Technology Solutions 2014 by OPI

TECHNOLOGY 2014 SOLUTIONS For US office products dealers

Tech providers speak out p6

Up to speed with BMI p12

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

Features & Production Editor Heike Dieckmann +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

Sales Executive Fergus Cox +44 (0)20 7841 2952 fergus.cox@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

EDITOR’S COMMENT

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Editorial

Staying on the level

Technology has often been described as “the great leveler” in the OP industry, allowing independent dealers to compete on a level playing field with their bigbox rivals and the e-commerce giants. While that certainly may be true, what is also true is that the large players are pouring huge amounts of money and resources into further developing their digital capabilities. You only have to look at Staples’ recent acquisitions of Runa and PNI Digital, and Amazon’s distribution center roll-out across the US to realize that the playing field isn’t where it once was. Dealers that think they are ‘there’ in terms of the e-commerce capabilities need to think again and make sure they have an ongoing development strategy and investment plan in place. As United Stationers’ CEO Cody Phipps said in an OPI interview last year (see OPI’s US Annual Review 2013), dealers don’t need to be right where these big players are, but they mustn’t lose sight of their tail lights either. As a number of senior technology providers point out on pages 6-9 of this supplement, there is a reluctance on the part of many dealers to invest in updating their technology capabilities. With the continued shift to mobile ordering from both B2C and B2B customers and greater expectations surrounding the whole digital commerce experience, that reluctance could ultimately prove to be a costly mistake.

“Dealers don’t need to be right where these big players are, but they mustn’t lose sight of their tail lights either.”

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

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.

Office Products International Ltd (OPI), Diamond House, 36-38 Hatton Garden, London EC1N 8EB, UK

Contents News ........................................ 05 Opinion .................................... 06 Research ................................. 10 Interview .................................

E-Commerce .......................... 16 Case Study .............................. 18 Social Media ............................ 22

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OPI.NET | Technology Solutions

Tech News A ROUND-UP OF SOME RECENT TECHNOLOGY NEWS FROM OPI.NET

Staples makes tech investments Staples agreed to buy Canadian software company PNI Digital Media for $67 million in May. PNI’s software platform is used by retailers for a variety of print-related solutions including in-store kiosks and personalized products ordered online such as photo books, calendars, invitations and stationery. About 30,000 retail locations receive printin-store orders via the PNI platform and last year the platform handled more than 20 million transactions. The acquisition is expected to close before 30 September. The PNI deal comes after Staples bought Silicon Valley-based software firm Runa at the end of last year. Runa develops e-commerce solutions that help online retailers personalize the shopping experience for consumers and has what Staples CEO Ron Sargent described as “a unique platform and outstanding talent with experience in e-commerce and online marketplaces”.

SPR launches catalog app

SP Richards (SPR) has unveiled an interactive full-line catalog app for iPads. The downloadable app, an addition to the Evolve online publications program, has been developed with dealer sale reps in mind for use on sales calls and for consumers who prefer digital to print. SPR said that it had also developed apps for its general furniture and Lorell furniture catalogs. “As more dealers and consumers move toward tablet usage in the business environment, developing an app to complement the print catalog was the next logical step,” said SPR Director of Marketing Larry Goodman. “We see this as a great tool for field sales personnel and believe there’s a consumer application as well.”

Supplies Network links with MBS Dev IT consumables wholesaler Supplies Network has integrated its e-commerce systems with software provider MBS Dev. The companies said the move means dealers using the latest version of MBS Dev’s software can now connect with Supplies Network and check stock availability in real time. The integration also means dealers can submit purchase orders and process invoices electronically and receive confirmations immediately.

Acsellerate integrates software with Red Cheetah

ECi Acsellerate’s Profitability Manager software is now available for Red Cheetah dealers in a move described as a “game changer”. The solution automates time-consuming manual processes associated with recommending substitute products and was always intended to be available across additional ERP systems. Acsellerate says analysis of 25 dealers using the solution showed margin improvement potential of 3-5 percentage points, which can equate to “several hundred thousand dollars”. Steve Sabatini, President of ECi Acsellerate, added: “We recognize the importance of offering this product across ERP systems and have been working tirelessly to make that happen. Most dealers have margin challenges, which is why we remain focused on providing innovative products that improve profitability.”

Walmart buys e-commerce firm

Walmart Labs has acquired product search and e-commerce company Adchemy, the 12th purchase for the division. The global retail giant has been busy picking up talent and technologies as part of its Walmart Labs acquisition strategy as it bids to build “the best in-house” e-commerce capabilities and keep Amazon at bay. Bringing more than 60 new tech specialists into Walmart Labs, the Adchemy purchase represents the division’s biggest acquisition in terms of employee numbers.

TriMega makes data drive Dealer group TriMega has partnered with research group NPD to create a new program that will provide its members with market information and analysis. The NSIGHTS program aims to get TriMega dealers on board the data drive and give them the market knowledge to be more agile and informed about their business. Research reports such as Market Pulse and Office Supply Data Alerts will be available on the TriMega website while NSIGHTS webinars hosted by NPD began in May. TriMega President Mike Maggio said: “Information is power, and we strongly believe that being able to access and learn from timely and relevant market information makes us all better operators in today’s challenging economy.”

