OPI 290 JUNE 2019 A by OPI

BIG INTERVIEW

Connecting the

business products world

Carlos & Rafael Benavides, Comercial del Sur June 2019

INSIDE THIS ISSUE l Final curtain for ADVEO Italy and Germany l Office Depot takes aggressive action l Amazon raises the stakes in deliveries

l GSA shares e-commerce plans l Manutanâ&#x20AC;&#x2122;s e-procurement agenda l Viscom: category success l How to attract the right talent

CONTENTS 16 Big Interview Comercial del Sur is now the largest wholesaler in Spain. Its ambitions reach far beyond its home country, however, with France also gaining considerable momentum 24 Hot Topic Are Amazon’s new delivery options something our industry needs to be worried about? OPI finds out... 28 Focus French reseller Manutan outlines its expansive e-procurement plans 30 Spotlight Acquisitions, organic growth and product expansion are at the heart of US dealer Eakes Office Solutions’ success

Big Interview: Carlos & Rafael Benavides, Comercial del Sur

The Spanish business supplies market has frequently hit the headlines over the past few years as the country’s largest wholesaler ADVEO has been on a downward spiral. Fellow Spanish wholesaler Comercial del Sur, meanwhile, has been a beacon of stability and positivity and is now reaping the rewards. As joint Managing Directors Carlos and Rafael Benavides point out, the company’s mission is to inspire confidence that office products wholesaling has a bright future in Spain and beyond. HOT TOPIC: ON YOUR MARKS...

36 Category Update Sales of traditional office products may be declining, but there are several key trends that keep the sector innovative and alive 40 How to... ...attract the right talent to your business 42 Preview: Advantage Business Conference A look ahead to SP Richards’ 21st ABC event, this year taking place in San Diego, California

REGULARS 5 Comment 6 News 44 5 minutes with... Frank Indenkämpen 46 Final Word Ian Elliott

June 2019

It’s no secret that Amazon has been steadily building up its ground, air and sea logistics strength as it seeks to take control of its distribution network. The operator has now debuted an online freight shipping brokerage platform [...] which, according to data and content provider FreightWaves, is undercutting prices by up to 33%. At the time of going to press, the service was available in five Northeast US states including New York, Maryland and Pennsylvania. As Morgan Stanley analyst Brian Nowak said in a widely-reported quote: “We see this as a Trojan horse for Amazon to grow its next disruptive business – a third-party logistics network.”

32 Category Update The use of viscom products in a wide variety of settings is one of the drivers behind the success of this burgeoning category

COMMENT The OPI team EDITORIAL Editor Heike Dieckmann +44 (0)20 7841 2950 heike.dieckmann@opi.net Deputy Editor Michelle Sturman +44 (0)20 7841 2942 michelle.sturman@opi.net News Editor Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net Freelance Contributor David Holes david.holes@opi.net

SALES & MARKETING Chief Commercial Officer Chris Exner +44 (0)7973 186801 chris.exner@opi.net Head of Media Sales Chris Turness +44 (0)7872 684746 chris.turness@opi.net Digital Marketing Manager Aurora Enghis +44 (0)20 7841 2959 aurora.enghis@opi.net

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

PRODUCTION & FINANCE Studio Joel Mitchell +44 (0)20 7841 2943 joel.mitchell@opi.net Operations & Production Amy Byrne +44 (0)20 7841 2950 amy.byrne@opi.net Finance Kelly Hilleard +44 (0)20 7841 2956 kelly.hilleard@opi.net

PUBLISHERS CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net Executive Assistant Debbie Garrand +44 (0)7718 660249 debbie.garrand@opi.net

Instant gratification? In your own time

ike I said last month, while our industry is undoubtedly in a state of flux, for any deals and big announcements to shake out, bear fruit and create results often takes a long time. And that goes for both ends of the results spectrum – good and bad. So the ADVEO saga is slowly reaching its conclusion, with the company apparently safe in France and Benelux through its new private equity owner Sandton Capital Partners, while it’s curtains in countries such as Italy, Germany and Spain (see page 7). Nobody would argue that OP wholesaling is a tough business, profitable wholesaling even more so. Proving that this channel is still very much needed at a time when ‘going direct’ is becoming more common is one of the remits of fellow Spanish wholesaler Comercial del Sur, incidentally one of the beneficiaries of ADVEO’s demise (see page 16). But Comercial too had a hard time establishing itself in a brand new market – France – and it’s taken years before the company is now able to address the market from a position of strength.

