OPI September 2015 EU

The word in office.

magazine

Big Interview

Jim Hebert, CEO, Office Partners p16

September 2015

p22 Crunch time for Jan/san opportunities abound p45 Staples/Depot deal p10 OTTO Office sold to Printus

Contents September 2015

www.opi.net

News

Events

6 Round-up

34 Facilities Show

WB Mason acquires again; Memjet sues HP; SOfEA withdraws from EU PEF pilot

The environment was one of the key themes at the Facilities Show in June as OPI found out

10 News Analysis

36 ISSA/Interclean

Features

38 Climb of Life

ISSA/Interclean heads to Vegas and OP dealers are invited to take part

Printus makes OTTO Office move

The UK OP industry takes to the hills again this autumn to raise money for cancer research

16 Family man

Fresh from winning the Industry Achievement award at SP Richards’ recent ABC event, Jim Hebert gives his first ever interview to OPI

40 EPIC 2015

The third EPIC event sets out to show dealers ‘Where Big Happens’

16

22 Crunch time

What are the chances of the Staples/ Depot deal getting antitrust approval in the US? OPI investigates

45 Jan/san

The opportunities in the jan/san category are huge, but training and education remain key

27 Mopping up the competition

45

Amazon winning the cleaning supplies price war

Regulars 5 Editor’s comment

28 Tapping into the private label market

52 5 minutes with...

Making the case for private label jan/san products

33 Adapting to change

Category Analysis

Ralph Bianculli

33

54 Final word

The agile workplace and how it’s changing the office environment

Beverly Peeling

Should the Staples acquisition not go through, how Depot is going to grow the business organically and increase shareholder value must be major concerns. The likelihood is that it would have to find another strategic partner – and then we start throwing names like Grainger or even Amazon into the ring... For the full story, turn to page 22

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

Features & Production Editor Heike Dieckmann

Editor’s comment

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

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

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

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

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

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

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

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

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

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

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

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

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Brushing up on jan/san We focus on the increasingly important jan/san category this month in the latest of our ‘Special’ issues.

Apparently, there are office resellers out there that have yet to embrace the notion that selling jan/san products will help offset declines in traditional categories.

What are they waiting for?

Jan/san may seem daunting to some and, of course, there are things that have to be learned, but there are plenty of resources out there to help newbies to the Apparently, there are office resellers out there category. In any case, there that have yet to embrace are some product sub-groups which allow for an easier the notion that selling entry into the category than jan/san products will others if people just want to help offset declines in test the waters.

The ISSA/Interclean show traditional categories in Las Vegas next month (see page 36) is a great opportunity for North American resellers to keep up to speed with the latest trends in jan/san; their European counterparts have a little longer to wait before the same show hits Amsterdam in May. In the meantime, we’ve got things pretty well covered in the following pages, including an expanded Category Analysis on page 45 with insight from jan/san experts and a look at how changes in the workplace could affect the office cleaning industry (see page 33).

Finally, I would just like to wish my soon-to-be ex-colleague India Pride all the best in the next stage of her career. Many readers will know India from her work at events and with subscriptions, and she will be leaving OPI this month after more than eight years to seek a fresh challenge in marketing.

Andy Braithwaite Editor

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

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Memjet sues HP over News from opi.net patent infringements IT & EOS

RR Donnelley to split into three RR Donnelley (RRD) has announced its intention to create three independent, publicly-traded companies.

The company said the business will be split into one business focused on financial communications and data services; one focused on publishing and retail-centric print services; and one focused on customised multichannel communications management.

The decision behind the split is to “unlock value” by allowing the three businesses to pursue their own strategies and invest accordingly, said the firm.

RRD’s office products business – which includes Esselte and TOPS – will be part of the Publishing and Retail-Centric Print Services Company (PRSCo), and “accretive acquisition opportunities” will be part of the new company’s growth plan.

RRD doesn’t expect to complete the spin-offs until the end of 2016, and leadership, governance, corporate branding and other matters for each company are still being developed.

Sales for RRD’s OP reporting division fell 6.5% in Q2 to $148.3 million as a result of lower outsourced volume in envelopes and note-taking products.

Vendors 6

OPI Magazine | September 2015

Printing component supplier Memjet has filed a patent infringement lawsuit against HP in the US. The lawsuit alleges infringement of eight Memjet patents related to its page-wide ‘waterfall’ printing technology. Memjet wants to stop HP from the unauthorised use of its waterfall technology and recover damages resulting from HP’s use of the technology in its printer products.

Memjet said it has invested substantial resources in the research and development of its page-wide waterfall technology and has sought to protect that investment through several thousand US and foreign patents in the page-wide inkjet printing space.

In response to OPI’s request for more information, HP said it “does not comment on pending litigation”.

Mergers & Acquisitions

Grainger to acquire UK MRO distributor US-based MRO reseller Grainger has entered into a definitive agreement to acquire UK-based MRO distributor Cromwell Group, together with its subsidiaries.

Through the acquisition, Grainger expects to grow its MRO online model in the UK, similar to the company’s MonotaRO in Japan and Zoro in the US. The company said it will run Cromwell’s core business with the goal of quickly ramping up the online part, which currently represents less than 5% of total sales.

The reseller also said that the deal will help to profitably scale its Zoro online business in Germany, and benefit from access to a large portfolio of private label product sourced from Cromwell.

The deal is worth £310 million ($482 million) and the transaction is expected to immediately be accretive to Grainger’s 2015 financial results. Grainger CEO Jim Ryan said Cromwell’s solid foundation will enable the acceleration of growth for its online model in Europe within the next six months. He added that over the next five years, the expectation is of sales growth from low single digits to approaching double digits.

Cromwell will operate as a standalone business unit led by current Managing Director Michael Kerins.

Trade association SOfEA has withdrawn from its role as coordinator for the stationery category of the European Union’s Product Environmental Footprint (PEF) pilot initiative.

SOfEA took on the PEF pilot project at the end of last year from French trade association UFIPA, but has now said that “complexity in project management” meant that it couldn’t guarantee the completion of the project.

The European Commission website lists the Stationery PEF as “discontinued”, and Policy Officer Imola Bedo confirmed to OPI that the project is “fully discontinued” as it would now not be able to be completed by the pilot phase December 2016 deadline.

SOfEA Managing Director Anita Singh shed more light on the decision, explaining that delays in clearing the finances for the PEF project meant that the association was unable to complete the deliverables according to the EU timelines.

Singh added that the only difference now is that SOfEA is not providing industry input to the pilot to demonstrate the application of the life cycle assessment method on the notebook category.

Sustainability/Green

Singh told OPI that even though it is no longer the coordinator on the PEF pilot, there is minimal impact on SOfEA’s product labelling initiative, and it is following other pilots such as the Intermediate Paper Pilot (IPP) and attending public meetings to keep up to date with PEF developments.

Anita Singh

News n Round-up

SOfEA discontinues European PEF pilot

News n Round-up

Mergers & Acquisitions

WB Mason acquires again in New England US mega-dealer WB Mason has acquired Massachusetts-based independent dealer Office Supply Superstore.

While Office Supply Superstore has current annual sales of $250,000 – a mere drop in the ocean compared to WB Mason’s $1.5 billion – the move cements the company’s hold on its home turf in the north-east of the US. WB Mason also recently acquired $30 million local dealer New England Office Supply (NEOS), based in Braintree, Massachusetts.

Calipage expands into Austria ADVEO’s independent dealer network Calipage has launched in Austria with an initial six dealers.

The group currently consists of Aktiv Büro, Colipri, Tscholl, Toner & Co Blieberger, Bürotechnik Ruby and AOS Bürobedarf Schlosser.

The newly formed network met a few months ago to discuss the sales and marketing activities for the remainder of the year, with plans to develop specific campaigns in conjunction with ADVEO. Calipage Austria has chosen Aktiv Büro’s Reinhard Göllner as its spokesperson, and he will work closely with the German Advisory Council on behalf of the group to develop new activities and ideas.

ADVEO said it expected the number of members to double in the near term as the dealer group launched its first targeted customer campaign in August.

Dealer groups

Facilities Management

Keurig looks to save $300m Coffee maker Keurig has said it would reduce its workforce by 5% as part of plans to save $300 million.

The company added that the 4% decrease in Q3 sales was primarily due to a 23% drop in domestic sales of its brewers and accessories, along with a 1% decrease in pod revenues.

As a result, a multi-year productivity programme will be implemented to reduce costs and streamline structures to drive efficiency, the company said. The $300 million Keurig expects to save over the three years will include the loss of over 300 employees over the next two quarters.

Keurig CEO Brian Kelley said the programme was the result of having to take “decisive actions to adapt and compete more effectively in today’s rapidly-evolving, dynamic marketplace”.

In its 10-Q SEC filing, Keurig said it expects to launch its new cold brewing system, Kold, in the autumn to US customers through its website. In addition, the company said it had identified specific opportunities within the away-from-home channel, including food service, workplace, higher education and hospitality locations, but did not specify what these were.

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OPI Magazine | September 2015

Spicers and VOW cooperate on bad debt problem UK wholesalers Spicers and VOW are to share information on bad debtors to stop ‘phoenix’ companies just being able to switch accounts.

In an open letter to the UK trade signed

by EVO CEO Robert Baldrey and SPOT CEO Jeff Whiteway, it was revealed that there have been several instances in the past few years where a dealer has been wound up leaving a wholesaler with a bad debt. The same dealer business would then re-emerge shortly afterwards in the form of a new company which then seeks to carry on business with an alternative wholesaler.

This practice has had a “material impact” on both Spicers and VOW, and the two wholesalers – after seeking legal advice – have agreed to share bad debtor information “so that they can avoid supporting and/or doing business with any dealer companies or business principals that they consider to have engaged in such ‘phoenix’ transfers”.

“VOW and Spicers will refuse to supply any dealer company or provide it with credit based solely upon information received under this information-sharing agreement,” the letter concluded.

Wholesalers

news n Analysis

Printus makes OTTO Office move Online/mail order player Printus cements its leadership status in the German market with the purchase of OTTO Office

When

the news of Germany’s Printus buying OTTO Office was announced in mid-July, it was a done deal. Yes, there had been rumours in the prior few weeks, but as was befitting for a company as private and press-shy as Printus, the competition authorities had already approved the acquisition by the time it was announced.

And as Printus Managing Director Siegfried Sorg told OPI: “OTTO Office will continue to operate from its own facilities, which means both firms will operate completely independently from each other.”