OPI.NET | Technology Solutions

Opinion

A VIEW FROM THE TOP Leading technology providers give their views on dealers’ e-commerce performance and the challenges they face

HOW

are independent dealers really performing in the digital space? OPI asked a number of leading technology solutions executives four key questions: • In general, how are dealers performing online? • What do they need to be doing better? • How should dealers view the threat of Amazon? • What should be dealers’ Number 1 technology priority for the next 12 months? Read on for some honest – and sometimes controversial – points of view.

Gilbert Walter Owner, eQuality Internet Services General view I do not believe independents are performing as well as they should be. One of the main problems with e-commerce is that the field of play is shifting from desktop to handheld devices, and over the next few years the independent dealer is going to have to switch focus from a traditional website to the mobile app. The real challenge is to the software development community to change focus from a traditional e-commerce development environment to the new world of mini touchscreen devices.

Improvements The independent dealer community needs to take greater advantage of social networking sites to promote their businesses. While it is a good idea to have a company profile on Facebook, it is an even better idea to update that profile at least twice a week to maintain customer interest. Another thing they can do to increase their visibility is to take advantage of email campaigns such as SP Richards’ CampaignAdvantage or United Stationers’ eFlyers programs. Only about 12% of our dealers use these programs, and the percentage should be much higher. Since the introduction of CampaignAdvantage in late 2012, those dealers that signed up for this program increased their web traffic by over 30% and sales by 24%.

Technology Solutions | 2014

Amazon While Amazon’s new multi-billion dollar warehouse system is giving a lot of independent dealers the heebie-jeebies, it only gives it a key advantage in 19 metropolitan areas. For the rest of the US, nothing changes: an Amazon Prime customer in Grand Rapids will still have to wait at least two days for free delivery. If that customer orders from their local independent dealer instead, they will usually have it the next day. And in those metropolitan areas that will be affected, I wouldn’t be wasting time worrying about their same-day delivery drones promised by Jeff Bezos. While drones may be a factor 5-7 years down the line, for the time being Amazon has no capacity to deliver anything on its own. If you look at the business model it is currently using for grocery delivery (45 lbs of groceries to your door for $5.99), it makes you wonder if Amazon will ever make a profit with this venture. The other point I would like to make is that prices on Amazon have increased dramatically over the past five years. I used to buy all of my new DVDs and Blu-Ray movies from Amazon because I could get them 30-40 % cheaper than at a bricks-andmortar outlet. Those days are gone: as Amazon has built up its warehouse and delivery capacity, it has also increased its prices on everything it sells. The bottom line on Amazon is that, despite the fact it generates billions of dollars in sales, it is incapable of making any significant profit for its investors.

Number 1 priority The Number 1 priority should be restoring their customers’ trust in the security and privacy of doing business on the internet. Consumers are losing confidence with online companies that continually fail to protect their personal data and transactions. Consumers need to be assured that an independent dealer has an e-commerce site where their privacy is protected.

Opinion Sonny Arora Managing Partner, AOS Ware General view In general, dealers are not performing well – mostly because of the current state of the OP software industry where ‘a lack of competition breeds mediocrity’ and legacy system providers have not evolved with technology. All dealer sites share a common IP (domain) address, meaning Google and other search engines cannot tell the difference between one dealer or another, so they block sites as if they are affiliate sites, hence next to no internet presence for any dealer on those systems. Most dealers have become complacent and have basically ‘given up’. They pay little or no attention to their online presence, despite clear signs that it’s a major concern to the new generation of buyers. A very small percentage of dealers recognize the need and have made appropriate software and website changes.

Improvements The short answer is: invest in your online presence. Engage with customers and take advantage of all the free advertising such as Twitter, Facebook, etc.

Amazon Amazon is a threat like any new competitor. In my opinion it is more of a threat to the big boxes than the local independents. Dealers that have studied the Amazon business model realize that most of the product it sells is on either consignment or is a simple pass through for a hefty middleman fee (as much as 15%). Dealers that sell on Amazon have to cover shipping, credit card processing charges and the Amazon commission; that leaves very little margin for the Amazon dealer. Items can be bought cheaper at times, but why is it any different than any major player or competitor selling items at or just above cost? Obviously that strategy only works for a limited time. Dealers should focus and capitalize on ‘Buy Local’ strategies and do what they have always done:

be competitive and provide personalized service. Amazon cannot provide such service and is not capable of maintaining a continuous commercial relationship.

Number 1 priority A dealer’s website is a direct representation of their business. A perfect example is: if it is not acceptable for a sales rep or a driver to visit a customer looking like a hobo, then why is it acceptable to have your site look like it never changes its clothes? In my view, dealers invest next to nothing to make their sites look attractive or up to date. Dealers need to start treating technology just like an employee. Allocate a budget just as they do when they hire a sales rep. Gauge its success and failures by utilizing readily available analytics programs and call-tracking software.

