September 2014 Type B by OPI

Office Products International ISSUE NO.242

The word in office.

magazine

Jan/san Interview John Garfinkel, ISSA p22 September 2014

SEPTEMBER 2014 WWW.OPI.NET

FSSI jan/san contract â&#x20AC;&#x201C; The importance of MPS p48 who benefits? p26

p14/19 Merger moves in the UK

Contents September 2014

www.opi.net

News

Shows

7 Round-up

36 ISSA/Interclean

Why OP dealers should be at this year’s premier cleaning sector event

HP ramps up Instant Ink; Pelikan consolidates; Depot’s new USP

10 Beyond OP

Keurig’s humble expansion; ASKUL diversifies; IS gets jan/san contract

38 BSA/IOPDFA

14 Analysis

41 Big Buyer

Features

Category Analysis

US associations merge events

Merger moves in the UK; Herman Miller’s consumer strategy; the state of wholesaling in Oz

Italian event broadens international horizons

22 Raising the bar

As the jan/san opportunity ramps up, education is key for dealers

ISSA’s John Garfinkel explains why OP dealers venturing into the cleaning sector is a win-win for all concerned

48 MPS

Ignoring the importance of MPS would be foolish, that’s the verdict

26 Let’s get FSSI-cal

Regulars

Office supplies resellers have muscled in on the new strategic sourcing jan/san contract for the US federal government

5 Editor’s comment 52 On the move 55 5 minutes with...

30 All eyes on Brazil

Debbie Nice

As the dust settles after the FIFA World Cup, Inforshop continues on its journey to prepare for the future

34 Flying the FM banner

42 Jan/san

57 Calendar

58 Final word Paul Kelly

OPI finds out about Banner’s full-on foray into the FM category

“Previous attempts to lobby Washington to stop FSSI were confronted with the question: ‘Do you have any data to prove that FSSI is bad for small business while GSA has claimed hundreds of millions of dollars of savings for the US taxpayer?’ It is hard to win that argument unless you have data”... For the full story, turn to page 26

This month’s cover is supplied by United Stationers

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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

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

Events Events Manager Lisa Haywood +44 (0)20 7841 2945 lisa.haywood@opi.net

Production and Finance Operations Manager Nicky Coulson 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 Dotun Olaniyan +44 (0)20 7841 2956 dotun.olaniyan@opi.net

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

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

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

Summer shake-up in the UK With many people in the northern hemisphere taking their summer holidays in July and August, it can sometimes be a bit of a struggle to come up with news content for the September issue. The opposite has been true this year after two major acquisitions in the UK in the space of a few weeks that have really shaken up the market there (see pages 14 and 19). When Novexco bought Lyreco Canada at the start of the year (see News Analysis, OPI March 2014, page 12), I suggested that wholesalers in other In both cases, there appears to be markets too may plenty of room for synergies look to adopt more of a multichannel approach to offset pressures in their traditional wholesaling businesses, and so it has turned out with both Spicers and Vasanta acquiring leading contract stationers. Time will tell which – if either – of the acquisitions proves to be the more successful; there is less of an overlap between Spicers and OfficeTeam, while Vasanta will need to decide how to integrate o2o’s Banner contract business with its own Supplies Team division. But in both cases, there appears to be plenty of room for synergies. Some dealers, of course, will have to adapt to the greater likelihood of facing competition from the reseller arm of their main wholesaler, but neither Vasanta’s VOW nor Spicers are likely to want to alienate their independent reseller customers – after all, they still account for the majority of their business. Andy Braithwaite, Editor

Office Products International Ltd (OPI), Diamond House, 36-38 Hatton Garden, London EC1N 8EB, UK Tel: +44 (0)20 7841 2950 Fax: +44 (0)20 7841 2951

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News from opi.net HP ramping up Instant Ink in UK Hewlett-Packard (HP) is expanding its Instant Ink programme in the UK and Ireland following a successful pilot phase, the company has told OPI. Instant Ink is a subscription-based ink programme with a fixed monthly fee, based on one of three plans related to the number of pages printed. Speaking to OPI, Gary Tierney, HP’s Category Director of Print for the UK and Ireland, said that a pilot programme for Instant Ink with Dixons (Currys and PC World) and John Lewis had achieved its objectives and that the OEM was moving to a full deployment with both retailers. He added that Dixons and John Lewis had been selected as initial partners because of the need for an ‘attended’ sale, with customers requiring personal assistance from store staff. “Consumers are used to mobile phone plans where they’re locked in for a two-year period,” explained Tierney. “A degree of interaction is required to explain that with Instant Ink they can opt out any time, switch plans, roll over pages to the following month, etc.” Gary Tierney

GSA names OS3 awardees

The resellers for the latest Federal Strategic Sourcing Initiative (FSSI) office supplies contract have finally been named. After a protracted bidding and award process, the US General Services Administration (GSA) has named 21 suppliers for the third generation of its FSSI office supplies contract – known as OS3 – 20 of which are small businesses. The list includes some familiar names such as Shoplet, MyOfficeProducts, The Supply Room and EZ Print (the latter bidding as a consortium). The one award set aside for a non-small business went to Office Depot. GSA said that there “may” be further awards pending further review. OS3 is estimated to be worth about $250 million a year and GSA said it is expected to provide more than $90 million in annual savings for federal agencies. GSA also expects about 90% of OS3 spend to go through small businesses, although the relatively small number of suppliers involved has led to criticism from a number of quarters.

A tribute to UK industry legend Roy Cowan UK office products legend Roy Cowan passed away at the beginning of July. Cowan, who was 78, had been involved in the stationery and office products business for almost 50 years, and was still Chairman of Roy Cowen (centre) successful dealer and contract stationer UKOS at the time of his death. Cowan started off working at the General Post Office before taking a position as a sales rep for Ofrex in 1959 for £6 ($10) a week plus 5% commission. Working his way up through the ranks, he became Managing Director in 1987. A former BOSS Lifetime Achievement Award winner, Cowan’s achievements included growing Ofrex into one of the UK’s largest dealers by the mid 1990s. By 1998, Ofrex was a £99 million business with a £7.5 million profit. Guilbert subsequently acquired Ofrex – along with fellow dealer Niceday – in 1999 to create what later became a major component of Office Depot UK. w w w.opi.net | OPI Magazine

News n Round-up

Clover and MSE create global business Aftermarket supplies vendors Clover and Micro Solutions Enterprises (MSE) have told OPI that operations for both companies will remain unchanged following their recent merger. The merger was completed in July and the only outward difference will be the new MSE moniker, which has changed to MSE Technologies. MSE Technologies Global SVP Luke Goldberg said that no other branding would be changed or compromised and both firms would continue to operate as independent organisations. The businesses will have a combined workforce of over 16,000, operating from more than 60 office, sales and distribution locations worldwide. With the exception of certain MSE R&D functions that will be transitioned to its manufacturing and technology centres in the US, all other locations will continue to run as normal. Clover and MSE would not disclose the annual sales in terms of the combined firms.

Depot keeps USP cards close to chest Office Depot has revealed details of its new ‘unique selling proposition’ (USP). Depot CEO Roland Smith recently provided an update on Depot’s USP plan which is being billed as a way the reseller will differentiate itself from the competition. However, Smith warned that it would not be ‘a silver bullet’, that Depot is taking a “methodological and systematic” approach to its planning, testing and rollout, and that it would “be difficult and take time” to be successful. Depot has identified two “large” customer segments where it is currently under-represented. Two segments where, according to Smith, customers are “driven by quality, service and experience” and not just price. These two segments combined represent a total addressable market of around $60 billion, and Depot’s target is to take a $1 billion slice of that pie. The launch of the USP programme has been divided into four phases: customer segmentation, market testing, confirming the market testing

Pelikan consolidates stationery business Stationery manufacturer Pelikan will consolidate its stationery manufacturing and distribution business into Herlitz. The proposed asset streamlining exercise mainly involves the manufacturing and distribution of writing instruments, art, painting and hobby products, school and office stationery, and paper products. The transaction will involve 100% equity of the following Pelikan subsidiaries into Herlitz: Germany, Belgium, Switzerland, Mexico, Japan and Pelikan Middle East. A Germany-based logistics and distribution warehouse complex for the stationery business in Central Europe is also included. Following the transaction, the name of the consolidated businesses will be changed to Pelikan. Meanwhile, the printer consumables business has been carved out into a separate business unit to remain under Pelikan.

OPI Magazine | September 2014

and refining the USP, and building a rollout plan. Smith said that Phase I has been completed and that testing is now beginning. Depot has devised 20 different market tests which it will conduct in order to evaluate its USP. Crucially though, Smith has not revealed which customer segments Depot has identified, but they are unlikely to represent a revolution for the big box operator. He said the USP would include new products and services, and new sets of customers – although not exclusively. The testing and refining phases will take place over the next 12 months or so, with the rollout plan set for late next year, followed by implementation over the course of 2016.

Martin Yale targeting global distribution Escalade sold its Martin Yale print finishing business in July to Michigan-based private equity firm LV2 Equity Partners. The sale – for which financial details were not announced – includes the print finishing (laminating, binding and cutting) assets and the Martin Yale brand name. Escalade continues to own and operate the intimus International shredding and information security unit run by Reiner Eckhardt in Germany. Speaking to OPI, Martin Yale President Greg German said that one of the company’s main priorities over the next few months would be to expand its global distribution network. He explained that there would be relatively few changes made to his experienced team going forward and that the company would continue to be based in Wabash, Indiana. He added that enhancing Martin Yale’s global distribution opportunities as well as placing greater emphasis on product development were two key drivers in its overall strategic objectives under the new ownership.

News n Beyond OP

Keurig downplays global expansion plans Coffee brand Keurig does not expect to see a meaningful short-term sales contribution from its non-North American operations. The company’s first foray outside North America began earlier this year when it launched into the away-from-home coffee market in the UK, signing a number of distribution agreements for its K-Cup brewers. However, CEO Brian Kelley has said that, while the company believed there was “significant potential” for both hot and cold brewing systems in international markets, it would be “selective and disciplined” in its approach, with no indication whether Keurig would enter other markets in the near future. The company is currently focused on the launch of its 2.0 brewing system – which brews both single-serve cups and carafes – that will hit North American shelves ahead of this year’s holiday season. A new cold-brewing system is also due to be launched in the next financial year. This will feature Coca-Cola brands following the drinks giant’s investment in Keurig earlier this year.

ASKUL diversiﬁes into food delivery Japanese reseller ASKUL has taken a 20% stake in food delivery company Star Festival as it continues to diversify its business model. ASKUL spent around ¥2.8 billion ($27 million) on the stake in Star Festival in two separate share and bond transactions; the deal came into effect at the end of July 2014. Star Festival is a Tokyo-based online start-up that delivers lunch boxes and meals, primarily to business customers. ASKUL said it expects to introduce the service to its own customers in November. The reseller added that it was exploring delivery synergies between the two firms; tests aimed at increasing the frequency and volume of Star Festival deliveries will begin shortly using ASKUL’s distribution subsidiary Bizex. Meanwhile, ASKUL’s acquisition of alcoholic beverages reseller Shouri – announced in April – has been finalised. However, the firm has now acquired the entire Shouri business, not just the alcoholic drinks division as first planned.

IS awarded FSSI jan/san contract

SCA gets away from home in China

Independent Stationers (IS) has been awarded a Federal Strategic Sourcing Initiative (FSSI) jan/san blanket purchase agreement. IS is the only office supply dealer group to be awarded the first generation of the federal government’s newest strategic sourcing category of janitorial and sanitation supplies and equipment, although the group held the first two generations of the FSSI office supplies contract. Independent Stationers’ authorised dealers will be able to sell under this agreement in the cleaning compounds and paper products categories, enjoying a portion of the contract which, overall, is worth an estimated $599 million in purchases annually. IS EVP Charles Forman said: “With the challenges facing the traditional office products category, this is a tremendous opportunity for our

Jan/san vendor SCA is to transfer its hygiene business to Vinda, China’s third-largest tissue company. SCA has been a shareholder in Vinda since 2007, becoming the majority shareholder in late 2013. This latest transaction will give Vinda the exclusive license to market and sell numerous SCA brands, including its away-from-home tissue brand, Tork, in China. SCA is looking to reach a broader base of customers in China, where its sales reached around SEK600 million ($88 million) in 2013. The agreement will give Vinda access to a broader portfolio of hygiene products and SCA can take advantage of Vinda’s distribution network to attract a greater audience. Vinda will acquire the SCA assets for HK$1.14 billion (US$147 million), subject to shareholder approval.

OPI Magazine | September 2014

members to expand their sales reach into a different category and sector. We believe category and sector diversification are imperative for the long-term health of the independent dealer channel.” (see also Hot Topic, page 26).

Measuring the Effectiveness of Cleaning in K-12 Schools (Clean Standard). The Clean Standard is a framework that helps schools assess the effectiveness of the cleaning process using traditional inspection methods and ATP tests. ATP tests detect and measure the amount of the enzyme adenosine triphosphate (ATP) left on surfaces

The advantage of recycling with Staples Staples Advantage, in partnership with Electronic Recyclers International (ERI), has launched a technology recycling programme for businesses to recycle old electronics. According to the Environmental Protection Agency (EPA), global e-waste is expected to more than double by 2016 to 93.5 million tonnes compared to 41.4 million tonnes in 2011. Staples’ new programme involves a three-step process: order recycling

The main revision is to the range of ATP values that define ‘effective cleaning’ associated with Hygiena SystemSure Plus. The values for other ATP systems in the Clean Standard – Charm Sciences NOVALUM and 3M Uni-Lite NG – remain the same. The Cleaning Industry Research Institute (CIRI) offers certification and training programmes around the standard. boxes online from the Staples Advantage website, fill the boxes and then ship back to Staples. Businesses will then receive a certificate of recycling accredited by the e-Stewards Initiative. The cost of the service will range from $15-$500 depending on the size of the box ordered and will also be integrated into Staples’ future managed print services contracts.