Where is it all going to end at a time when consumers demand more and more instant gratification? Talking of logistics, what of Amazon, its recent focus on distribution and its new next-day delivery promise (see page 24) – is the latter going to put the wind up an industry where next-day shipping has been the norm for years? Maybe not, but it’s a sure indication of where Amazon is headed in terms of its strategy. And where is it all going to end at a time when consumers demand more and more instant gratification? When will they expect same-day delivery as a standard, something that Amazon of course already offers to some, mostly B2C, users; in fact, several OP resellers also do in some locations and often as emergency offerings. Customer convenience is key – and the B2B world will inevitably follow the pace of B2C. So is perseverance. But with perseverance often comes the need for very deep pockets – which Amazon clearly has. Small independent dealers around the world haven’t got that luxury, nobody will catch them when they stumble or fall. Or has that changed as well now, with the likes of Staples and Office Depot in the US keen to add them to their fold? They too have deep(er) pockets and can wait out a crisis or two (see pages 6 and 7). But how many? And at what cost? Testing times indeed! Have a great month. HEIKE DIECKMANN, EDITOR

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business products world

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.

June 2019

Connecting the

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

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NEWS

REASONS TO BE CHEERFUL? Office Depot CEO Gerry Smith said that “tremendous progress” had been made over the past year. Some of the positive results from Q1 specifically include: l

Analysis:

Depot slashing costs after disappointing Q1

A company-wide restructuring plan is set to save at least $100 million a year Office Depot Inc has launched what it is calling a “business acceleration programme” following an April profit warning and first quarter results in May that sent its share price tumbling by around 45% in the space of a few weeks (ODP shares were trading at $2.06 at the time of writing, down from $3.77 in early April). The blame for the Q1 result was largely put on the shoulders of the CompuCom IT services division. Office Depot CEO Gerry Smith described its sales decline and $15 million operating loss as “completely unacceptable”, adding that “aggressive actions” were being taken to put CompuCom back on track. These include streamlining the operational structure, reorganising its customer-facing organisation and realigning the sales teams under new leadership.

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NEW LEADER AT BUSINESS SOLUTIONS DIVISION (BSD)

Office Depot appointed Stephen Mohan as EVP of BSD, effective 13 May, following the departure of former BSD President Steve Calkins a few months ago. Reporting directly to CEO Gerry Smith, Mohan will assume responsibility for accelerating growth of B2B sales across all customer segments and vertical markets. Mohan has a strong sales background. He joined Office Depot from XPO Logistics, where he was in charge of the company’s North American sales and marketing teams. Before that he spent a year as Chief Sales Officer at environmental services provider Clean Harbors.

16% growth in buy online, pick-up-in-store sales and a 20% jump in the number of subscriptions (for ink and toner, for example) to 1.2 million. Positive retail comps in several districts, including the Austin, Texas, market which is seen as a test bed for Office Depot’s new retail experience. A year-on-year increase in services revenues at Retail of 16% and at BSD of 13%. Continued growth in adjacent categories at BSD, taking them to 37% of the division’s total sales. Net customer wins in BSD’s contract unit and further expansion of Depot’s “federation” strategy with the addition of two more independent resellers.

However, the changes are by no means limited to CompuCom. The reseller said its programme is a company-wide process that will involve “numerous organisational realignments, increased leverage of technology and accelerated use of automation”. Office Depot CFO Joe Lower said savings from the plan essentially fell into three “buckets”: organisational efficiencies (where it seems middle-management roles are being cut), customer delivery (a sales force realignment) and discretionary spend (with the introduction of zero-based budgeting). OPI understands that several hundred positions have already been eliminated across Office Depot’s three reporting divisions and its corporate headquarters as part of the plan to reduce annual costs by $100 million by the end of next year. In addition, Depot has said that it will close around 60 stores this year and a further 90 outlets by the end of 2021, while nine other facilities – consisting of distribution centres and offices – will also be shut down. The $1 billion acquisition of CompuCom at the end of 2017 was made in order to pivot Office Depot into “an integrated B2B distribution platform”, but legacy issues at the IT services company appear to have been an unwelcome surprise for Smith and his team. That said, there have been some positive developments at the Business Solutions and Retail divisions in the past few months (see ‘Reasons to be cheerful?’, above), and the performance at CompuCom is expected to pick up in the second half of this year. Smith said he and his team “are more determined than ever” to execute on the Office Depot transformation plan. They will need to be because strategic plans and restructurings have come and gone for the best part of 20 years without ever achieving anything but some short-term wins. It will be interesting to see if things are different this time.