The existing OTTO Office management team, based at the company’s headquarters in Hamburg in the north of the country, will also remain in place indefinitely, with Uwe Orgas and Roy Vieregge at the helm.

Where are the synergies?

Sorg described the integration process as “minor” due to the autonomous running of the two entities. So where are the expected synergies that constitute a substantial reason for any acquisition and consolidation move?

The most obvious one would appear to be in the area of logistics.

Printus invested about D65 million

($78 million) in new facilities at its headquarters in Offenburg (in the far south of the country in the Black Forest region) which became operational in 2005.

Not only are these facilities state-of-the-art, they also have excess capacity that, to remain cost-efficient, needs to be filled.

OTTO Office, on the other hand, operates a warehouse in Karlsruhe, only an hour’s drive away from Printus’ HQ and at the other end of the country in relation to its own HQ. Given that this warehouse is said

OPI Magazine | September 2015

Multi-brand approach On the other hand, however, there are many – about 20 – other catalogue and online businesses that already operate under the overall Printus umbrella and have done so for many years, fairly autonomously too. The ones that have similarities to OTTO

Part of the reason for the acquisition is no doubt the desire to grab a larger slice of an OP cake that is becoming ever smaller to be nowhere near as modern and automated as the Printus facilities, the assumption that ultimately all logistics might be run from Offenburg is not too far-fetched.

For that to happen efficiently, however, the two companies’ warehouse systems as well as e-commerce platforms – currently run completely separately – will have to be aligned, and this presumably would be the first step in any

Printus’ expansive HQ and logistics facilities in Offenburg in southern Germany.

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integration process, followed by changes in logistics.

If either or both of these scenarios happen, it is inevitable that staff cuts will follow. At the moment, Printus employs approximately 1,000 people.

The purchase of OTTO Office has added another 300, a considerable percentage increase.

Part of the reason for the acquisition is no doubt the desire to grab a larger slice of an OP cake that is becoming ever smaller. But there surely must be substantial synergies to be found in other parts of the business, especially since – and this is purely anecdotal – OTTO Office was “no bargain” for Printus.

Office are OP discounter Büroplus in Hamburg, and Office Discount which is located both in Munich and in Salzburg (Austria).

Do many small players going essentially for the same target audience create better results – top and bottom line – for Printus than one mighty big operator?

Uwe Orgas, remaining Managing Director of OTTO Office, preferred to leave the commenting to his new

at least long term, but that hurdle seems to have been overcome.

Printus’ Sorg confirmed to OPI that the OTTO Office name will continue to be used. And while he referred to confidentiality agreements when

that the acquisition is an intelligent move by Printus, further backing its market-leading position in the German SME segment.

Büromarkt Böttcher, one of the largest online-only operators in the

“For us, this market consolidation effectively means that we’re facing one less competitor and, as such, less price competition” asked for how long the company was allowed to use it, insiders put the timescale at ten years. This will be long enough for those particularly affiliated with OTTO Office to ultimately change to another brand; it will also be long enough to further concentrate and work on Printus’ Google rankings, an area where OTTO Office has historically been strong.

Will the deal substantially change the make-up of the German OP landscape? Not likely, but all industry players OPI spoke to – both from the manufacturer and reseller community – agree

German OP category (2014 sales were D100 million), believes first and foremost that this transaction means one less competitor in the market.

Managing Director Udo Böttcher said: “In the long term, there will certainly be changes in the market and we assume that they will be positive. For us, this market consolidation effectively means that we’re facing one less competitor and, as such, less price competition.”

But not if OTTO Office and Printus – not to mention its other subsidiaries – have different price points as well.

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news n Analysis

parent company, but emphasised that “the takeover by Printus is the ideal solution”.

And that is likely to be the case.

Printus is a well-run and profitable organisation with sales of about D500 million. The business is 100% focused on catalogues and online shops.

OTTO Office, too, is well established and profitable in the mail order and internet business and adds D200 million to the revenue total. Unlike Printus, which has also had a B2C presence since 2006, it is 100% B2B oriented (part of the reason its B2C-focused parent Otto Group wanted to divest the subsidiary to concentrate solely on its multichannel retail business), but both companies have the same core customer base – small to medium-sized businesses.

What they also have in common is a strong brand name. When OTTO Office was first put up for sale by the Otto Group last November and negotiations began with interested parties, the continued use of the OTTO Office name was in doubt,

The jan/san category is becoming increasingly popular among dealers, but what is going on from a vendor and wholesaler point of view? OPI asked some of the major jan/san players for their thoughts. Below are some of the responses.

(For a full analysis of what’s happening in this industry sector, read this issue’s Category Analysis on page 45) We launched an environmentally friendly aircare solution at the beginning of 2015 and this, in particular, has performed well. It shows not only that consumers are looking for solutions that have minimal impact on the environment, but also that they are looking for new technologies and innovation.

Paul Wonnacott, Managing Director, Vectair Systems As more companies such as Amazon, Walmart, Staples and Grainger compete more aggressively, office supply distributors are driving hard in jan/san and breakroom as their traditional categories struggle compared to last year and their retail store sales decline.

Fabio Vitali, Central Marketing Manager, Sofidel – Papernet Our research indicates that wellness is a very important focus of millennials, and as their presence in the workplace increases, it is driving demand for products that create a healthy workplace. The main opportunities for resellers are capturing end-user sales away from competing channels such as clubs, e-tailers or even grocers.

The research also shows that the facility management buyer is increasingly purchasing online, which mirrors what we see in office supplies and requires resellers to have a robust e-commerce solution for their customers.

Vince Phelan, Director of Category Marketing, Essendant

Projected worth of the global market for cleaning and disinfecting wipes in 2020

100,000+

Number of compostable rubbish bags used at the 2015 Glastonbury Festival in the UK

TWEET CHAT follow us on Twitter @OPInews, @andy_opi

@Geerpres Another reason to be thankful for custodial cleaning crews & all who keep our facilities functional. #Humour #JanSan @MasterCareClean This needs to catch on in more public washrooms!! #weloveclean #jansan

$46 billion+

Projected worth of the global market for cleaning chemicals in 2018

$16.7 billion

Projected worth of the global market for infection control in 2020

News ■ And finally...

Comment

$3 billion

@digper Collective office cleaning equals ice cream plus beer #officecleaning #icecream #beer #tgif

SNAP SHOT What chemicals should you be using to clean the inside of a shark tank? The answer to that and other important questions will no doubt be answered at this year’s CMS – Cleaning, Maintenance, Services – show taking place in Berlin, Germany, later this month.

Photo: Messe Berlin

The growth in jan/san products typically tracks GDP and the most recent data supports that proposition. In the commercial markets, the growth in new construction, businesses and employment all help fuel the demand for jan/san products.

Bill Balek, Director of Environmental Services, ISSA Consumers like the one-stop shop from the dealer as they are getting hi-touch and fast delivery, which is not what they are accustomed to from a jan/san distributor. The biggest challenge, however, is getting a manufacturer to set up a programme where dealers can access products at a cost where they can be competitive. But then, the manufacturers want a full truckload of product purchased and most dealers are not at or near that level yet.

Mike Foster, Director of Merchandising, Independent Stationers

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

opi.net poll results Resellers... what is your biggest challenge selling jan/san products?

Having sufficient product knowledge Sourcing the right products at the right price

15%

62% Connecting with the customer’s jan/san buyer 15% Training reps to sell jan/san

8%

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Big Interview | Jim Hebert

Family man NOT

one to put himself in the spotlight, Office Partners founder and CEO Jim Hebert nevertheless found himself on the stage at this year's SP Richards (SPR) ABC show when he was presented with the Industry Achievement accolade at the North American Office Products Awards.

A 40-year industry veteran, Hebert set out from humble beginnings to eventually establish his own dealer group in 1998, using the vendor relationships he had established prior to that to develop competitive buying programmes for his members.

17 years later, Office Partners has grown to around 150 members, but has very much retained its small, family business roots. Indeed, the dealer group prides itself on resembling, both structurally and mindset-wise, the small, family-run, entrepreneurial businesses that make up the bulk of its membership.

Office Partners has rarely featured in OPI over the years, so we are pleased to be able to put that right in this issue after Editor Andy Braithwaite caught up with Hebert shortly after the ABC show.

OPI: Firstly, congratulations on the award at the ABC. What did that mean to you?

Jim Hebert: Well, for 40 years I’ve tried to stay out of the limelight and in the past few months I’ve basically received two lifetime achievement awards: one from BSA and this one from you folks and the people in our industry. It’s kind of humbling and it’s hard to put into words when you’ve been round as long as I have, and all of a sudden people start to recognise you for what you’ve done in the industry all this time.

OPI: Well, it’s nice to finally feature you in OPI after all these years! Perhaps we could begin with a quick round-up of your career.

JH: I started out on the dealer side of the business, driving trucks and delivering products, so that’s when I first started to learn about the products. In the early 1980s, I went to work for a large contract stationer in Illinois and that’s where I really learned the business.

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OPI Magazine | September 2015

Fresh from receiving his Industry Achievement award at the SP Richards ABC show, Office Partners’ Jim Hebert talks to OPI about his dealer group and and key issues affecting our industry I learned the contract side, handled purchasing, contracts, the buying end of it and so forth, and got to sit down with Fortune 500 customers and learn their needs and wants. I was trained by an exceptional man, Mr Ralph Burgess, and he really put me on my road to success in this business.

We were one of the original dealers in the NPA [National Purchasing Association] buying group and I ended up going to Jackson, Mississippi, to help them get the group started, which really started me into the buying group side of the industry.

I then came to Birmingham [Alabama] to run NOB [National Office Buyers] for a year.

They were going to merge with NPA, but I really didn’t want to do that, so my wife, Diane, and I sat down and decided we would start our own buying group, as crazy as that may sound.

OPI: Why were you against the merger between NOB and NPA? JH: There was nothing political. I had moved from Jackson, Mississippi, to Birmingham and they were going to move it back to Jackson and be headquartered there, and I just didn’t want to move again.

OPI: That was in 1998?

JH: Yes, we started in ’98. We had no dealers or vendors and didn’t have any money, but the industry helped me and here we are today, almost 20 years later.

OPI: How did you get the ball rolling in terms of getting people on board?