US dealer group TriMega has joined forces with ISSA as part of its Orange Project initiative. TriMega’s Orange Project is designed to help the group’s members make the most of opportunities available in the facility supplies and breakroom products market. The deal with ISSA includes preferential rates for joining ISSA as well as access to webinars that ISSA will conduct for TriMega members on topics geared toward driving growth in the jan/san and facility categories. TriMega President Mike Maggio said: “We are eager for members to tap into ISSA’s vast experience, resources, tools and insights in this marketplace. They are also incredibly progressive with a distinct focus on innovation, so we look forward to leveraging their expertise and vision to drive success in this space for our members.”

News n Beyond OP

ISSA and CIRI clean up standards Peeling back the Global cleaning industry association as a way to determine the jan/san layers effectiveness of a cleaning regime. ISSA has updated the Standard for

News ■ Analysis

Vasanta and o2o to merge The UK market sees its second large merger in the space of a few weeks

office supply groups Vasanta and office2office (o2o) are set to merge following an offer for o2o by Vasanta’s private equity owner Endless. Endless – which had set up a new company called EVO Business Supplies ahead of the proposed deal – has offered £19.1 million ($31.7 million) for o2o, or 51p per share, a premium of about 85% on the closing price of 27.63p per share on 20 August 2014 – the last dealing day prior to the announcement. o2o’s board has recommended its shareholders accept the Endless

offer, and the reseller’s directors and major shareholders – including activist shareholder Nick Gerber – representing about 45% of o2o’s shareholding have already given their backing to the proposal. OPI sources believed that the transaction could be closed as

Industry comments (as OPI went to press…) Bob Geens, CEO, Advantia With the overcapacity in stock, warehousing and distribution in the industry, it is inevitable that these types of mergers and acquisitions will take place. From an Advantia point of view we have a good working relationship with both o2o and VOW, so I see in the future a number of opportunities for the members of the group to further improve their sales and profitability. Jeff Whiteway, CEO, OfficeTeam This was foreseen and is not a surprise. The industry needed change; we led but thought Vasanta/o2o would not be far behind. Vasanta has capacity to fill, which it will achieve with o2o. I still believe we will see further consolidation in the market. The only surprise is the price paid: a premium of 97.1% to the average closing price per office2office share of approximately 25.8p for the six-month period up to the announcement. Certainly interesting times. Tim Beaumont, Managing Director, Nemo The announcement was no real surprise although change is gathering pace and getting harder to predict. Venture capitalists are reshaping our industry from on high although successful integrations will define the winners. I think it’s too early to tell what the effects on the independent dealer and dealer groups will be. Larger dealers for which the core business concentrates on big contracts face more of a challenge. The good news is that dealer groups will become even more important and more dealers will join. Mark Austen, Managing Director, Office Club This is just part of a continuing process in the OP industry the world over. However, the deal raises more questions than answers. It will be interesting to see where it leaves the other large wholesalers. Karen Harrison, Group Marketing Manager, HK Wentworth I think this is positive from a manufacturer’s point of view but it will be interesting to hear how Advantia members feel; they signed up with o2o to leave the large wholesaler world.

OPI Magazine | September 2014

early as October if everything goes according to plan. o2o has suffered in recent times after customers’ purchasing habits changed to buying more frequently, but with smaller orders for lower-cost products. This increased the group’s cost to serve and negatively impacted its financial performance. The company also no longer has sufficient funds to expand its Business Critical Services activity, originally designed to “mitigate the structural declines” it faced. Endless has already said that if its offer is successful, it will then merge Vasanta and o2o, creating a business supplies group with annual sales of about £660 million. The merged group will generate around 60% of its revenues through reseller customers, 30% from direct sales to large corporate and public sector clients and 10% through the Banner Managed Communications business, Vasanta said in a press release.

Anticipating consolidation “We created the multichannel structure of the group to enable us to serve the entire market,” commented Vasanta CEO Robert Baldrey. “It was designed with industry consolidation and the fast-evolving and challenging nature of the market in mind.” He continued: “With Vasanta’s well-invested infrastructure, one of the broadest product ranges available, the combined talent of the Vasanta and o2o teams and the Truline final mile delivery service, we are confident that the combined group will be a powerful force in the industry.” News of the Vasanta/o2o merger came less than a month after Better Capital announced that it had acquired £140 million reseller OfficeTeam and was combining it with wholesaler Spicers. These two acquisitions have certainly changed the face of the UK OP market as the private equity owners of the two leading wholesalers seek better returns.

Pelikan Artline agreement strengthens GNS’s office supplies presence

DEVELOPING

a nationwide wholesaling solution for the office products channel in Australia has presented a number of challenges over the years; one only has to think back to the short-lived Appaloosa initiative a few years ago. However, one constant on the national wholesaling scene has been GNS, a 40-year-old newsagent-owned distributor which has essentially serviced Australia’s network of about 4,000 newsagents.

Newsagency sector challenges The newsagency sector has been facing challenges of its own recently: the growth of digital publishing, big-box retail, lottery and gaming deregulation and migration to the internet, rent increases from landlords and changing customer buying behaviours are just some of the factors that are putting significant pressure on this channel. Most newsagencies are owner-operated with long trading hours and a convenience factor that used to be valued by consumers, but is less relevant by today’s standards. This secular contraction in the newsagency channel has led to GNS looking to other areas in which to grow sales and a natural adjacency has been office supplies resellers. About three years ago GNS signed a preferred wholesaler agreement with dealer group Office Choice and just a couple of months ago announced

a strategic alliance with leading Australian vendor Pelikan Artline. This latest agreement sees GNS becoming the preferred wholesaler of the entire Pelikan Artline range to the office products sector. “The objective of this alliance is to ultimately reduce supply chain costs for the dealer community, while providing an enlarged range of market-leading brands,” said Pelikan Artline Managing Director Bruce Haynes. “The combination of the distribution strength of GNS and Pelikan Artline will deliver an

The wholesaler was effectively running as four separate operations (Sydney, Melbourne, Brisbane and Perth) trading with the same name. He has removed the state management function and now each location runs as a sales and operations business with all shared services now centralised. “We had a longstanding culture of an expectation that our customers had to deal with us because we were industry-owned and not because they chose to,” Stewart told OPI. “I learned very quickly that choice is out there and was being exercised daily.” With his leadership team, Stewart has been changing the culture of the company, creating a vision for the business, opening up communication, changing the corporate identity and introducing fundamental management best practices. GNS is also upping its service levels to cater for the needs of office resellers and to provide a point of difference. A drop-ship service is currently being tested, systems are being introduced to allow order cut-off times up to 5.30 pm for next-morning delivery, while same-day delivery is already offered in three states. “For OP resellers we are increasing our range to include the most relevant categories where we can add value through an aggregation model. Quite a considerable component of our range is linked to our customers’ commercial catalogue strategy,” added Stewart, citing catering, jan/ san, furniture and fashion stationery as recent additions to the GNS portfolio.

“Quite a considerable component of our range is linked to our customers’ commercial catalogue strategy”

GNS CEO Alex Stewart

improved sourcing model for the office products dealers of Australia, full of choice and convenience.” GNS CEO Alex Stewart added: “We will broaden our product range to meet the Pelikan Artline range where it makes sense, and be able to offer relative pricing to customers with – in most cases – less than the minimum order values and quantities they would have from Pelikan Artline direct. “This gives the customer greater flexibility in managing stock, maximises their credit facilities and allows the customer to aggregate purchases from GNS from many suppliers including Pelikan Artline. This is a great example of a strategic relationship that is in the best interests of the channel. We are forging alternative means for the channel to leverage suppliers in new and different ways to create bottom-line results.” Stewart – who headed up Corporate Express Australia’s wholesaling business before taking on the CEO role at GNS about two and a half years ago – has been implementing something of a transformation at GNS.

B2B growing from small base The commercial channel now represents about 20% of GNS’s total sales of A$100 million (US$94 million), but is “growing from a low base”. It’s where Stewart sees the wholesaler’s key growth coming from. If GNS can ink more deals along the lines of the recent Pelikan Artline agreement, then perhaps a sustainable, large-scale OP wholesale solution for the Australian market is not that far away. w w w.opi.net | OPI Magazine

News ■ Analysis

GNS eyes OP success

News n Analysis

Herman Miller’s new consumer strategy DWR acquisition gives Herman Miller retail presence

Office

furniture manufacturer Herman Miller hosted an investor day recently to outline its consumer strategy following the $155 million acquisition of a majority stake in design-led retailer Design Within Reach (DWR) which closed on 28 July. Changing work habits are driving transformation at Herman Miller – something that is relevant to many companies in the business supplies space today – and CEO Brian Walker said the company was in “the middle inning” of the third major transformation in its history as it looks to become a lifestyle brand as opposed to simply a contract supplier of office furniture. “Our vision is that wherever you are, you are having a ‘Herman Miller experience’,” said Walker. “How do we follow you throughout your day?”

$100 billion market There’s a good reason why Herman Miller is targeting the consumer market. While the US office furniture segment is estimated to be worth $10 billion a year, the consumer furniture category is almost ten times the size and has shown much less volatility over the past 20 years. Before making the move for DWR, Herman Miller had consumer-led sales of about $70 million a year in the US; that’s less than 6% of its North American sales, but EBITDA margins are an attractive 23.5% – almost double the company average – so it was a side

John McPhee

John Edelman

OPI Magazine | September 2014

of the business that the board was keen to expand. Herman Miller estimates it could have grown its consumer business organically to about $175 million with investments in areas such as e-commerce and a limited number of retail locations in key markets. However, to really take things to the next level required an outside boost, and that’s where DWR fits in. The two firms have had a long history of partnership, and prior to the acquisition DWR was Herman Miller’s largest retail customer while

to be consolidated into a single location in Cambridge. This will create larger stores with more room for DWR to show lifestyle concepts for its products – tests have already shown that larger stores are more productive and the retailer is looking to increase sales per square foot by about 20% to $790. That gives the stores a FY2017 sales target of around $205 million. The remainder of the sales are planned to go through online

“Our vision is that wherever you are, you are having a ‘Herman Miller experience’” the manufacturer was DWR’s largest supplier. And DWR CEO John Edelman and President John McPhee have really turned the company around in the past four years, taking it from a loss-making business with sales of $113 million in 2010 to one with $218 million in sales and adjusted EBITDA of $13 million last year – and that involved more than halving the number of stores to 38. Now, with DWR’s retail and web presence, proprietary designs and design expertise, Herman Miller has a roadmap to achieve consumer sales of $360 million over the next three financial years, which will mean growing sales by 11% year on year, several percentage points higher that estimated GDP growth and trade association BIFMA’s three-year forecast. On the retail side, the plan is to actually have fewer DWR Studio outlets by bringing stores in the same markets together. That’s something that has recently been done in Chicago where three stores have become one, and two Studios in the state of Massachusetts are shortly

channels, where DWR already has estimated sales of about $70 million a year, and Herman Miller will target the SOHO market more strongly with an enhanced e-commerce offering, helped by the expertise of the DWR team.

Customer-centric approach Edelman and McPhee have a proactive, customer-centric approach to sales – impressive growth from roughly zero to over 25% of sales to architects and interior designers is proof of this – and both have made long-term commitments to remain at Herman Miller (in fact, that was an important condition of the transaction) where they will head the newly created Consumer division. Even if the $360 million target is achieved by 2017, the Consumer division will probably still represent less than 15% of Herman Miller’s total sales, so it’s hard to call this move ‘transformative’, but it still represents an interesting step in the evolution of a firm that has been synonymous with design since the days of DJ Dupree in the 1940s.

AOPD to oversee initiative that brings larger dealers together

the April 2014 issue of OPI (News Analysis, page 10), we reported on an initiative by TriMega called Prime, a cross-group block of large dealers that would be able to negotiate stronger terms with vendors and which would also help to stem the flow of dealers leaving TriMega’s DSC sub-group to Pinnacle, the group for larger dealers founded by Dave Guernsey. Prime in its original form is no more, but the concept has evolved, OPI has learned. A new umbrella organisation has been created under the auspices of dealer network AOPD that – initially – will include members of TriMega’s DSC and the Direct Purchasing Catalog Group (DPCG), a group of 13 dealers that already work together on buying programmes. The basic concept behind this initiative is the need for larger, stocking dealers to negotiate and buy together, not dissimilar to the reasons why Guernsey started Pinnacle.

One might expect the idea of this umbrella group – a name for which has yet to be decided – to have come from TriMega, but the concept is actually the brainchild of Mark Leazer, Director of Sales Technology at North Carolina dealer FSi, a member of both DPCG and AOPD.