As OPI went to press, it appears that the long-running insolvency process of European wholesaler ADVEO is reaching a conclusion. In mid-May, the company confirmed in a stock market filing that the court handling its bankruptcy had given the go-ahead for its operations in France and Belgium to be acquired by private equity firm Sandton Capital Partners. At the time of writing, the closing of this transaction was imminent, although final details of the purchase price and the debt load taken on by Sandton had not been published. While France and Benelux appear to have been saved, the outcome for ADVEO’s other markets is less positive. Iberia has already been wound down, with just a skeleton staff in place handling the transition process with Sandton. In Germany, the company said it had stopped taking orders from 15 May following a stock clearance sale, while in Italy insolvency proceedings have been opened after negotiations to find a buyer fell through. It had been hoped that parts of the Italian subsidiary might be saved, but talks with distribution group GDN ended without an offer being made, and two other potential buyers also declined to make a binding offer.

Canon looses ITC appeal – and appeals again

The three aftermarket toner manufacturers at the centre of a patent lawsuit by Canon have issued statements following the US International Trade Commission’s (ITC) decision to end its investigation. In late May, the ITC sided with a ruling made in March which concluded that Print-Rite, Ninestar and Aster Graphics (and various subsidiaries of these three companies) had not infringed on Canon’s patents pursuant to a lawsuit that the OEM had filed in March 2018. Ninestar-owned Static Control and Aster both said they were “pleased” with the ITC’s decision while Print-Rite said that it “is certainly a setback for Canon”. All three companies underlined their commitment to respecting intellectual property rights and highlighted their own R&D investments to produce non-infringing workarounds to Canon’s patents. “[We have] always been aware of the importance of understanding the scope of what is and, more importantly, what is not covered by others’ intellectual property,” said Static Control. “[We] will continue to defend the aftermarket and remain vigorous in our defence of designs which do not infringe valid claims of OEM patents.” Print-Rite adopted an almost conciliatory tone: “We also insist that OEM and compatible vendors are a natural match in the printing industry,” it stated. “There might be competition between the two, but they are not each other’s enemy. Therefore, this ITC case is only a part of the commercial social ecology; there is no winner or loser, let alone a patent war.” Print-Rite also predicted the possibility that Canon might appeal against the ITC’s determination, something that was confirmed by Canon at the time of OPI going to press.

June 2019

There have been question marks for some time over the plans of Staples’ owner Sycamore Partners for the reseller’s 1,200-strong US store network. And following Staples’ 2019 US Retail Conference which took place in Dallas, Texas, in May, it seems it’s not giving up on retail. The ‘big’ announcement at the event was the launch of a new retail concept called Staples Connect. As the name suggests, the idea is to make Staples more than just a venue to shop. “It is a place to connect with the community, for students and business owners alike,” Mike Motz, the recently appointed CEO of Staples US Retail, told OPI. Motz’s appointment came following the departure of veteran Steve Matyas at the end of 2018. Prior to joining Staples, he was COO at Canada-based retailing giant Loblaw. He has extensive senior executive experience in the retail world, including almost 15 years at Loblaw-owned Shoppers Drug Mart. The Staples Connect concept will be launched and tested in the Boston market, but some merchandising components of the new retail strategy will be incorporated into every store, Motz confirmed. “New elements of the store will include co-working and a new community space, Spotlight, which will encourage collaboration and networking through events, workshops and guest speakers hosted in the space,” he added. The co-working areas are being branded as Staples Studio – the name that Staples Canada is also using – and they are being run in-house by Staples after its partnership with Workbar ended a few months ago. New merchandising layouts in stores will also feature some of the own brands introduced by Staples Inc, and currently TRU RED and NXT Technologies products are being sold at retail. Staples Connect does not sound too dissimilar to what Office Depot is trying to achieve with its ‘store of the future’ concept: a services-rich offering aimed at small businesses, co-working spaces, and an attempt to make stores a focal point in local communities. Depot has said it is seeing some success in its test market of Austin, Texas (see left), but it still looks like being a long – and expensive – journey for both companies to turn things around and give businesses and consumers compelling reasons to visit their stores, of which there are still around 2,500 in the US.