OPI.NET | Technology Solutions

Opinion Rick Marlette Co-owner, OPSoftware General view

In general, independents are performing poorly. There are exceptions, but when you consider all independents, the overwhelming majority are severely lacking.

Improvements Make it fast and easy to order from you. If I can’t start placing my order in ten seconds, I’m going elsewhere. Poking around your site looking for the order link/ button is a complete waste of my time. When I do eventually find it (if I’m lucky) and I’m sent to a completely different site, you come off looking like an amateurish, hodge-podge, thrown-together company that does not take your own business, much less your customers’ business, seriously.

Amazon Amazon is after a cut of everything and they don’t care where or who that cut comes from. Amazon Supply is the sleeping giant that most have ignored. When Amazon Supply gets cranked up and goes after the dealers’ commercial B2B business, leveraging all that customer data they now own (thanks to third-party sellers), the short-term profits some made selling on Amazon may all of a sudden seem inadequate. I would be amazingly cautious in dealing with Amazon. They have already

proven they will convert to their own use what sellers so willingly hand over.

Number 1 priority Catch up to where you should have been 24 months ago. If your website is not mobilefriendly, then you are just not friendly. If I can’t easily and quickly order from you on my phone or tablet, then I just can’t order from you. If every aspect of my mobile experience with your site is not ‘adaptive’ to my mobile device, from landing page to check-out, then I’m checking out your competition.

“Amazon Supply is the sleeping giant that most have ignored”

Jennifer Schulman President, Fortune Web Marketing General view Dealers are making progress every year. In fact, this past year we have had more activity and growth for OP dealers looking for new websites and more advanced online marketing strategies than ever before. It’s encouraging and wonderful to see. The largest area of growth we have seen has been for responsive websites: dealers are understanding that if they are going to go through a website redesign, not only should it be SEO friendly, but mobile-ready as well.

Improvements Many dealers still need to take a good look at their websites. There are still very old, outdated sites out there and a website truly is the face of your company. Another thing is mobile. Even though we have seen dealers understand the importance of mobile, some do not put much stake in it. The truth is that people are using their mobile devices more and more, and they are set to outpace desktop use. I think that dealers that are jumping on the mobile bandwagon (for advertising and mobile-ready sites) are raising

the bar and setting an example for good online best practices in OP. I’d like to see more dealers overall really come to a full understanding of how important mobile is now and will become.

Amazon This is a topic that we can’t seem to get away from! I do think Amazon is a threat, but businesses are faced with threats every day. Amazon is a leader; it has amazing technology, is forward thinking and they make it super easy to order from them (take the Amazon app for instance). For online retailers in OP, they need to understand what it takes – in terms of time, money and strategy – to play against the big players, like Amazon. If you are not ‘in it to win it’, not willing to spend the time and money and not willing to be aggressive and take time to niche out your spot in the marketplace, you will not succeed. For local independents, I think they have a different advantage. They are targeting local customers (playing off ‘Buy Local’ works well here), but they also can offer services that Amazon cannot provide. Things such as office coffee service, furniture installation, printer/copier repair, etc. When we market for local businesses, we try to put most of our efforts first into the service-based offerings as once a customer is acquired for these services, signing them up to order supplies as well can be a lot easier.

Number 1 priority Mobile-ready sites and easy-to-use interfaces. I really like the user interface of the new ECi Plus. They really did a nice job with the ease of use, overall design and some of the customizations as well. Logicblock also has a mobile-ready e-commerce offering.

“There are still very old, outdated sites out there and a website truly is the face of your company” 8

Technology Solutions | 2014

Opinion John Freund CEO, Jump Technologies General view I think that independents are doing what they can with the technology that is available to them. What I would like to see is a much stronger push towards mobile commerce as today no-one leaves home without their smartphone. Smartphones have become a huge convenience factor in people’s lives and they are installing apps that simplify very common tasks. I don’t think anyone will run out and buy a mobile phone to order office supplies. That’s because they already own the device, but if there was an app that allowed them

“What I would like to see is a much stronger push towards mobile commerce” to go into their store room and place an order, they would use it; it would be easier than having to create a list and come back to the computer and enter it. We have several office products dealers that are using our mobile solution to cut requisitioning times for their customers by leveraging mobile technology.

Improvements Cutting costs from the top line of a business can quickly translate into more profits for owners. Most independents don’t realize the amount of time they spend handling paper for proof of delivery. A typical dealer with five delivery trucks doing 30 stops per day with printed invoices that their customer signs will spend $2,000 per month on paper and the associated labor. That includes the time to print the invoices, separate them and give them to drivers,

drivers managing them on the route, and returning and filing paper when the route is complete (see Case Study, page 19, to find out how Jump Technologies saved one dealer over $100,000).

Amazon Amazon is a customer of ours (an internal use app only, nothing customer facing) so I cannot comment here.