JH: I had spent a number of years negotiating the first real large programmes with the vendors because we had a group of 40 of the largest dealers in the US at NPA. So I went back to the vendors and said, “Here’s what

“When I originally started it, I didn’t want dealers to be intimately involved in the running of the group”

Office Partners | Big Interview

I want to do”. Virtually all of them turned around and gave me the same programmes I had negotiated with them in order to help our group, and then we took those and went out to the dealers to get them to join.

OPI: You’re not a cooperative, are you?

JH: We are not and the reason for that is when I originally started it, I didn’t want dealers to be intimately involved in the running of the group – they should be running their own businesses. And in a corporation, they’re not responsible for the debt that a group incurs, unlike in a cooperative structure.

OPI: How many dealer members do you currently have?

JH: It’s hard to say with us because we have so many multiple location-type people that are in the group, but it’s probably about 150.

OPI: Are they spread around the country?

JH: They’re mostly east of the Mississippi.

We do have dealers all over the country, but for the most part the density is on this side.

That’s just kind of the way it works. This side of the Mississippi is more densely populated and you’ve just got more office products dealers here.

OPI: How many staff members do you have working at Office Partners?

JH: Office Partners has six people, that’s it. And that’s because we started with the viewpoint that the only way we were going to be able to do this effectively in the future was with technology. Our dealers had to be on the internet to be part of the group, they had to pay their bills on the internet, they had all their programmes there, they got accounting functions and so forth, and that’s the only way you could do what you do with over 100 vendors and still do it efficiently.

OPI: You mentioned your wife, Diane, at the start setting up the business with you. Is she still part of the Office Partners family?

JH: Oh yes, she’s still on board. We have my son, my daughter, my son-in-law and my daughter-in-law who work there and myself.

OPI: That’s the six. So it really is a family-owned and family-run business.

JH: Yes, it is. The dealers feel there are similarities between their own businesses

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Big Interview | Jim Hebert OPI: I’m trying to imagine your family dinners. Do you have to ban business talk at these kind of things?

JH: After 6pm there’s no business. I’ve been doing this a long time and I’ve tried to tell them that when you leave the office and you lock the door, that’s where it stays. Heck, on the weekends we try not to see one another just to give everybody a break because enough’s enough. I mean, you see your kids every single day and your mom and dad every day and that’s difficult to do, so you have to find out where the happy medium is.

OPI: You seem to have found that – they’re still there.

JH: We’re doing ok. We’ve always said we just want to be a little country store.

OPI: When you look at your members, how are they embracing the changes in the office category, which is declining, and the need to expand and diversify?

JH: I think there’s a position of not being a stocking dealer; stockless dealers are more flexible because of the amount of product they can buy from the wholesalers that’s not included in their inventory.

It’s been my experience in the past 40-plus years that every ten years the products in our industry kind of rotate. Some come in, a lot of them come out and we’re selling something different every ten years.

We have a retailer here in the US called Dollar General with small town stores that sell everything. They sell pots and pans, they sell food, they sell anything you can think of, and that’s where dealers are going to have to go to be a one-stop shop for the customer.

“It’s been my experience in the past 40-plus years that every ten years the products in our industry kind of rotate”

OPI: Obviously, that one-stop shop helps if you’ve got a nice snazzy website with all the products available online. How up to speed are your dealers on that technology side and how do you help them in that area?

JH: That’s one place where the dealers are kind of between a rock and a hard place.

There are only a few software houses left out there that can help these dealers. The wholesalers help them as much as possible, but dealers don’t have a lot of new ways to go to market on the internet because they are limited to the people that can help them run their companies.

OPI: Is it a case of they have to invest in this technology or else?

JH: It’s a lot of money to invest on the technology side of things. You’re talking about adding more SKUs to your offering and that’s very costly to get started and to maintain. In order for the buying groups to do that, we would have to get together to share the costs of something like that.

OPI: Is that something you’ve talked to the other groups about?

JH: Yes, we have talked about that.

OPI: And is anything likely to happen?

JH: They’re trying to figure out how to get it done. I talked to them again at the SPR show and we’ll be talking again soon. You almost have to set up a separate company to do something like this or outsource it.

Basically, on the wholesale side you have, let’s say, on average 50,000 SKUs that they offer through the internet. You’ve got Staples at over a million, you have Amazon – who knows how many they have in our business – so if you’re going to put up a million SKUs, we have that in our industry easily.

But how are the dealers going to buy them? Where are they going to source them from? How do you buy them with the kind of prepaid every one of these manufacturers has? It’s going to be a very costly thing to get involved in in the long run.

OPI: Do you see it as a bitter pill that dealers are going to have to swallow if they want to continue to sustain their businesses in the long run?

JH: It’s going to have to be. There are going to be dealers in parts of the country where that big guy can’t get to them, but for most it’s kind of the old saying of ‘the Russians are coming’! You’d better devise a way to protect yourself.

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OPI Magazine | September 2015

Big Interview | Jim Hebert OPI: I guess dealers have been saying that for 20 or 30 years, haven’t they?

JH: 30 years ago it was Boise Cascade, and they had probably the most efficient way to do it: they knew how to be a contract stationer, they knew how to sell and they were also wholesalers. That was a difficult nut to crack.

OPI: But dealers are still here.

JH: Yes, that’s what I tell them. I say, “No matter what other guys have come and gone, you guys are still here”.

OPI: We’ve got the potential merger of Staples and Office Depot coming up.

What do you make of all that?

JH: I hope that it all goes through this time. If you take two large entities like that and try to merge them, you’re going to have a few years of them not knowing what’s going on, so it presents opportunities for dealers in their marketplace or potential customers or even adding sales people.

The problem with that is the average dealer doesn’t know enough about that sales person or how they’re compensated or how they go to market in some cases to hire them. So that’s where they need help and I know that Steve Hilleard and Mark Hampton were working on something – and that’s a service I think they’ll need if this thing goes through [see 'Collaboration for dealer growth', OPI July 2015, page 29] .

I don’t know if it’s going to go through, though. They own 90% of the Fortune 500 business and if you only have one entity bidding on those contracts, are prices going to go up? It’ll be interesting to see how the FTC calls that. It’s a difficult scenario.

OPI: You get together every year in Nashville for your Grand Ole Gathering, don’t you? Is this your typical conference and trade show or is it something a little bit different?

JH: We have always had one-on-one meetings.

We have dealers and vendors sitting down with a schedule and the dealers have to talk to every single vendor there and the vendors talk with every dealer that’s there.

We don’t arrange it to

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OPI Magazine | September 2015

be a vacation – it’s work. They work hard and they play hard, but they get work done and that’s what’s key, especially in today’s environment where the vendors and the dealers don’t want to spend too much time out of their business. So you’ve got to make it be done efficiently and be worth their time and effort.

OPI: TriMega and IS are about to have their third EPIC show. Have they asked you to come along and be a part of that?

JH: Yes, they’ve asked us about it and we’ve discussed it, but it doesn’t fit with what we’re doing right now.

Even IS and TriMega have segments of their dealers who aren’t necessarily involved in EPIC because they have their own one-on-one scenarios.

OPI: When you look at the future of Office Partners, what’s your vision or your strategy for the business?

JH: Well, we’ve already made the transition as far as our succession plan goes. My wife and I are going to stay in the business and keep doing what we’re doing, but the kids actually run things day-to-day now and they’re the focal point for everybody.

So our future is we’re going to keep going and we’re going to keep viable and keep trying to help dealers like we already do.

OPI: But no kind of game-changing vision or change of direction that the kids want to bring in?

JH: We’re going to sit back and watch, especially in the next year or so, what’s going to happen. Is the Staples/Depot thing going to go through? Where’s the Amazon going?

Instead of jumping out there and coming up with a lot of things that may or may not work, in the immediate future we’re going to sit here and wait and see what’s going to happen, because it’s going to change, we just don’t know in what direction.

And if we do need to do something, it’s easier for us to do here because we don’t have a board of directors, and we don’t have anybody making decisions but us – so we can turn on a dime if we have to.

“If you take two large entities like [Staples/ Depot] and try to merge them, you’re going to have a few years of them not knowing what’s going on”

Read more from the interview with Jim Hebert online on opi.net

Hot Topic | Staples/Office Depot

C H N R C U

e m ti

by Andy Braithwaite andy.braithwaite@opi.net

AFTER

a few months of relative quiet, there has been a lot more market activity and chatter in recent weeks over whether the US Federal Trade Commission (FTC) will approve Staples’ proposed $6.3 billion acquisition of main rival Office Depot.

Just to recap where the FTC is in its investigation, both Staples and Depot are busy putting together their respective responses to a second request for information from the FTC. This is standard procedure in cases which the FTC feels warrant a closer look, and was expected when the Staples/Depot deal was announced back in February of this year, ahead of a pronouncement by the FTC expected sometime in November.

Speaking on 19 August, Staples CEO Ron Sargent said things were “on track” regarding the work required to complete the second request, adding that Staples would announce when it had certified substantial compliance

OPI assesses the chances of the impending Staples/Office Depot transaction getting US antitrust approval as the expected date for an FTC decision draws closer with the request. Although he declined to specify when this might be, he said he still expects the deal to go through before the end of the year.

The market, however, is still split on whether the acquisition will get unconditional FTC approval, as

not considered a done deal given their positions as the number one and number two resellers to large corporate and government customers. In fact, estimates put their combined market share to these segments as high as 85%.

So, could the recent approval for the acquisition by the Australian Competition and Consumer Commission (ACCC) be considered something of a surprise and provide some pointers as to what the FTC will decide in the US? After all, the ACCC said it had liaised with the FTC prior to giving its approval.

On whether the decision is a surprise, the answer from some of the leading industry figures in Australia is a resounding ‘no’, although as consultant Andrew Penfold points out, the fact that the ACCC extended its original deadline implies that it was “probably a close-run decision”.

“I am not surprised by the ACCC’s decision and think (once implemented) it will create opportunity for both

Could the recent approval for the acquisition by the ACCC […] provide some pointers as to what the FTC will decide in the US?

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OPI Magazine | September 2015

shown by Office Depot’s share price at the time of writing of about $7.50.

That is still around $2 below what the Staples acquisition values it at, and indicates a high level of doubt about whether approval will be given – although a number of analysts have already publicly said they believe it will be approved.

What clues from Australia?

Australia was one of the markets where antitrust approval for a combination of Staples and Office Depot (which operates as OfficeMax in Australia and New Zealand) was

Staples/Office Depot | Hot Topic independents and corporate [resellers] in the short term,” said Brad O’Brien, CEO of dealer group Office Choice.