Neutral position Leazer told OPI that the idea was hatched at the AOPD annual meeting in March where there were several conversations around the theme of how different groups might be able to work more closely with one another without necessarily having to merge. AOPD – a network of dealers as opposed to a buying group per se – was seen as the ideal vehicle to pull the different groups together due to its neutrality. The notion of groups coming together to negotiate contracts with vendors brings the name BPGI to mind. Leazer admitted the umbrella

concept was similar to the dealer group consortium, but said that there were three main differences: aligning the buy side with the sell side; the ability to monitor and deliver contract compliance; and a lower cost structure. A board comprising representatives of AOPD, DSC and DPCG has already been formed for the umbrella group, but there are a number of key items that still need to be ironed out such as legal structure and funding. This is certainly an interesting move and one will which no doubt receive more coverage in OPI in the near future. Mark Leazer

News n Analysis

Under my umbrella

News n Analysis

Better Capital makes UK market move Jeff Whiteway to head combined Spicers and OfficeTeam group

The

first of two major acquisitions in the UK business supplies market took place at the end of July when Spicers’ owner Better Capital paid £80 million ($136 million) to acquire OfficeTeam, a leading national reseller with annual sales of about £142 million. Shortly after announcing the deal, Better Capital changed the ownership of Spicers to the same fund-owned vehicle that controls OfficeTeam, effectively bringing the two companies together under the same roof.

Mixed views OfficeTeam had been owned since 2013 by a syndicate of five banks and CEO Jeff Whiteway told OPI that it had had “mixed views” about whether to hold on to the reseller or sell, given OfficeTeam’s “excellent profitability and cash generation”. “We engaged Gleacher Shacklock to investigate the market to identify

Whiteway himself will continue to have day-to-day responsibility for OfficeTeam and confirmed that he didn’t intend to Jeff Whiteway appoint a COO for that side of the business. Spicers CEO Greg Michael now officially reports to Whiteway, but the new Group CEO said: “I’m very happy he is driving Spicers in the right direction, so look at it more as working together.” One aspect of this transaction has been to highlight the trading independence of Spicers and OfficeTeam, and the two companies will continue to have separate boards of directors (although there is now a Holding board chaired by Better Capital’s chief Jon Moulton). Spicers was quick to write to customers to allay fears that OfficeTeam would enjoy a commercial

“Spicers and OfficeTeam serve different markets, so the sales and customer focus sides of the two businesses will stay independent” whether there were potential buyers interested in OfficeTeam,” he explained. “There were numerous interested parties and a formal process was undertaken, with Better Capital being faster and more decisive than others. This delighted me and I very much look forward to rejoining life under private equity ownership once again.” Whiteway has been installed as Group CEO with overall responsibility for both the OfficeTeam and Spicers businesses, with his CFO at OfficeTeam Andrew Mobbs now elevated to Group CFO. Apart from a group-level Secretary, all other positions are focused on the two trading businesses.

advantage now that both firms are owned by Better Capital. The wholesaler underlined the integrity of commercially sensitive information, saying that any disclosure of customer information to OfficeTeam or any third party would be “commercially reprehensible”. Whiteway added: “Spicers and OfficeTeam serve different markets, so the sales and customer focus sides of the two businesses will stay independent. Spicers represents 60% of the group’s turnover and we will certainly not risk that by alienating the dealer base of Spicers. Indeed, we have some exciting initiatives that will further strengthen the Spicers bond with its customer base.”

Spicers’ trading performance has certainly been in the spotlight in recent months as its well-documented supply issues have dragged on, but Michael appears to be moving things in the right direction. “The recovery plan for Spicers is progressing well, with Greg Michael having done wonders in the two months since he joined, and he has a great team,” stated Whiteway. “Getting service levels to an acceptable level for Spicers is the key priority and we won’t ‘penny pinch’ to achieve that,” he continued. “Exceptional costs will certainly take a toll on profitability for H1, but that will recover in line with getting service back to where it needs to be.”

VOW relationship Commenting on the OfficeTeam relationship with wholesaler VOW, Whiteway said: “We have had a very close working relationship with VOW, which has enjoyed 100% of our wholesale business since November 2012. The bulk of the business has already moved to Spicers, although I have had a ‘sensible’ conversation with Robert Baldrey [Vasanta Group CEO] on continuing supply arrangements. “How this will pan out, time will tell. I believe, whilst competitors, the two wholesalers’ main aim must be to develop the dealer market as that is their ‘life blood’. So, if we can help each other maximise the benefit for dealers to take market share from the international big box players, then that would be a good result for both wholesalers and dealer partners alike,” he concluded. w w w.opi.net | OPI Magazine

Comment

$4.9 billion How key is green jan/san?

Our forthcoming Green Thinking supplement which will be published later this year will include an article on green jan/san products. Here are a few ‘taster’ comments about the core issues. Noel Huebner, Director of Marketing, Alternate Channels, Soundview Buyers of jan/san products should continue to educate themselves about the products they are buying and be mindful of their environmental footprint. Some, especially low-cost imports, are often made from non-sustainable virgin fibre that is transported thousands of miles to North America. While these might be well-priced, the products’ true environmental cost should be considered. Jeff Abernethy, Associate Marketing Manager, Kimberly-Clark Professional We have come to understand that people in general see green paper and cleaning products as less efficient than their regular counterparts. We are actively working at changing those misconceptions among our customers and dealers’ customers. We believe that safer jan/san products are not only good for the environment, they are also beneficial to the people who are exposed to them.

News ■ And finally...

TWEET CHAT

Expected worth of the global scanning market by 2020

49.3 million

Number of tablets shipped in Q2 2014

295.3 million Number of smartphones shipped in Q2 2014

@jeffjarvis If print were an Eskimo it would be on an ice floe now awaiting cold death. @StationeryBytes Are selfies making autographs obsolete? Not if you print them off and get them signed. @officeshow Beatles’ secretary Freda Kelly confirmed for Q&A Keynote at @officeshow 2014. @SimonWallis 40 pallets & 25 bales of waste office paper. Avoiding #landfill we’re #recycling it back into 5Star Loop office paper.

SNAP SHOT

Bill Balek, Director of Legislative and Regulatory Affairs, ISSA Green products must not only be as effective as traditional products, but they must be competitive on price while also minimising the impact on the environment and promoting the safety and health of cleaning staff and occupants alike. The mistaken belief that green products do not perform well or are too expensive continues to present a challenge to the proliferation of environmentally preferable cleaning products and practices. David Baumgarten, EVP, Baumgartens The world is burgeoning with new and exciting raw materials made of natural waste materials. We see a trend where the mass market will be ranging these items at retail long before they will be available in the office and school supply channel.

Beyoncé has joined forces with State Bags and #BeyGOOD to provide school supplies to children in need. Over 2,000 students in Charlotte, Baltimore, Washington DC, Philadelphia, Newark and New York City will receive a new backpack, which will also be available on Beyoncé’s online store to purchase, with proceeds benefitting the #BeyGOOD 2014 Back to School Programme.

Don’t forget to take Resellers, how have you expanded your jan/san category? part in the By using existing category 57% By hiring 21% discussions sales reps specialists A combination By acquiring a jan/ on the OPI 7% san distributor of the two 14% LinkedIn page opi.net poll results

w w w.opi.net | OPI Magazine

Jan/san Interview | John Garfinkel

Raising Jan/san is a great sector for OP resellers to get into, that’s already been proven. But the two categories working closer together also benefits the cleaning industry itself, says ISSA’s John Garfinkel by Heike Dieckmann heike.dieckmann@opi.net

WHEN

it comes to the topic of cleaning, John Garfinkel knows what he’s talking about. As Executive Director of ISSA, the US-based worldwide trade association for the cleaning industry, Garfinkel and his team represent all channels in the industry, from manufacturers to distributors and resellers to building contract service providers and in-house decision-makers. OP players from all channels have shown an ever increasing interest in getting a slice of the commercial jan/san cake – the US portion of the industry alone is estimated to be in the region of $25 billion – over the past couple of years in particular. That’s why ISSA and its members are keen on creating greater awareness of the value cleaning brings to the facilities sector. If this cross-fertilisation results in more collaboration between the two sectors, all the better…

OPI Magazine | September 2014

OPI: John, let’s start with a fairly generic question: how would you describe the global cleaning industry today? John Garfinkel: Well, firstly I think it’s important to point out that most people don’t think about cleaning a great deal, certainly in a commercial environment. They take it for granted that something is clean unless they notice otherwise, so the cleaning industry’s most important mission is to create awareness of the impact that cleaning has on human health and on the environment. So ordinarily, many businesses look at cleaning as a cost to be cut, like they do with any maintenance, repair and operations goods. Then all

these diseases, they buy more hand cleaners and sales tend to surge [see also ‘Clean bill of health’, page 42]. But to really answer your question, the first thing to note is that the number of dedicated jan/san distributors has declined considerably over the last 15 years, in all developed nations, but in the US specifically by a magnitude of approximately 75%. So it’s gone down from about 20,000 at the turn of the century to what I think now is something like 5,000. Something not totally dissimilar happened in the OP industry, of course, but the repercussions of consolidation, challenging economic times and simply a lack of succession planning have manifested themselves quite differently. Whereas the remaining jan/san distributors have become real specialists, many OP dealers have evolved somewhat differently and have broadened out their product

“The cleaning industry’s most important mission is to create awareness of the impact that cleaning has on human health and on the environment” of a sudden a pandemic comes along – swine flu, bird flu, MRSA, currently everybody’s talking about Ebola – and whenever that happens people are suddenly worried about the spread of

line beyond office supplies. The same thing is happening with other sectors like food service, plumbing or safety – they’ve all expanded and are now also selling cleaning products.

John Garfinkel | Jan/san Interview So the core of the cleaning sector has shrunk substantially, but the wider industry has grown hugely. In terms of distribution and the amount of warehouses servicing customers from a jan/san perspective in the United States, I would say exposure is bigger than ever. OPI: But with so many players wanting a piece of the pie, is that not a considerable threat to the traditional jan/san distributors? JG: My experience is that what threatens some people, others see as an opportunity. For real entrepreneurs, the biggest threat is usually the best opportunity.

redistributors of food service disposables and jan/san products; and of course increasingly so the two major OP wholesalers United Stationers and SP Richards. That transformation is affecting independent dealers. On top of that, there’s a bigger trend going on,

“In emerging markets [...] the growth rate for cleaning products could be triple or even quadruple that of GDP” Industries age and people get used to doing things in a certain way; they see everything as a threat rather than looking at it as an opportunity. Many companies – in my sector as well as others – go out of business because they are too slow in adapting. In the cleaning sector, certainly, the supply chain has been changing quite a bit. OPI: How so? JG: It’s essentially following what’s already occurred in other industries years ago – office products included – the overall idea being to take as much cost out of the system as possible. In the US, for example, historically the majority of relationships were between manufacturers and dealers/ distributors. This is now changing, with considerably more product being sold through wholesalers or redistributors these days. There are a handful here that dominate the field: Bunzl, a huge and well-known player in the sector; Lagasse [United Stationers’ jan/san division]; RDA Advantage, a $500 million buying group made up of independently-owned

globally I believe, and I alluded to that earlier. All the industry lines are blurring: the MRO sector has come together under one umbrella, then we have industrial products, the food service industry, OP… and they all want to sell cleaning products. OPI: What does that mean for traditional distributors in the cleaning industry? JG: Well, I think that the traditional distributors that are surviving in this industry are doing very well. OPI: Is the sector growing? JG: Yes, it is and the cleaning products industry, definitely in mature markets, tends to grow a little faster than the economy as a whole, so if the general GDP of a country is growing at 2%, you can expect cleaning products to be growing a bit faster than that, even without these health scares when they tend to spike considerably more.

In emerging markets such as countries in Africa or even in parts of eastern Europe, the growth rate for cleaning products could be triple or even quadruple that of GDP. In the poorer countries, knowledge about proper cleaning techniques is far less sophisticated; also, these countries simply cannot afford the products. But as their economies develop, the cleaning industry becomes a real beneficiary. OPI: So does the industry pretty much work in tandem with the global economies, at least in the developed world? JG: To an extent. You have to separate it out a bit. Cleaning as a whole is not as cyclical to the economy as many other industries are. It does have an impact because, as unemployment increases, you certainly have swings in the amount of product needed for cleaning. But generally, if you own or occupy a commercial facility, you still need to keep it clean. There are basically two different product categories. One is the capital goods, such as the machinery for cleaning carpets and polishing hard floors, or something as simple as a vacuum cleaner. The other is the disposables side. You won’t see much in the way of cyclical swings on the disposables side – it varies by 3-5% in terms of product sales. It’s just something you need to have. For capital goods, it’s very different. In a bad economy, your service requirements go up in terms of the services that you need to provide to maintain machines. But your sales of new equipment would decline much more severely – by 20% or even more during slower economies. OPI: How important is product expertise in this sector? w w w.opi.net | OPI Magazine

Jan/san Interview | John Garfinkel

JG: Again, it really varies. Where product knowledge is really important is on the chemicals and on the machinery side. To really know about the products and how to use them in these areas requires extensive training and professionalism. If companies such as OP dealers, for example, or even the wholesalers, are looking at jan/san as a commodity line – and things like toilet paper or bin liners obviously are – expertise is usually not an issue and it’s all about the lowest price and the fastest delivery. But when you run into a health scare like bird or swine flu, it’s a very different situation. Then customers want expertise and knowledge, and here often lies the problem for OP companies that have originally gone for the low-hanging fruit in the category – they’re out of their depth. There are other service-related questions like ‘How do I get that stain out of my carpet?’ or ‘How do I use this machine?’ that wouldn’t pose a problem for the traditional operator in this field, but it definitely would for the OP newcomer. As end users start to look for the experts in the field, my belief is that they continue to favour the traditional jan/san distributors or indeed directly the manufacturers that have the expertise. OPI: So that’s the jan/san distributors’ core USP and also the main obstacle for OP [and

OPI Magazine | September 2014

other] players venturing into the sector? JG: Yes. If OP dealers want to keep the higher margins that come with some products, rather than being a low-cost, low-margin supplier, they have no choice but to become experts at what they’re selling. And I would speak in favour of acquisition to get that expertise. Another way would be to recruit specialists into their internal sales and marketing organisations. ISSA also offers resources and education to help develop that knowledge. OPI: You mentioned fast delivery earlier. How does the cleaning industry compare to the OP sector in terms of its logistics capabilities? JG: Certainly historically, I don’t think next-day delivery was commonplace. Maybe if you were located in New York City, San Francisco or Chicago, you might have gotten that level of service from your local distributor, but generally the supply chain in cleaning products in the US was nowhere near as sophisticated even five years ago. Today it’s almost expected as you compete with the likes of Amazon

and Staples, but it’s still catching up in terms of delivery expectations. OPI: What ultimate impact do you think the increasing move of OP resellers into the cleaning category will have on the industry as a whole? JG: I don’t think there will be an impact in terms of buying, because the buying is driven by the end market. But one growth factor will come from the higher value proposition as the ultimate end user of the product – and the one who approves the final budget for cleaning – becomes increasingly aware of the value of cleaning. That growing awareness is also key to what we’re trying to do at ISSA and with our members. That said, I do believe that OP dealers venturing into the jan/san category is a good thing because the more distribution is able to service the industry – with the appropriate service and training and all that it entails – the better for the marketplace. Of course, some people won’t like it because it creates a new competitive threat, but the overall impact on the marketplace will be one of more efficiency as a result of that competition. There’s a great opportunity here for OP dealers. I have met with the management of TriMega and their leadership and I am very excited about their interest in the category [see also Beyond OP on page 11]. As you know, we’re also running a special day at ISSA/INTERCLEAN in Orlando in November to try and help OP dealers understand the cleaning business [see also our Event Preview on page 36]. For more info on the jan/san industry in a sustainability context, look out for our Green Thinking supplement later on this year.