ADVEO saga drawing to a close

NEWS

Staples invests in US Retail division

NEWS

Analysis:

GSA pilot set to include office products Industrial supplies are also called out in the latest GSA e-commerce report At the beginning of May, the US General Services Administration (GSA) and the Office of Management and Budget (OMB) issued their Phase 2 joint implementation plan for the use of commercial e-commerce portals for US government purchases, a project also known as the Commercial Platforms Initiative (CPI). The report was originally due to be published in March, but was delayed due to the US government shutdown at the turn of the year. While the GSA says it has listened carefully to various stakeholders in the past few months, this latest document shows that the CPI proof of concept pilot phase will be based on some of the controversial proposals made at the end of 2018 (see Analysis, OPI February 2019, page 6). Notably, the GSA will begin the initial proof of concept with an e-marketplace model that will target a range of “routine” commercial items, “with office supplies and industrial products being the most common”. Although the GSA was mandated to give special attention to categories such as healthcare and IT, it said that “real concerns” about issues such as supply chain security prevented it from starting with these kinds of products.

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THRESHOLD CONCERNS In order to “drive adoption and mitigate risk”, purchases made through the initial proof of concept will be limited to an amount known as the micro-purchase threshold (MPT). This

currently stands at $10,000, although the GSA is asking for legislation to be changed to temporarily raise the MPT to $25,000 for purchases made through the CPI. While the GSA played down the impact that raising the MPT would have, Mike Tucker, CEO of US trade association NOPA, expressed concerns about having two MPT levels – one for the CPI and another for all other purchasing avenues. He questioned the potential detrimental effect this could have on suppliers on other federal programmes and on federal purchasing compliance regulations such as the Trade Agreements Act which are not applicable on spending under the MPT. “The GSA says it wants to have an easier-to-use buying experience for the government, but it seems it’s willing to sacrifice compliance and bring on more risk to provide that more modern buying environment,” he told OPI.

It seems [the GSA is] willing to sacrifice compliance and bring on more risk to provide that more modern buying environment MULTIPLE AWARD The GSA has stressed that the proof of concept will be a multiple award, ie one involving more than one e-commerce marketplace. It is hard to look beyond Amazon as one of the awardees, but Tucker is hopeful that the EPIC Business Solutions platform for independent dealers will be in the frame too when the GSA launches the pilot phase later this year. Although he recognises that EPIC doesn’t (yet) tick all the boxes in terms of the GSA’s priorities, he believes it is well placed with regards to many of the compliance and reporting capabilities that the GSA is demanding. He also points to the relative ease with which EPIC could ramp up in the industrial and office supplies categories (both of which are already selling through the platform), the established supply chain partnerships it has and the fact that many of the resellers are already experienced in selling to federal government customers. Another factor in EPIC’s favour could be the positive reaction its selection for the CPI pilot would receive from the small business community – that might allow the GSA to head off potential protests or conflict if the initiative was perceived to be favouring big business. The next step in the process will be the publication of a draft solicitation, with a final solicitation and awards to follow in order for the proof of concept to start before the end of the calendar year. There are still a number of other important loose ends to tie up before that, including marketplace fees, terms and conditions, and how data is used. How the GSA handles these areas will be a strong indicator as to how seriously it is taking the input from industry stakeholders or whether it is merely paying lip service to the notion of a consultative process in this CPI initiative.