“Longer term, it will depend on what morphs out of the merged entity and also the competitors’ response, so it will be an interesting time.”

A closer look at the ACCC approval document throws up some interesting points.

Firstly, it based its decision purely on the impact of the acquisition on large corporate and government customers, not on the wider office and business supplies marketplace.

Despite the huge market share enjoyed

by Staples/’Max to these customers, the ACCC argued that there was sufficient present and potential future competition from the likes of Complete Office Supplies (COS), Lyreco, Officeworks and OEM suppliers such as Fuji Xerox and Canon.

And the winner is...

“COS is no doubt going to be the big winner,” states Gavin Ward, CEO of dealer group Office Brands. “They have a good track record at picking up corporate and government business, and while Staples and ‘Max work out the amalgamated structure and staff I have no doubt there will be change, and through change, opportunity.”

At COS itself, Managing Director Dominique Lyone says: “There is significant rivalry in the Australian OP market. I do not believe the merger between Staples and OfficeMax will reduce that rivalry dramatically. I am very optimistic that, should this merger eventually proceed, it will present significant opportunities for all progressive independent dealers.”

While Lyreco doesn’t have as strong a market position in Australia as it would probably like – its nomination

What if the FTC says no?

While there is probably more than one analyst sweating over the FTC’s decision, so must be Office Depot’s shareholders and management. Of the two protagonists involved, Depot is clearly the one with most to lose if the acquisition does not go through.

While Staples has been implementing its transformation strategy for the past couple of years and gone through a bit of pain in the process, Depot’s recent focus – at least in North America – has been on the OfficeMax integration and ensuring that synergy targets are met.

While there was talk of a new ‘unique selling proposition’ (USP) due to be introduced at the beginning of 2016, this still remains vague and no update has been provided other than that “defining and beginning to implement” the USP remains on a list of critical priorities for 2015.

Should the Staples acquisition not go through, how Depot is going to grow the business organically and increase shareholder value must be major concerns Should the Staples acquisition not go through, how Depot is going to grow the business organically and increase shareholder value must be major concerns. The likelihood is that it would have to find another strategic partner – and then we start throwing names like Grainger or even Amazon into the ring.

Staples, on the other hand, is in something of a win-win situation. If the deal is approved, then it snaps up its major direct competitor; if not, it continues on its transformational journey leaving a weakened Depot in its wake, paying a $250 million break-up fee for the privilege.

There are those who have even suggested that paying this break-up fee was part of the Staples plan all along, as it recognised from the start that antitrust approval was unlikely.

And when you look at it, paying $250 million – about 8% of the combined sales of Staples and Depot – to seriously or even mortally wound Depot might sound like a very clever bit of business.

While that idea is probably wishful thinking, it does show that the Staples board entered the deal from a position of strength, knowing that whichever way it went they would come out on top. Depot, on the other hand, has pretty much all of its eggs in one basket.

of supply understate their current competitive impact in the market,” it concluded.

The ACCC also assessed the chances of new competitors entering the market, stating that “it is likely that Officeworks […] will in the

If the FTC looks at Fortune 1000 corporate accounts in isolation, then that would probably raise serious competition concerns as a key player even drew surprise from one industry source – the ACCC recognised its ability to service these large accounts and provide competition to an enlarged Staples.

“Lyreco and COS’s smaller shares

future be a credible competitive threat to the merged entity for supply to large customers”, pointing to the fact that Officeworks “has been actively tendering to large government customers”.

So, is the FTC in the US likely to come up with a similar set of conclusions to its counterpart in Australia?

The honest answer to that question is that no one knows, but there are a few areas which might provide some clues.

The ACCC chose a specific area of the market – large corporate and government customers – rather than take the general market for office supplies as a whole.

The key to the outcome in the US is to what extent, if at all, the FTC looks at distinct market areas or customer types. If, for example, it looks at Fortune 1000 corporate accounts in isolation, then that would probably w w w.opi.net | OPI Magazine

23

Staples/Office Depot | Hot Topic

raise serious competition concerns as Staples and Depot control a huge part of this market between them.

In Australia, the ACCC didn’t even consider the wider OP market because both Staples and ‘Max operate almost exclusively in the private and public sector large accounts arena. There are still observers in the US who refer to Staples and Depot as ‘office supplies retailers’, missing the point about their contract operations. Sure, there is an abundance of competition in retail and online, but that’s not the case in the specialist corporate B2B market.

The ACCC gave approval to the acquisition even though a combined Staples/OfficeMax would control up to 85% of large corporate and government customers.

Approval was given because there are two other alternatives in the market – Lyreco and COS – that, although much smaller, have the capability in place of competing effectively in this space.

Staples and ‘Max coming together is effectively taking the market from four to three players.

In the US in 2013, it was a case of two weaker competitors – Depot and ‘Max – joining forces to act as a viable competitor to Staples. Where will the FTC argue that this competition is going to come from now if Staples buys Depot?

Despite all the talk of mega-dealers WB Mason and HiTouch Business Services, Amazon and the dealer groups, could any of them compete

today with a combined Staples/Office Depot on a national basis for those largest corporate accounts? That is highly unlikely given the issues with sales and customer support staff and/or providing competitive delivery capabilities they would face. The US scenario is still a case of going from two to one (with this particular customer subset).

The ACCC referred to Officeworks as a credible future competitor.

Officeworks is already the largest specialist player in the wider office products market in Australia, has

the wings, but they are probably hoping to pick up assets required by an FTC ruling more than anything else; and TriMega and Independent Stationers have already told OPI that the focus with their new EPIC Business Essentials joint venture is “most probably not” Fortune 1000 accounts.

In addition to the above there are two other points that are worth noting.

Firstly, OPI understands that the ACCC has historically taken a different stance to the FTC on M&A activity, generally not getting in the way of what might be regarded as a monopolistic situation as long as the market is not overly affected. Which would appear to be the case here.

Secondly, OPI sources in Australia have not been aware of any major objections to the proposed Staples/’Max merger, suggesting the competing resellers regard one less player as a preferable market situation, suppliers don’t see too much in it and customers are happy with the alternatives.

That is not the case in the US. There have already been some high-profile objections from organisations such as the American Antitrust Institute and the American Postal Workers Union, and OPI is aware of a number of other protests from within the OP industry itself.

Where the issue may be won or lost, however, is from the FTC’s interviews with Staples’ and Depot’s largest clients. Do they think there will be less price competition after a merger? When they put their office supplies contracts out to bid, are

Amazon Business may have a few bells and whistles in terms of account management, but doesn’t look geared towards more complex major accounts a dedicated B2B sales force and is already tendering for larger accounts. In the US, the presence of future competition is much more hypothetical: Amazon Business may have a few bells and whistles in terms of account management, but doesn’t look geared towards more complex major accounts; HiTouch and WB Mason may be waiting in

there viable alternatives to Staples and Depot?

These are the key questions.

Industry insiders would probably answer ‘yes’ and ‘no’ respectively to those – and that’s what some of those subpoenaed by the FTC must have been saying. We’ll just have to wait and see how much weight they carry in the grand scheme of things. w w w.opi.net | OPI Magazine

25

Marketyze | Research

Mopping M opping up the competition The latest pricing trends report on cleaning products from online pricing comparison and market research firm Marketyze reveals a highly competitive market

BY

2017, global sales of household cleaning products are expected to reach $147 billion, primarily driven by growing concerns about hygiene and infectious diseases. As a result, office products resellers are jumping on the bandwagon and the big retailers and e-tailers are no exception.

The Marketyze Competitive Pricing Trends – Cleaning Supply report covers the price positioning and behaviour of three retailers – Amazon, Office Depot and Walmart – as well as four pure e-tailers, Amazon, Betty Mills, Shoplet and OfficeSupply.com.

In the report, Marketyze investigates pricing on over 900 products in the retail channel and almost 1,100 products in the e-tail sector covering the period 14 May-14 July 2015. The cleaning supply categories covered in the report include floor cleaning products, paper products and dispensers, soaps and dispensers, cleaning chemicals and tools, and deodorisers.

Retail rodeo In the retail category, Amazon was the most competitive and price dynamic throughout the reporting period.

For the first two weeks, Walmart kept up but then on 3 June, Amazon dramatically dropped its prices and Walmart failed to keep pace.

Overall, Amazon came out as cheapest (60% of the time), not unsurprising as it changed prices on 95% of its products – for 116 items, the online giant changed prices over 15 times.

Office Depot, on the other hand, made little effort to keep up and

changed prices on only 9% of the entire assortment, with relatively few amendments on the products it did actually change.

Interestingly, while all three retailers lowered their average price, Office Depot and Walmart’s prices were increased more frequently than

In line with its position as a seller of discounted products – and therefore needing to closely monitor Amazon’s pricing to stay competitive – OfficeSupply.com kept up with Amazon until the price drop on 3 June. Although OfficeSupply.com followed suit a week later, Amazon’s

Retailer price updates over time

decreased, and 43% of Amazon’s updates were also price increases.

Marketyze believes this behaviour demonstrates the cleaning sector’s highly competitive pricing nature, with the retailers continually seeking ways to increase margins.

E-tailer wars Against the pure-play e-commerce sites, Amazon again had the lowest average price across the entire period, and was the cheapest overall across 68% of the selection.

Although Shoplet started and ended with the highest average price, it had the biggest price drop overall (10%) and also changed prices across 96% of the assortment. Meanwhile, Amazon changed prices across 97% of the selection, but it only managed a 4% drop overall in average price over the reporting period.

average price was still 11% lower than OfficeSupply.com’s for the rest of the reporting period.

Betty Mills’ average prices remained pretty constant throughout and were by far the least price competitive.

While Amazon decreased prices over 5,000 times across the entire assortment, Betty Mills did this just 220 times, and increased prices more than 1,000 times.

Marketyze suggests the price increases were either a case of “misreading” the competitive landscape, as in the case of Betty Mills, or a strategy of making the most of margin opportunities as they present themselves in real time.

To download the full Marketyze Competitive Pricing Trends – Cleaning Supply report, visit: http:// go.marketyze.com/cleaning-supplyreport-aug15-opi. w w w.opi.net | OPI Magazine

27

Special Feature | Private Label & Jan/San

Tapping into the PRIVATE LABEL MARKET There is enormous potential for B2B resellers to leverage consumer trends and develop private brand jan/san solutions

by Carolina Betancourt-Gomes Senior Manager, Global Category Solutions – Home Daymon Worldwide

AS

office products experts know, the janitorial and sanitation (commonly known as jan/san) sector greatly impacts the successful operation of any business, regardless of its size. It encompasses the simple necessity of keeping work environments clean along with more complex facilities management

This increase has not gone unnoticed. In fact, many national brands within the cleaning sector have recognised the office products industry as a channel for growth and have invested the right resources to pursue profitable opportunities in this area.