John Garfinkel has spent much of his career in the cleaning industry. Before joining ISSA in 1990, he held various senior management positions in finance, sales and marketing, culminating in his role as VP and General Manager of Crown Zellerbach (acquired by James River in 1986). Over the years, Garfinkel has received several recognition awards from industry organisations. He is a fellow of the British Institute of Cleaning Science and has served as a board member of the US-based National Association of Wholesalers and Distributors.

Hot Topic | FSSI Jan/san Contract

Let’s get -cal The ability of hundreds of jan/san resellers to continue selling to the US federal government may be under threat following the award of the first FSSI strategic sourcing contract for the category

by Andy Braithwaite andy.braithwaite@opi.net

DARK

clouds have been looming on the horizon for some time for the hundreds of small businesses that supply jan/san products and services to the US federal government. Like their cousins in the office supplies category, they have had to face up to the realities of the General Service

Administration’s (GSA) Federal Strategic Sourcing Initiative (FSSI – pronounced colloquially as ‘fizzy’) which is aimed at consolidating federal purchasing contracts. The Obama Administration is fast-tracking FSSI as part of its goal of reducing federal procurement spending by $40 billion a year; office supplies have been in the vanguard with a second generation contract (OS2) introduced in 2010 and a new OS3 contract having just been awarded (see News Round-up, page 7), but GSA is now expanding FSSI into categories including jan/san, MRO and office furniture.

Counting the cost of FSSI There have been calls for GSA to conduct a full cost-benefit analysis (CBA) of its strategic sourcing initiative, cost including the economic and social cost of job losses incurred by small businesses shut out of FSSI, and benefit relating to the procurement savings claimed by GSA. While the agency has been quick to underline the benefit aspect, it has so far resisted commissioning a full CBA. One organisation that could hold the key to any eventual CBA is Bornstein & Song, a New Jersey-based accounting and consultancy firm which has been studying the impact on small businesses of FSSI since the initiative was introduced into the office supplies category in 2010. Professor Sam Bornstein is a partner in the firm and a professor of accounting and taxation at Kean University’s School of Business in Union (NJ). He is keeping actual data close to his chest, but spoke to OPI about the need for a CBA. OPI: Can you provide any details of what your CBA research threw up in terms of the impact of FSSI on small businesses? Sam Bornstein: Bornstein & Song has focused its FSSI research on the holistic impact of federal strategic sourcing on small business, job loss and the US economy. The challenge is to quantify and place a dollar amount on the economic and social cost of job loss and we

OPI Magazine | September 2014

have devoted years of research to this while GSA could not or would not do so. With regards to the impact of the FSSI on GSA Schedule 75 office supplies contractors, the key factor is how many jobs were lost. Fortunately, Bornstein & Song was able to capture this data – which is now no longer available as most of these contractors are no longer in business. OPI: The recent Government Accountability Office’s (GAO) decision to reject OS3 complaints would suggest that GAO is satisfied with the steps GSA is taking. SB: GAO may be satisfied with what GSA is saying, but the Small Business Administration (SBA) said otherwise in its letter to GAO dated 11 April 2014: “It is the position of SBA that a cost-benefit analysis needs to be performed. Cost must include the economic and social cost of job loss, not just to individual small business, but to the economy as a whole. SBA believes that this is a reasonable approach to assess negative impact of the consolidation.” We were gratified to see that SBA has accepted the Bornstein & Song FSSI research findings by including this requirement in their letter to GAO regarding the OS3 protests. But the only stick that forces

FSSI Jan/san Contract | Hot Topic While GSA touts impressive numbers in terms of savings achieved through FSSI and the amount of spend that is channelled through small businesses, the programme has come in for widespread criticism from a variety of industry groups for greatly reducing the number of small business contractors that can work with federal agencies, thereby reducing competition and threatening jobs.

Double-digit savings

“The reality is they’re going to put thousands of small firms out of business”

After a protracted bidding process, GSA finally announced the awardees of the first FSSI jan/san contract towards the end of July, with 18 firms being awarded a total of 35 blanket purchase agreements (BPAs) in four product categories (see table on page 28). Annual spend on the contract has been estimated at almost $600 million and GSA says annual savings through the FSSI model will be in the region of 14%. Jan/san trade association ISSA has certainly been alert to the detrimental impact that FSSI could have on its membership and has been working hard to both try and forge a legislative ‘remedy’ to FSSI and educate members on the implications of FSSI. ISSA Executive Director John Garfinkel comments: “My feeling is that, as a general business practice,

One group’s pain…

GSA to conduct a full CBA will come from Congress which is currently enamoured with the GSA claim of millions of dollars of FSSI savings. OPI: Are you hopeful that changes to small business contracting legislation will result in GSA being required to conduct a full CBA? SB: If it is passed, the Meng/Walberg amendment will be ineffective because it relies upon GAO preparing a “study” of the impact of FSSI on small business. The specifics of the study were not clearly defined nor was there any mention of the need for a CBA. It is also unlikely that either GSA or GAO has the necessary data to perform a CBA.

it’s important in a profitable enterprise to consolidate your purchases and standardise them. For the federal government to get involved in that, they’re being a little bit contradictory to their own speech about creating competition. While the government preaches on the one side favouring small and minority businesses and new business start-ups, the reality is they’re going to put thousands of small firms out of business.” One person who is very familiar with the ins and outs of FSSI is ISSA Director of Legislative Affairs Bill Balek. While he admits that the award of the jan/san BPAs was “a setback for federal jan/san contractors”, he says the association continues to pursue a number of administrative and legislative avenues designed “to maximise federal business opportunities for small businesses while providing the desired cost reductions associated with federal procurement”. These avenues include the efforts of the Coalition for Common Sense Contracting – of which ISSA and OP/office furniture association IOPFDA are founding members – to, among other things, support an amendment to the National Defense Authorization Act and work with the congressional representatives to require GSA to assess the economic impact on small businesses of its consolidation of contracts, as stipulated in the Small Business Jobs Act of 2010. ISSA is also working with an organisation called the MPU Network to provide its members with an alternative pathway to doing business with the federal government.

Sam Bornstein

OPI: What do you make of the Coalition for Common Sense Contracting and how much influence will it be able to have? SB: It appears that it will focus on lobbying while ignoring the need for data. Data will speak louder than words. Previous attempts to lobby Washington to stop FSSI were confronted with the question: “Do you have any data to prove that FSSI is bad for small business while GSA has claimed hundreds of millions of dollars of savings for the US taxpayer?” It is hard to win that argument unless you have data.

While jan/san distributors are still getting to grips with FSSI, some traditional office products resellers have taken advantage of their strategic sourcing head start and experience to win FSSI jan/san BPAs. This not only demonstrates the continued expansion of OP resellers into adjacent categories, but also underlines the value of the sector’s traditionally high service levels. Dealer group Independent Stationers (IS) has a well-established public sector programme and has enjoyed success with its consortium model in the federal space. Speaking to OPI about the award of a jan/san BPA, the group’s EVP Charles Forman notes: “We believe our model is an ideal solution for GSA in terms of their wanting to administer and manage fewer contracts and still support small business because we assist them in doing both. We have built a good relationship with GSA, but in order to win these awards w w w.opi.net | OPI Magazine

Hot Topic | FSSI Jan/san Contract you have to be competitive from a pricing standpoint in addition to being technically capable.” IS is now busy certifying its members that wish to take part in the jan/san BPA to ensure that they comply with the contract’s specific terms and conditions. Another ‘group’ that may be able to participate is AOPD. Its member The Supply Room was a jan/san BPA awardee and the dealer’s EVP Addison Jones says there is a “strong possibility” that other AOPD members will be able to ‘piggyback’ on to the contract. The consortium approach taken by IS is also something favoured by trade association NOPA as it tries to get GSA to open up FSSI to more small businesses. “We are very pleased several office supply-focused members received jan/san bids, but with three out of over 500 [federal-qualified] vendors in just our category and over 1,000 in the jan/ san-specific category, that means a lot of others were left out,” says NOPA spokesperson Paul Miller. He adds: “NOPA continues to push for a more balanced solution that helps GSA achieve its [small business] goal while allowing for more opportunities and competition from the entire industry, either through more contracts or wider use of the consortium model.”

Harming small businesses

FSSI Jan/San Contract Awardees Product Category Contractor Name

Ansley Business Materials of Chicago

Cleaning Compounds and Related Dispensers

✓ ✓

✓

OPI Magazine | September 2014

✓

Document Imaging Dimensions

✓

Global Procurement Solutions

✓

Independent Stationers✔

✓

Noble Supply & Logistics

✓

Premier & Companies

✓

Shelby Distributions

✓

Staples

✓

Sterling Business Machines

✓

Supplies Now

✓

Stephens Office Supply✔

✓

✓ ✓

The Supply Room WW Grainger WECsys

✓

While NOPA’s focus has been on the Wrigglesworth Enterprises federal office supplies contract, the issues that it has with FSSI stretch Zep Sales and Service ✓ across multiple industries. In July, Miller and an ISSA representative took part in a House Small Business Committee was delayed because a number of small roundtable focused on FSSI during which they businesses protested that GSA was flaunting were able to voice their concerns to GSA and existing legislation by failing to carry out a members of Congress. Miller diplomatically proper impact analysis as stipulated in the applauded GSA’s efforts to drive FSSI spend to Small Business Act. small business contractors, but he contended However, these protests were dismissed that by making so few awards by federal watchdog the Government GSA was actually harming the Accountability Office (GAO), which small business community determined that GSA had carried the as a whole and urged the required analysis. That decision went agency to conduct full FSSI against an April 2014 ruling by the impact studies. Small Business Administration How successful these which is now at loggerheads with pleas will be remains GAO/GSA. How all that plays out to be seen. The award will determine the future direction of the latest OS3 federal of FSSI, but nothing has stopped the office supplies contract GSA juggernaut so far.

Motorised Paper Products Floor Cleaning and Related Equipment and Dispensers Accessories

✓

Capitol Supply CAPP✔

Non-Motorised Cleaning Equipment and Trash Receptacles

✓

“In order to win these awards you have to be competitive from a pricing standpoint in addition to being technically capable”

Dealer Spotlight | Inforshop

z l i a Br

All eyes on

From Carnival fever and World Cup (host nation) despair to pre-election jitters, Brazil’s a country in the limelight. Away from the spotlight, Inforshop has had an interesting year too, with 2014 marking the beginning of a new era by Heike Dieckmann heike.dieckmann@opi.net

TOURISM

numbers predictably soared during Brazil’s recent hosting of the FIFA World Cup, but its impact on other sectors of the economy was decidedly negative. Industrial production fell steeply in many sectors, as did consumer consumption in a country that is heavily service-oriented. None of it was helped by some host cities declaring municipal holidays on days when matches were played in local stadiums or legions of workers playing hooky to watch the Brazilian national team’s games. According to Thiago Britto, Managing Director of Brazilian B2B operator Inforshop, retail sales fell by a whopping 35% in the month of June.

Thiago Britto

OPI Magazine | September 2014

Inforshop itself fared somewhat better, but revenues during the World Cup month were still down 9.7% compared to the same period a year ago. But the World Cup – as well as other ‘distracting’ events like Mardi Gras or the forthcoming elections – is merely a blip for this profit-oriented (rather than just top line) player in a year

in so many markets, the financial crisis of 2008 has irrevocably changed the outlook for this somewhat struggling BRIC nation. Says Thiago Britto who took over from his father as Managing Director (José Mário is now Chairman) at the beginning of this year: “For many years, Brazil benefited from international growth and commodity exports. Since 2008, things have changed and the challenge nowadays is to boost economic activity – the prediction for 2014 is already lower than 1% – and both control and reduce inflation (5.91% in 2013) and interest rates (11%). An obvious

“Through our partnership with Lyreco [...] we’ve been able to provide global solutions to multinational firms” that is seeing the OP reseller venture down new avenues and consolidate its existing strengths.

