce rivals in the A3 copier space. w w w.opi.net | OPI Magazine

Office supplies brands are taking the lead with the European roll-out of the Amazon Dash Button ordering device

Internet

giant Amazon recently announced the availability of its Dash Button in the UK and Germany following its launch in the US in April 2015. The Dash Button is a wi-fi connected thumb-sized button which allows customers to order specific, branded products with just a single press, eliminating the need to order via a computer or smartphone. More than 100 brands in the US have already been attracted to the initiative, which is only available for Amazon Prime members. US customers pay an initial fee of $4.99 for each button, but this amount is then credited to their first order, meaning the button is essentially free. It’s a similar concept in Europe, with Prime members paying £4.99/€4.99 for the button. About 40 brands are involved in the launch in the UK and Germany, and the products are not just confined to household consumables such as nappies (diapers), washing powder and pet food.

that technological innovation is reshaping the way consumers purchase goods, and that it is important that vendors such as ACCO Amazon’s are in the vanguard. Echo speaker “The Dash Button is an excellent development which means consumers no longer need to run out of their essential office products,” he noted. Amazon also introduced its Dash Replenishment Service (DRS) in the UK and Germany. DRS enables connected devices such as printers and soap dispensers to order consumables automatically when supplies run low, with human intervention only required to validate an order. One of the first companies on the DRS programme in Europe is

“The Dash Button is an excellent development which means consumers no longer need to run out of their essential office products” OP brands in the vanguard Office products manufacturer ACCO – which is already involved in the US programme – has a Dash Button for several of its brands in both the UK and Germany, while label manufacturers Avery-Zweckform and Herma have them on the German site. Chris Gaskell, ACCO’s Marketing Director for its Office Products Group in the EMEA region, told OPI the manufacturer recognises

printer manufacturer Samsung, with a number of its home office printers and multifunction devices compatible with the service. Shortly after the Dash/DRS announcements, Amazon confirmed that its voice-activated Echo device – which uses its proprietary Alexa artificial intelligence (AI) engine – would also be coming to Europe. Reacting to these developments, Mark Skilton, a Professor of Practice

at Warwick Business School in the UK, and an expert on technology and the Internet of Things (IoT), commented: “[The Dash Button] is not the Amazon Echo/Alexa system as there is no interaction with the user, but it’s another step in the direction to automation [which one day] will be ubiquitous.” Skilton views the Dash Button as a temporary solution, but still a key step in Amazon’s connected ordering journey. “It’s still the early days of IoT, but it is going to be huge in the way everyday objects will become ‘intelligent’ and ‘smart’, enabling object-to-object ‘talking’ to optimise various outcomes.” He called Amazon Echo “a very significant development in the rise of the connected home that is one of the major next waves breaking as we move from the PC and mobile era to the smart devices in the home, work and [other] places”.

Technology-enabled OP ordering While Amazon is grabbing the headlines, office supplies operator Staples has also been working hard to provide more convenient, technology-enabled ordering options for its customers. It is currrently testing an ‘intelligent’ version of its iconic Easy Button and has been investing in areas such as voice recognition and AI. While many smaller resellers are still trying to get to grips with adding mobile ordering capabilities, it looks like the next generation of ordering – through AI and connected devices – is already upon us.

w w w.opi.net | OPI Magazine

news n Analysis

Amazon Dash hits Europe

News ■ And finally...

Comment OPI asked industry members in its Q3 OP Business Confidence Survey what impact they thought the current political and economic climate – Brexit, US elections, terrorism, etc – will have on their businesses over the next six months. Below is a selection of the anonymous responses. I see major consolidation within the next six months to obtain market share and an uptick in sales growth. I also feel we may see manufacturers either go the way of the dinosaur, or alternatively more mergers and acquisitions. North American dealer group If Donald Trump is elected it will be a disaster for the USA in every way, including the economy. North American manufacturer rep group Brexit could potentially decrease market demand; expectations are around -3%. European manufacturer We always see unusual craziness in a presidential election year. I expect issues no matter which side wins. North American reseller Markets have a tendency to be very reactive when a change occurs politically. I was shocked about the Brexit result, but whether this will mean big changes to trade, I don’t know as yet. In relation to the US election, we also don’t know how the markets will react depending on the result. With regards to terrorism, this has an affect on businesses and travel, which in turn affects growth. This could be a major barrier to economic growth in Europe in my opinion. It could also slow down trade due to increased security checks – customs and otherwise. European reseller I expect a slight dip in the economy due to the distraction of the US elections and the accompanying fearmongering by the politicians. But once the election is over it will (hopefully) be business as usual. North American technology solutions provider Local factors are more likely to have a disruptive effect than international influences. Asia/Middle East/Africa manufacturer rep group I don’t think any specific current events will affect Australia in a substantial way. Australasian dealer group

OPI Magazine | October 2016

TWEET CHAT follow us on Twitter @OPInews, @andy_opi

@geoffreybetts Great evening with the Rubber Stamp Guild at the Swan at Streatley. Forgot how late they go to bed. @MikeJames40 Great open day at Stationers Hall with 1,300+ visitors @uniball_uk Always embarrassing when you realise you’ve forgotten how to use a pen! #HandwritingFail #ModernLife #Stationery @LEGO_Group Rise and shine! It’s that time of the year #BackToSchool

$87 billion+

Expected sales of office stationery and supplies in the US from 2016-2020

Expected growth (CAGR) of global school stationery between 2016-2020

$95 billion

Estimated value of the global managed print services market by 2024

5.5%

Expected growth (CAGR) of the global office furniture market between 2016-2020

SNAP SHOT Australia-based Yell Design – the country’s first dedicated Vine studio – has created some delicious-looking meals using only paper and office supplies. From penne meatballs and ramen, to fish & chips and a banana split, the results are amazing as the ‘meals’ are created from scratch and served. Check out the videos at http://papermeal.com.

opi.net poll results Which of the following is the hottest issue in the OP industry right now?

9% 10%

14%

53%

14% Amazon/e-commerce M&A activity Workplace digitisation Staples/Office Depot fallout The economy

Big Interview | Aidan McDonough

In the thick of it After a tumultuous couple of years, UK-based dealer group Integra Business Solutions is firmly back on track and CEO Aidan McDonough is raring to go with new initiatives and deals, all in an effort to make the dealer community more competitive

OPI Magazine | October 2016

Integra Business Solutions | Big Interview believe the best interests of independent dealers would be served by private ownership. We’re now a cooperative that will continue to focus on providing services and solutions to dealers; we believe this is the right way to run it – the group was created by dealers and is now effectively run by dealers.

Interview by Steve Hilleard Edited by Heike Dieckmann

Dealer

groups have become powerful beasts in our industry. They help independent dealers cope with and embrace the many challenges thrown at them: a tough and ever-more expansive competition, a changing, widening and more demanding customer base, and deepening cost and margin pressures, to name but a few. Integra Business Solutions is one of the UK’s leading groups, headed by CEO Aidan McDonough. Deeply passionate about the present and future state of independents – not just in the UK but globally through his role as Chairman of buying group consortium BPGI – McDonough has devoted his entire career to the dealer cause. Well-liked, outspoken and hugely knowledgeable about the independent community, he is standing proud at the helm of a group that has won numerous accolades for outstanding dealer engagement and success, not least this year’s European Office Products Award for Dealer Group of the Year. All that said, it’s been no walk in the park, with the group only last year having emerged from a tough couple of years of ownership battles. But that’s in the past now, says McDonough, eager to move on and address the issues that matter to dealers. Four years after our last Big Interview with McDonough, OPI’s Steve Hilleard caught up with him to find out what exactly these issues are and how they’re being tackled. OPI: Let’s start with some fairly recent history. The acquisition of Integra by this unknown character William Good caused a bit of a stir in the summer of 2015. Even more eyebrows were raised when there was another announcement shortly after about Integra members buying the group back from Good, resulting in the cooperative model that you have now. What was the background to all of that? AM: Well, it was quite a challenging time for a sustained period. We had spent the best part of two years trying to acquire the business from Reflex Holdings – a diverse set of shareholders including some former OP dealers and private investors – but the holding company decided to sell it to an individual, namely William Good, in June of last year. We managed to convince Mr Good that we didn’t

OPI: You’ve done a good job over the past 12 months or so communicating with your dealers and marketing your services to them. I guess one notable side effect of this was Integra winning the European Office Products Award for Dealer Group of the Year in March. It’s not the first time you won it, but it must be particularly pleasing after a tough period. AM: Yes, we were absolutely delighted with it, especially when you look at the competition, like Quantore, that we were up against. It’s also gratifying for the whole team to see their hard work rewarded on a European stage. We certainly had a few drinks to celebrate.

Integra Business Solutions Founded: In 1997 as a result of the merger of buying groups NDA and Instat Business model: Cooperative – owned by its members since the acquisition in 2015 from private investor William Good. Members are split into five divisions based on revenues and specific product focus. The five divisions are: Alliance, Aspire, COG, Directory and Gold Members: 250 in the UK and the Republic of Ireland; combined revenues of £450-£500 million ($594-$660 million) Staff: 30 Product portfolio: Core office products, print, furniture, jan/san, personal protection equipment and catering

OPI: And there have been plenty of initiatives that you have launched. You have recently entered into a relationship with Vistaprint, for example, whereby your members have access to Vistaprint’s professional print fulfilment solutions via a branded online store on their websites. How’s that panning out? AM: It’s still early days. We’ve put together between 20 to 30 sites for dealers so far; they are all bespoke for those that want to engage with this. I haven’t seen any metrics yet, but I think the opportunity to diversify is critical for dealers. It’s a great platform with a varied product offering that can also be customised. OPI: Integra is also very involved with workwear and safety products, particularly so through your recent partnership with Portwest Clothing. How important is that category? AM: To be fair, Portwest is just the latest in a series of 20-30 vendors in adjacent categories that we’ve introduced over the past few years. It’s a natural extension for dealers, but there’s definitely a learning curve for those that want to get involved, as it moves away from customer service to project management. But we have had some success with it and we’re enthusiastic about the opportunities. OPI: Are you finding that dealers can quite easily grasp those opportunities – and the sales – and are adapting to those new demands? w w w.opi.net | OPI Magazine