Find the right partner One nimble way to do this is by partnering with a reputable retailer or manufacturer to create and market an innovative line of jan/san

Many national brands within the cleaning sector have recognised the office products industry as a channel for growth responsibilities like breakroom safety and maintenance.

According to IBISWorld’s March 2015 Janitorial Services Market Research Report in the US, jan/san is a $51 billion industry that experienced 1.4% annual growth between 2010 and 2014. This growth has been fuelled in part by an increasing demand for cleaning services, slow and steady economic recovery and greater portfolio diversification.

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OPI Magazine | September 2015

products that offer both functional and value benefits.

To do this successfully, it’s important for resellers to foster strategic sourcing alliances with either national brands or with innovative manufacturers with a sophisticated R&D and service infrastructure to develop professional private brand jan/san solutions. Resellers embracing this business model in the B2B space are

also capitalising on consolidation and contract cleaning as areas of opportunity to drive differentiation.

The home/work connection It’s critical to understand that jan/ san is a highly emotional category in connection with overarching consumer home care.

In both instances consumers are end users as they gravitate between work and home, and their expectations for the products they’re exposed to are high.

When considering private brands in the jan/san realm, it’s important to note their significance in the value/benefit equation. For example, the following realities should be considered: Cleaning is an emotional category: Having a clean, well-maintained workplace enables a positive and productive environment; having a clean and well-maintained home brings personal satisfaction.

Home care and health and wellness: About 90% of US consumers agree that maintaining a clean home is a good way to stay healthy (Mintel 2014). Although the average consumer spends less time cleaning, he/she is putting more emphasis on quick clean options and disinfection, thus making wipes the fastest growing segment in the

Special Feature | Private Label & Jan/San category. Health and disinfection in the workplace are equally important as this topic is top of mind with employees and employers to safeguard their organisations from potential cold/flu outbreaks.

Consumers demand transparency and safety: According to Datamonitor, 70% of global consumers are concerned about the chemicals in products they or their families use.

There is increasing awareness and demand among consumers to gain a better understanding of ingredient content and toxicity.

Today, the notion of transparency and safety starts with the tangible benefit for each individual and extends to the benefit for the environment. The idea of ‘better for you and better for the environment’ is gaining more relevance, particularly as millennials and younger generations with this concept embedded in their DNA enter the workforce and demand safe cleaning practices.

Consumers demand efficacy and convenience: Private brand products with the power to remove stains are important to more than two-thirds of consumers, which means that efficacy is a key purchase driver when choosing private brand cleaning products.

Consumers also look for value-added formulations that simplify the cleaning process and save time. According to Mintel, more than 45% of consumers look for products with multi-benefit attributes. Convenience is also driving the growth of wipes and single-dose products in the home care category. These trends can enable organisations to streamline the jan/san process.

Consumer use and perception of home care private brands are increasing: Private brands have evolved to become respectable brands in their own right. In fact, about 50% of consumers agree that home care private brand products are good alternatives to national brands (Mintel 2014). In the jan/ san category, this means they must

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OPI Magazine | September 2015

deliver on the promise of quality, efficacy and safety.

Taking share According to Nielsen Total xAOC, 52 weeks, May 2015, private brand share of disinfecting wipes is 19.4% and experienced double-digit growth of 10.4%. Meanwhile, private brand share of laundry single-dose detergent is 2.9% and grew 40.6% in the past year.

A key statistic to bear in mind is that retailer trust and familiarity with its private brands influence purchasing behaviour among 23% of shoppers in the home care category (Mintel 2014).

These numbers indicate that retailers and private brands are becoming much better at communicating their value proposition, providing differentiation and making cleaning innovation

According to Daymon Worldwide research, more than 80% of jan/san buyers are influenced by their own personal shopping behaviour and about 70% of them research online or shop in-store when deciding which products to consider for their companies.

Bearing that in mind, jan/san organisations should understand their target audience’s specific lifestyle needs and preferences to deliver relevant product solutions to their customers.

Leverage trends Companies in the jan/san industry should leverage consumer trends and transfer key learnings to their respective businesses, but especially when developing private brand offerings. Understanding key consumer purchase drivers will

More than 80% of jan/san buyers are influenced by their own personal shopping behaviour affordable to shoppers. Europe, in particular, is a region with higher private brand share than North America and in 2014 accounted for 47% of new laundry launches, while the US experienced growth of just 6%.

In other words, the home care category is highly competitive, with new brands and SKUs proliferating at an impressive rate.

As consumers continue to realise the range of private brand jan/san offerings available to them, the gap between private brands and national brands is narrowing.

Carolina Betancourt-Gomes

help retailers and manufacturers to understand, predict and respond to specific consumer needs and offer differentiating private brand products that offer value way beyond cost savings.

Considerations should include: ■ Focusing on efficacy, attributes and value equation ■ Understanding consumer trends driving change in the category ■ Offering a compelling private brand professional cleaning solution to win business ■ Starting and finishing with a service-oriented mentality and a qualified sales force to provide a 360-solution that extends beyond chemicals and supplies ■ Understanding the economic climate to assess areas of opportunities. For example, even though office space is shrinking as more companies implement flexible schedules and telecommuting as standard practices, the global economy shows sign of modest growth and potential business expansion, which in turn creates the need for more jan/san.

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How will you be working in 2020? | Research

Adapting to

change

UK facilities outsourcing firm Mitie has issued a report looking at how the cleaning industry will have to adapt to the fast pace of change in the office environment

OVER

the past few years, the workplace environment has undergone major transformation.

It started with flexible working, which refers to choosing suitable working hours and places to work – such as remote working – in order to suit employees’ requirements.

This has been made possible thanks to the increasing use of connected technology along with the ubiquitous availability of wi-fi.

Now, the concept of agile working is exerting a major influence over the workplace environment.

Agile working is not to be confused with flexible working. According to the founder of the Agile Organisation, Paul Allsop, agile working is about “bringing people, processes, connectivity and technology, time and place together to find the most appropriate and effective way of working to carry out a particular task”.

High-tech cleaning Technology has also impacted the cleaning industry, with new products such as a smart hand dryer with a 4G chip, screen and a counter. When the dryer reaches 100 uses, the chip sends a message to the cleaning supervisor to send someone to clean the washroom.

Mitie explains that this has changed the process from sending someone ad hoc to check the state of the washroom to being able to send someone only when necessary. This use of intelligent data can help companies reduce cleaning costs and improve services.

Office of the future Momentum towards the agile workplace has been building for the past few years with technology being the primary driver. Since the start of 2013, Mitie has been conducting ongoing interviews and research to find out how property and facilities directors in the UK see the future of their businesses.

According to the research, the need for commercial office space in the UK in 2020 will be half that of 2010.

Only 40% of office workers will have their ‘own’ desk and 60% of staff will spend more time working out of the office than in it.

to reduce the number of desks and office space required, for example, while accommodating the transient nature of home and mobile workers.

Fundamental changes All of this equates to fundamental changes in the size and design of offices, which ultimately affects the cleaning industry and its suppliers.

This change doesn’t necessarily herald bad news for the jan/san industry. Instead, as Mitie points out, on days where there are fewer workers, whole offices or floors can be closed to allow for deep cleaning or for maintenance.

The need for commercial office space in the UK in 2020 will be half that of 2010 Many businesses also reported the ‘ghost ship Friday’ phenomenon, whereby offices become deserted on this day, particularly after lunch!

But it’s not just restricted to the end of the week. The trend is for offices to only be busy Tuesday-Thursday as workers favour these three particular days to arrange meetings, presentations and collaboration.

The design of offices is changing too, with an emphasis on shared spaces and the introduction of furniture such as pods and collaborative workspaces.

Technology has created the ability to utilise space more efficiently – through the use of space-planning tools – which enables businesses

When the office is busy, more cleaning will be required in order to maintain the pristine appearance of the building, an area that is becoming an intricate part of a business brand and important for attracting and retaining talent – no one wants to work in an unsanitary office.

While no one can predict the future, it is fair to say that the workspace of 2020 will look substantially different for many businesses than it does today, and it’s up to the jan/san industry to work with and exploit those changes.

To download the full report, visit www.mitie.com/news-centre/ publications/how-will-you-beworking-in-2020. w w w.opi.net | OPI Magazine

33

Event Review | Facilities Show 2015

Cleaning up

by Michelle Sturman michelle.sturman@opi.net

This year’s Facilities Show held at London’s ExCeL exhibition centre was a hive of activity, with products on display from the entire facilities management range

AT

this year’s Facilities Show, over 11,000 attendees were treated to packed halls filled with more than 300 exhibitors, plus seminars, live demonstrations, birds of prey and the chance to challenge Jimmy White to a game of snooker.

The large exhibitor contingent was showing off everything from cleaning/washroom, health and safety, and vending and water, to furnishing and interiors and green FM. Names familiar to our readers included Newell Rubbermaid, Armor UK, Papernet and GOJO, and OPI caught up with them during the show.

The environment was a prominent theme this year, evidenced by the launch of the Energy Management Trail, whereby visitors interested in sustainability, waste management and environmental issues could follow a special trail mapped out on the exhibition floor to find all the latest products and services in this area.

Green credentials Aftermarket supplier Armor UK, a first-time exhibitor, was at the show specifically to demonstrate its sustainable credentials to a potential new audience. Speaking to OPI, Head of Sales Sean Loftus said that with its OWA closed loop solution, the

Speaking to OPI, Ben Maguire, Sofidel UK Business Development Manager for Independent Wholesale, said the company was making inroads into the washroom arena and its products were becoming increasingly popular for use in the office environment. To this end, he said the firm is making investments in the UK market.

Thinking beyond the box

He also warned that in 2016 toner cartridges will fall under the EU Waste Electrical and Electronic Equipment (aka WEEE) directive, which deals with how these products are processed in terms of disposal and recycling. This means that printer cartridges will be banned from going into landfill.

Sofidel’s Papernet was also showing off its green credentials with its new biologically active toilet paper and hand towels. Launched in the UK at the beginning of 2015, Bio Tech toilet paper and hand towels use biologic active tissue paper (BATP) technology

Dealers need to focus more on what the end user wants, [and] think beyond price company guarantees 100% recycling of used laser toner cartridges.