Company evolution Inforshop has come a long way since 1986 when it was founded by José Mário Britto (Thiago’s father) as a retail franchise with the slogan ‘O shopping da informática’ (explaining the name of the company). The business model changed over time, with it now being an operator that is 100% focused on the B2B sector, split into four business units. These are corporate, SMB, government and resellers, the latter accounting for just 10% of overall revenue. With current revenues of approximately BRL191 million ($84 million), this number is steadily – though not as dramatically as hoped a couple of years ago – going up. But as is the case for so many companies

way out of this trap is to reduce government overheads and increase investments, but that’s often easier said than done when political interests are involved.” Inforshop’s key factor for success, Britto adds, has been its ability to adapt as the market evolved. “We have been in the office supplies contract business since 2002, servicing an average of 3,000 customers per month. Through our partnership with Lyreco that began in 2012 and our part in an international alliance of 15 distributors, we’ve been able to provide global solutions to multinational firms. These types of partnership are a great example of think global, act local. We rely on each other to be part of the international landscape and at the same time each individual player is more efficient and more specialised in its own market.”

Dealer Spotlight | Inforshop In terms of product, Inforshop’s main categories comprise cut-size paper, IT consumables and stationery. Paper being so important is interesting and due to the fact that the country’s paper consumption is still relatively immature compared to the US or parts of Europe where paper usage is considerably higher but now on a downward trend, whereas in Brazil there’s still plenty of room for growth in this category. That said, Britto is fully aware that the global declining trend for paper and paper-products will eventually reach Brazil as well. Indeed, through its Lexmark Solutions Center, the company is already offering ways to customers of printing more consciously and realising savings through apps and embedded solutions. Furthermore, a growing focus on personalised print, the whole gamut of facilities management – a negligible proportion of its 8,000 SKUs at present – and also a planned foray into private label are other product extensions that should counteract the anticipated declines in some categories and significantly boost revenues overall. Product slightly aside, though undoubtedly related, Britto and his team are currently working on two major initiatives and that is the creation of two new business units: E-commerce and Services. He says: “What we’re doing is preparing

Inforshop Fact Box Founded: 1986 by José Mário Britto

Staff: 318

Headquarters: São Paulo, Brazil

Business model: B2B

Managing Director (as of 2014): Thiago Britto (son of José Mário)

Geographical coverage: Brazil, including 230 cities

Revenues (2013): BRL191 million ($84 million)

Logistics: Four distribution centres; deliveries via own fleet and third party

the company for the future. Our Services and E-commerce units are both focused on the SMB market and have a lot of synergies between them. The reason for the SMB focus as regards e-commerce specifically is because most contract customers prefer to input orders through their own platforms and systems,

“What we’re doing is preparing the company for the future” so the options are more limited for us. But e-commerce in Brazil is growing by 30-40% a year and we need to maximise the potential in this area. Social media uptake is also growing and we’re hoping to create opportunities here as well, in conjunction with our open e-commerce platform.” He adds: “The new Services unit is a differentiation alternative to the traditional box-moving model and an attempt to add more value. The portfolio is going to be initially more concentrated on IT services, including MPS, hardware rental, tech support and maintenance.” With e-commerce developments comparatively recent still, Inforshop has nonetheless ploughed significant

Inforshop supports a number of social initiatives in its local area. One of these is the Happy Children programme from Madre Teodora Educational Centre which benefits vulnerable children and teenagers. Using the centre after school, they are offered meals as well as activities and classes in areas such as hygiene and health promotion, reading, arts, sports and entertainment.

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OPI Magazine | September 2014

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funds into other technology areas, but these have so far largely focused on the logistics side of things. Within its main distribution centre, strategically located in the São Paulo countryside – the area generates the country’s second highest GDP, ahead of the entire state of Rio de Janeiro – investments in logistics are paramount to a smooth and sophisticated operation. Britto explains: “We internally developed an app to confirm deliveries in real time and/or start a claim quicker. RFID is also deployed in our distribution centres through handheld wireless devices connected to the ERP system, and is used for checking in goods, picking and checking out orders.”

Financially sound With many OP firms fighting for organic growth through new strategies, products and services, being financially stable and nimble is paramount. Inforshop is in an enviable position in this regard as Britto points out. “We are financially very solid, with low levels of debt and the ability to invest using our own resources. This is key in a country where interest rates are 11%.” “It’s all about reinvesting in the company,” he concludes, “and investments in my opinion should be focused on people and logistics automation. In the short-term future, we will pay close attention to our new business units and constantly review our existing business model and our mix of products.”

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Special Feature | Facilities Management

Flying the

r e n FM ban

At the recent Facilities Show, OPI caught up with Banner Business Services Managing Director Richard Costin to talk about the real need for diversification in the OP industry and the move into the FM world

by Michelle Sturman michelle.sturman@opi.net

WITH

the increasing need to find new revenue streams, the Facilities Management (FM) category has become ever more appealing enabling dealers to maintain margins and provide a more comprehensive offering to customers.

The need for diversification The decline in traditional OP led Banner Business Services (BBS) – part of the office2office group – to re-evaluate its offering and look for alternative sources of income to benefit both its own business and its customers. Seizing a gap in the market, Banner introduced Closed Loop, a secure volume-based document destruction service. The innovative concept is deceptively simple: Banner takes a customer’s confidential waste paper, securely destroys it either on or off-site, bales the paper, segregates it, passes it to the mill and gives it back to the customer as recycled copy paper. Not only is Closed Loop environmentally friendly, but it’s also an effective solution for the secure destruction of confidential documents.

OPI Magazine | September 2014

“It’s a USP for Banner that also creates three separate revenue streams for us,” says BBS Managing Director Richard Costin. The success of Closed Loop led Banner to realise that there were pieces missing in terms of document life solutions, resulting in the company offering record management services to customers. Partnering with South African company Document Warehouse, a fee is charged for storage and collection and at the end of the document life, charges can be levied for document destruction and waste value.

Branching out into the FM world With the success of its document solutions divisions coupled with the continued decline of traditional OP sales, Banner kept a close eye on industry developments. The company identified FM supplies as a potential addition and researched the category thoroughly. Costin admits that determining which product segments to focus on from the vast array available within the sector was challenging. “After market research, we realised that products such as high-vis jackets didn’t really suit us so we

Branding Banner To ensure Banner was heading in the right direction with its product category diversification, the company recently conducted a customer survey which threw up some surprising results: when asked what Banner stood for, the most frequent customer answers were ‘trusted’, ‘steady’, ‘innovative’ and ‘old-fashioned’. Richard Costin admits the ‘old-fashioned’ comment was “challenging”, but it gave the company the impetus to modernise and refresh its brand. To continue its forward momentum, BBS reviewed its current brand and – working with agency Honey Creative – took the time to understand its brand values from both an employee and customer point of view. This was then coupled with its business and marketing strategy to create a new look and feel that convey both its brand values and vision to customers. BBS Head of Marketing Stephanie Gentle told OPI that the revamp includes the website and social media platforms. “It will involve a refresh of our verbal and visual identity with the objective to enhance our credibility and positioning within existing and new marketplaces as our product and services continue to expand and diversify.” Visually, the overall look and feel of the Banner update includes a refreshing colour palette along with a new core statement and strapline. However, more details were still a closely guarded secret at the time of going to press.

Facilities Management | Special Feature

have been selective in what we offer,” he says. Being selective has nevertheless yielded a category which, from June this year, has been offering customers a choice of over 14,000 products, covering everything from catering and front of house to washroom and premises management. Costin says the decision to enter the FM market was not taken lightly, but in the face of industry developments, market trends and the introduction of FM products into many customers’ businesses, it became 'a no-brainer'. The company itself stocks around 300 FM items which, says Costin, makes sense as they are fast moving and allow Banner to be more competitive on price. The rest are sourced from partners with next-day delivery and using its own logistics fleet of around 220 Truline branded vehicles across the UK and Ireland.

Go-to provider Priding itself on offering customers a ‘one supply chain’ business model, the Banner strategy for FM going forward is to become the go-to provider of supplies and services for the workplace, enabled by its sophisticated source, supply and distribution infrastructure. It hasn’t all been plain sailing. Facilities management is a substantial category that required considerable time and expense in terms of staff training, according to Costin. Banner entered the FM market cautiously, starting with furniture in January followed by catering products such as the ubiquitous tea and coffee as well as disposable cutlery and plates in May. “Following the first day of catering training, an account manager took an order; he would never have dreamt of selling cutlery to a customer before,” reveals Costin. With orders flowing in from the launch of the FM product category online, Costin firmly believes that as

its limitations lie. The company, for example, would not pitch for a large corporate FM contract. “We wouldn’t tender for that type of contract as there are specialists in that market,” long as Banner continues to add the says Costin. Instead, Banner right products, both the company and is focusing on supplying FM products its customers will continue to grow. to existing customers, using online “Moreover, the margins are healthier ordering – where 80% of its orders in FM categories such as catering originate – which makes it simple to than they are for general office add FM products to a sale. “This way, products,” he adds. customers can deal with one supplier, That said, Banner isn’t trying one account manager, one delivery to muscle in on traditional FM and one complete supply chain. It’s just so much easier,” he concludes. contractors and recognises where

On the jan/san case Richard Costin talks to OPI about the importance of jan/san products within the FM mix. OPI: How big is the jan/san category for Banner? Richard Costin: Spend in this category is in the millions and continues to grow; this represents significant turnover and future revenue opportunities for Banner. Our customers increasingly see Banner as a complete workplace provider and recognise the clear benefits of purchasing from a single source. OPI: How many jan/san products does Banner offer? RC: We offer over 500 products specifically in jan/san, the majority of which are listed in the main Banner catalogue, plus a number of other lines stocked for specific customers. If our customers need a product that we currently do not provide and we see volume potential, we will bring it into stock and provide it as a standard item to complement our portfolio. OPI: What are the main products on offer? RC: In terms of jan/san, the main products are cleaning equipment and disposables such as hand towels, dishwashing tablets, laundry items, sanitisers and soap. OPI: Which are the most popular? RC: Banner is one of the largest contract suppliers of toilet tissue in the UK. Our top five bestsellers include toilet tissue, hand towels, hand wash, dishwasher tablets and antibacterial wipes. OPI: Is Banner doing anything specifically in terms of promoting the jan/san category to customers? RC: Facilities supplies are a real growth area for Banner and we’ve recently run a number of very successful campaigns. This year we’ve increased the range in our main Banner catalogue and printed a separate dedicated facilities supplies catalogue too. We’re also producing brochures throughout the year that showcase our product portfolio within certain sub-categories of facilities supplies, such as cleaning and washroom.

Richard Costin

OPI: How does Banner see the jan/san category evolving? RC: There’s a growing trend for organisations to bring their catering and cleaning operations back in house, and this is leading to strong sales in this category. We’ve seen a real rise in demand for products for the office kitchen: everything from dishwasher tablets to fridges and beverages. I expect to see this continuing as more and more businesses look at reducing costs and consolidating purchasing.

w w w.opi.net | OPI Magazine

Event Preview | ISSA/INTERCLEAN

In one fell sweep

Orlando is the place to be during the first week of November where players old and new and from all channels can learn – and showcase - all there’s to know about the facilities sector by Heike Dieckmann

sending a top executive to the Advanced Distributor sessions on 4 November which include topics such as: • making your service department a competitive advantage • branch and operations effectiveness • leveraging analytics to improve your business and building a powerful team. Dianna Steinbach, ISSA’s Director of Industry Outreach, says: “More than 5,000 customer executives attend ISSA/ INTERCLEAN, making it a valuable event for distributors to pick the brains of facility decision-makers. And if janitorial products aren’t your core market, then you likely don’t have a lot of time to stay abreast of the latest trends, regulations and customer demands specific to these products. The ISSA convention seminars held throughout the week provide updates on all you need to know to remain relevant and innovative for your customers.”

heike.dieckmann@opi.net

THERE

are several similarities between the traditional OP industry and the jan/san sector. Both sell products that often comprise low-interest and highly-commoditised products, both have seen a lasting period of consolidation, with fewer – but often considerably more powerful – players in reseller, wholesaler as well as manufacturing circles commanding the stage. Bearing these factors in mind, it’s heartening to see that both exhibitor and delegate numbers have been going up at ISSA/INTERCLEAN events around the world and its North American show is no exception. At this year’s event, to be held from 4-7 November at the Orange County Convention Center in Orlando, Florida, more than 700 exhibitors will be bringing janitorial or ancillary facility-related products, services and solutions to the table.