Number 1 priority Put pressure on your tech partner to provide you with mobile commerce ASAP. Independents were late to the market with e-commerce in the first place and they are quickly getting left behind in mobile commerce. Also, look for ways to help your customers cut requisitioning costs, improve contract compliance and cut inventory levels while avoiding stock-outs.

OPI.NET | Technology Solutions

Research

THE SHIFT TO DIGITAL A recent United Stationers white paper highlights the decline in printed full-line catalogs

UNITED

Stationers recently published a new white paper Leader

Of The Pack: Digital Replaces Full-line Catalog which reveals that the printed full-line catalog traditionally distributed by resellers is losing its luster as digital marketing efforts grow in popularity. In response, says United, resellers must adjust their strategies to match customers’ preferences, as 71% of customer orders now take place online. The report reveals customers turn to printed full-line catalogs primarily for inspiration, but ultimately go online to research product information, compare prices and access convenient ordering systems. “Over time, digital and online tools have evolved to play a central role in the research and purchasing process for the majority of purchasers,” says Owen Carr, Consumer Research Marketing Manager at United. “As a result, resellers must focus on digital marketing first and print second when closing an office products deal.” Historically, catalogs have served two purposes: they have acted as marketing for a local reseller and have provided customers with product information. With the full-line catalog, a reseller could market to customers, inspire them to purchase and provide them the appropriate information. Today, while the catalog still retains some of its effectiveness as a marketing vehicle, it its losing its appeal as a provider of product information and content. Customers are turning to the catalog primarily for inspiration and are going online for product information, pricing comparisons and

Technology Solutions | 2014

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ordering. To remain “Customers convenient effective in an age of decreasing deliveries, resellers are turning to the catalog must create marketing and strategies that meet catalog primarily digital the purchaser’s needs and for inspiration and preferences. Additionally, verbatims from are going online survey respondents reveal that in many cases purchasers for product turn to the catalog only after they become frustrated with the information” search, content, pricing, usability or ordering process of a reseller’s website. Therefore, a reseller’s digital limitations may be slowing down customers’ natural inclination to go online. As one would expect, catalog non-users tend to be aged 39 or younger, while ‘core’ and ‘soft’ users tend to be 50 and over. With the millennial

Research generation expected to represent the majority of the workforce by 2020, catalog usage decline will likely accelerate. Even among current core and soft users, the desire to use a catalog is waning: research data reveals that 17% of end purchasers who currently use a catalog do not want one next year. However, catalogs – while declining – still have a part to play. While only 13% of the survey’s respondents were core catalog users (those who use a catalog weekly or more), these respondents spend much more per year – almost $14,000 – and give a greater share of wallet to their preferred supplier than do soft users and non-users. “It’s time to think about your go-to-market strategy with both print and digital in mind,” Carr tells dealers. “It’s time to make sure these different areas of your business are aligned and coordinated with each other.” À

OPI.NET | Technology Solutions

Interview

KEEPING UP TO SPEED BMI’s VP of Sales Craig Greitzer believes dealers need to take an honest look at their back office and e-commerce platforms OPI: Can you begin by telling us about some of the recent product developments at BMI? Craig Greitzer: Most of our development efforts go into our e-commerce site and the tight integration with our back office (Microsoft Dynamics NAV) ERP system. More and more, the e-commerce site is the main touchpoint between the dealer and their customers so it just makes sense to put our efforts into making sure their customers have a great online experience. We also have our mobile e-commerce site in development and expect to release that by the end of Q3 2014. Mobile will continue to gain traction as the workforce replenishes itself with younger workers and our dealers will be able to satisfy those users with a robust, mobile e-commerce experience. OPI: What can you say about ERP under Microsoft Dynamics NAV and how it helps dealers to be more efficient? CG: Microsoft Dynamics NAV, while being a sophisticated suite of software functionality, has a very simple objective: a single point of data entry with easy access to decision-driving information. It is tremendously inefficient and dangerous to enter data more than once in a system. It is also time consuming and inefficient when ERP data needs to be manipulated in order to reach some conclusions and make a business decision. Dynamics NAV makes that all so easy by getting to your data quickly and allowing the user to filter, sort and analyze. Beyond that – and diving deeper – there is a myriad of functions developed specifically for OP dealers that are designed to make them more efficient and to improve profitability.

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OPI: Changing to a new ERP can often be a daunting experience. What is your advice to dealers who may be hesitant about ‘taking the

plunge’ and how does BMI ensure a smooth transition to a new system? CG: Moving to a new ERP system should never be taken lightly. With that said, we have proven methodology that gets dealers live on time and on budget. Our analysis phase and simulated golive phase ensure that all requirements are covered and that the team is properly trained so there is virtually no interruption when the go-live day arrives. In terms of ‘taking the plunge’, dealers are hesitant to spend money in uncertain economic times, let alone face the upheaval that they think will occur when making the switch. We understand that. Everything we do is geared to making them more efficient and more profitable. The ROI can be very rapid and dealers just have to be willing to take an honest look at their software and their business. As a recent example, Eaton Office Supply went live in early May on our most recent version of the back office ERP and e-commerce site. Our people were out of there within a few days and the golive went very smoothly. OPI: What key improvements have been made to your OP Revelation e-commerce software over the past 12-18 months? CG: As I mentioned earlier, a lot of effort goes into our e-commerce site. We continue to add functionality that both SP Richards (SPR) and United Stationers want for our mutual customers: from SPR, Furniture Advantage and Product Pro; from United, real-time content integrated with SmartSearch. We’ve added The Spot from