Big Interview | Aidan McDonough AM: That’s a tough call, because I don’t think this is necessarily low-hanging fruit. There are a whole variety of issues in terms of product management and e-commerce data management, for example. Then there’s the need for training and for marketing collateral… What we do at Integra is to put all these things together in very simple packages to make it easier for independent dealers to actually embrace them. It’s not easy, but it’s a commercial imperative to get more products into the same customers. OPI: You mention marketing, an area where Integra has been very successful. I believe you have a close relationship with TriMega in that regard. What are the similarities – or otherwise – in terms of marketing approach for dealer groups in North America and the UK? AM: Yes, we’ve worked closely with Mike Gentile and Greg Fish within BPGI for many years and we have a close relationship with TriMega. There are lots of similarities, but one of the things we were discussing in some detail very recently is the absolute need for dealers to embrace technology more. One thing specifically that we’re working on at the moment is webinars. So following on from putting these packages together that I mentioned in terms of workwear or 3D printing, for example, we’re creating training sessions in the form of webinars that enable us to offer remote training to dealers via this platform. OPI: This is not new technology... AM: No, it’s not, but you need to do it properly for it to be effective and that’s what we’re doing. OPI: OK. You also make reference to 3D printing which is another area you got into through your deal with Centrex Printing Services. Is that a bit niche or is it an opportunity for every dealer? AM: We’re concentrating on the education sector for now where 3D printing is forecast to grow massively, so we have introduced a couple of entry-level models for now. As such it’s relevant for those dealers that are active in that sector. OPI: Another bit of news that came out recently is your alliance with Australian dealer group Office Brands. What does that alliance actually mean? AM: The essence of it is that Office Brands is now allowed through a licensing agreement

OPI Magazine | October 2016

“It’s not easy, but it’s a commercial imperative to get more products into the same customers”

to launch our Initiative own brand range of products in the Australian market. We will also be sharing marketing collateral with Office Brands, such as email templates that we produce for our dealers in the UK, catalogue artwork or even things like price lists – basically anything that we are already doing and can pass on to reduce the workload for Office Brands. And, of course, it’s a reciprocal arrangement and where we know that Office Brands is doing something innovative and new that we’re not, we’ll share that too. It’s a really exciting sharing initiative. OPI: It sounds great, but isn’t that the type of initiative you should have more of under the BPGI umbrella anyhow, given the close contact that you have with all the groups? AM: Yes and no. We’ve looked at this in some detail over the years, and we worked together with TriMega and some of the European buying groups in terms of sharing intelligence, joint sourcing, etc. This is the next logical step going forward and we’d like to take this type of arrangement into continental Europe. And clearly, we have been able to do this through our membership in BPGI. OPI: Before we head into Europe and talk about the inevitable topic of Brexit, let’s stick with BPGI for the moment. You are currently the Chairman, something of a poisoned chalice some might say. BPGI has come under the spotlight quite a bit in recent times and either nothing much is happening or you’re being very quiet about it. Where is the organisation headed, strategically speaking? AM: There have been some structural changes in terms of moving the business from the US into Europe. The accounts and operational functions are now run through the UK, thereby reducing the cost base. We have secured all the vendors for 2017 and a large proportion for 2018 as well, and

Integra Business Solutions | Big Interview we’ve now got three new vendor agreements coming online in adjacent categories. Additionally, we are continuing to develop other areas of member support. The fact that the members unanimously voted to continue in BPGI in 2017 means they are comfortable with the speed of changes at the moment, and we feel there is a positive climate currently within the membership. OPI: But it doesn’t sound much like a strategy, and more like a logical progression of what you’ve always done. AM: It’s true in the past 12 months nothing radical has happened. But we continue to have good relationships with the vendors and close working relationships with each of the groups. So much so that the BPGI agreements help drive improved support for the vendors. As a result we see growth in many areas. It’s more of an evolutionary rather than revolutionary journey and I’m actually quite comfortable in terms of where we’re going. Let’s not forget that we have had one new member this year and we are currently in serious dialogue with some others since the change in our policies and membership criteria. We have rebranded the organisation, launched a new website, and have a significantly more proactive PR offensive. But fair point, we could be better at explaining what our strategy is and I’ll take your observations on board. OPI: Moving on to Brexit – what does it mean for the British business products industry and your members? AM: For a start, the exchange rate volatility doesn’t help and this puts massive pressure on the UK in terms of imports. There isn’t really much of a discussion to be had about UK manufacturing in the OP sector, therefore the effect of a weak pound sterling would be price increases and the challenge on the part of independents of passing those through to the consumer. We’ve seen a couple of price increases come through on the wholesaler side. And generally, the notice periods are becoming a lot shorter than they once were. Price increases used to come through on a quarterly basis, but with this level of volatility you can’t do that. OPI: But didn’t UK wholesaler Exertis say just recently that they were going to hold prices right through to next year? AM: I think so, but we don’t have a contract with Exertis, so I don’t have any details. We’ve done the same with our Initiative brand and

Aidan McDonough fast facts:

• Post graduate diploma in Export Marketing • Joined buying group NDA in 1994 as Marketing Manager • Appointed Marketing Director of Integra Office Solutions in 1998 • Promoted to Managing Director in 2007 • Currently CEO of Integra Business Solutions

the intention is to try and hold the price to the end of this year. All in all, it’s too early to predict anything in my opinion. I don’t think we’ve seen any real effect of Brexit yet and we need to wait until Article 50 has been enacted. The stock exchange will only react with anything that we can reasonably take away once we have a proper timetable of events. Let’s just hope it’s not going to put us back into recession like some high-level predictions forecast. It’s the uncertainty that’s bad because that’s when people start putting off capital investment and that’s not what we need, particularly for our larger dealers that have a big furniture business, for example. OPI: Let’s talk about wholesaling, a fundamental pillar of the UK industry, but also one where there’s been plenty of disruption. Integra enjoys relationships with both of the primary wholesalers, Spicers and VOW. What’s your reading on where we are at the moment? AM: I actually think we’re in a very stable period. As for performance – and I’ve said this before – it’s off the scale what these guys are capable of providing dealers with in terms of the number of SKUs, delivery schedules, etc. We’re in a good place and I firmly believe that we need two strong, healthy and dynamic wholesalers because they play a pivotal role in the independent dealer community. OPI: I agree with you on their service level capabilities, but I’m not sure either is financially that healthy – that must be a concern for anyone relying on them. w w w.opi.net | OPI Magazine

Integra Business Solutions | Big Interview AM: But we’re seeing plenty of activity to enhance the performance of these businesses in terms of focusing on going back to basics and not trying to be all things to all people. Integra certainly proactively supports these guys because they are the lifeblood of independent dealers. As for the financial side, if over the next 12-18 months they can get over the various hurdles, we’ll be in a better place overall as an industry I believe. OPI: Can you envisage a situation where those two businesses are combined? They are both essentially hybrid models with a reselling division, owned by private equity firms. AM: I don’t think a monopoly would be a very good idea. OPI: But it wouldn’t be a monopoly if you consider some of the other players like Antalis, Exertis and Beta that are all supplying product. AM: They would still be highly dominant though. I thought it would happen two or three years ago that those two could potentially come together. There are a lot of logical synergies, but it depends on whether the people in charge have an appetite to do it and then also on whether it would get through the UK Competition Commission. OPI: Does it surprise you that dealers in general have accepted their primary wholesalers are also involved in direct selling operations? AM: It’s been a challenge I agree, but in fairness to both I think they’ve managed it quite sensibly. It shouldn’t happen in an ideal

world, but the reality is it brings economies of scale and that makes them viable operators. OPI: Lastly, you had your annual conference just before we went to press with this interview. What were the key topics that you talked to your dealers about during that event? AM: Succession planning is a big topic. There’s no simple solution other than to advise dealers to seriously look at training within their management teams and their overall business. The challenge is particularly prominent for our industry because we’re such a long-established sector and therefore we have quite a sizeable proportion of senior – and therefore older – people. One way ‘out’ of course is to merge with another company or be acquired. We can help with that and have got very hands-on experience with that. In that context, it will also be interesting to see what happens with the so-called super dealer category that we see emerging. Is their growth sustainable? There are a lot of people who are really passionate about what they do, but we need more of those in our industry to take it forward. The world’s not coming to an end because of Brexit or because of a competitive landscape. We are all well aware what the predictions were for independent dealers back in the 1990s and guess what – many of them are still here, better and stronger. There’s plenty of business out there and Integra is doing very well, so I’m confident for the future. Look out for the November issue of OPI where we will take an in-depth look at the topic of succession planning.

“There are a lot of people who are really passionate about what they do, but we need more of those in our industry to take it forward”

w w w.opi.net | OPI Magazine

Hot Topic | The big OP issues

The

burning issues What are the ‘hot’ topics occupying the minds of busy business supplies execs and industry experts? OPI asks around…

The view from Europe by Andy Braithwaite andy.braithwaite@opi.net

INDUSTRY

consolidation, big-box retrenchment, secular declines in traditional categories, the digitisation of the workplace, Amazon and the rise of the e-commerce channel, reducing complexities and costs to serve, recruiting and retaining talent – these are just some of key issues in the business supplies world today. But what is the one topic that is top of mind; the thing that wakes industry leaders up at night in a cold sweat and leaves them in a state of fear and trepidation? OPI has asked a number of well-known OP figures to share their views.

The view from ‘down under’ Andrew Penfold has been involved in the Australian office products industry for decades and is recognised as the market’s leading source of research. For him, the biggest issue for dealers is choosing the most appropriate new areas to expand into. “For most of them, it’s non-core business categories such as kitchen/canteen supplies, cleaning/janitorial and workwear/safety,” he says. “I think these offer the most growth potential for the average dealer because they have a good degree of compatibility with core OP, dealers generally have low shares, and the growth outlook is positive.” However, while he recognises that many dealers in our industry are actively targeting these categories and making investments, it’s often a slow and complex process. “It means coming face to face with new Andrew Penfold competitors, having to re-strategise, and generally stretching resources,” he adds. “It’s important to prioritise because there is a danger of spreading resources too thin and not being effective.” But the stakes are high, he says: “If dealers aren’t effective in expanding into these areas, they will suffer ongoing declines as core OP shrinks. So really, their survival is under threat if they can’t pull it off.”