“With OWA, a cartridge can be reused as a remanufactured cartridge again or given a completely new life; it’s a highly sustainable solution that’s fit for purpose – a no-brainer,” he added.

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OPI Magazine | September 2015

that contains micro-organisms which, when in contact with water, produce enzymes that feed on dirt.

Papernet said BATP decreases the risk of clogging, reduces odours and trims the costs of unplanned maintenance by up to 40% when compared with normal toilet paper.

Keeping the focus on washrooms, hand sanitiser specialist GOJO displayed its latest range of products, from state-of-the-art foam dispensing systems to Ecolabel-approved foam soaps.

Keeping in line with a focus on smaller, more personal areas, GOJO said its European division is currently preparing to launch its washroom products into hotels.

With jan/san vendors widening their opportunities and increasing product lines – and thus opening up further possibilities for dealers – GOJO Europe National Account Manager Tim Harris warned that it is imperative resellers gain in-depth knowledge of health and safety if they want to compete successfully in this sector.

Newell Rubbermaid Commercial Director UK & Ireland Paul Kelly echoed this sentiment, but added that dealers need to focus more on what the end user wants, think beyond price and suggested that resellers concentrate on building customers online.

In addition, Kelly advised dealers to truly broaden the jan/san and breakroom product range beyond the basics. He added that ‘green’ jan/ san products are now becoming a massive driver of sales.

Event Preview | ISSA/Interclean North America 2015 Increased participation from office dealers is once again expected at this year’s ISSA/Interclean show in Las Vegas

Keeping up with THE

Cleaning Cleaning

commercial cleaning and facilities solutions mega-show ISSA/Interclean heads into Las Vegas at the end of October for a week of networking, education and deal-making in the buoyant jan/san sector.

The jan/san industry in North America is estimated to be worth around $25 billion annually and the potential market is put at a much higher figure. While other industries have been struggling, cleaning has shown that it is virtually recession-proof, and demand is expected to increase in the next few years, driven by a robust economy, declining office vacancy rates and an increase in non-residential construction activity.

With more than 700 exhibitors and an expected 16,000 visitors, ISSA/ Interclean is bound to be a busy time for cleaning professionals, and that includes an increasing number of office products resellers as jan/ san continues to be a key growth category for many.

demonstrations. For the latter, a new addition this year is the outdoor exhibit space, where visitors will be able to get first-hand experience of the latest products and meet the people behind the brands.

On the education side of things, Rangel says that infection control continues to be a hot topic. “The ISSA Convention will include an educational component that addresses the importance of cleaning as a frontline defence, as well as infection prevention protocols,” she notes, adding that there are also several workshops that provide certification training.

Last year, raising awareness of the importance of cleaning, or ‘the value of clean’, was a key industry theme, and Rangel highlights a number of Dealer group partnerships issues and priorities for cleaning Recognising the potential of the companies in 2015. These include office channel, ISSA has been actively differentiating one’s business and marketing the Interclean event to diversifying into profitable market dealers. This includes establishing verticals as competition in the partnerships with Independent cleaning sector intensifies.

Stationers and TriMega, and “Companies are both dealer groups are beginning to focus on expecting a strong turnout specific speciality areas from their membership. of cleaning, such as Rosie Rangel, ISSA Director windows, speciality of Industry Outreach, says flooring, and fire/ the association makes flood restoration,” sure the show caters she states. “As more to the different non-traditional needs of attendees, cleaning companies whether that be are coming into networking, training the industry, and education Rosie Rangel competition is or product

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OPI Magazine | September 2015

growing and forcing companies to look for other means of revenue or to create a new value proposition to their current customers by providing additional resources.”

Generation gap An issue all-too familiar to the office channel is also affecting the cleaning industry. “As the workforce within some of the generational companies gets older, some cleaning industry companies are struggling to attract and keep the younger generation,” notes Rangel.

She also points to a cleaning industry that is becoming more sophisticated as people’s views on cleaning evolve. “This change is giving ISSA the opportunity to provide cleaning professionals throughout the value chain with the necessary tools to stop budget cuts and prove what the investment in clean really is,” she says.

A visit to ISSA/Interclean would certainly appear to be a worthwhile investment for dealers that want to keep their fingers on the pulse of this important growth category.

ISSA/Interclean North America 2015 at a glance Where: Las Vegas Convention Center, Las Vegas, USA When: 20-23 October 2015 ISSA Innovation Awards: 23 October Website: issa.com/show

Event Preview | Climb of Life 2015

Saying

NO to cancer TRAGICALLY,

one in three of us will develop cancer in our lifetime.

Your support can help find a cure. On 6 November 2015, the UK office supplies industry will once again be fundraising and organising the annual Climb of Life trek to raise funds for the Institute of Cancer Research (ICR).

The ICR is at the forefront of some amazing breakthrough treatments for cancer and OPI is proud to support its efforts. Many people across the world are alive today because of ICR’s hard work and groundbreaking discoveries that help create better drugs to defeat cancer.

Climb of Life (COL) creator and organiser Graeme Chapman MBE said: “The enthusiasm and amazing support of the COL team helps to motivate me from year to year. The fact that one-third of us in the UK will suffer with cancer is a good enough reason for us to strive to help ICR to find a cure for this cruel disease. Without sufficient funds, progress would not be as fast as we all would want. Thanks to the likes of ICR, now less than a third of cancer sufferers actually die from the disease.”

Now in its 28th year of fundraising, the Climb of Life will again return to the Lake District in the north of England to complete another arduous challenge.

The teams will be climbing some of the highest peaks in England, on tough terrain

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OPI Magazine | September 2015

Help OPI to fight cancer by supporting fundraising efforts for the Institute of Cancer Research (ICR) and in difficult winter conditions – snow and ice above 1,500 ft are common at this time of the year. The ten teams will each climb a different peak such as Nethermost Pike, Outerside etc, which will spell out this year’s theme: ‘NO TO CANCER’.

Just say yes…

The OP industry-supported COL has raised over £1.2 million ($1.9 million) over the past 21 years and we hope to top last year’s record-breaking amount of £100,157. This will be tough to beat, but everyone is up for the challenge.

The climb is supported across the industry with key sponsors EVO, OPI and Newell Rubbermaid on board once again. The OPI team will be taking part for the sixth year in November, led by CEO Steve Hilleard who said: “This is a red letter day in the OPI calendar and we are genuinely honoured to be able to participate. Battling wind, rain and snow for just one day is a small price to pay to help raise funds in the fight against a dreadful disease that has affected our team, family, friends and industry colleagues. We thank everyone who has supported all Climb of Life participants previously and implore you to give generously once again.”

“We thank everyone who has supported all Climb of Life participants previously and implore you to give generously once again” Please sponsor OPI Donations can be made at www.opi.net/ COL2015

Event Preview | EPIC 2015 For the third time, two US dealer groups are coming together this autumn for a joint convention intent on showing dealers ‘Where Big Happens’

BIG business

IN

2013, the two largest dealer groups in the US, Independent Stationers and TriMega, took the unprecedented step of announcing a combined national convention in order to try and help relieve the growing calendar pressure on everyone in the industry. The event saw over 1,300 individuals register and that success has seen the EPIC show become a regular fixture.

Following Texas in 2013 and Florida in 2014, this year the bandwagon moves to the glitz and glamour of The Cosmopolitan of Las Vegas as, once more, the two organisations host a trade show, full seminar programme and a feast of entertainment under the banner of ‘Where Big Happens’.

on the Friday morning. Hosted by TriMega’s EVP of Marketing Michael Morris, participants will get to enjoy the spectacular surroundings of Red Rock Canyon just outside Las Vegas and support a worthy cause in the process.

The Hike of Hope is part of EPIC’s ‘Give Big’ programme that also includes charitable actions in support of Three Square Food Bank and the Kids In Need Foundation.

There will be a number of different show specials on offer

Giving BIG The first day of the event – Tuesday 6 October – has traditionally been reserved for the EPIC golf outing and this year is no exception, so those so-inclined can head to the Desert Pines Golf Club to work on their swing. There’ll be prizes on offer throughout the day with longest drive and closest to the pin competitions, while mulligans will be sold to support City of Hope.

City of Hope is also being supported after the event thanks to the Hike of Hope that will take place

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OPI Magazine | September 2015

Sales boot camp Any attendees who want to get straight down to business are catered for with a new event being held on the Tuesday this year – the EPIC Sales Boot Camp. This is a comprehensive and intensive one-day workshop that aims to help sales managers and reps improve their results by engaging in consultative selling, which involves understanding how office supply products help organisations achieve their business goals.

Wednesday 7 October sees a full day of meetings and seminars. The first half of the morning is taken up with membership meetings and seminars that are specific to members of each of the

two groups, while from late morning the seminars open up for general attendance and have been tailored to focus on helping dealers to grow their businesses. They include topics such as Rebranding Your Business, How to Secure More New C-Level Meetings, and Five Ways To Make Your Business More Successful.

The next day, following the General Session and keynote address by Peter Sheahan, author of international bestsellers Fl!p and Generation Y, attendees will have access to an exhibition hall featuring around 200 booths showcasing the latest innovations in every area of the industry, from office products, furniture and school supplies to facilities management, MPS and ground-breaking new technologies.

There will also be a number of different show specials on offer, allowing visitors to make big savings by ordering product on the show floor.

Of course, no event of this nature would be complete without some networking opportunities. These include the poolside Welcome Reception, the prize-drawing reception on the final day and Wednesday night’s party at The Cosmopolitan’s very own Rose Rabbit Lie club.

With so much on offer, it all promises to be a most EPIC event.

Sponsored Article | Hopax Hopax is creating new opportunities in the repositionable products category with its Stick’n Concept programme

Adding

EVOLUTION

has taught us that it is not always the strongest or biggest that survive and thrive, but those that are able to adapt to changes in the environment. For the past 28 years, Hopax has been manufacturing sticky notes and other repositionable products and has achieved significant growth in the traditional office products sector by working with its numerous partners throughout the world.

However, Hopax’s senior management recognises the importance of continuing to develop the business for the future, rather than look back and admire past performance. This is one of the reasons why the firm recently introduced its Stick’n Concept, a line of design-led products that brings new possibilities to the repositionable notes category.