“Dealers just have to be willing to take an honest look at their software and their business”

Technology Solutions | 2014

Interview

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OPI: What are you seeing generally in “It’s vital terms of e-commerce trends within the independent dealer community? for dealers to CG: Everyone is worried about Amazon and continues to worry about the power recognize that channel people. These organizations can mobile usage by their put ridiculous amounts of resources into their e-commerce sites. We believe we customers will can level the playing field on so much of and let the dealer focus on what they continue to grow” dothis best: customer touches and customer

HON, which is their microsite that is fully integrated into our e-commerce and back office ERP. We also added functionality from Millennium Marking which allows custom business cards, stamps and other items to be ordered through our e-commerce site, with orders being automatically placed to stamp and printing vendors for fulfilment. Additionally, we have completed an integration with JumpTech’s JumpTrack proof-of-delivery system.

OPI: Do you have any examples of measurable improvements that dealers have seen after implementing your e-commerce solution? CG: We don’t like to speak on behalf of our dealers, but we believe they would tell you that they are able to reduce warehouse labor due to more efficient pick/pack/ship functionality and reduce administrative labor due to tighter accounting and reporting integration. Finally, most would tell you that their average online order size and number of lines has increased.

OPI: How do you help dealers effectively collate and then use data? CG: We don’t really have to do much. Microsoft Dynamics NAV makes it very easy to collect and analyze data from their system. We’re starting to explore ways in which we can aggregate all of our dealers’ data and then work with the manufacturers to more effectively market and sell. OPI: What are you seeing in terms of B2B orders placed from tablets or smartphones, and how key is it for dealers to ‘get on board’ with mobile? CG: We think it’s vital for dealers to recognize that mobile usage by their customers will continue to grow – it’s an unstoppable trend. Smartphones and tablets are either close to outselling desktop and laptop PCs or they have already surpassed them by. For customers, our mobile e-commerce site will be ready by end of Q3 this year and we have functionality today that enables mobile access to any part of the back office Microsoft Dynamics NAV ERP system for outbound sales reps and other dealer team members.

service.

OPI: We hear a lot about the threat of Amazon. Just how great a threat do you think Amazon is (or could be) to the independent dealer community and what do you think can be done about it? CG: Amazon should be taken very seriously – the threat is very real. Not only will its prices be tough to beat but its supply chain is really efficient and that will definitely be a challenge for the independent dealer community. Dealers will have to be able to offer a great online experience and the ultimate in customer service.

OPI: To what extent do you think dealers are ‘up to speed’ (or not) with their e-commerce systems? CG: Judging by how many dealers have not made a move to a new e-commerce system, I think many of them are not up to speed and will continue to see their businesses decline. OPI: That’s worrying. At what rate are dealers’ sales shifting to online? And what do they need to do to deal with this? CG: We see incredible trends toward online sales. Most of our

OPI.NET | Technology Solutions

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Interview

are doing in excess “Judging by dealers of 50% of their total online and a few how many dealers sales go as high as 80%. need to make have not made a move They sure their search to a new e-commerce and content is first rate. We system, I think many of integrate with both the SPR Etilize them are not up to speed search and United’s Smartsearch as and will continue to see well as our own BMI search, which is more their businesses wholesaler neutral. The maintain choice decline” aboutdealers which search they want to use; there is no difference in price.

OPI: What do you think is the greatest challenge that dealers face in order to be able to compete sufficiently in the online space? CG: They have to be able to provide the experience that customers demand and deserve. Anything less and they will go elsewhere with their business. To us, a great customer experience means easy site navigation and finding the products you want, along with the information necessary to evaluate and compare products, easy list usage and manipulation for frequently ordered products and an easy checkout process. OPI: What is your relationship with wholesalers United, SPR and Supplies Network? How have you been working with them in a way that will benefit dealers? CG: We have a great relationship with SPR at the highest levels. Our relationship with United can be challenging at times, because of their ownership with our primary competitor, but they do fund improvements because we have so many of their large dealers. We don’t do much with Supplies Network although we would like to explore ways of enhancing that relationship.