OPI Magazine | October 2016

Former EVO Group CEO Robert Baldrey – who is still very much in touch with the industry, for example as the moderator at next month’s OPI Global Forum in Chicago and the keynote speaker at the recent BPGI conference in Rome – and Jan Van Robert baldrey Belleghem, Managing Director of distributor/reseller alliance Interaction, both feel there is one key issue in Europe right now: what happens to the European operations of Staples and Office Depot. While they agree that this is more of a short-term issue, with an estimated €4 billion ($4.5 billion) in annual sales at stake, it is a situation they are watching with great interest. “We’ve talked before about e-commerce and the need to diversify into new categories, but on a European scale, having this huge amount of business about to change hands is, for me, the number one topic at the moment,” says Van Belleghem. What exactly will happen is open to speculation, but it appears likely that both Staples Europe and Office Depot Europe will end up in the hands of private equity investors. “There is really no one in the trade in a position to acquire them,” notes Baldrey. “Lyreco has its hands more or less tied due to the European Commission and its antitrust laws, and the two big groups in the UK are already owned by private equity firms looking more at an exit than making more investments.” Van Belleghem points to negative impacts following the eventual sell-offs such as job losses and further restructuring while Baldrey sees the restructuring and possible future divestments or spin-offs as a positive development for the competition. He also thinks it could lead to more pricing rationality in the market. “Both Staples and Depot are known for ‘killing’ each other in the contract space,” he says. “If you’ve got two financial buyers and they both decide to get more sensible about the margin that should be earned, that should help everybody.” Jan Van belleghem

The Big OP Issues | Hot Topic

“Amazon is a really big deal and far more threatening, I believe, than the emergence of Staples and Office Depot all those years ago”

The view from a US dealer Dave Guernsey needs very little introduction; he falls into the ‘industry icon’ category when referring to the US – and global – independent dealer channel (IDC), and is forging ahead with the development of his own dealership, Virginia-based Guernsey, one of the largest dealers in the US. For him, the current big industry issue is a no-brainer. “It’s Amazon, no two ways about it,” he says. “These guys are everywhere, and when people tell me they [Amazon] are not going to get down to the localities, well, that’s just ridiculous.” He continues: “There is an opinion that Amazon’s new hire [Anne Rung, the US government’s top procurement officer] means they are going after the Schedule 75 and OS3 [federal contracts], but that is hardly the complete extent of what they are doing. Their public sector marketing is not only at the federal level, it’s also at state level and now they’re drilling down into the local government and school levels. We’ve already got them in school systems in our area.” The IDC considers itself – and rightly so – a resilient bunch, having dealt with major obstacles over the years such as the growth of the office superstore and the big-box players. But Guernsey believes Amazon presents a whole new set of challenges, and warns against complacency. “Amazon is a really big deal and far more threatening, I believe, than

the emergence of Staples and Office Depot all those years ago. You not only have the services side which they are rolling out in a significant fashion and things like next-day, same-day delivery, usage reports, e-procurement integration, etc, which is what we all do now. You also have them rolling this out to a generational change; millennials in the workforce – who are moving now into decision-making positions – are almost knee-jerk when it comes to using Amazon.” He also points to the speed at which Amazon moves. “Technology-wise, they are way ahead of any of us, and they’re going to move fast. The dealers that are thinking about resiliency and the fact they’ve been around for 50 years or more, and no one is going to knock them off – they’d better have a game plan on how to do battle with Amazon, otherwise they’ll be in big trouble. And even if you do have a game plan and you intend to do something, you’d better do it quickly.” So, what can be done? “We are working on that,” says Guernsey wryly. “We’re looking at what it is that we do well, do differently, and what we might pivot to? “For example, I’m not looking at acquisitions of office products companies; I’m looking at acquisitions in the jan/san space, especially where the business has a floor-cleaning machine base as well as servicing of

Dave Guernsey that base. I’m also looking at furniture acquisitions, because at the end of the day, I want value-add. When it comes to OP, there is no value-add – you don’t have to teach anybody how to use a file folder!” Guernsey also gives the example of the breakroom category, which his company first entered about 15 years ago. “We make the equipment available to our customers free of charge; what they have to do in return is buy our products,” he says. “So we install, maintain, repair the equipment – brewers, coolers, fridges, etc. In other words, it’s about programmes in categories where there is a real value-add component.”

How do US dealers view the Amazon threat? Martin Wilde Associates and OPI recently published the US version of The Phoenix Report which focuses on the state of the independent office products channel. One section of the report looks at Amazon, its impact on the dealer channel and how these resellers are responding. The table on the right shows that only 4% believed that Amazon has made no impact on their business. 23% of dealers believed that Amazon had taken a small (<10%) share of their business, while another 6% claimed that this loss was over 10%. A considerable 38% of dealers said that they had specific requests from customers to match Amazon prices. For more details on how dealers are responding to the threat of Amazon and to order ‘The Phoenix Report’, please visit: www.opi.net/phoenix

No effect: we come across them but see no impact on our business

A positive effect - we are an Amazon Marketplace trader

58%

We may have lost sales to Amazon, but the extent of this is hard to quantify

38%

Requests by customers to match prices found on Amazon

31%

General pressure on our prices and margins

23%

Small (<10%) decline in sales values

Pressure to extend product range to match that of Amazon

Large (>10%) decline in sales values

Pressure to supply next-day delivery service

Pressure to supply same-day delivery service

Other

What impact is Amazon having on your business? Source: MWA

Don't know

w w w.opi.net | OPI Magazine

Hot Topic | The Big OP Issues

The view from a UK manufacturer Geoff Betts is the Managing Director of UK-based vendor Stewart Superior and the current Chairman of the country’s trade association, BOSS Federation. As far as he’s concerned, we are living in unprecedented times. “The one thing that keeps me awake at night is that, for the first time ever in my business career, I have no idea where the industry is going!” he states.“I don’t think my customers know either – if they do, they haven’t shared it with us,” he continues. “Most of them seem to be in trouble in some shape or form and there is no finance in the market.” Betts points to recent industry figures that show an 11% decline in the B2B market for office products in the UK over the past year. “We are suffering from a decline in the market and that probably has a lot to do with it,” he adds. “Companies are run by private equity firms as opposed to being privately held, so they are looking for a different kind of return on their investment; that has moved the goalposts as well, and the people we deal with are under much greater pressure than they used to be.” Although Betts says he doesn’t want to paint too grim a picture, he is predicting “massive problems” coming in the next 12 months. “Dealers will go out of business and we will see further consolidation,” he warns. So what can manufacturers like Stewart Superior do? The company has already been diversifying into new product categories and working outside its traditional customer base, but Betts also notes a change in the relationship between the vendor and its office products reseller customers. “We are working more closely with them and even advising them on which new categories they should be selling to make money and margin. To me, that’s a sign that everybody has to work more closely together.”

“For the first time ever in my business career, I have no idea where the industry is going!”

Geoff betts

OPI Magazine | October 2016

The view from a US dealer group Mike Gentile has been CEO of US dealer group Independent Stationers since 2004 and has never been one to shy away from expressing an opinion on where the independent dealer channel (IDC) needs to go. “If I look at the entire industry and think about a common issue that is affecting manufacturers, wholesalers and dealers, it is about achieving relevancy and gaining value for their respective shareholders and customers, but not doing that at the expense of each other,” he states.

“I think too many people are trying to keep everyone happy”

Mike Gentile “I think there is a lot of cannibalisation within the channel in these three entities. The sooner they come together and realise that the competition is not each other, it’s Amazon, Staples and Office Depot, the better off all three will be.” He continues: “I think too many people are trying to keep everyone happy, but at the expense of each other. As opposed to coming up with a strategy and implementing it, there are a lot of what I call ‘herky-jerky’ short-term, short-sighted strategies in an effort to increase market share.” Gentile says he is “desperately trying” to get the IDC to work together. “As I said at a recent industry event, ‘Let’s stop complaining and all work together’.” So what’s his advice? He believes that manufacturers should refrain from implementing “sales strategies that dilute their brand and cannibalise the IDC” and calls on wholesalers to stop competing against their dealers “because that is the only way they think they can achieve growth”. “I would also like to see dealer group consolidation,” he concludes. “We have four groups [in the US] and that is too many.”

TOP IOO

Special Feature | Top 100

Who’s in this year’s OPI Top 100? From familiar, long-serving executives to new entrants who have made the cut as a result of a number of key senior leadership changes, it’s an eclectic mix and in these pages we’re profiling a small – but influential – selection

IT’S

that time of the year again when Executive Director), Ron Sargent (formerly we publish our latest OPI Top Staples CEO) and Jim Ryan (formerly CEO of 100 list of the leading influencers from the Grainger) all the best after many years at the global business supplies reseller community top of their respective trees. – comprising mega resellers, independent dealers, dealer groups and wholesalers. Power play As we have done over the past few years, Amazon Business’ Prentis Wilson powers we are featuring a hand-picked selection into the Top 100 extended magazine entries of 12 noteworthy extended entries for this this year after the unit reported $1 billion in magazine issue, with the full list appearing sales just 12 months after its rebrand from on opi.net, updated on an ongoing basis AmazonSupply. With grabbing office products throughout the year (see page 36 for the and MRO supplies market share a top priority complete list of names). for Amazon Business – in both the private and Factors such as leadership changes and public sectors – it is certainly one to watch, industry consolidation mean that there especially as the concept is expected to are always new faces appearing in the Top expand internationally in the near future. 100 – and familiar ones departing – and this Finally, the business products industry year is no exception. Despite all the chopping has always proudly supported good causes, and changing we always seem to be reporting and it’s great to see two of our magazine on, there are still many organisations where entries this year – Danièle Kapel-Marcovici stability is a watchword and leadership of Raja Group in Europe and Dominique longevity prevails. Lyone of Complete Office Supplies in But this year we have seen a number of Australia – continuing to support charities industry veterans stand down, and we wish and humanitarian projects through their stalwarts such as Bud Mundt (formerly AOPD own foundations.

OPI Magazine | October 2016

Top 100 | Special Feature shIrA GOOdmAn InTerIm CeO | sTAPles

merI C •A

A As • me

It’s been a time of change at Essendant over the past few months as CEO Bob Aiken comes to grips with a number of key issues such as the soft market environment for office and industrial supplies, the continued secular declines in the traditional office products category, the growth of the e-tail channel and accelerated industry consolidation. It would be fair to say that the wholesaler’s second quarter results took Aiken and his team somewhat by surprise. The lower-than-expected sales and earnings sent the company’s share price tumbling by around 30% in July and it hasn’t recovered since then. Nevertheless, Aiken remains committed to Essendant’s long-term strategic goal of being the leading online wholesaler of workplace essentials. What is changing in 2016 is a stronger focus on gross margins – this will mean changes internally to drive cost and productivity improvements, and aligning more closely with key suppliers and reseller partners to add more value for Essendant. One early example of this alignment was a strategic partnership with dealer group TriMega that includes the wholesaler producing the group’s marketing from next year. Aiken has also wasted no time in shaking up Essendant’s organisational structure and cutting out management layers so that he has a better line of sight through the business. The wholesaler is now organised around its two main customer channels: business and facility essentials, and industrial essentials. Harry Dochelli was promoted to take charge of the Business & Facility Essentials division while Ric Phillips is leading the Industrial Essentials unit.

rIC me As

As rIC • A

BOB AIken CeO | essendAnT

Shira Goodman has been in the hot seat at Staples since long-standing CEO Ron Sargent stepped down in June, shortly after the proposed acquisition of Office Depot was scuttled. Currently occupying the CEO role on an interim basis, Goodman has the backing of Sargent to take over on a permanent basis, but that is a decision that will be taken by the board of directors in the coming weeks. Goodman has been with Staples since 1992 and she has assembled a leadership team of seasoned company veterans – including Joe Doody, Neil Ringel and Steve Matyas – to execute the reseller’s latest 20/20 strategic plan. This plan aims to transform Staples into a B2B delivery-focused company operating principally in North America. Once implemented, more than 95% of Staples’ sales are forecast to come from North America with an 80/20 split between delivery and retail. That means the sell-off of Staples’ European operations – set to be announced shortly – and possibly in other markets too. The reseller is also on a fresh acquisition drive targeting North American independent dealers as it looks to take share in the mid-market space, particularly in categories beyond office supplies. Goodman says the company intends to double its mid-market sales force from a number of 1,200 at the start of 2016, and has added more than 100 reps since then. Key investments have been made in enhancing digital capabilities as Staples looks to fend off the growing challenge of Amazon in the B2B space. Being able to provide a differentiating customer service proposition from the e-tail behemoth will be crucial to Staples’ future success.