Coming together

Another sign of growth – and of an industry that is doing well (see also pages 22 and 42) – is a continued increase of other industry organisations co-locating their annual events with ISSA/ INTERCLEAN, making it the one week in the year when all top professionals in the sector come together. And because all the right contacts are in one place, office products dealers interested in expanding into janitorial lines will find it easy to find partners and network with customers. From an education point of view, there’s also plenty to specifically engage OP dealers. In addition to the newly launched Janitorial Solutions 101 Day (see right) on the last day of the event, dealers should consider

OPI Magazine | September 2014

For office products dealers intent on expanding their janitorial business, there are a number of must-attend sessions during this year’s ISSA/ INTERCLEAN North America. One of them is the Janitorial Solutions 101 Day, held on the last day of the event (Friday, 7 November) and sponsored by OPI. Janitorial Solutions 101 gives time-pressured dealers the opportunity to experience the event for one day only if they wish to. They can meet with exhibitors on the show floor as well as attending a number of key sessions tailored directly at their needs. These include two keynote speakers – champion basketball coach Rick Pitino and boxing legend Sugar Ray Leonard – and a marathon analysis of the ‘10 Trends Shaping the Cleaning Industry’, presented by Dave Frank. The day finishes with a sales roundtable discussion that aims to answer all the questions dealers may have by experts in the field. Registration for this custom day also comes with a trial membership in ISSA, giving delegates access to valuable market information, designed to help them grow their business. For more info on the Janitorial Solutions 101 Day and/or to register, visit www.issa.com/janitorialsolutions101 or email rosie@issa.com

OP dealer d must-atten event

Event Preview | BSA/IOPFDA

Stronger together US industry associations co-hosting annual meetings in October

by Andy Braithwaite andy.braithwaite@opi.net

IT'S

no coincidence that the number of co-hosted industry trade events has increased in the past 12 months as acceptance grows for the need to take costs out of the channel. The Business Solutions Association (BSA) and the Independent Office Products & Furniture Dealers Association (IOPFDA) – which includes the restructured NOPA – are the latest organisations to come together in what has been hailed as an "historic

event" for the independent dealer community. The first BSA/IOPFDA Annual Forum takes place in San Diego, California, from 22-26 October and it is expected that more than 320 people will attend. BSA will hold its own conference at the start of the event and IOPFDA will close the meeting with its own conference. In

"We're trying to dive deeper into industry problems and opportunities"

the middle, there is a merged portion including a number of awards and special recognitions. Combined, the two organisations certainly include all the BSA/IOPFDA 2014 Annual stakeholders in the independent channel: manufacturers, rep Forum highlights groups, wholesalers, service Two state-of-the-industry presentations by providers, dealer groups and Cleveland Research dealers. "When we look at BSA members BSA presentations/panels on: and the value we try to provide • social and digital media them, I think one of the missing • cohesive digital strategies • rebranding links from our previous events • sales processes has been attendance by resellers themselves," says BSA President IOPFDA sessions: Jim O'Brien. "Putting the • legislative review furniture and office dealers from • sales training with Tim Wackel IOPFDA in front of our members • ROI on social media • Affordable Care Act implications adds a lot of value to them." • recruiting and retaining an age-diverse IOPFDA President Mike Tucker workforce believes that the event could • dealer roundtables herald closer ties between furniture dealers and the rest Industry recognition awards: of the office proucts industry. • David Williamson – Legend of the Industry • Jeff Howard – Leadership Award "Even though these dealers are • Jim Hebert – Lifetime Achievement considered part of our industry, • Sandi Jacobs – IOPFDA Chairman Award they haven't really engaged • Glenn McDaniel – IOPFDA Chairman Award much at all with the office products side," he notes. "Moving Many networking opportunities forward, we hope we can bring

OPI Magazine | September 2014

them closer – we will certainly become stronger if we all work together." The theme of the Forum is 'Creative Disruption', something which O'Brien says describes the desire to break existing patterns in behaviour. "BSA believes our industry is already in a transformational stage and wants to be a constructive voice and accelerant to the change it feels is necessary," he states. Tucker adds: "What I like about this collaboration is that we're trying to dive deeper into industry problems and opportunities, and come up with programmes to really help take independents to the next level." There is no product expo at the BSA/IOPFDA Annual Forum, but manufacturers do have the opportunity to book suites at the Loews Coronado Bay venue if they wish to display merchandise.

Both O'Brien and Tucker say there has been strong interest from their members in the combined event and they hope that future meetings will be able to build on this year's achievements. There are also plans to make future conferences even more inclusive as independent resellers broaden their ranges of products and services. This could hopefully include some form of collaboration with adjacent categories such as jan/san and educational supplies. But first, to San Diego next month and to this latest example of the growing collaboration between the various stakeholders in the independent dealer community. For more information, visit www.iopfda.com or ww.businesssolutionsassociation.com Jim O'Brien

Mike Tucker

Big Buyer | Event Preview

A winning formula

Barrie Hayes

The 19th Big Buyer trade show takes in Bologna, Italy, from 26-28 November

IT'S

a rarity these days for a national stationery and office products trade show to have support from all sectors of the channel, but Italy's Big Buyer event continues to attract the country's leading manufacturers, wholesalers and resellers, and a growing number of international participants as well. With its reputation for a relevant and high-level conference and educational programme, Big Buyer's goal is to strengthen dialogue and develop synergies between manufacturing, wholesaler and reseller partners.

Focus on the future "For the 2014 edition, our mission is to provide exhibitors and visitors attending Big Buyer with guidelines for developing their sell-in and sellout strategies," says Mariella Nasi Pfeiffer, owner of show organiser Edinova. "Over the years, operators have unanimously appreciated this strategic approach and have continued to provide information on how to create an event that always looks to the future. In fact, Big Buyer is an event based on direct cooperation between Italian and foreign players and leading

associations in the sector as well as on the ongoing exchange of market visions." Edinova says this year's event has already achieved one of its main goals: to strengthen its international horizons. "Many companies have already re-confirmed their participation and this year, more than ever before, the event will be attended by many exhibiting companies and foreign parent companies that believe in the growth potential of the Italian market," adds Pfeiffer. A large number of foreign buyers are also expected to attend Big Buyer. "Many of them have already registered to take part in the next edition and have asked our staff information on how to better organise their presence at the trade fair," states Sales Manager Simonetta Pfeiffer. Edinova – assisted by industry experts – is busy finalising this year's conference and seminar programme. In addition to the traditional meeting organised by AIFU (the Italian association of office suppliers), which last year saw the participation of BPGI CEO Barrie Hayes, who gave a widely appreciated talk on global trends in the business supplies market, a debate will be held on relations

between manufacturers and resellers, with a particular focus on how to operate more profitably. Aesthetics and functionality are the criteria for the Best Design award and, for the eighth consecutive year, a jury of experts will have the task of selecting the top product from all those exhibiting in the Design, Form & Functionality area.

Comprehensive product range In 2014, Big Buyer will expand its exhibition space for the hobby, creative and fine arts categories after receiving growing interest from leading companies in the sector. Other product categories include: computer accessories, writing instruments, back-to-school supplies, office paper, print consumables, gifting, leather goods, office machines and equipment, stationery and party supplies. In addition to foreign-made products, Italian goods will once again be highlighted with a 'Made in Italy' tag. "This represents a guarantee of added value and an advantage for brands and companies that will certainly be appreciated by all visitors," stated Edinova.

Bologna: an easily accessible and attractive location Bologna, considered one of the most beautiful cities in Italy, is very easy to reach from abroad. In addition to the Guglielmo Marconi airport, which is connected to all major international hubs and the A1 motorway – with an exit located just 100 metres from the trade fair centre – Bologna is well served by high-speed trains. To help facilitate their travel arrangements, visitors to the show will be able to find a list of many affiliated hotels on its website www.bigbuyer.info. These hotels offer special rates and are located in the city centre or close to the exhibition halls.

w w w.opi.net | OPI Magazine

Category Analysis | Jan/san

Clean bill of health Growing numbers of office supplies players are seeing the potential of the jan/san sector – after all, every office environment needs to be kept clean – and are keen to take share from the traditional jan/san distributors

by David Holes

WHEREVER

people are working, they need a clean, safe and healthy working environment and jan/san products sit right at the core of this requirement. But traditional supply and distribution channels in this sector are changing and many OP wholesalers and resellers are adapting to maximise the opportunities this presents (see also ‘Raising the bar’ on page 22).

Necessity, not nice-to-have As some OP categories decline, many companies are diversifying into the jan/san sector, aware of the fact that virtually every business or office has a need for these types of products and are increasingly looking to single-source all their office requirements from one supplier. Robert de Montigny, CEO at Novexco in Canada, says: “The jan/ san category has rapidly become one of the main focuses of our growth strategy, with a view to meeting all the supply needs of our customers and dealers. The performance of the jan/san sector is now surpassing other more traditional categories.”

OPI Magazine | September 2014

As Debbie Nice, Category Head of Facilities Supplies at UK wholesaler VOW, explains: “Jan/san products are an essential part of running a business – not a ‘nice-to-have’. We’ve seen sales grow at over 35% year on year, but there’s still massive potential and we’re looking for further new opportunities in this sector, particularly in healthcare product areas.” United Stationers’ jan/san group over in the US takes a similar stance: “Unlike traditional office supplies, shifting behaviours do not suppress demand for jan/san items – employees need a clean restroom and a healthy workspace whatever they are doing.” This ever-present need has also helped this sector weather economic storms. While other categories suffered significantly,

clean kitchens, bathrooms and work areas for those that remain. We’ve seen a moderate, but consistent 2.2% growth year on year and we expect this to continue and increase.” Sofidel reports similar progress in Italy. Marketing Assistant Viviane Gueli says: “It’s been a good year to date with a positive second quarter, and we expect a strong finish. Economic activity, more employment and population growth are all helping to fuel the fire.” Category statistics back up what all parts of the supply chain are witnessing. Data from GfK in the UK shows that the sector is strong, with total jan/san sales in value up 10.7% year on year, with the last quarter showing especially strong growth of 13.7% (see also growth chart on page 47). The ‘cleaning product’ sub-category is performing

“The performance of the jan/san sector is now surpassing other more traditional categories” some companies report that the jan/san category didn’t feel the full ferocity of the downturn and many are reporting healthy sales. As Jo Oakley, Buyer of Kitchen & Cleaning at Officeworks in Australia, puts it: “While not totally recession-proof, businesses that cut back on staff still have to ensure they provide

particularly well, with 20.3% year-on-year growth and a 23.6% increase in the last quarter. As Leanne Whittaker, GfK Senior Account Manager, Retail World, says: “We believe many B2B retailers and resellers are moving into this area to provide the ‘one-stop shop’ for all business supplies.”

Jan/san | Category Analysis The big push One dealer that has recently announced a major push into the jan/san sector is California-based AAA Business Supplies & Interiors. CEO Steve Danziger has hired a jan/san specialist and announced his aim of moving beyond ‘convenience’ jan/san and providing the full gamut of items that companies need in this category. AAA’s focus is on eight main areas: • Paper towel and toilet-tissue dispensers that help customers save money by reducing usage • Chemicals – bulk industrial-strength concentrated products, including floor-cleaning and stripping products, together with bathroom cleaners, degreasers and disinfectants, selling either to the companies themselves or the contract cleaners they use • Hand care solutions and dispensers of all types • Bin liners • Restroom supplies – air fresheners, toilet seat covers, urinal and feminine-care products • Protective clothing – gloves, gowns, face masks, lab coats and overalls • Cleaning equipment – vacuum cleaners, scrubbers, burnishers, strippers and carpet extractors, with the possibility of leasing some of these items • Miscellaneous items such as matting, mops/brooms/carts, waste collection, etc Danziger believes jan/san has the potential to become 25% of AAA’s product mix over the next five years. He wants to position the company to make acquisitions in this area and feels that having a functional understanding of the full breadth of this category will give AAA the best chance of achieving this. Also, offering the full range of jan/san products will, he believes, give AAA the USP to distinguish it from other suppliers and convince customers to switch. “It’s a growing category, whereas office supplies is a shrinking one, so this push will help replace sales lost in other areas”, he says, adding that, “jan/san as a category name is too cryptic, so we’ve chosen to rename this whole area Janitorial and Maintenance Solutions to reflect its diversity”.

US data from The NPD Group tells a similarly positive tale. Office Supplies Category Specialist Leen Nsouli points out: “Total dollar sales in the jan/san category grew overall by 2% over the last year, with commercial sales growing 16%. E-commerce sales for paper towels, tissues and dispensers showed a particularly strong 36% rise. We see a trend for first quarter sales of jan/san products to be higher than others, especially for hand cleaners, most likely fuelled by the flu season.”

Germ warfare Workplace health and safety are key drivers for this sector and the desire to comply with regulations and keep a workforce fit and well by combating the spread of bacteria and viruses means investment in jan/san is seen as money well spent. According to United Stationers, “unscheduled absenteeism and lost productivity bring considerable

health stories can impact sales: “Any mention of the rise of a ‘super-bug’ can create a huge spike in demand, especially for hand sanitisers, although this drops back to previous levels as soon as everyone has forgotten the story and the media has moved on. Companies really need to be more consistent.” At Soundview, a manufacturer of towel and tissue products for the office, Noel Huebner, Director of Marketing, Alternate Channels, notices a growing awareness that “the most effective means of preventing cross-contamination is through hand washing and drying with paper towels”. The healthcare segment, which it also supplies, is especially sensitive to the impact of this practice on reducing hospital-acquired infections.