OPI: The platform you developed for the Point Nationwide national accounts initiative is highly regarded. What advantages do you think it presents over other systems and have there been any developments/upgrades recently? CG: It’s important to understand that this started out as our standard e-commerce site, but a lot of specific functionality was added both on the e-commerce site and the back office to accommodate the unique requirements and customers of the Point Nationwide program. We also had to communicate with a lot of different dealer back office systems. All of this made the Point Nationwide site and back office somewhat unique. We worked with a third-party design house – that TriMega chose – for the ‘look and feel’ aspects of the site and they did a nice job with the design and usability. So, because of these differences, we need to maintain both our standard e-commerce site and the Point Nationwide site. There have been discussions about adding some new features to the Point Nationwide site but these are in an early stage. OPI: You were part of the Office Products Software Alliance (OPSA) group which was announced in February 2013. It appears that OPSA is now ‘on ice’ following the ECi acquisition of Red Cheetah. What is your view on OPSA, the motives for its creation and its future? Cynics say it was a vehicle to enable ECi to acquire Red Cheetah – what’s your reaction to that? CG: We’re not in a position to comment on whether or not OPSA facilitated the deal between ECi and Red Cheetah. We can say that the initial reason for OPSA was to deal with common issues facing all of the software vendors. It definitely lost momentum after the Red Cheetah acquisition and we are not sure if the initiative will be revi ved or not. À

OPI: What are the real e-commerce opportunities for dealers? CG: To partner with wholesalers and manufacturers in order to offer products that customers want and that provide margin to the dealers. Some of this can be determined with the better sales analysis that I referred to earlier. OPI: What is your view on paper catalogues? Do they have a future? CG: Being an environmentally conscious company, paper catalogues should have been eliminated years ago. There is no real purpose for them and it’s only a matter of time before they disappear completely.

Technology Solutions | 2014

Craig Greitzer

E-Commerce

SURVIVAL OF THE FITTEST Dealers must become more creative with their pricing, argues OPSoftware’s Rick Marlette think that survival of the fittest means that only the biggest and strongest will survive. If this were true, then a Tyrannosaurus rex really would be the CEO of Amazon instead of the fantasy of an unrequited bromance. But survival of the fittest is survival of the ones that are most adaptable to change. That is why T rex is no longer with us. He couldn’t adapt to the changes fast enough and he died off. There is no doubt the office products industry is changing rapidly – but if you are adaptable you can thrive while the big and strong crash and burn.

The declining industry Paper product sales are down. This includes ink, filing, printing and the myriad of associated products. What were once commodity items are no more. What were once front-of-the-store price leaders are no more. What dealers once focused on in terms of price competitiveness is no more. Those who continue to focus on the commodity items of the past will be no more. If you think your price on copy paper is going to make or break you, you are doomed. You will join the ranks of T rex and the 400 Office Depot

and every single OfficeMax store in Canada in the dustbin of the way things used to be. Have you priced copy paper on Amazon lately? The number one best-selling copy paper on Amazon is $50 a carton. Number two is priced at $65 a carton. I can’t begin to tell you how many people have bought into the ridiculous idea that this is somehow ‘not the real price’, that this is not what Amazon is ‘really’ selling it for. Instead, they prefer to believe that the real price is what the dealer has always sold it for since the 1990s. Ignoring these glaring and obvious facts is how you guarantee failure. The number one selling copy paper on Amazon is not sold by the ten-ream carton either. It’s not sold by the individual ream and it isn’t the so-called fiveream convenience carton. So what is it? The #1 Best Seller copy paper (according to the Amazon site) is a three-ream pack: 1,500 sheets. It works out to $50 a carton, but it is sold in three-ream packs. So what do you do now? Start claiming that Amazon is not really selling most of its copy paper in three-ream packs? That it’s just the advertised pack and they really ship you a carton? Because that makes just as much sense as claiming it’s not the real price. You have to let the facts guide your decisions and learn to recognize invented agendas if you are going to survive.

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SOME

“Survival of the fittest is survival of the ones that are most adaptable to change”

When demand shrinks, what happens to the price? It goes up, of course – but with creativity, like a three-ream pack of copy paper. How about a 250pack of file folders? An 18-pack of legal pads? A 22-pack of pens? Here’s one you may remember: our new candy bar is 25% bigger and we doubled

Technology Solutions | 2014

Rick Marlette

E-Commerce

and pricing is the number one trend in the industry that will require laser focus if you are going to thrive in the new world.

Introducing the ‘bundle’

the price. But the bit about the price is not on the wrapper – just ‘25% larger’ in big, bold letters. This is what is beginning to happen in the OP industry. Those formerly commodity items will continue to go up in price. Copy paper, pens, pads, ink and toner are all going up because demand is shrinking. New products are taking the place of these older items and these new items will become the price leaders of the future. You need to re-think your pricing and stay on top of these trends with much more vigilance than ever before. If your pricing is not following current market prices, you can lose big because the cost is going up too. Manufacturers are going to continue to raise their prices as demand shrinks and you will be out of business if you keep selling at yesterday’s price. So get ready for big changes. Units, packs, pricing, cost and hopefully your price to your customers will be changing drastically. This shift in product mix

”

“If you think your price on copy paper is going to make or break you, you are doomed”