As rIC • A

A As • me

merI C •A

TOP IOO

w w w.opi.net | OPI Magazine

Top 100 | Special Feature rOlAnd smITh CeO | OffICe dePOT

merI C •A

A As • me

DG Macpherson is one of the newcomers to this year’s OPI Top 100 list as CEO of Grainger, this month filling the large boots of his predecessor Jim Ryan who’s assuming the Chairman role. But Macpherson is no stranger to the global MRO and business supplies reseller, and is well-placed to succeed Ryan. Even before he joined Grainger in 2008, he had close dealings with the firm through Boston Consulting Group, where, in his role as Partner and Managing Director from 2002-2008, he served as a consultant to Grainger on a number of strategic and operational efforts. Before being made COO of the reseller in August 2015, he was SVP and Group President of Global Supply Chain and International, where he led the development of corporate strategy and continuous improvement, the global supply chain organisation, the company’s single channel online business model and international operations in Asia and Europe. All that will stand him in good stead for his new role. Ryan himself oversaw significant investment in the firm’s supply chain and IT infrastructure, both of which contributed to the company’s growth in revenues from $5.9 billion in 2008 to $10 billion in 2015. However, Macpherson also comes in at a time when the firm’s Q2 results showed a 4% drop in US sales, and an 8% operating profit decline. Like other big resellers in the business supplies sector – notably Staples and Office Depot – one of Grainger’s answers to top-line and margin pressures comes in the shape of a push into the lucrative mid-market segment. A further ongoing focus area for Grainger is its online channels where it continues to do well.

rIC me As

As rIC • A

dG mACPhersOn CeO | GrAInGer

Roland Smith’s three-year tenure as CEO of Office Depot is coming to the end after he recently announced that he would retire in the first quarter of 2017. When he joined Office Depot in November 2013, the plan was for him to stay for three years to complete the integration of OfficeMax, but that project has been delayed by about 12 months due to the prolonged and ultimately unsuccessful acquisition attempt by Staples. Nevertheless, Smith, who recently turned 62, has made the decision to leave in order to fulfil a number of personal goals – including an ascent of Mount Everest – while he is still physically fit, although he is expected to remain as Chairman of the Office Depot board. Despite being dogged by growth challenges, he can look back at his time as Office Depot CEO with some satisfaction, having exceeded the initial OfficeMax synergy and efficiency targets. Having said that, Smith’s successor will certainly have his or her plate full. The final phase of the OfficeMax integration is a complex one, involving the consolidation of distribution facilities, and then there is the wider issue of the future strategic direction of the company itself. A new three-year plan was announced in August that will focus on areas such as growing jan/san sales, targeting small business and mid-market customers, and revamping the retail network in North America. Meanwhile, in the reseller’s International division a lot of uncertainty remains as Office Depot continues to explore the potential sale of its European operations. We are no doubt entering a key moment in the history of Office Depot.

As rIC • A

A As • me

merI C •A

TOP IOO

w w w.opi.net | OPI Magazine

Special Feature | Top 100

As rIC • A

PrenTIs WIlsOn vP | AmAzOn BusIness

OPI Magazine | October 2016

mAnAGInG dIreCTOr | kAuT-BullInGer Robert Brech is the third Managing Director in the past year at leading German independent dealer Kaut-Bullinger, underlining what a turbulent time it has been for the Munich-based reseller. As it transpired, predecessor Oliver Mathes’ brief was to stabilise Kaut-Bullinger’s financial situation and transition the company out of its relationship with dealer group Soennecken. With both those goals achieved, and the latter resulting in a new alignment with wholesaling cooperative InterES, it was time to turn to a proven operations leader to take charge of the next phase of Kaut-Bullinger’s development. Enter Brech, a turnaround specialist whose 35-year career has included spells at major groups such as Metro, Karstadt/ Quelle and Woolworth Germany. With that strong retail focus, it doesn’t come as much of a surprise to learn that Brech’s immediate priorities will focus on Kaut-Bullinger’s retail division. He has already identified areas such as inventory management, purchasing, merchandising and product assortment where improvements can be made. It would appear to be a mix of growth initiatives and sections where cost reductions and working capital improvements are possible. That doesn’t mean that Kaut-Bullinger is looking to reduce its retail network of eleven stores. Just the opposite, in fact. Brech says that he will look to expand the group’s retail operations in a “very intelligent and controlled” manner. It will be interesting to see to what extent Brech takes a holistic approach to changes at Kaut-Bullinger or whether he has been drafted in to focus purely on the retail side – although it is difficult to imagine the retail network evolving without an e-commerce/omnichannel component.

ur •e O

• eu Pe

Once a controversial choice as an OPI Top 100 entry, no one can surely question the importance and influence of Amazon, and more specifically Amazon Business, in the business products B2B reseller space. Launched in the US in April 2015 out of what was formerly known as AmazonSupply, the most recent figures from the internet giant revealed Amazon Business sales in excess of $1 billion, with more than half of all orders fulfilled by the 30,000+ third-party resellers that are signed up to the platform. The number of customers Amazon Business is attracting is growing fast too. In July, Amazon said 400,000 companies were using the platform, a leap of 100,000 in the space of just three months. Amazon Business VP Prentis Wilson was thrust into the spotlight earlier this year when he testified in the Federal Trade Commission trial to block Staples’ acquisition of Office Depot. What this revealed is that, while Amazon Business may currently be serving mainly small-and-medium-sized businesses and the ‘long-tail’ spend of larger companies, it has the enterprise B2B market firmly in its sights. Amazon Business is a top priority for Amazon as a whole and it is fast developing procurement tools, services and strategies to go after the likes of Grainger and Staples in the corporate space, while the recent hire of the US government’s top procurement officer Anne Rung shows its lofty ambitions in the public sector too. Resellers in other markets should also be paying attention to Amazon Business: it is forecast to enter Europe in the near future.

rOBerT BreCh

O ur Pe

rIC me As

A As • me

merI C •A

Pe • e rO

TOP IOO

Top 100 | Special Feature Stephan ISelI

top Ioo

ManagIng DIrector | offIx group

ur •e o

• eu pe

Steve Haworth was propelled to the role of Group CEO of £660 million ($860 million) office products group EVO in April 2016 following the sudden departure of Robert Baldrey. Haworth has more than 25 years’ experience in the OP and EOS sectors and first joined EVO predecessor group Vasanta in 2009 as Managing Director of Supplies Team and ISA Retail. As Vasanta Group Sales and Marketing Director from July 2011 and then in a similar role at EVO since November 2014, Haworth was responsible for the day-to-day management of the group’s companies, so he knows the business inside out. One of his first priorities as new Group CEO was to complete the integration of the office2office (o2o) business that was acquired at the end of 2014 and then merged with Vasanta’s existing Supplies Team business under the Banner brand. Banner is a leading player in the UK enterprise and public sector contract market and is aiming to shake things up with the introduction of a new seat-based procurement model. Banner Managing Director Richard Costin has also recently been handed responsibility for the VOW Retail unit. Haworth’s message over the past few months has stressed the need for a ‘back to basics’ approach at the VOW wholesaling division, with the focus firmly being on the needs of the dealer customer and on providing industry-leading service levels. The bokz initiative has been discontinued, but renewed impetus has been given to the former VOW+ dealer programme, now rebranded as VOW Venture. A key area for VOW Venture has been dealer development and training, with a series of roadshows being held throughout the UK.

o ur pe

pe • e ro

Steve haworth ceo | evo group

pe • e ro

• eu pe

ur •e o

Offix Group is the new powerhouse of the Swiss independent OP channel, having been formed in 2015 through the merger of the independent dealer cooperative operations of PEG (which were rebranded to Papedis) and IT and imaging supplies distributor Ecomedia. The group has annual sales of approximately CHF300 million ($306 million) and stocks an impressive 50,000 SKUs at its two distribution facilities. Former BPGI Chairman and Offix Managing Director Claude Ackermann left the company at the end of 2015 to lead a PEG sister company, with ex-Ecomedia Managing Director Stephan Iseli stepping in to take the top job at Offix. The annual PEG trade show was renamed Innopap and attracted a strong turnout earlier this year as Iseli and other Offix executives laid out their vision for Papedis and the group as a whole. A key initial focus of Iseli and his team has been an overhaul of logistics, and improving the customer experience and service levels at the Papedis unit, via a new initiative called PapLINK. CHF4 million was spent on upgrades to the distribution facility in Aaburg in order to increase automation and efficiency and reduce errors. At the same time, Papedis dealers have been given access to new delivery options and improved e-commerce capabilities. As well as the Papedis and Ecomedia divisions, Offix Group has two other reporting units: Oridis specialises in serving the retail channel with EOS products and related services; and there is now a new division called Office Leader which was set up to handle the needs of customers that have more sophisticated needs in terms of services and data exchange.

w w w.opi.net | OPI Magazine

toP ioo

Special Feature | Top 100

danièLe kaPeL-Marcovici ceo | raja grouP

o ur Pe

Pe • e ro

OPI Magazine | October 2016

o ur Pe

Pe • e ro

• eu Pe

ur •e o

• eu Pe

Raja Group CEO Danièle Kapel-Marcovici is a worthy inclusion as one of our OPI Top 100 magazine entries for 2016, as she leads the expansion of Europe’s largest packaging reseller. The France-based group operates in 15 European markets and sales last year grew by 8% to €475 million ($530 million), thanks in part to the 2015 acquisition of retail supplies distributor Morplan which doubled Raja’s presence in the UK. Further European expansion this year includes the Portuguese and Slovak markets. The Morplan deal also marked another step in Raja’s product diversification strategy, something that has been further boosted by the relaunch of the L’Equipier brand in France. This focuses on the jan/san and personal protective equipment categories, and the continued growth of the Welcome Office online office supplies business. A catalogue business at heart, more than 30% of Raja’s sales now come from its e-commerce sites, and major investments have been made in digital platforms and tools. The firm’s French subsidiary was recognised for its new website when it won the best B2B e-commerce site award from trade organisation Fevad. Another major online development is a new marketplace called RajaMarket which will enable the entire product range sold by all the group’s businesses to be available on a single ordering platform. The Raja Group CEO has also been an active campaigner for women’s rights via the Raja-Danièle Marcovici Foundation. She led a seminar on Women and the Environment at the high-profile United Nations Climate Change Conference, COP21, in Paris last December and the foundation continues to support dozens of projects throughout the world.