EO Group CEO Simon Drakeford has been elected as the new Chairman of UK office products trade association BOSS, succeeding Stewart Superior’s Geoff Betts. Drakeford has spent the past three and a half years actively involved in the association as one of the non-executive directors of the BOSS board and was at the heart of the rebranding and repositioning of BOSS during that time. “With the appointment of Amy Hutchinson as our new CEO, we are entering an exciting and transformational period in the long history of BOSS and our support for members of our trade,” said Drakeford. “It is a real privilege and an honour to be asked to chair the federation and I relish the opportunity to work with Amy to help BOSS continue to objectively champion all sectors of our rapidly changing industry.” Drakeford confirmed that the CEO handover between Hutchinson and the retiring Philip Lawson was already well underway and going smoothly and that, with Betts remaining on the BOSS board, there was a good degree of continuity at the association. Hutchinson and Drakeford will be hosting the BOSS annual meeting and members’ day taking place at Stationers’ Hall in London on 16 July.

Bain to acquire Imperial Dade

BBB revokes Office Depot accreditation The Better Business Bureau (BBB) revoked its accreditation of Office Depot Inc at the end of April. The BBB said the office supplies reseller had failed to adhere to two of its requirements in relation to building trust and embodying integrity. YPO readies Amazon Business platform Amazon Business is set to make strides in the UK public sector procurement channel as its contract with purchasing organisation YPO is finalised. The agreement was announced last year, but it appears that Amazon and YPO initially had some issues agreeing commercial terms. COLOP creates arts and crafts unit Stamp manufacturer COLOP has established a new Arts & Crafts division after acquiring the entire creative stamp division of Belgium-based Royal Posthumus, including the international trademark rights for the NIO, Woodies and Alta brands. New Product Manager at Office Choice Australian dealer group Office Choice has appointed Terri Symes to the role of Product Manager. She brings 12 years of experience in product management, purchasing and merchandise planning from diverse industries including fashion footwear, and motorcycle parts and accessories. HQ move for Wulff Wulff has revealed plans to move to a new head office later this year. The European reseller has already spent €2.2 million ($2.5 million) on office and logistics premises in Finland’s second-largest municipality of Espoo, which CEO Heikki Vienola called “the most sustainable and intelligent city in Europe”.

June 2019

Private equity powerhouse Bain Capital is to acquire a majority stake in leading US foodservice and jan/san supplies company Imperial Dade. Bain has signed a definitive purchase agreement for Imperial Dade, and the transaction is expected to close during the current quarter. Financial details were not disclosed, but Bain said the transaction “is supported by fully committed debt financing”. Father and son team Robert and Jason Tillis will continue to head up the company. Audax Private Equity, the company which invested in Imperial Bag – as it was known then – in 2016 will retain a stake in the business. Under Audax’s watch, the Tillis’ embarked on a major acquisition spree that began with the merger with Dade Paper in 2017 to create a $1 billion distribution giant. In all, more than 20 acquisitions have been made since then, including two in the past few weeks: Missouri-based distributor Mid Continent Paper and Distributing, and Butler-Dearden Paper Service, a distributor of packaging supplies, printing paper, chemicals and janitorial supplies serving the New England area. Founded in 1935, Imperial Dade serves more than 40,000 customers through a footprint of 27 branches operating in 13 states, and has a growing a network of distribution centres with over 620 fleet vehicles. “We are pleased to welcome an experienced investment partner that shares our vision for building Imperial Dade into a national distributor of foodservice and janitorial supplies, and which will support our efforts to seize the many opportunities we see in the marketplace,” said CEO Robert Tillis.

IN BRIEF

NEWS

Drakeford named BOSS Chairman

NEWS

Harry Gould makes industry return Paper industry icon Harry Gould has taken a majority stake in UK-based paper supplier Denmaur Paper Media. Gould left US-based Gould Paper Corporation – founded by his father in 1924 – when Japan Pulp and Paper completed its takeover of the firm in 2015. At the time, it was the fourth largest paper L-R: Harry Gould merchant in the US. Now he with Mike Gee has returned to the paper distribution industry with his investment in Denmaur, a supplier with annual sales of approximately £115 million ($150 million). Gould will be joined on the Denmaur board by his brother Robert, who has taken on a non-executive Director role. Denmaur’s Mike and Nick Gee – also brothers – will remain in their current roles of CEO and Managing Director respectively, while Stephen Mason also stays on as non-executive Chairman. “Denmaur Paper Media is the fourth biggest player in its market, so I’m kind of starting where I left off,” said Harry Gould. “It is a dynamic company with clear growth ambitions and I’m excited about the future where Robert and I will be working with a like-minded group of people.” Mike Gee added: “Harry’s involvement signifies the next step forward for us – looking at strategic growth opportunities, diversifying into new product areas, acquisitions and possibly expanding into international markets.”