This twist is similar to the candy bar price increase. The goal is to disguise price increases (and comparisons) by ‘bundling’ items into multipacks. The Amazon threeream copy paper pack is one example, but Amazon is not alone: Staples has begun to join in with its own unique packaging configurations (see Dixon Ticonderoga image from Staples.com). There are at least 100 items now packed as ‘2/Bundle’ on the Staples site. Other items are being packed even more per bundle. This is Staples getting ahead of the curve (and the manufacturers) by creating their own packaging to address the declines. The ‘bundle’ offers additional benefits to the seller in the web-only world by absorbing more shipping costs than a single item can. Manufacturers may take a little longer to catch up with their own repackaging, but it has started. Meanwhile you can expect this trend to continue on its own at Staples and Amazon as commodity items evolve. The thing to do now is be aware, be focused and develop a plan for adapting your pricing and market strategy to take advantage of these inevitable changes. À Rick Marlette is co-owner at OPSoftware

OPI.NET | Technology Solutions

Case Study

JumpTrack saves ImpactOffice

OVER $100,000

”

Savings in paper-related costs plus elimination of operating costs for one truck add up to more than $100,000 in annual savings for the dealer

independent dealer ImpactOffice has a fleet of 33 trucks that cover a wide geography, from Fredericksburg (VA), northwards to Manhattan and westwards to western Maryland, south-east Pennsylvania and northwest Virginia. The company provides next day delivery to its customers, whether they are in the regional delivery area or are national customers that can be serviced through the company’s network of carefully selected couriers and partnering distributors. Originally, drivers obtained ‘hard-copy’ customer signatures upon delivery. They would then return to the warehouse, where these hard copies would be filed by support staff. Later, as customers called to obtain proof of delivery, the cumbersome process began to find the appropriate signature copies and fax them back to the waiting customers.

“The first thing that jumped out at us was the attractive pricing from a licensing point of view”

Technology Solutions | 2014

ImpactOffice therefore began to look for a simple solution to eliminate paper-based proof of delivery.

Two-year search During its two-year search, ImpactOffice found several systems that were too complex or expensive to implement. According to Brian Shaffer, Director of Warehousing and Logistics for ImpactOffice, other solutions ended up costing at least six figures and required an inordinate investment in handheld units. One such solution required handheld phones that cost up to $1,500 each, which for a fleet of 33 trucks meant an investment of more than $50,000 in equipment alone. After investigating several solutions that didn’t meet Impact’s criteria, the company came across JumpTrack by Jump Technologies. JumpTrack is an easy-to-use proof-of-delivery system delivered via smartphone or tablet – in ImpactOffice’s case, the company uses it with Android phones. “We had an existing relationship with Jump Technologies, as we use the company’s JumpCart product. When JumpTrack came out, the first thing that ‘jumped’ out at us was the attractive pricing from a licensing point of view,” says Shaffer. “Beyond that, the application is simple – it does exactly what we set out to do. It just fit the bill for us.” JumpTrack integrates with ImpactOffice’s MBS Dev business management software built on the Microsoft Dynamics platform. Impact says the implementation process went smoothly because Jump Technologies had already built the interface for that platform. “Implementing new software can often be very stressful, but that was not the case with JumpTrack,” notes Shaffer. “Everything went really smoothly, and we were able to turn on JumpTrack while still printing our paper manifests for a couple of days to get our drivers familiar with the system. Within three days, we were fully up to speed and getting customer signatures on the Android phones.”

Case Study Delivery efficiencies Each ImpactOffice driver has 25-30 stops each day, with 200-300 pieces to deliver. Altogether, that is approximately 1,000 stops and between 7,000 and 10,000 packages every day. With JumpTrack, drivers come in each morning with their manifests loaded onto their Android devices. They can re-sort the stops if they wish, based on preferred routes, traffic or construction. When drivers stop at each location, they check JumpTrack for the number of packages they should have at the stop. This eliminates any errors in the delivery process, as it ensures that packages do not get lost or forgotten in the truck, only to have to be redelivered later in the day. Drivers grab the appropriate pieces, and customers can count them and then sign for their packages on the Android device. A side benefit is that ImpactOffice can also use the phone cameras to obtain photographic proof when necessary. All signatures are now maintained electronically so that when customers call for proof of delivery, they can have signatures emailed or faxed to them immediately. ImpactOffice’s customer service employees say they receive about 20 proof-of-delivery calls each day and this has reduced a 15-minute process to less than five minutes per call.

Significant cost savings The savings ImpactOffice has achieved are significant: • Improved delivery efficiency enabled elimination of one truck, which saves an estimated $75,000 per year in operating costs. • Paper handling time has been reduced by 83%, resulting in approximately $25,000 annual savings in paper-related administration and driver costs of delivery. • Customer service call time for proof-ofdelivery inquiries have been cut by nearly 75%. • The total annual savings over a paper-based system have been calculated at $100,836. • The time to achieve ROI (return on investment) was just one week.