As simple as ABC Perhaps the most important benefit to understand regarding this initiative is that there are no limitations to the imagination of consumers. The printed designs can be Artistic, Beautiful and Creative; it’s as simple as ABC! Think of the most popular types of repositionable products: pads, cubes, die-cut shapes and film index. Hopax can print on them to create customised and personalised products to add value to the traditional favourites.

“Stick’n Concept not only enables our existing customers to gain more business, but we also expect to find new customers

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OPI Magazine | September 2015

value in different markets,” says Hopax European Sales and Marketing Director Stuart Seymour. “It is important to develop products that are not so price sensitive and can be regarded as more desirable and valuable as a result of their design.”

To illustrate the range of opportunity, Hopax points to two examples of products that have been created and are selling successfully.

“Bespoke printed sticky notes are a simple, cost-effective way for organisations to keep their name or brand in front of their clients, so B2B resellers should consider the Stick’n Concept in the promotional products assortment they offer,” he adds.

To help resellers present Stick’n Concept professionally to their market, Hopax has developed a range of marketing and point-of-sale

“[Stick’n Concept] will encourage more impulse purchases as well as generate higher values per sale” Line Friends – characters that children like to use when they wish to express their feelings with an image rather than with written text – has proved popular in Asia; while in Taiwan, the Chimei Museum range is tapping into the tourist industry and allowing gift shops to generate extra business.

Seymour says Stick’n Concept will appeal to different types of resellers.

“Nicely-designed products will attract attention in retail stores and encourage more impulse purchases as well as generate higher values per sale,” he notes.

collateral that includes: a presenter with samples and explanations of some of the unique items; a catalogue with images and more information about the types of products that can be made; a new website enabling distributors to log in and download the required marketing materials; and samples to stimulate the imagination of potential consumers.

With Stick’n Concept already proving popular in some Asian markets, Hopax has been looking to expand the initiative into other areas. Seymour points to the “significant potential” for development in European markets such as Scandinavia, Germany, France and the UK, while the 2016 Olympic Games in Brazil presents a natural opportunity in Latin America.

North America is also on the radar and Seymour says Hopax is currently looking to find the right partners in this market to help create designs suited to local trends and tastes.

Jan/San | Category Analysis

clean

Jan/san products are the cornerstone of a hygienic, safe office and suppliers report no slowdown in this sector

KEEPING

the workplace clean and safe for employees is an essential requirement for any business today and the increasing demands of health and safety regulations, coupled with the desire to keep the workforce fit, means the jan/san sector continues to do well.

It’s a category that’s expanding fast as Mike Foster, Director of Merchandising at US dealer group Independent Stationers, reports: “Two years ago it accounted for less than 7% of our total volume, last year it was almost 15%, and we’re now showing numbers in the 20%-plus area.”

Donna Snyder, President and co-owner of software solutions firm GOPD, says that jan/san has been a great growth category for independents: “Many of our dealers are now leading with this sector and seeing double-digit increases year after year.”

At UK dealer group Integra it’s a similar story. Purchasing Director Neil Basham reports continued high interest levels from its members: “Over the past decade jan/san has grown from below 10% to over 15% of dealers’ spend. Even when most other categories have been flat or in decline, whether due to product life cycle or the economy, jan/san has bucked the trend and continued to grow year on year.”

Vince Phelan, Director of Category Marketing & Communications at Essendant, says the jan/san category has been a real growth engine for the company: “We see increases coming from a number of different channels as jan/san has become the current battleground for customer wallet share between traditional jan/san distributors, traditional OP resellers and e-tailers.”

Fuelling the fire One driver fanning the flames of the jan/san success story has been the increased focus on wellness and office health. High-profile news stories have brought the threat of microbial attack centre stage and raised general awareness.

As Paul Wonnacott, Managing Director at hygiene-product w w w.opi.net | OPI Magazine

45

Jan/San | Category Analysis manufacturer Vectair Systems admits: “The Ebola outbreak acted as an important reminder to everyone to make sure we wash our hands regularly. It also served as a wake-up call to venues that they must provide the right services to enable us to do that. ‘No touch’ – where individuals don’t have to touch anything – is very popular at the moment because customers see it as the safest way to wash their hands.”

Snyder agrees and says GOPD has noticed this increased awareness of the threat posed by malevolent microbes, with resultant sales growth in sub-categories such as medical and safety supplies and items like air filters, masks and gloves.

At a more mundane level, Wonnacott says that in addition to clean, hygienic spaces customers also want washroom systems that are quiet and discreet, remarking that “ladies in particular don’t like disposal systems that make a lot of noise”.

And even in the washroom new technology is having an impact, he adds: “Customers don’t just want it, they expect it. As a company, we always look to new technology to create systems that provide an even better overall experience for the customer and bring something new to the table. Ultimately, it shouldn’t just replace what’s already there, but provide something better that they couldn’t get before.”

A-tissue Creating a clean, germ-free office makes for happy, more productive workers and seasonal needs can help sales too. The arrival of the cold and flu season drives demand every year as businesses seek solutions to minimise their spread.

At US dealer group TriMega, Director of Purchasing and jan/ san specialist Tom Hoffmann notes that hand-care products to combat disease has been a growing category for its members: “The annual cold and flu attack jump-starts a dealer’s interest in handcare. Manufacturers now devote significant resources to training and promoting their products in this area.

“Hand care is an easy entry point into the jan/san category because there’s a simple story to tell, the product is easily

understood and dealers can highlight the downside of the customer not embracing their cold and flu product offering. If effective hand care within the office space can eliminate or limit the amount of absenteeism or illness within the workplace, end users can quickly see the benefits.”

In a similar vein Bill Balek, Director of Environmental Services at industry association ISSA, singles out disposable disinfectant wipes as a product category that’s growing faster than others: “Growth in any product associated with public health protection is accelerating fast, but these wipes are doing particularly well, reflecting the relentless demand for hygiene and convenience.”

“Hand care is an easy entry point into the jan/san category because there’s a simple story to tell” Tissue and dispenser sales are a particular success story in the jan/san category. Data from The NPD Group shows that US e-commerce in this sub-category grew by a staggering 31% in the first 20 weeks of 2015, accounting for $47 million of sales. The paper towel sector has also shot up by 19%.

In the UK it’s a similar story, with GfK data showing the jan/san sector as a whole up 5.7% over the past year, with particularly strong sales in sanitary dispensers and refills, where sales including paper towels and toilet paper have increased by 13.1%.

According to Natasha Fernando, its UK Marketing Manager, bins and liners have also seen a recent surge: “The investment in rubbish bins was evident last year, when this category saw strong growth. The replacement cycle has not come round again just yet, but the refills are still a perennial essential.”

Essendant’s Phelan provides some interesting background here: “Our largest jan/san sub-categories are restroom paper products and bin liners. Most dealers start by selling these as they are an easy entry point. As these grow, the more complex sales of dilution systems and floor-care chemicals can become part of the equation as they have high-margin potential.” w w w.opi.net | OPI Magazine

47

Category Analysis | Jan/San In Italy, at paper tissue and towel manufacturer Sofidel, European Marketing Manager Fabio Vitali has noticed increased demand for higher-quality products: “Toilet tissue is a huge seller, but we are now seeing increased interest in other products such as kitchen towels. There’s a trend for ordering less, but more frequently this is due to a lack of storage space in highly-urbanised offices. That’s where e-commerce comes into its own.”

Technological innovation is again driving this sub-sector. Vitali adds: “We’ve concentrated on R&D to produce products that really solve problems.

Our DissolveTech range is an innovative

“Tissue is the most hygienic way to dry hands, yet firms make the strange decision to install air dryers”

Is brand still king?

The jan/san sector, like any other, is seeing an influx of private label products posing a potential threat to established brands.

Fabio Vitali, European Marketing Manager at Sofidel, sees this threat as real and one that needs to be tackled head on: “Private label products are taking more and more share of the jan/san category. Promoting your brand is vital and we are committed to building and strengthening it. Consequently, you’ll see a succession of product launches aimed at giving added value to both our distributors’ portfolios and the end consumers.”

Donna Snyder, President and co-owner at GOPD, also sees private label increasingly encroaching on branded products: “Nationally branded products enjoy sales through multiple channels and they work hard to protect those channels. It can therefore be challenging to compete with those items head to head. However, private label is enjoying positive growth, with a multitude of new products entering the jan/san channel every year and I believe the future looks strong for private label in this arena.”

UK dealer group Integra’s Purchasing Director Neil Basham says private label and unbranded products are beginning to gain ground as volumes and credibility build up. Its members are finding themselves in increasingly competitive scenarios where the brands they originally entered the market with are no longer price competitive enough.

He adds:”Despite that, loyalty to household brands remains high due to the consumer trust in those products they buy and use at home,” he notes, adding: “We’re adopting a deeper, more stratified approach – good, better, best – with household brands, private label and basic, contract offerings competing across all the larger sub-categories.”

Both branded and private label products play an important role according to Vince Phelan, Director of Category Marketing & Communications at Essendant, who says that private label products actually make up about half of what is currently in the marketplace: “Many dealers are successfully leading with private brands as it differentiates them from the price-competitive national branded strategy.

“Crucially, it also locks their customers into a product line that is much harder for the competition to source against and steal their business. Having a private branded offering should definitely be at the forefront of any dealer’s plans to gain new jan/san business.”

Ralph Bianculli, CEO of Emerald Brand at the Paradigm Group, takes a different tack. “Brand is still king,” he says, adding: “Unless you are developing a private label that has a tremendous added value (and it’s got to be more than just price), we’re still finding that brands command real loyalty.” (See also Special Feature on Private Label & Jan/San, page 28).

example. It’s a paper towel that performs as well as a conventional one, but you can flush it down the toilet. This saves cost and reduces the risk of clogging your pipes.”

Vitali is a keen advocate of the benefits of paper towels: “Hygiene should be the top priority, but if you look at customer behaviour that’s not always clear. Studies at Westminster University in the UK have shown that tissue is the most hygienic way to dry hands, yet firms make the strange decision to install air dryers to supposedly save on costs. This is so bad – increased hygiene means less sickness and more productivity, but buyers just don’t see this.

We’re trying to educate people, but it’s a long haul.”

ISSA, meanwhile, is engaged in an active campaign to promote ‘the value of cleaning’.

Dollar share of jan/san As Balek states: “All ■ Tissues & dispensers too often cleaning is ■ Paper towels & dipensers ■ Hand cleaners under-appreciated and ■ Other simply viewed as a cost to be minimised, particularly during an economic downturn.