Laurent Proy Managing director | grouPe aLkor Laurent Proy began the year at the helm of a new entity called Groupe Alkor following the rebranding of the Majuscule dealer group. Deriving its name from the star Alcor, the group is now the umbrella organisation for the cooperative that comprises the Majuscule and Burolike reseller brands, which between them have around 150 members. Proy says the name change was made to provide a clear distinction between Alkor’s two banners. It also facilitates moves into other areas, such as offering general wholesaling services to non-members, something high on the Proy's agenda. Proy regards supply chain excellence as a key factor in Alkor’s long-term success and major investments have been made in upgrading the group’s main 36,000 sq m (360,000 sq ft) distribution centre in St Quentin, France. Recent improvements include 30 new picking stations and six state-of-the-art packing machines. To offset the soft market conditions for traditional office supplies, BPGI member Alkor has been expanding into the education and school supplies sector for a number of years and is now a major supplier to local school authorities. In fact, about 45% of all orders are school related and Proy estimates that the group has a share of around 30% in the infant and primary school market. New for 2016 is a catalogue featuring both educational and outdoor games. Other notable growth areas include facilities supplies, craft products and seasonal items.

Top 100 | Special Feature

CEO Worawoot Ounjai has big plans for the expansion of Thailand-based COL Group, whose largest division is the OfficeMate office supplies multichannel player. These plans include further store openings in Thailand at both OfficeMate and the B2S stationery and lifestyle chain, continued investments in online retailing following the creation of the Central Online Group earlier this year, and a move into international markets, beginning with Vietnam. At OfficeMate – which combined with Office Depot’s former business in Thailand in 2013 – sales have been growing at a healthy high single-digit rate this year following on from 2015’s 9% increase when revenues reached THB6.1 billion ($175 million). Store openings are continuing at a steady pace with eight new outlets planned for 2016, which will take the total to around 65, and the existing store base is undergoing refurbishments. Efforts have been made to promote OfficeMate as a one-stop destination for all office needs, and this has included a big push in the office furniture category where a recent mid-year promotional campaign resulted in year-on-year furniture sales jumping 30%. However, it is in its call centre and online B2B operations where OfficeMate is seeing the strongest growth. To cope with this – and for the expanded furniture offering – the company is increasing the floor space at its main warehouse by 30% to 20,000 sq m (200,000 sq ft), with work on this project scheduled to be completed in 2017. Other initiatives this year include the addition of more than 3,500 own brand SKUs – including the introduction of a new private label brand called ONE – and further investments in e-commerce and mobile capabilities.

sIA •A •

A AsI • A

It’s been another busy and fruitful year for Dominique Lyone, CEO of Australia’s largest independent business supplies reseller Complete Office Supplies (COS). Performance-wise, sales for the most recent financial year grew by an impressive 13% to A$122 million (US$94 million), led by the technology category (+40%) and followed by furniture (+29%) and jan/san (+20%). The office furniture offering has also been enhanced by the introduction of a workplace design and fit-out solution and website called COS Working Spaces. Investments have been made to revamp the COS website, giving it a responsive design that works across all devices. The next phase for COS in terms of e-commerce is to create a more open online platform to attract more small and medium-sized business customers. Other initiatives include the reconfiguration of the distribution facility in the state of Victoria; the launch of a content marketing-driven office products blog called COS Fast Facts; a new, environmentally-friendly delivery service that uses returnable tub containers; and the rapid expansion of the Indigenous products range. Lyone has always been one to recognise his humble beginnings and the support he and his family received when they moved to Australia from Egypt in the 1960s, and he established the Lyone Foundation in 2013 which supports local charities. Most recently, the foundation has sponsored an indigenous childcare programme in Queensland. COS’s contribution to the Lyone Foundation led to the company being named as a 2016 Australian Business Awards 2016 winner in the Community Contribution category. COS was also recognised when Belinda Lyone – Dominque’s daughter and the company’s General Manager of Strategic Sourcing & Marketing – was presented with the 2016 Family Business Australia Next Generation Achiever award.

As IA • IA

CeO | COmPleTe OffICe suPPlIes

WOrAWOOT OunjAI CeO | COl GrOuP

A sIA • s

dOmInIque lyOne

TOP IOO

sIA lA •

sIA • lA

sTrA Au

w w w.opi.net | OPI Magazine

TOP IOO

Europe

Australasia Dominique Lyone

CEO | Office Choice

Grant Sheridan

Founder | Komus

Gavin Ward

Managing Director | Büromarkt Böttcher

Mark Ward

Managing Director | Officeworks

Robert Brech

Managing Director | Kaut-Bullinger

Jaime Carbó CEO | ADVEO

President | Carlin

Simon Drakeford Dr Benedikt Erdmann

Siobhan O’Connor

László Féher

Managing Director | Codex

Managing Director | Corwell

Theo Paphitis

Christa Furter

Chairman | Ryman

CEO | iba

George Gerardos CEO | Plaisio

Gert Gerber

Managing Director | Office Supplies Denmark

CEO | Integra Business Solutions

Bruno Peyroles

CEO | Bureau Vallée

Nicolas Potier

Managing Director | JM Bruneau

Radostin Kirilov

Managing Director | Office 1 Superstore

CEO | RKV

Miroslaw Szydlowski Managing Director | PBS Polska

Arnold Theuws

Managing Director | Quantore CEO | Samson

Jan Van Belleghem Managing Director | Interaction

Frank van Zanten CEO | Bunzl

Thomas Veit

Managing Director | soft-carrier

Francesco Villa General Manager | Gruppo Buffetti

Jeff Whiteway

CEO | SPOT Group

John Wilson

President | Staples Europe

Felix Zimmermann CEO | TAKKT

Mark Leazer

Executive Director | AOPD

Sid Lerman

President | Weeks Lerman

Sean Macey

President | Basics Office Products

Igor Trifonov

OPI Magazine | October 2016

CEO | Warehouse Direct

CEO | OCAY

Stefan Sonesson

Aidan McDonough

˘ Serban Oarza ’ | RTC Proffice CEO

Chairman | Soennecken

CEO | Office Partners

Kevin Johnson

Mats-Ola Schulze

Managing Director | Mercateo

Managing Director | ALSO International

CEO | Guernsey

Jim Hebert

Managing Director | Plate

Peter Ledermann

Marc Nijhof

CEO | EO Group

Dave Guernsey

President | Printus

Vice General Manager | Akoffice

Managing Director | Nectere

Interim CEO | Staples

Dieter Schmidt

CEO | Raja Group

Paul Musgrove

Managing Director | Büroring

Shira Goodman

CEO | PBS Holding

Danièle Kapel-Marcovici

CEO | Lyreco

Mike Gentile

CEO | Independent Stationers

Hans Schmid

Director | Offix Group

Hervé Milcent

Ingo Dewitz

Paulo Garcia

Managing Director | Kalunga

CEO | Wulff Group

Alper Kisa

Udo Böttcher

CEO | Office Brands

Sean Fleming

CEO | DM Supplies Network

Richard Scharmann

Stephan Iseli

Sergey Bobrikov

CEO | Office Products Depot

Tony Ellison

CEO | Shoplet.com

Topi Ruuska

Chairman | Westcoast

Managing Director | Fiducial Office Solutions

Michael Brown

CEO | HiTouch Business Services

President | Errebian

José Luis Hernández

Laurent Bertrand

CEO | Warehouse Stationery

Chairman & Managing Director | Inforshop

CEO | Merlion

CEO | BPGI

Managing Directors | Comercial del Sur

Pejman Okhovat

CEO | SP Richards

José Mário Britto & Thiago Britto

Ferdinando Rese

Joe Hemani

Carlos/Rafael Benavides

Brad O’Brien

Wayne Beacham

Sergey Raskolov

CEO | EVO Group

CEO | EOSA & Hedera

Craig Bartholomew

CEO | 360 Office Solutions

Laurent Proy

Barrie Hayes

Philip Becker

Kevin Obern

Interim Managing Director | OfficeMax

Patricia Barber

CEO | The Supply Room Companies

Managing Director | Alkor Groupe

Steve Haworth

Managing Director | NEMO Group

CEO | Complete Office Supplies

Julie Hawley

Tim Beaumont

Ángel Alverde Losada

CEO | Office Depot de Mexico

CEO | Officeday

Interim Managing Director | Office Friendly

General Manager | In Ufficio

President Australia/ New Zealand | Staples

Bob Aiken

CEO | Essendant

Šarunas Pranukevicius ˇ

CEO | Manutan

Adriano Alessio

Darren Fullerton

Asia

Xavier Guichard

Americas

DG Macpherson CEO | Grainger

Mike Maggio

President | Trimega Purchasing Association

Denis Mathieu CEO | Novexco

Leo Meehan

CEO | WB Mason

Roland Smith

CEO | Office Depot

Jennifer Smith

CEO | Innovative Office Solutions

Prentis Wilson

VP | Amazon Business

Joe Yorio

CEO | School Specialty

Middle East/Africa Trevor Girnun Managing Director | Waltons Abdulrahman Ibrahim CEO | HPG Wihan Oosthuizen CEO | Office National Africa

Category Analysis | Stamping monitoring the Brexit situation very closely. It’s definitely a high-priority topic for us.” Rival Austrian manufacturer Trodat maintains this upbeat tone. “Overall we achieved high double-digit growth in 2015 and that trend is continuing this year,” says Assistant Product Manager Andrea Dörner. “However, you definitely have to take a market-by-market view, as we do have areas where demand is still declining, mainly in more mature markets where we already have a high share of more advanced self-inking stamps and hence little room to grow. “On the other hand, there are newer, huge-volume markets where we see the opposite picture, with demand for our products constantly rising.”