AT A GLANCE Customer: ImpactOffice Group, Beltsville (MD) Fleet size: 33 trucks Challenge: To find a simple way to automate proof of delivery. Objectives included reducing administrative time spent on answering customer delivery inquiries and filing proof-of-delivery documentation Solution: JumpTrack proof-of-delivery system Recognized savings: Reduced time to handle paper by 83%, saving $2,200/month. Deliveries made with one less truck, saving vehicle operation costs by approximately $75,000 per year Total annual savings over paper-based system: $100,836 Time to ROI: One week

Additional benefits There have been other benefits too. With JumpTrack, when customers call to ask when a package will be delivered, the customer service team can look up where drivers are on their routes and give customers accurate delivery estimates. ImpactOffice prides itself on its attentive, experienced and fast customer service team, so this added level of service goes a long way. Shaffer points out that, aside from the obvious service and cost-efficiency improvements, the system gives customers an appreciation of how ImpactOffice is on top of whatever ‘state-ofthe-art’ technology is necessary to improve the overall customer experience. An indirect benefit gained by using JumpTrack was converting from Nextel Direct Connect phones to the Android system. Shaffer says the Direct Connect system was cumbersome, and it is now much easier to get a hold of drivers on the road. He says all of his drivers – even those who were somewhat technology-averse – were able to get up to speed quickly on JumpTrack and become familiar with their new devices. Now Shaffer is working on incorporating the JumpTrack process for the company’s large staff of coffee technicians. Additionally, ImpactOffice’s newest division, Canon copier/MFP sales and service, will also use JumpTrack. Concludes Shaffer: “It is such an easy-to-use and simple solution that we look forward to using it in additional ways across our company.” À About ImpactOffice Group ImpactOffice Group, including the George W Allen Company, is a leading national supplier of office commodities, furniture and technology products to both the commercial and government sectors. The company has 190 employees and is headquartered outside of DC in Beltsville (MD), with three other mid-Atlantic locations.

OPI.NET | Technology Solutions

Advertising Feature

OPI.NET | Technology Solutions

Social Media

Facebook advertising: how to get the biggest bang for your buck Fortune Web’s Marisa Sanfilippo highlights some areas of best practice for advertising on Facebook

FACEBOOK

is a social media giant with more than 1.15 billion users as of February 2014. With so many people spending over 25 minutes a day on Facebook (according to Alexa.com), advertising on the site is a viable option for reaching potential customers. But, if you jump into Facebook advertising blindly, you could be throwing money down the drain. Get the most out of your money with these tips. 1. Identify an objective For many, when it comes to advertising, the ultimate objective is to get more business, but we don’t all take the same road to get there. Some marketers may choose to offer their target audience valuable information to make an informed purchasing decision; others may choose to directly promote a product or service. A lot of the time, creating brand awareness is an important part to turning your target audience into customers. Facebook advertising is no different. Consider the approach that’s best for your business and choose your objective accordingly when setting up your Facebook ad campaign. Facebook offers eight objectives: • page post engagement • page likes • clicks to website • website conversions • app installs • app engagement • event responses • offer claims In my experience, the ‘post engagement’ and ‘page likes’ objectives are best for driving brand awareness. Clicks to your website or blog, along with website conversions and offer claims are best for getting people to directly purchase products and services.

Technology Solutions | 2014

2. Create graphics that sell The images you choose should be sized appropriately, be clear and be attention grabbing (size requirements vary between objectives). Your ad should be free of grammatical errors and should not mislead. You’ll also want to keep your text concise. Get to the point in letting people know what they can expect from clicking on your advertisement. Office Depot did a good job with this ad copy:

It kept its promise. When I visit the company’s page, I see numerous posts noting sale items. 3. Target accordingly It’s almost scary how detailed we can get with targeting Facebook campaigns – from age to location, interests, and the new behaviors option. Identify your target audience per campaign and target accordingly.

4. Run A/B testing Create two different ads for each campaign and then run them for a set amount of time. Observe which ad is performing best and stop the one that’s not. I recommend having one variable at a time during your testing. Your testing may include any of these scenarios: • Each ad has the same objective, targets the same audience, has the same graphics and uses the same body copy, but there are different headlines. • Ad A targets people who are between ages 18-40 while ad B targets people who are ages 35-45. All other variables remain the same. • Both ads have all the same variables but their images are different. 5. Price your campaign right When you opt to bid for clicks, Facebook offers you two options: • automatically optimize your bid to get more clicks • manually set your maximum bid for clicks Opt for that manual option. It gives you more granular control over pricing. Then, appropriately price your maximum bid for clicks (CPC). Facebook will provide you with a suggested bid. Start with the lower suggested amount first but increase that cost as needed. 6. Monitor, analyze, and adjust The last thing you want to do is run your ad continuously and forget about it. To get the most out of your investment, monitor the progress of your campaign frequently. Carefully observe key performance indicators (KPIs) such as: • total actions • reach • frequency Have you tried Facebook advertising in the past? What has your experience been like? I’d love to hear from you. Please write to marisa@ fortunewebmarketing.com with your comments. Marisa Sanfilippo serves as the Content and Social Strategist at Fortune Web Marketing – an internet marketing agency based in Asbury Park (NJ). À