Raising awareness VOW’s Nice sees merit in using social media to raise awareness of hygiene issues while Kimberly-Clark has launched the delightfully-named www.achoo.com to back its seasonal ‘Prepare to Care’ campaign to lessen the effects of cold and flu in the workplace. The website gives visitors an idea of when the flu virus is predicted to come calling in their location. Kleinmann in Germany has taken things even further in the fight against office bugs. It’s developed a device (see picture below) that assesses the hygiene status of any surface by measuring the bacteria count and delivering a verdict on its contamination level in seconds. It uses the device in a number of demonstrations to show the effectiveness of its Dataflash cleaning products by measuring

cost and workers’ compensation claims are a growing concern for owners and managers”. Creating a clean, germ-free office makes for happy, more-productive workers. “We see lots of potential in those products that support this workplace wellness,” the wholesalers adds, while also referring to seasonal needs: “Spring cleaning and the arrival of the cold and flu season or news stories around health issues such as the spread of the H1N1 (swine flu) virus can drive demand for new products and solutions.” Rob Abrahams, European Purchasing Director at ADVEO, also finds that media Kleinmann’s hygiene testing kit attention on

w w w.opi.net | OPI Magazine

Jan/san | Category Analysis presenting the ‘Healthy Workplace Project’ to many different types of company with great success, says Associate Marketing Manager Jeff Abernethy: “Essentially, the Healthy Workplace Project is a programme designed to maintain a clean and hygienic office which helps reduce the transmission of germs through a proven protocol of wash, wipe and sanitise. This, mixed with the right range of products, employee education and marketing materials

Jan/san sales trends by category

$ sales

% change

Paper towels, napkins & dispensers

$3 billion

+4%

Tissue & dispensers

$6 billion

+1%

Hand cleaners

$689 million

+6%

Source: The NPD Group / Retail Tracking Service (data refers to 12 months ending May 2014)

Janitorial other

Rubbish bins

w w w.opi.net | OPI Magazine

Cleaning equipment

Sanitary dispensers and refills

reinforcing the importance of category and have invested heavily keeping the workplace health, can in dealer training. Our goal is to train have a big impact.” 1,800 reps this summer with intense The overall message is one of a one-day sessions in 18 cities across healthy (no pun intended) sector. the US to increase their knowledge And if a company really embraces and confidence level.” this category and takes time to Fellow US wholesaler United educate and train both itself, its Stationers also has a heavy focus teams and customers, success is on training. As the jan/san group highly likely with a significant explains: “It takes time for resellers opportunity for growth. to develop confidence in their ability to sell jan/san products and Retail category growth – some shy away from this category OP vs jan/san altogether. We’ve helped our resellers take on the low-hanging Source: GfK www.gfk.com/uk/industries/retail fruit in cleaning products and ■ Latest quarter have a dedicated jan/san helpdesk (Apr-June 2014) to provide support when they ■ Year on Year (%) face challenges. We’ve also established three-day intensive training ‘boot camps’ which complement our monthly webinars and local ‘lunch & learns’.” The theme continues at VOW in the UK. As Nice points out: “We offer unique jan/ san training days several times a year where our VOW+ Partners spend a day with 6-8 key manufacturers getting hands-on experience with the products and are given supportive literature to take away.” On the manufacturers’ side, Kimberly-Clark Professional takes education directly to its business customers. It’s been

Cleaning products

With so many new players now moving into the jan/san market, a lack of product expertise is hampering some as they break new ground. As ADVEO’s Abrahams explains: “Without doubt the biggest challenge is around knowledge, experience and confidence about the products. For companies where jan/san has not previously been a core focus it takes time to adapt and understand what they need to do to deliver to their full potential. Education and training are critical to developing this category and we all have an important role to play here.” Novexco’s de Montigny adds: “Firstly, we had to get our sales force and the dealers on board and convince them of the need to add jan/san to our offering. Secondly, we had to raise awareness among our end customers regarding this new category to change their purchasing habits. The sales force was then trained to assess customers’ needs in jan/san products and educate

“Customers [...] just want hygiene products that work well, are safe and don’t cost the earth”

Total janitorial

Education is key

them as to how Novexco could meet those needs.” SP Richards is taking a proactive approach to education and training too. Kelly Wilson, Merchandise Marketing Manager, says: “We’ve made two strategic acquisitions this year to help fuel growth in this

Total office products

bacteria levels both before and after use on keyboards, mice, telephones and desks. “It’s the most effective way of showing the usefulness of our products,” says Kasia Holland, Kleinmann’s Account Manager. Technology has also had an impact on the products themselves. Vectair Systems regards itself as being on the cutting-edge here, bringing sub-micron fragrance technology, Piezo devices and antimicrobial chemistry to its product range. But despite the impressive-sounding specifications, Paul Wonnacott, its Managing Director, knows that ultimately “customers and resellers just want hygiene products that work well, are safe and don’t cost the earth”. He adds: “We believe in simple science where products look simple and act simple, yet provide extremely powerful results.”

Category Analysis | MPS

The MPS land grab

MPS

The MPS sector is rapidly evolving, but are OP dealers keeping up? OPI digs deep to find out

by Michelle Sturman michelle.sturman@opi.net

PINNING

down a concrete definition of Managed Print Services (MPS) is difficult; no wonder it is hard for OP dealers to keep up. The Managed Print Services Association (MPSA) definition is "the active management and optimisation of document output devices and related business processes" but, as MPSA President

increasingly in Western Europe, is continually and rapidly developing. The good news is that there is still scope in this market if dealers jump on the bandwagon quickly. Supplies Network SVP Strategic Business Doug Johnson explains that while only a minority of dealers are currently offering truly optimised fleet management, they are now beginning to look beyond document output to document input (scanning, related storage, archival and

“OP dealers would do well to investigate any and all the MPS programmes that are on offer” retrieval) and document workflow solutions, both paper and electronic. Increased customer demand is making MPS the de facto way in which businesses buy and manage print. InfoTrends predicts a CAGR of 6.1% from 2013-2018, reaching $9.9 billion in 2018, with 40% of machines in use in Western Europe under MPS contracts. With demand clearly rising, it is Rapidly maturing market David Concors no surprise when Supplies Network VP Sales David dealers are suddenly faced with the Concors agrees, saying that all too reality of losing their consumables often MPS is offered as a commodity, creating little long-term client etention. contracts. As co-founder of IDeAs, a network of independent document The reality is that MPS, particularly advisors, Steven Swift points out: in the mature US market and

Greg Walters points out, this defines the notion of a constantly evolving MPS market. Gary Downey, Group Marketing Director of UK managed print provider Balreed, notes: “MPS is a term that is increasingly misused and often very confusing to customers. Some OP dealers are selling MPS when in reality they are delivering the same reactive break-fix service they have always done. Others use MPS simply to describe a fleet that combines software with hardware.”

OPI Magazine | September 2014

“Often, the first time OP dealers hear of this is when they are informed they no longer have responsibility for the procurement of printer consumables as these are now being handled by the IT department under an MPS contract.”

Compensating for declines A shift to MPS may incur a change of business model, but all the signs point to one conclusion: OP dealers need to make the change to offset declining print revenues. Swift says that MPS providers sell a range of solutions and services to manage the fleet and move up the value chain. “This way, they can more than compensate for the decline in sales of hardware and consumables," he comments. "If OP dealers do not find a way to be part of this, they face an ongoing squeeze in revenues and margins." Canon UK and Ireland Partner Channel Director Matthew Searle adds that dealers should be adapting to a longer-term sales mindset, which could represent a fundamental change in their traditional sales cycle. “This is a natural evolution, taking the customer on the journey from print to digital documents, and to managing information stored in these documents,” he says.

Category Analysis | MPS

MPS | Category Analysis

Photizo MPS Practice Director Ken Stewart states that leading MPS providers have moved beyond simple price-per-page contracts and are willing to go on the hook for a customer’s outcomes. “If customers don’t achieve the expected results, they pay a percentage based on the amount of the miss,” he says. Stewart’s prediction is that resellers must gravitate to one of two models: high volume, low margin or high value and higher margin. “A recent Photizo channel partner loyalty study leads us to the conclusion that providers in the UK are really starting to see aggressive pricing pressures (perhaps even stronger than in the US, the largest MPS market in the world),” he says.

Making the MPS move OP dealers should also be using existing print customer relationships to their advantage while building knowledge to deal with technical and commercial components. “Most customers we have spoken to recently want a smooth service offering to take away the pain of dealing with print devices," says Print Audit Managing Director Phil Madders. "The key for dealers is to get involved with the processes that integrate them more closely with the core business.” Supplies Network's Concors adds that dealers which focus on the larger view of managing documents are more likely to remain relevant as document output declines over time. On the other hand, Chris Iburg, Xerox Managed Print Services, United States Solution Providers Director, warns that traditional 'box sellers' need to look at MPS carefully as it’s not a simple transactional sell, but more of a consultancy proposition. However, he adds that in the mature US market, many OP dealers have already learnt to add the necessary specialisation or to partner with a company that fills the required expertise gap. In addition, Madders

suggests that OP dealers should focus less on the capital sale of devices and instead concentrate more on the complete service package and recurring revenues. Entering the MPS market may seem daunting, but help is always at hand. And, advises MPSA’s Walters, “OP dealers would do well to investigate any and all the MPS programmes that are on offer”. Paul Gaiser The majority of MPS vendors now offer entry-level MPS programmes designed to ease the way into the MPS market. Xerox, for example, has recently extended its offering to include entry-level offerings. “The entry-level offerings are an opportunity for many OP dealers to step into the MPS market. They can begin by offering a proactive supplies management service, for example,” says Xerox Director, Managed Print Services, Channel Partner Operations Paul Gaiser. Lexmark UK and Ireland Channel Director Martin Fairman agrees, adding that over the past 12 months, the vendor has seen an increase in

MPS

requests for MPS solutions from the private sector and SMB users. Like most MPS vendors, Lexmark has created a channel programme aimed at encouraging more dealers to look at MPS as a viable option, particularly in light of flat or dwindling hardware margins. “Dealers now have MPS packages that are easier to articulate and sell, and easier to deploy without hindering the sales cycle. They have been developed to drive down the complexity of delivering MPS,” says Fairman.

A Zen view of MPS UK dealer ZenOffice, which made the decision to move into MPS almost three years ago, hasn’t looked back. As a Xerox XPPS partner, the dealer has access to all of the vendor’s enterprise tools and is currently signing over ten deals a month, including hardware. ZenOffice MPS Director Dale Needham advises dealers wishing to engage in MPS business to prepare for a different sales cycle and – importantly – to start understanding the technology involved. “Choosing the right MPS vendor that provides great products and services is also a must,” he adds. w w w.opi.net | OPI Magazine

Category Analysis | MPS

No time to lose

Steven Swift

IDeAs co-founder Steven Swift talks to OPI about the need to get involved in the MPS game OPI: MPS has been around for a while so it’s already proven its staying power. But is it something that the OP channel really needs to engage with? Steven Swift: Be in no doubt, MPS is not just a temporary phenomenon, but represents a fundamental shift in the way organisations buy and manage print. As you say, MPS has been around for over ten years now, and is fast approaching a point where it will become the standard business model for print. You can see this from forecasts made by all the major market research and analyst firms. Photizo Group, for example, shows that MPS will account for over a quarter of the office printing market in EMEA by 2017. As this is for the whole of EMEA, which includes less developed markets, the MPS share will be higher in the more advanced markets of Western Europe. OPI: What is the likely impact of this on revenues and margins? SS: It is not just that transactional print revenues will decline, the other important point is that the mix of revenue in an MPS contract is different, with services and solutions growing fastest and also attracting the highest margins. Over the past five years, IDeAs estimates that MPS services and solutions have almost doubled as a share of the growing MPS revenue and now account for over 20% of the total. Think of it this way: the sales pitch for an MPS contract is about the customer achieving savings, typically in the range of 25-30%, by rationalising and managing the print fleet more efficiently. The savings quoted refer to hard costs, ie hardware, consumables and break-fix. If large numbers of customers are reducing their expenditures

by 25-30%, it follows that the market must decline by a commensurate amount. OPI: But do I really need MPS if my target audience is the SME sector? SS: It is certainly true that when MPS first got going, it was mainly for large corporate customers and it stayed more or less that way for several years. However, within the last 2-3 years, there has been a growing mass of evidence of SMEs also becoming aware of, and understanding, MPS. The Quocirca chart below illustrates this point. OPI: So how should an OP dealer get started to be ultimately successful? SS: The first piece of advice must be not to start unless you are serious and totally committed. MPS involves a significant change

opportunities for rationalisation, with potential for significant savings to be delivered relatively easily. However, as the market matures, there will be fewer first-time buyers left. Already in the UK market there are indications that we are close to a crossover point, where the majority of sales opportunities will be to existing MPS users. The point here is that a sale to an existing MPS user can be much tougher. The obvious rationalisation gains have already been made,

“There has been a growing mass of evidence of SMEs also becoming aware of [...] MPS” of business model, with major implications for all parts of the business, including people, processes, infrastructure and software tools. That said, OP dealers have some advantages over other MPS providers, through their intimate knowledge of their customer base and their logistics capabilities. OPI: Is there any harm in waiting a year or two longer, to see how things develop, before deciding whether to really commit to MPS? SS: A good question, but in this case I believe that being overcautious may represent the greatest risk to future business prospects. The most straightforward MPS sale is to a customer who is a first-time MPS buyer – the fleet is typically unmanaged and presents large and fairly obvious

and to persuade the customer to shift, the new provider has to work much harder to make a significant differentiation. Market research also shows that rates for renewal of MPS contracts with the same provider are currently running at well over 90%. Customers, as well as providers, invest a lot of time and effort in setting up an MPS contract and they are reluctant to go through the whole process again unless they see a very good reason to change provider. The implication is clear. OP dealers need to seize as many as they can of the first-time buyer opportunities while they still exist and turn them into long-term loyal customers. Otherwise, they will be left scrapping with other new entrants, to persuade existing MPS users to switch provider. This is a land grab.

Awareness and understanding of MPS among SMEs ■ ■ ■ ■

Complete and detailed understanding – have researched Good understanding, know what it is Little understanding, have heard phrase No understanding – what is MPS?