Innovate to grow

Reports from the stamping sector are encouraging, but industry experts agree that innovation is key to its continued success

by David Holes

SALES

of traditional OP have been on a downward slide over recent years and the stamping category has proved no exception. Yet it looks as though it may have turned a corner, with most of the main players now adopting a cautiously optimistic stance. At German metal stamp manufacturer Reiner, Marketing Manager Annette Zandomeni confirms this belief: “Industry trends were down, but things have been different over the past 12 months, with sales of both our standard and customised numbering machines picking up significantly. Encouragingly, we’ve not only seen this trend in our traditional European market, but also in emerging areas such as Africa.” Taiwan-based Shiny Stamp also reports an excellent year, with annual revenues increasing by 10% and June’s sales figures hitting a record high. “We’ve also entered the US market,”

OPI Magazine | October 2016

says Deputy Executive Manager Jimmy Chen. “Our new US distributor, Shiny America, opened earlier this year in Jackson, Mississippi, with a second branch in Chicago following a few months later.” Austrian stamp specialist Colop says that volatile market conditions make forecasting extremely difficult, but they also generate many opportunities for gaining additional sales and market share across the globe. The company’s Head of International Sales and Marketing, Franz Ratzenberger, explains: “We’re satisfied with the general situation and are fulfilling our 2016 plans. Some regions, such as South America that were mired in economic difficulties, are doing better and even the difficult Russian market is on its way back. “However, the UK is an important European market for Colop and we’re

The main players in the stamping sector agree that the only recipe for sustainable success in a mature market like traditional OP is through product innovation. Dörner continues: “We need to precisely understand the needs and problems of all our target groups. This includes not just the end users of our products, but also all the manufacturing and distribution levels in between. If we can do that, we can develop products that are better than anything else on the market. This means performing a huge amount of market research beforehand and rigorously testing prototypes before we launch a new product. “For example, the development of the self-inking Original Printy 4.0 was completely based on customer insights that we gained from market research conducted in countries all over the

Trodat’s Original Printy 4.0

Stamping | Category Analysis globe. This showed, for example, that stamp users hated getting their fingers dirty when changing the ink cartridge. Therefore, a key design imperative was to introduce a clean, intuitive cartridge-change system when it was developed. It’s now the bestselling product of its type in the world.” “Innovation and design are key,” agrees Ratzenberger, “but so is a focus on offering stamps for specific applications and key target groups. A very successful example is our range of new ‘Motivational Stamps’. Compact and easy to use, they are

Microban version of the stamp with antibacterial protection, and this autumn we’re bringing a new embossing press to the market that’s more robust and reliable than ever before.” Shiny, meanwhile, has imported advanced printing techniques from Solar panels on Shiny’s factory rooftops other industries which have made it possible to incorporate high-resolution images into a stamp’s The environmental stamp front trim plate. The greening of the industry is another trend that can’t be ignored, even in the world of stamping. Says Dörner: “We see increasing demand for products that minimise the impact on the environment. Therefore, in response, our Original Printy 4.0 now contains up to 65% of post-consumer “Not only does this make them stand recycled plastic and its manufacture out from competitors,” says Chen, is climate neutral. We’ve also reduced “it makes low-volume customisation CO2 emissions by 49% compared to possible, opening up new markets”. the production of the previous model. Looking to apply an increasing level Investment in best practice climate of sophistication and technological protection projects recommended wizardry to products is also essential, by the WWF compensates for says Reiner’s Zandomeni: “It’s this the remaining, unavoidable CO2 electronic side of the business that footprint.” continues to find new customers and Likewise, Chen reports progress markets. Our inkjet-based jetStamps on the environmental front: “Shiny are increasingly finding their way into is taking part in the Taiwanese both offices and production sites for government’s solar power generation marking documents and packaging. programme and we’ve installed solar “The new Windows-based panels on all our factory roofs aiming standard interface (GDI) offers to produce 757,000 kWh from solar more convenience to energy each year and reduce our those who want annual CO2 emissions by 386,000 kg.” to connect the Ratzenberger adds that this stamps to their increased focus on environmental own bespoke credibility is a theme that Colop is software. also following: “We’ve extended our Generating Green Line range because not only barcodes does this cater to people’s desire and QR codes to care for the environment, but are common additionally it gives us an advantage applications in tenders for governmental where this is departments. Having the ability to used. We’ve also provide the right stamp in the right introduced a new format for every conceivable situation type of ink known is what being a stamping specialist is as MP4 which all about.” offers better Analysis of the stamping sector in rub resistance previous years has often painted a and greater somewhat patchy, uncertain picture. contrast when But reports in 2016 show a renewed used on glass sense of optimism and a category surfaces.” once again on the march.

“Having the ability to provide the right stamp in the right format for every conceivable situation is what being a stamping specialist is all about” aimed primarily at teachers for use on children’s schoolwork and feature positive star, tick and smiley-face designs that are ideal for encouraging and rewarding students.” He adds: “This year we’ve also made smaller, incremental additions to our stamp range. Due to increased demand in some countries we have launched the new Pocket Stamp Plus in size 30, giving users more room for address information. This model can be opened, used and closed with just one hand. We’ve also released a

Colop’s Motivational Stamps

w w w.opi.net | OPI Magazine

Category Analysis | Mailroom & Packaging

Alpha mail

The traditional mailroom is reinventing itself as e-commerce and technological advances bring sweeping changes to this sector

by David Holes

THE

role of the mailroom is changing. Parcel shipping is growing and, although traditional mail volumes are diminishing, it’s becoming more interactive, more compelling and is often seen as more valuable. “While mail volumes continue to decline around the world, it remains a vital channel for companies,” says Stephen Darracott, Country Manager at Pitney Bowes Australia & New Zealand. “In today’s borderless and connected world of commerce, mail and parcels often represent the lifeblood of business, from

OPI Magazine | October 2016

transactional documents and customer communications to order fulfillment and e-commerce. “Significant shifts in technology, mobility and information are creating new challenges, but also exciting new opportunities for mailers. Essentially, we are reinventing mail so that it represents much greater value as we extend the physical experience into the digital realm.”

Parcel force The enormous growth in parcel shipping is having a major impact on company mailrooms and those that supply them. According to Debbie Nice, Facility Supplies Category Director at wholesaler VOW, UK parcel traffic has grown 20% over the past year, with 2.5 billion parcels projected to be shipped in 2016. She believes the distributor market is now worth £1.26 billion ($1.65 billion).

“E-commerce has certainly helped sustain the mailroom and packaging sector,” says Fiona Mills, Marketing Director at Avery UK. “It’s generating good demand for all products associated with shipping, such as labels designed to suit large envelopes, parcels, mailing tubes and boxes. With services like Amazon Prime Now launching in the UK and offering ultra-fast, same-day delivery, e-commerce is hitting new heights and demand for these kind of supplies will only continue.” Nice adds that high-volume users are looking for solutions that offer security and protection while having less waste to dispose of. “As a result,”

Mailroom & Packaging | Category Analysis she says, “boxes are getting smaller and some employ clever built-in seals that ensure goods arrive safely and securely. We’re also seeing a rise in the use of polythene packaging, driven by the need to keep goods dry and protect parcels as they are moved from one delivery vehicle to another.”

Rethinking the mailroom However, this growth in both outbound and inbound parcel shipping is putting an increased burden on the mailrooms of many organisations. “Businesses really need to leverage new technologies and solutions to better integrate their shipping and mailing,” says Darracott. “By connecting their digital and physical processes they can help streamline and automate the systems that track customer usage and automate repeat orders.”

Initiatives such as location intelligence technology that let recipients know where their parcel is anywhere in the world are on the horizon. And technology such as near-field communication and radio frequency identification will allow people to have easier interaction with their orders. “We are also heading towards predictive analytics,” adds Darracott. “This will accurately determine the consumption needs of customers and eliminate time spent on routine repurchasing so employees can focus on core business.” One sub-sector of the mailing business that’s benefitting from the surge in parcel

shipping involves the suppliers of the cutters that are used to open the boxes arriving at our businesses and homes en masse.

they had experienced messy or damaged parcel packaging on an online order, with almost a third commenting they would leave negative feedback in an online review. More worryingly, over 20% said it left them wanting a refund, with close to a third saying they feel like the sender wasn’t trustworthy or reputable. “It seems there’s a love-hate relationship between online shopping and UK consumers,” says Fiona Mills, Marketing Director at Avery UK. “The ease of ordering is what they love, but for complete customer satisfaction the way items are delivered and packaged is an area that requires more focus and development. “It’s clear that parcel appearance is a key area for consideration. However, it’s not just about neatly packaging a parcel, it’s about preparing it appropriately for the journey and letting couriers and delivery people know how best to handle it, with the proper warnings such as ‘Fragile’, or ‘This Way Up’. Taking these precautions helps reduce the chance of negative feedback and shows the recipient every care has been taken.” Small businesses and independent online sellers are playing an increasing part in fuelling

the demand for mailroom and packaging supplies. The global popularity of sites like eBay and Etsy means there’s a whole market with specialist shipping requirements. Avery’s survey found that adding company branding to a parcel can have a positive impact. A quarter of UK consumers said that seeing branding on a parcel made them feel like they had purchased from a retailer that cares about them. A further 25% commented that it reassured them they had bought from a trustworthy, reputable seller. “These smaller, independent sellers still want high standards of presentation in packaging, reflecting their passion for the products they sell and the pride they have in their business,” explains Mills. “Many will be looking to personalise their packaging in order to send the right message to customers and make them feel special. Our survey reveals that this is a very worthwhile exercise. As such, mailing solutions which allow smaller businesses to conveniently ship branded parcels are a growth area.”

“Businesses really need to leverage new technologies and solutions to better integrate their shipping and mailing”

Online angst The increase in e-commerce and associated parcel shipping is not without its problems. Avery recently conducted a survey on UK consumers’ attitudes to online shopping, paying particular attention to their opinion regarding shipping and delivery. It found that while the sheer convenience of online shopping was what made it so appealing, there were some commonplace frustrations that the industry needs to address. Delivery charges were what respondents disliked the most. However, they were also annoyed by excessive packaging, with 64% calling it wasteful. Poor packaging and labelling was also cited as a problem. Over 60% said that

w w w.opi.net | OPI Magazine

Mailroom & Packaging | Category Analysis “Cash flow is the fundamental backbone of commerce, and businesses still rely on mail for payment and communication” Cutter specialist Acme United reports a 25% growth in sales in 2016 to date. European Managing Director Georg Bettin has noticed an upswing across the board: “There are two major trends: firstly in the cutting tools needed in the warehouse environment – from the basic cutter to industrial cutters with GS [safety-tested] safety certification – and secondly in the cutters ordered by households and companies to deal with the huge increase in e-commerce packaging. The new ceramic cutters that are more efficient and longer lasting than standard steel blades are proving very popular, for example.” He adds: “Despite the undisputed fact that conventional mail is in decline, we are constantly amazed by how many letter openers we sell. This is possibly because so many competitors have withdrawn from this niche market. Whatever the reason, it offers us an additional sales stream that’s independent from the e-commerce upsurge.”