Therefore, in order to change the way the world views cleaning, ISSA has launched this campaign to highlight the critical role cleaning plays in protecting public health, preventing the transmission of infectious diseases, while contributing to the sustainability goals of the facilities we serve.

It’s been welcomed and used extensively by our supplier and service provider members to expand their sales efforts.”

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OPI Magazine | September 2015

categories – total retail

50% 21%

5% 24%

The fear factor Despite the strong growth and excellent prospects of the jan/san category, many contributors that OPI spoke to have sensed a reluctance among some dealers to take the plunge.

Snyder has spotted this fear factor: “There are dealers out there that are struggling to enter this category successfully.

Education and dedication is necessary in order to succeed, yet many are Source: The NPD Group stuck in the

Jan/San | Category Analysis office supply mode frame of mind. Some dealers tell me their sales staff are still reluctant to move forward with jan/san and they need leadership to give them the confidence to do this. The braver ones are already leading with this category, with a growing number now committing to a growth strategy within this sector.”

Ralph Bianculli, CEO of Emerald Brand at the Paradigm Group, says the biggest challenge for OP providers to overcome is that the vast majority of them are not

“As the industry has been preaching for years, the need for dealers to hire a jan/san specialist is a must”

Tips from the expert OPI talks to Tom Hoffmann, Director of Purchasing and jan/san specialist at dealer group TriMega, about the opportunities and challenges the jan/san sector presents.

OPI: Many of your members already offer jan/san products. What’s preventing the rest from entering this sector?

Tom Hoffmann: The jan/san category still offers significant additional growth for those members that have not yet embraced the opportunity. It’s not that these ‘non-committed’ dealers don’t realise the opportunity, but they simply haven’t moved forward and devoted the necessary resources to focus and grow the category like those dealers that are already ‘all-in’.

OPI: What jan/san sub-sectors offer the most potential?

TH: The front office or ‘carpeted’ area continues to fuel the growth of the jan/san category. Whether it be disinfectants, hand sanitisers, roll towels or toilet paper, these are the items that can be easily added to a traditional office products order.

However, it’s the ‘uncarpeted’ or backroom area that offers the most challenging arena within the category, where chemicals and more facility-related products tend to be needed. These backroom products necessitate additional training and product knowledge.

TriMega’s jan/san programme, ‘The Orange Project’, aims to fill this gap by providing a variety of tools and resources including product information, education and sales training. Our alliance with the cleaning association ISSA also gives our members access to its powerful resources, helping to give them an edge in their efforts to penetrate this category.

OPI: How are you promoting the jan/san category to your members?

TH: Whether TriMega has a direct or indirect relationship with a supplier, the key to getting the product to our dealers is awareness. There are many jan/san product opportunities for our dealers that may not be noticed unless they are put in front of them. The non-traditional mops and buckets, industrial wipers or urinal screens may not be high on their awareness meter, but all offer opportunities for sales. Many manufactures have now brought in national and regional rep firms specifically to get their products in front of dealers and gain their attention.

OPI: Overall, what’s the key to selling jan/san?

TH: I often say the success of selling jan/san within the OP channel is down to a square of key players. An effective product awareness programme relies on the combined efforts of what the manufacturer, wholesaler, rep group and buying group can achieve together to drive effective sales efforts at both the dealer and end-user levels. But it takes all four entities working in harmony to do this.

experts in the jan/san category: “This is understandable as they sell dozens of product categories, but the solution is really simple – bring in the experts.”

TriMega’s Hoffmann echoes this call and says the key is to employ someone who knows what they are talking about: “As the industry has been preaching for years, the need for dealers to hire a jan/san specialist is a must. Those that have are now converts and consistently mention the added value they have brought to their firm.

“Specialists who know how to ‘walk the walk’ and ‘talk the talk’ can help in finding the areas in which to become more competitive throughout the jan/san sub-categories. The traditional ‘national brand’ manufacturers need to understand this shift or one day they will wake up and wonder where all the dealer purchases have gone.”

David Fisher, VP Office Channel, R3 Redistribution at Bunzl, agrees that the primary challenge to dealers is their lack of jan/san product knowledge, but takes a different line: “OP dealers needn’t recruit jan/san specialists if they partner with the right wholesaler. We have our own experts who can lead them into this sector and help them grow their sales.”

Education is key Phelan adds that training and education are the key to success: “Jan/san products require a higher degree of product knowledge for resellers to be effective in selling to end users. Essendant has a series of ‘CORE Learn Category Immersion’ training sessions designed to help less-experienced resellers gain the product knowledge they need to be successful. Dealers must also identify the right opportunity in size and scope to pursue.

“Focusing on the right customers, which for the OP dealer are SMEs, will bring much greater success than trying to go after the big fish straight out of the gate. Prioritising existing customers that don’t currently buy jan/san supplies can also add to dealers’ existing business and profitability.”

For an in-depth analysis of the effect environmental concerns are having on the jan/san sector, see our Green Thinking supplement which will be published later this year. w w w.opi.net | OPI Magazine

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Your OPI

5 minutes with...

Ralph Bianculli, VP, Emerald Brand

“Failure is really the road to success”

Describe what you do in less than 20 words.

My job is to make sustainable practices achievable for every business and consumer in the world.

The biggest change that has taken place in the industry since your career began.

Consolidation.

Your first full-time job.

I started my own landscaping business at 17, which was very successful until I realised what taxes were.

If you could invite two famous people for dinner, who would they be and why?

Ronald Reagan because he was so pragmatic and was a genius in the way he connected with people. Thomas Edison so he could give me the next greatest invention!

If you weren’t doing your present job, what job would you like to be doing?

Coaching American football.

The best moment in your career.

When my sister Jaclyn joined the company.

Your favourite movie, and why.

The Legend of Bagger Vance. It taught me a lot of life lessons.

What would you like to be doing in five years’ time?

Running the largest and most innovative environmental brand in the world.

If you won the lottery, what would be the first thing you would do?

A cliché I know, but I would honestly give half of my net gains to charities.

Your greatest strength.

Persistence.

How would you like to be remembered?

That I helped change the world.

Your biggest achievement.

Realising that failure is really the road to success.

If the world had a President – who would you vote for?

The Dalai Lama or the Pope – both inspire me greatly.

What do you think has been the best innovation in the OP industry in the past two years?

I recently met Canadian coffee roasters Reunion Island – producers of fair trade, single-cup coffee in fully compostable packaging at cost-neutral and better quality than national brands. I could relate and was really impressed.

Your favourite office product.

Emerald Brand’s Tree-Free line.

What do you think will be the biggest issues affecting the OP industry over the next five years?

Figuring out millennials... and Amazon.

What do you like best about the OP industry?

The opportunity for young people to enter the industry and innovate and succeed tremendously.

What do you like least about the OP industry?

I don’t believe the industry adapts to the rapid pace of change that influences today’s marketplace.

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OPI Magazine | September 2015

The most memorable travel experience you’ve had while in the OP industry.

Travelling back from Washington (DC) to see a dealer and getting caught in an unexpected lightning storm.

Your OPI

Final word Your industry, your opinions

Beverly Peeling, EMEA Small Offices Segment Market Leader, Kimberly-Clark Professional

The case for paper towels in washrooms FOR

years, the emphasis for facilities and office managers has been firmly on delivering fit-for-purpose services and amenities within a strict budget. Where their remit extends to washrooms, there has been an added burden: maintaining the health both of personnel and, when applicable, of the general public.

Now, facility and office managers are faced with an extra opportunity: the introduction of agile home and mobile working, and millennials’ expectations for a work environment that’s exceptional, not just functional, have transformed the office landscape.

To attract and retain the best talent, companies need to create an ever more attractive workplace, but within budget. Elevating the office washroom experience to enhance users’ satisfaction, or showing they care with familiar brands, while strengthening the tenant’s corporate image and brand, can be a large step towards achieving these objectives.

and 71% feel that they dry faster. The greater flexibility of paper towels – capable of cleaning faces, removing make-up and eliminating marks on clothing, as well as drying hands – helps keep people looking at their best.

Single-use paper hand towels are more hygienic: A more mobile workforce, open space office areas and a busy social life can wreak havoc on employees’ health.

The choices of washroom amenities you offer can actually have a major impact on employees’ health and help reduce absenteeism, while healthy employees are likely to be happier and more engaged.

New research from the University of Leeds demonstrates that jet air and warm air dryers can actually contaminate air in washrooms, for example by dispersing water droplets containing bacteria into the washroom or aerosolising bacteria from wet hands. It has been shown that contamination of the air with aerosolised bacteria can remain for up to 15 minutes after hand drying.

“Contamination of the air with aerosolised bacteria can remain for up to 15 minutes after hand drying”

Personal touch From the user’s perspective, a washroom is an intensely personal thing, with the vast majority believing the condition of a workplace restroom is an indicator of how a company values its workforce. Get the balance of facilities right to give users a home-like washroom experience, and they will give it respect. As a result, it becomes easier for you to maintain a washroom environment that’s continuously both clean and welcoming.

Research from IBISWorld shows that around 30% of the complaints fielded by facilities managers originate from dissatisfaction with the washroom. Reducing or even eliminating these helps free up budget and time, both of which can be more profitably spent on other activities.

Presenting users with the right mix of drying methods can go a long way towards enabling customer satisfaction. Top of the list for users’ preference in hand drying methods are: Single-use paper hand towels are quicker: A hand dryer takes 30 seconds longer to achieve about the same dryness as a towel according to research from the Queensland University of Technology. In addition, several users can dry their hands at the same time with a towel.

Single-use paper hand towels are more satisfying: Kimberly-Clark Professional (KCP) research reveals 61% of users feel that paper hand towels leave their hands drier

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OPI Magazine | September 2015

Sustainability commitment Sustainability concerns, of course, are top of mind when selecting the right supplier of paper hand towels products.

Here at KCP, sustainability is inherent to our vision and challenges us to create a better future through our ‘reduce today, respect tomorrow’ efforts.

As a result, 100% of our virgin wood fibre comes from third-party certified suppliers and we received the prestigious FSC 2014 Leadership award for our commitment to forest stewardship.

We are also still among the best in compression technology, which means that our towels take less space, meaning fewer trucks on the road, less storage space needed and less frequent need to replenish dispensers.

Paper hand towels have evolved, but they are still people’s preferred choice when it comes down to drying hands.

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IN THE NEXT ISSUE • Big Interview with Steve Harrop, Managing Director of dealer group Office Friendly • Top 100 Resellers – the movers and shakers of 2015