250-500 employees 50-249 employees

15% 9%

48% 27%

32% 48%

5% 16%

Source: Quocirca

OPI Magazine | September 2014

Your OPI

On the move

OP personnel changes from around the globe We would love to hear from you. Email editorial@opi.net, Tweet us @OPInews or you can write to us at OPI, Diamond House, 36-38 Hatton Garden, London, EC1N 8EB, UK

North America

United Stationers is now on the hunt for a new President of its ORS Nasco industrial supplies business after Larry Davis the resignation of Larry Davis. Davis, who was appointed to the position in 2010 after originally joining ORS Nasco in 1999, is leaving the wholesaler to join United’s customer Stellar Industrial Supply as Chief Commercial Officer. Fellowes has made two internal promotions. Mike Parker has been promoted from EVP to President of Global Sales, adding the Pacific region to his existing markets of US, Canada, Mexico, Central America and the Caribbean. Ron Stephens has been named as VP of Global Product Development with his new role designed to expand his benchmarking methods globally.

Europe

Staples Europe VP of Merchandising Ronny van Rossem has Ronny van left the reseller. Rossem Van Rossem was with Staples/Corporate Express for 13 years, joining the company in 2001 as Corporate Express grew its operations in Belgium and Luxembourg. His future at Staples seemed to be in doubt when the reseller named Thomas Nowak as SVP of Merchandising in May. Bjarne Mindested has resigned as SVP and Chief Commercial Officer of visual communications product

vendor Bi-Silque. Mindested, who joined Bi-Silque in May 2013, plans to devote more time Bjarne Mindested to other business initiatives, including Munich-based investment and consultancy business Synergy Holdings, which he established in 2011. Vasanta Group Merchandising Director and industry veteran Nigel Mitchell has left the Nigel Mitchell company. Well-known and highly respected after 30 years in the OP business, he will continue to work for Vasanta on a project basis. Christin Lüdemann has been selected as the new Managing Director of the retail division of Christin Kaut-Bullinger. Lüdemann The decision to replace current Retail Managing Director Jürgen Diebold was announced earlier this year and he will remain in the position until Lüdemann takes over on 1 October. UK office supplies provider nectere has appointed John Warren as Managing Director for Ireland. Warren John Warren will be responsible for the Belfast and Dublin offices with a mandate to develop supplier relationships and recruit new partners.

OPI Magazine | September 2014

North America Office Depot has chosen experienced retail executive Mark Cosby to lead its North American operations. Cosby has been in the retail industry for the past 30 years. He was most recently President, Pharmacy at CVS Caremark where he was responsible for all aspects of the $65 billion retail business. Mark Cosby Before CVS, the 55-year-old spent five years at Macy’s and also held executive positions at Sears and YUM! Brands. At Office Depot, Cosby will oversee retail, contract sales, e-commerce, merchandising, marketing, real estate and supply chain functions in North America. Oliver Windbrake has taken the reins as Managing Director of German business products manufacturer Sigel. Windbrake Oliver Windbrake will assume responsibility for Sigel including Marketing and Product Development. Pentel has appointed Lisa Davis-Lindholm as Channel Manager, Mass Market, where Lisa she is charged Davis-Lindholm with developing new business opportunities with responsibility for managing relationships with all mass market customers. Industry training and performance improvement specialists Performance 1st (P1) has appointed Walter Washe as Walter Washe Associate Director (Ireland). He is tasked with supporting the strategy and aspirations of P1 in the Irish market. Meanwhile, Tom Rodda has been promoted to Director of Performance after working for the company for just under 12 months.

Tesa’s UK subsidiary has appointed Phillip Johnson as Key Account Manager for the stationery sector. Johnson joins tesa after 15 years at envelope manufacturer Bong, and his appointment comes as part of a restructuring aligned with tesa's 'tesacohesion' sales strategy. Armor has reorganised its UK sales operation with the appointment of Rachel Griffiths Rachel Griffiths in the newly created role of UK Business Development Manager. Sean Loftus has also been promoted to Head of UK Sales.

Rest of the World

Craig Thompson has taken on the new role of National Merchandise Manager in a restructured merchandising department at Australian-based Office Choice. In addition, Cameron Osborne has been appointed as its new National Marketing Manager, taking over from Diana di Cecco who has left the dealer group. Australian OP manufacturer Arnos Australia has promoted Thomas Froehlich to CEO of the company. Froehlich joined Arnos from Canada in 2004 as Marketing Assistant and for the past two years has held the position of GM.

Deadline for entries: 16 October 2014

Traditional Product of the Year FM Product of the Year Technology Product of the Year Marketing Initiative Wholesaler of the Year Dealer Group of the Year Vendor of the Year Reseller of the Year Professional of the Year Industry Achievement Enter or nominate online at www.opi.net/EOPA2015 Or email your nominations to awards@opi.net

call for entries

Last chance to enter

Your OPI

5 minutes with... Debbie Nice, Category Head – Facilities Supplies, VOW

Describe what you do in less than 20 words. I work with a fabulous team selecting brilliant products to help us all sell more to our existing customers. Your first full-time job. Selling forceps, hip joints and heart valves to hospitals. If you weren’t doing your present job, what job would you like to be doing? Professional bike racer with Team Sky or cake tester at Betty’s Café & Tearooms in Harrogate. Your best piece of advice to someone who has just joined the OP industry. Stationery is spelt with an ‘e’, not an ‘a’ – and it’s not stationary, so keep on learning! Your most embarrassing industry-related experience. Oversleeping on my first trip to Paperworld in Frankfurt and chasing around the exhibition looking for the ever punctual John Rogers.

“Stationery is spelt with an ‘e’, not an ‘a’”

The biggest change that has taken place in the industry since your career began. The product mix – there are no more typewriter ribbons, but lots more loo rolls. Your favourite holiday destination. Currently the Cote D’Azur, but there are still lots of places that I’ve not seen yet. Best way to spend the weekend. Eating, running and socialising. Any pets? Two cats – Jet and Pebbles. Have you got a claim to fame? I’ve worked for four wholesalers (when there were four) – Neville & Gladstone, John Heath, Kingfield (VOW) & Spicers. The best concert you have ever been to. Madonna’s Who’s That Girl tour at Roundhay Park in 1987.

Your greatest strength. My enthusiasm. Your favourite event on the OP circuit and why. The Yorkshire BOSS Dinner – I get to see lots of old friends and I’m on the committee. Your favourite office product. My Nespresso machine! What business/management book would you recommend as essential reading? The Chimp Paradox by Steve Peters (and yes, I am one quite a lot of the time). What do you like best about the OP industry? The fabulous enthusiastic people. Your first vehicle/car. Red Fiat Panda. The first record you bought. Pink Floyd – Dark Side Of The Moon.

What sports team do you support and why? Team Sky ProCycling – I love their marginal gains strategy (and their team outfits).

www.opi.net | OPI Magazine

Your OPI

Calendar Key dates in your industry If we are missing an event, please let us know. Contact editorial@opi.net Do you have an event that you would like to promote in the OPI Calendar? Please contact Chris Turness for further information about having an extended entry and pricing. Email: chris.turness@opi.net Web: www.opi.net/calendar

OCT 10-12 Office Brands EXPO Sheraton & Westin Denarau Island, Fiji OCT 20-22 Transform Europe 2014 Prague, Czech Republic OCT 21-25 ORGATEC 2014 Cologne, Germany

SEPT 17-19 EPIC 2014 Joint Independent Stationers/TriMega Convention Westin Diplomat Resort, Hollywood (FL), USA Contact: Cora Lienemann Tel: +1 317 579 1111 Email: cora@ independentstationers. coop Web: www. wherebighappens.com/

OCT 06-08 Pinnacle Annual Meeting and Vendor Forum 2014 Rosemont (IL), USA OCT 07 Advantia 2014 Conference Warwickshire, UK OCT 08 Howard Wolf Golf Classic Wheaton (IL), USA OCT 09 Spirit of Life Gala Chicago (IL), USA

OCT 22 BOSS Awards Birmingham, UK OCT 22-26 BSA & IOPFDA Annual Meetings San Diego (CA), USA OCT 29-31 EDspaces Tampa (FL), USA NOV 04-07 ISSA/Interclean Orlando (FL), USA

DEC 03-05 ADVEO World Munich, Germany

2015 JAN 12-15 Hong Kong International Stationery Fair Hong Kong, China JAN 21-24 Bett 2015 London, UK JAN 25-26 Paper Show 2015 Leuven, Belgium JAN 31-FEB 03 Paperworld 2015 Frankfurt, Germany FEB 16-19 United Stationers & Lagasse: CORE Live Nashville (TN), USA FEB 22-24 EDexpo Atlanta (GA), USA FEB 25-27 ISSA/Interclean Latin America Mexico City, Mexico

MAR 02-04 Paperworld NOV 10-12 Middle East 2015 ECi Connect Conference Dubai, UAE Las Vegas (NV), USA NOV 10-12 Marketplace 2014 Miami (FL), USA NOV 11-15 Office Partnersâ&#x20AC;&#x2122; Grand Ole Gathering 2014 Nashville (TN), USA NOV 20 Integra Conference Nottingham, UK NOV 26-28 Big Buyer 2014 Bologna, Italy

MAR 03-05 OPI Partnership 2015

Hotel Okura, Amsterdam, the Netherlands Contact: Steve Hilleard Email: steve.hilleard@ opi.net Web: www.opi. net/partnership2015 Assisting European vendor and reseller companies in building long-term strategic relationships.

MAR 08-13 AOPD & DPCG 2015 Annual Meeting Huntington Beach (CA), USA

MAR 04 European Office Products Awards 2015

Hotel Okura, Amsterdam, the Netherlands Nominations and entries are now being accepted. Visit www.opi.net/ EOPA2015 for further information.

MAR 19-21 Education Show 2015 Birmingham, UK

MAY 17-19 OPI Global Forum 2015

Sofitel Chicago Water Tower, Chicago (IL), USA Web: www.opi.net/GF2015 An invitation-only forum for CEOs and senior executives from the business supplies and associated sectors.

APR 28-29 London Stationery Show 2015

Business Design Centre, London, UK

Contact: Chris LeonardMorgan Email: clm@ firstevents.com Tel: +44 20 8462 0721; Web: www. stationeryshow.co.uk The only UK exhibition dedicated to stationery products, writing instruments and accessories for the home, school and office. Organiser of National Stationery Week.

w w w.opi.net | OPI Magazine

Your OPI

Final word Your industry, your opinions Paul Kelly, Commercial Director, Rubbermaid Commercial Products

Challenge the norm “SUPPLY

the customer with the right product at the right time, to the right place in the right quantities at a competitive price.” To me, this quote epitomises the perceived needs of all customers looking for a distributor to their businesses, with a growing emphasis on time (read tomorrow) and price (read inexpensive). So all any worthwhile distributor has to do is deliver on the above and the contracts come rolling in and ongoing partnerships are formed. Becoming the distributor partner of choice would be a challenge even within historical customer bases, but when distributors are deciding to offer their services to new customer channels as well – as is so often the case today – life becomes more complicated. It has been with great interest over the last ten years to see facilities management (FM) as a bundle of multiple disciplines – from cleaning to catering – become the pillar on which distributors see the ‘easy’ addition to their core historical business being built on. An early adapter to this was the traditional office products reseller followed closely by the major food players and more recently by the industrial maintenance suppliers. After all, they have great customer relationships, huge buying power and best in class logistics. So ten years on, how is the OP channel doing?

Forbes seems harsh in these circumstances, but I believe that not only is a fresh pair of eyes needed to analyse whether the right product is being offered, but also the OP supply channel will reap additional benefits if this work is completed thoroughly. For example, it is far easier to win a tender or quotation if you are offering a range of product that offers a cost-in-use saving to the customer, which in most cases means selling fewer products to the customer to do the same or even a better job. Doing this allows you to not only tick all the wants and needs of the customer, but it also means you are holding fewer SKUs and are delivering less frequently, thus achieving an additional cost saving to you. Obviously, if you are simply retaining the business this may not be the ideal solution as there is potentially less cash flow to you, but as OP suppliers tend to be new to the channel, it is all upside. Also, being brave enough to bring a new and innovative product saving to your existing customer will mean a further strengthening of the partnership if you are the incumbent. At Rubbermaid Commercial Products, four years ago we trialled and won the supply of a consumable range into a major UK airport by being able to offer a superior quality with the additional benefit to the airport of a 41% saving in usage. When a supplier linked to a distributor delivers such a solution, it of course guarantees the instant gratification of the customer. But it also shows that not only do you understand the customer’s wants, but you are proactive in being able to supply the solutions. So listen closely to the real needs of the client, talk to your suppliers and be brave to challenge the norm.

“There lies a true opportunity for OP distributors great and small to not offer a ‘me too’ range but an alternative solution that changes logistics provider to consultant and box mover to partner”

Listening to the customer With the cleaning sector alone being worth circa £4.6 billion ($7.8 billion) within the broad FM spectrum in the UK, from all the close interaction I have as a major supplier into the industry I would say that the OP industry has not taken note of what “right product and competitive price” may mean, as per the opening quote. The wants and needs I hear today from FM companies and – more importantly – from their clients are also not new, but they are equally as important: productivity, cost in use and green initiatives. Putting focus on these needs, there lies a true opportunity for OP distributors great and small to not offer a ‘me too’ range but an alternative solution that changes logistics provider to consultant and box mover to partner. “It’s so much easier to suggest solutions when you don’t know too much about the problem.” This quote by Malcolm

OPI Magazine | September 2014

Want the final word? Email editorial@opi.net or write to OPI, Diamond House, 36-38 Hatton Garden, London, EC1N 8EB, UK

IN THE NEXT ISSUE • Big Interview with TriMega’s Mike Maggio • An in-depth look at back-to-school and the education sector • OPI goes to Spain for a look at progressive dealer Oﬁpapel