Mail still matters And while mail volumes are declining globally, we shouldn’t underestimate how critical mail remains to commerce. Says Darracott: “Cash flow is the fundamental backbone of commerce, and businesses still rely on mail for payment and communication. “Direct mail also remains highly effective for businesses. If they take advantage

of innovations in data management, document design, mail production and sortation, they can ensure direct mail remains a critical part of their customers’ marketing mix for years to come. “Successful marketers are creating higher-impact, more targeted and personalised mail shots that are tightly integrated with digital channels. The results speak for themselves: direct mail delivers response rates 30 times greater than email and, when combined with a landing page, email address and mobile marketing, response rates increase by 45%.” Mills agrees: “A great many businesses recognise

there’s still a significant place for conventional mail. Even small companies are investing in conventional mail in the UK, with 20% saying traditional marketing methods like flyers and direct mail will still form part of their marketing strategy.” Indeed, the decline in conventional mail has actually placed a renewed importance on letters. Studies suggest the sheer volume of emails we receive each day means consumers now value a letter, treating it differently to an email and perceiving it as something more special. “Of course, email is very convenient and the right tool for many messages,” says Mills, “but postal communications can have more impact. If a particular message needs to make an impression or command attention, it’s worth sending by post.”

w w w.opi.net | OPI Magazine

Sponsored Article As online shopping becomes more important, the need for appropriate packaging of goods purchased increases. tesa, together with its reseller partner Lyreco, is thriving on the opportunities of the changing mailroom

Online

shopping is on the rise. About three billion shipments have been processed in Germany alone over the past year and the trend across Europe is similar. It is estimated that the carton sealing tapes market will grow by more than 20% over the next five years and this will in good part be driven by the increase of e-commerce. As a result of these developments, the mailroom has become a much more interesting place. Packaging tapes, for example, have never been more important – there’s simply not one type of tape that fits all needs. German adhesives manufacturer tesa has been in the tape business for 80 years, and it is these years of experience that have made the company an expert in the field. Whatever the specific needs of the customer, tesa can offer the right solution, from high-quality PVC tape needed for sealing heavy parcels and different kinds of polypropylene tapes for professional and efficient shipments, to recycled PP tapes for sustainable ecological packaging. Falk Butterwegge, Head of Office Supply, Stationery & Online for

OPI Magazine | October 2016

International Sales at tesa and Lyreco’s Group Marketing Executive Pascal Mitchell, talked to OPI about the mailroom sector at large and the opportunities that the continued collaboration between the two companies presents. OPI: What fuels the demand for mailroom products in the European markets that you operate in? Pascal Mitchell: The mailroom environment has changed in the past few years. The decrease in traditional mail, such as letters or invoices, and the increasing transfer of documents through electronic channels has resulted in a big shift in the way mailroom products and solutions have evolved. Falk Butterwegge: And while traditional mail is in decline, the strong e-commerce trend has given the demand for packaging tapes a boost. OPI: So overall that is good news for this product category? PM: Yes. The growing internet-based sales by both SMEs as well as the major online players of a huge variety

of products means that the type of packaging, sealing and protection of the products needed is more varied than ever before. Different box sizes and vastly differing content weight, plus more specific use of tapes – personalised and containing the name of the company or even including a message, for instance – has led to a much wider offer of packaging solutions. FB: As we all know, overall the traditional stationery market in Europe is mainly flat or, in some categories, even slightly decreasing. But there are several silver linings, even in this traditional segment. In addition to the

Sponsored Article ongoing online shopping trend, we see increasing demand for sustainable ecological solutions and as a result are now also producing tapes that are produced from 100% recycled plastic. These products are particularly interesting for certain public tenders, but also for customers that want to ensure a sustainable strategy across their entire business. OPI: What are the challenges from a reseller perspective? PM: The mailroom environment, which is linked to Lyreco’s industrial packaging strategy, creates a number of new challenges. What should our offer be in terms of SKU count and variety? How do we target our customers? Things like warehouse and storage issues for multiple box sizes also have to be addressed. Our main competitors in this sector of the market have a level of expertise and credibility that we need to match. FB: And we can help with gaining that expertise. Detailed product knowledge is vital in order to ensure that different tapes meet the needs of different applications. As one of the leading brands in Europe for packaging tapes, tesa has accumulated considerable knowledge in this sector. It is our objective to enable Lyreco to fully exploit the potential of this category by providing them with our full support. OPI: So what is Lyreco’s positioning in the mailroom and packaging sector at the moment? PM: We currently have a solid range of tapes and adhesives that allow us to cover most customer needs. However, our objective is to really develop this category. Our one-stop-shop approach will lead Lyreco to improve the packaging solutions we offer our customers in the near future. Lyreco and tesa have always had a strong relationship. In our view, the development of brands is key to maintaining a high level of quality across our ranges. It also reassures our customers that we are working with the right supplier sources. In the mailroom and packaging sector, though it might seem quite simple, identifying the right solutions for their packaging needs isn’t always

easy for customers. Working with tesa allows us to propose the right tape for the right use – being able to give customers that guidance is very important to us. OPI: How important is this category for tesa? FB: It’s part of tesa’s core business. Packaging tapes overall can be very generic. However, there are so many different specifications and needs that expertise and a wide assortment are required to best serve the market. The right tape depends on the type, timing and purpose of shipment as well as on the parcel/cardboard box itself. We at tesa have to ensure that our reseller partner understands the different needs of packaging, bundling and sealing tapes, as well as the variations in related dispensers. Having a good understanding of the different applications helps to increase the overall category value.

Falk Butterwegge

because we have placed less emphasis on this category. We want to become experts in both the packaging and the mailroom environment, understand our current and future customer needs and improve our credibility in this market by working hand in hand with key suppliers such as tesa. FB: For us it’s crucial to understand the objectives of our partners in order to enable them to achieve their goals.

“For [tesa] it’s crucial to understand the objectives of our partners in order to enable them to achieve their goals” OPI: What distribution channel provides the best opportunities for you Falk? FB: Professional packaging dealers as well as B2B contract dealers offer the best value to the business as they fully exploit the potential in the market. However, marketplaces and pure online dealers like Amazon are also becoming major players in the market. OPI: What are the core aims of the tesa/Lyreco collaboration? PM: Our ambition is to grow with tesa and develop our business by targeting customers who are small to large consumers of packaging solutions. The aim is to become a leader in the industrial packaging environment. Our category split in the mailroom sector overall is in line with the market and that is because of our long history in this segment. However, in the packaging category the split we have does not match the specialist distributors that serve this market due to our shorter history and also

To start with, a professional and competitive assortment is mandatory to enable their sales team to offer the best solutions to their customers. The support element then includes training programmes, workshops, submission of samples, etc. So overall, our role is to support Lyreco to improve their understanding of the packaging business by offering them our expertise and, of course, a comprehensive product portfolio. Pascal Mitchell, Lyreco

w w w.opi.net | OPI Magazine

Paul EPIC Gatens 2016 SPR | Event | TechPreview Special

Bigger & better

The annual EPIC joint dealer group show continues to evolve for the benefit of dealers

EPIC,

the trade show jointly organised by US dealer groups Independent Stationers and TriMega, is gearing up for its fourth edition at the beginning of November and this year promises to be the best one yet. As in past years, there is a full training programme – dealer group specific as well as general – a vendor tradeshow and a number of dazzling networking and entertainment options. Combined, they will provide dealers with a great learning experience in a fun and friendly environment. But the organisers have not been resting on their laurels, and there are several important initiatives that add even more value to EPIC 2016 and make it more cost effective for dealers to attend.

There are several important initiatives that add even more value to EPIC 2016 and make it more cost effective for dealers to attend ECi Connect and ISSA/INTERCLEAN benefits In an effort to bring further consolidation to the OP industry’s event calendar, this year’s EPIC and ECi’s Connect 2016 conference are taking place under one roof. This not only means savings on travel costs and time spent away from the office, but gives the chance for additional dealer staff members to take advantage of the greater learning opportunities. EPIC 2016 attendees also qualify for a large discount on the ECi Connect registration fee. Another special offer for those registered for EPIC is free admission to the ISSA/INTERCLEAN North America show that takes place a week earlier in Chicago. This is a show and convention package that would normally cost dealers more than $1,100, which makes it a great incentive to attend the leading jan/san trade show in North America.

By dealers, for dealers Following feedback from members and past attendees, the EPIC 2016 education programme has been given a makeover to put the focus on peer-generated learning. This has resulted in a new, more interactive approach that has been labelled ‘forDealers, byDealers’. The sessions – facilitated by an industry expert or dealer volunteer – will include panel discussions, success stories, best practices, idea swaps and roundtable discussions. Dealers are encouraged to bring their own ideas and insights to share, and to be prepared to participate actively. What is more, the organisers guarantee that participants will take away at least one idea that will help them grow their business!

Quality time with vendors

AT A GLANCE

1-3 November Gaylord Opryland Resort & Convention Center, Nashville, Tennessee Tuesday, 1 November Sales Boot Camp, Golf, Next Mixer, Welcome Party Wednesday, 2 November Group Meetings & Sessions, Education Forums Thursday, 3 November General Session, Tradeshow

In another EPIC first, dealer attendees this year have the opportunity to schedule one-on-one appointments with exhibitors during the tradeshow on Thursday, 3 November. Designed to enable more constructive face-to-face conversations between dealers and manufacturers – both for existing relationships and prospects – these EPIC Get Togethers (EGTs) will involve individual 15-minute meetings at vendors’ booths. EGT places are limited, so interested dealers should ensure they opt in during the registration process. They will then be able to build their EGT schedule a few weeks before the show, either online or via the EPIC 2016 app. As well as these new initiatives, the popular Sales Boot Camp introduced last year returns in 2016, and the second EPIC Hike for Hope in support of City of Hope will take place on Friday, 4 November. And all this against the backdrop of the Country Music Awards taking place in Nashville at the same time. It certainly promises to be another epic EPIC! w w w.opi.net | OPI Magazine

OPI Global Forum 2016 | Event Preview

Strategy talks The OPI Global Forum injects a muchneeded strategic shot in the arm for an industry that is going through much change

ThE

sixth OPI Global Forum – which takes place in Chicago from 13-15 November – will deliver real strategic business insights while tackling head-on the unique challenges of the business supplies industry. Held at the Sofitel Chicago Magnificent Mile (formerly the Sofitel Chicago Water Tower), two of the main topics of discussion will most certainly revolve around the fallout from the now-defunct Staples/Office Depot merger and the rising threat from Amazon Business.

“Leaders in the industry need an effective forum to discuss the challenges and possibilities in today’s sector and the Global Forum provides that unique opportunity” But these will not be the only subjects up for debate. Wider macroeconomic issues such as Brexit, the global economy and the US election – the latter will have just happened – will no doubt be hotbeds of conversation. As an invitation-only event, the Forum brings together senior executives from around the globe

from leading wholesalers, manufacturers and resellers in both traditional and increasingly non-traditional business supplies categories. OPI CEO Steve Hilleard says: “I am delighted that the turnout for this year’s event has already exceeded last year’s record. Just as satisfying, however, is the outstanding attendance by representatives of the independent reseller community. A quarter of participants will be CEOs from many of the most progressive large dealers in North America, Europe and Australia.” He adds: “Leaders in the industry need an effective forum to discuss the challenges and possibilities in today’s sector and the OPI Global Forum provides that unique opportunity.”

Up for discussion This year’s Forum will be chaired by industry stalwart Robert Baldrey, who has racked up more than 25 years in the business supplies industry. He recently moderated OPI’s European Forum with great success, and will open the Global Forum with an overview of the state of the industry. Then, over the next two days, some of the themes covered are: • The transformation of retail and distribution • Content marketing • Internet of Things • E-commerce • Mergers and consolidation In addition to the main agenda, there is the opportunity for more intimate discussions during the roundtable sessions on the first day of the event. Topics in these include e-commerce and price transparency, control of online content, shifting trends in office refreshments, customer activism and 3D printing.

In a high-profile Power Panel session, OPI’s Hilleard will interview some of the biggest names in the industry: Essendant CEO Bob Aiken, SP Richards CEO Wayne Beacham, ADVEO CEO Jaime Carbó, Staples Vice Chairman Joe Doody, and 3M Global Business Director – Stationery & Office Supplies Jeff Hillins.

Abundant networking One of the key benefits of attending the OPI Global Forum is the rare opportunity for delegates to engage in high-level networking in an intimate setting and under Chatham House rules. There is plenty of time over the course of the event to meet newcomers and catch up with old friends, colleagues and peers – from the drinks reception and welcome dinner, to structured groups or informal gatherings for more private discussions. For more details, visit opi.net/ gf2016. If you would like to attend the event, email Steve Hilleard at steve.hilleard@opi.net. Please note that space is extremely limited.

The 2016 Global Forum will feature a very special evening on 14 November in celebration of OPI’s 25th anniversary. Attendees of the Global Forum are automatically registered for the party, and will be joined by a handpicked guest list of friends and colleagues – past and present – from the OP industry. The drinks reception and informal dinner take place at the spectacular Signature Room on the 95th floor of the John Hancock Center in Chicago.

w w w.opi.net | OPI Magazine

Your OPI

Where are they now? Ed Walper

“I have benefited from good timing and good fortune in having worked with so many talented and distinguished people”

the last of our ‘Where are they now?’ series – and just before we take a comprehensive trip down memory lane for the 25th anniversary edition of OPI in November – we talk to US-based industry veteran Ed Walper. After a total of over 45 years in the industry, mostly on the reseller side, Walper decided to hang up his OP boots three years ago. The idea was to retire, but he was very quickly not content with the more sedentary lifestyle and decided to combine his passion for running a business with his love of travelling. He set up a travel agency in 2015 and now enjoys his retirement career of helping others research and book holidays all over the world.

of leverage in the industry, caused haemorrhaging in terms of margin, killed off financially unstable dealerships and forced even the largest players into a paradigm change. I think the salvation has been the creation of exciting new verticals such as coffee/breakroom and jan/san and the recognition that investment in technology, both for internal systems and as a sales vertical, was essential for survival. Bearing in mind that those years included the 2008 financial crisis, 9/11, a couple of Middle East wars and a host of terrorist attacks, our businesses certainly withstood enormous pressure.

Please describe your time in the OP industry. I have benefited from good timing and good fortune in having worked with so many talented and distinguished people. My good friend Tim Flynn gave me a great opportunity back in 1987 – I was already a 20-year industry veteran, but had just finished a seven-year stint in the wallcovering distribution business – to join Andrews Office Products, and get back into the office products field. Later, in 1994, Tim made it possible for me to join him, Jon Ledecky and the incredible team at US Office Products (USOP) for what was to become the ride of a lifetime. Being the SVP of Merchandising for USOP introduced me to the most senior and influential executives in the OP trade. Those were hysterical, frustrating but also very enriching and satisfying years.

“Those years from, say, 1992 to now gave our industry massive consolidation. They reshuffled the deck in terms of leverage in the industry, caused haemorrhaging in terms of margin, killed off financially unstable dealerships and forced even the largest players into a paradigm change”

What – in OP terms – would you say is your particular claim to fame? As far as positive industry impact is concerned, I would cite my time – albeit brief – as President of BPGI, working with folks like Dave Guernsey and Hugh Sear, and my role as co-founder, long-time co-negotiator and consultant for TriMega’s Dealer Supplier Collaborative (DSC) group. Both BPGI and the larger dealers in the US at the time suffered from enormous cost of goods disadvantages when up against power channel players. I was privileged to work with Greg Fish, Bruce Eaton, Mike Maggio, Lyle Dabbert and so many others in making our constituent dealers more competitive. My last 12 years in the industry, coinciding with my TriMega/DSC work, were back with Tim Flynn, building Impact Office Products into a leading dealership in the mid-Atlantic region of the US.

What do you do now? I officially retired three years ago, but now run a small travel agency with my wife – Cruises and Tours by Walper Travel. We deal with all the major cruise lines, tour companies and holiday venues, and book trips for a wide range of clients (and ourselves, in fact, as we love travelling, which led to the creation of the company in the first place). We are affiliates of one of the leading agencies in the US, which gives us access to everything we need to take care of our customers. Just as in office products, the customer must be cared for. Fail them and they go and find another agent. So overall, it’s real work, but less pressure. And we can spend more time with our kids’ families. We’ve just become grandparents for the eighth time. Life is good!

In hindsight, what were the defining milestones of the past few decades? Those years from, say, 1992 to now gave our industry massive consolidation. They reshuffled the deck in terms

OPI Magazine | October 2016

How do you view the OP industry of the future? I am not sure that ten years from now, there will be an office products industry that is recognisable to us. Let’s be grateful for the good years, for the many battles we won and for the many friendships we made during this incredible generation.

Your OPI

5 minutes with...

“I’m into ‘Scandi crime’ – if it’s not gruesome, procedural and in Danish or Swedish, I’m not really interested”

Alex Dunn, Managing Director, Superstat

Describe what you do in less than 20 words. Ensure we all do the best job we can to remain relevant to our dealers’ needs in a changing world.

What do you think will be the biggest single issue affecting the OP industry over the next five years? The internet – or whatever it has become in five years.

Your first full-time job. Office junior organising the first-ever Superstat conference in 1995.

What do you like best about the OP industry? Talking to dealers about how they’re going to succeed in what they’re doing.

The best moment in your career. Receiving the European Office Products Award for Dealer Group of the Year in Frankfurt in 2011.

And least? The hangovers!

Your favourite office product. My Matador stapler – I’m old school! What sports teams do you support? West Ham United. My grandfather played for them in the 1940s and we were fortunate to be at one of the last games at Upton Park, where he actually played, before the move to the Olympic Stadium (now called London Stadium). The industry figure you most admire. Eric Smith. He gave us fantastic support and invaluable advice – all done with great humour. Your biggest achievement. Hopefully still to come! The most memorable travel experience you’ve had while in the OP industry. Watching two security guys at Frankfurt airport enact a mock fight with the Dealer Group of the Year trophy to assess its effectiveness as a weapon. It’s quite a heavy object with sharp metal pointy bits and I had only paid for hand luggage!

What business management book would you recommend as essential reading? The Five Dysfunctions of a Team by Patrick Lencioni. What TV programmes do you find most entertaining? I’m into ‘Scandi crime’ – if it’s not gruesome, procedural and in Danish or Swedish, I’m not really interested. Have you ever had a lucky escape? Definitely. I signed up to go kayaking in Thailand on 26 December 2004. Thankfully we had too much to drink the night before and slept in. 250,000 others were not as lucky that day.

Your favourite holiday activity. Walking the Cornish coast path – ideally with my (very new) wife!

The worst job you’ve ever had. Flipping burgers at McDonald’s.

Your OPI

Final word Your industry, your opinions

Alina Fisher, Senior Marketing Manager, Office Power

The importance of branding A strong brand is derived from who you are, what your company stands for and how your customers perceive you. It might not seem important for a small office supplies business, but when it comes to your business’ equity value, a strong brand is second in importance only to your financial performance. In today’s competitive market where everything is available at the click of a mouse, it’s vital that you can compete not only on price. Effective branding will allow you to have better management of your margins and avoid the race to the bottom. It is also extremely important in generating loyalty among your customer base as it creates feelings of familiarity and trust. It allows for associations to be made by the customers between the brand and the history of quality and customer service the business has achieved in the past.

“The one key differentiator small office supplies dealers have from the big players is their strong local and personal relationships with customers, but beware who those customer relationships are being created with” Relationship advantage The one key differentiator small office supplies dealers have from the big players is their strong local and personal relationships with customers, but beware who those customer relationships are being created with. Are they made with the brand or individual members of your sales team? And what may happen if that person leaves? Will the customer still stay loyal to the brand? A strong brand will help keep and strengthen those precious relationships. There are various things resellers can do to create a strong brand for their business. First of all, a well-branded website is extremely important as this is the ‘shop-window’ of today’s office supplies dealer. A good website will help differentiate your brand from your competitors as well as ensure your customers can easily find you online. According to the latest industry research, buyers use the internet as their primary medium for office products searches – as many as 73% do that. As such, you have to

OPI Magazine | October 2016

ensure that your customers can find your brand through the channels they use, rather than the channels you have historically used or are most comfortable with. Secondly, avoid any brand-sharing initiatives unless the co-brand does not detract from the ‘ownership’ of the customer and adds significant value to your brand image through the association. Inappropriate co-branding can put you in danger of diluting your brand identity and confusing your customers. And finally, have a strong brand strategy that incorporates brand awareness and engagement initiatives. This should include powerful and consistent branding across all marketing channels – from print to email, from web to telemarketing, from catalogue to social media.

Best practice example A great example of an Office Power partner that has taken its brand from strength to strength is Just Office. Consistent investment and time spent on building the brand means that not only has the dealer acquired new customers, but also retained some since the day the company was first set up. Just Office has successfully created a strong local brand through its functional branded website, email as well as print marketing, and a strong presence on social media. Consistent branding and messaging helps create effective awareness and engagement for customers as they move from one channel to another. When planning your brand strategy, start with defining why your brand exists, what it represents and what value you bring to your customers. Clarity on who you are and what your brand represents will help you shape your brand framework and communicate with your customers in an authentic way. Identifying and living your core values will help you tell your brand story with its unique personality and tone of voice through every touchpoint. Want the Final Word? Email editorial@opi.net

IN THE NEXT ISSUE • Big Interview with Hervé Milcent, CEO, Lyreco • 25 years of OPI: We talk to OP players past and present about industry highlights, challenges and opportunities • Hot Topic: Succession planning • Category updates on the printing, imaging supplies and business machines markets

Office Products International ISSUE NO.2 63

OctObEr 2016