SOCIAL SPY

@FSIoffice

Join the fight against cancer by shopping our AOPD @cityofhope flyer! A portion of the manufacturer incentives from the flyer will be donated to City of Hope for cancer research, treatment and education.

Office Depot

Special thanks to our associates who teamed up nationwide to paint, garden and help make a #DepotDifference in our communities.

Fishlock to succeed Basham UK dealer group Integra Business Solutions has confirmed the appointment of Allison Fishlock, effective 3 June, as successor to longstanding Purchasing Director Neil Basham who will be retiring at the end of the month. Integra said Basham has been pivotal to the group’s success over the past 12 years; he has also played a prominent role at buying organisation BPGI, acting as the Chairman of its EU Purchasing Council since 2009. Fishlock has a wealth of experience in the industry, beginning her career in the OP wholesaling channel before moving to Office Club in 1998 as Marketing Manager. Her most recent role there was as Head of Merchandising. She also sits on the BPGI Purchasing Council.

SPENDING ON

SMART CITY www.opi.net

INITIATIVES IS SET TO GROW TO

$158 BILLION IN 2022

ExaClair Limited

Always willing to lend a hand, our MD Mark Daisley is assisting in our King’s Lynn factory as part of our new Employee Engagement Programme. An inspiration to us all! #employeeengagement

GLOBAL SMART DISPLAY MARKET WILL REACH

S6.7 S6 S 6

B LL LL BILLION BY 2025

BIC

In celebration of National Teacher Appreciation Day, #BIC donated 54 boxes of school supplies to The Roosevelt Elementary School in Bridgeport, CT. Follow us on Twitter @opinews

NEWS

Support the Ride of Life

Around 25 members of the business supplies industry have so far signed up to take part in this year’s Ride of Life (ROL), organised to raise funds for the Institute of Cancer Research (ICR). The second annual ROL will take place on 19 September 2019. Starting in the county of Surrey, just outside London, two routes are being proposed: a challenging, longer 100 km (63 miles) ride that takes in some iconic hill climbs; and a shorter 67 km (37 miles) route which combines a sporting challenge with beautiful scenery. The evening following the ride hosts an optional celebration dinner that includes a short, inspirational talk by an enthusiastic cyclist who has fought and overcome cancer. In addition, some exciting prizes will be up for grabs for those wishing to pledge for the ICR. Last year, the inaugural ROL raised almost £19,000 for the ICR and joined sister event, the Climb of Life, in raising a total of £103,000 ($132,000). The ROL is being coordinated by Sean Starkey, Managing Director of Durable UK. “It promises to be another unique day of great cycling, together with industry networking and camaraderie – and all for a very worthy cause,” he said. Anyone from the business products industry – from the UK or abroad – can take part; there are also jersey sponsorship opportunities available. For more information on how to participate, sponsor the event or offer your services as a volunteer for the day, please email Sean Starkey at sean.starkey@ durable-uk.com. Donations can also be made directly on the JustGiving page: www.justgiving.com/teams/rideoflife2019

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Kokuyo takes significant stake in Pentel

Japanese stationery and office products group Kokuyo has bought out an investment fund that holds a stake of almost 40% in writing instruments manufacturer Pentel. Kokuyo has spent around ¥10.1 billion ($92 million) to acquire all the shares of PI Investment Limited Partnership (ILP), a vehicle set up at the end of 2017 by private equity firm Mercuria Investment to acquire a 37.45% holding in Pentel. Kokuyo said that it had been sounded out by Mercuria when the investment firm began to consider a sale of ILP. It came to the conclusion that “an alliance with Pentel has solid strengths that will enable both the company and Pentel to further improve our corporate value and allow us to make the leap to becoming a top player in the global stationery market”. Pentel has a global distribution network while Kokuyo’s strength lies predominantly in the Japanese, Chinese and Indian markets (the latter via its tie-up with Indian manufacturer Camlin), so tapping into Pentel’s international presence might make sense if Kokuyo was looking to expand its geographical reach. The companies’ product ranges are also complementary, with Kokuyo’s stationery ranges mainly in paper-based and educational supplies. Kokuyo added that it would like Pentel to use its management resources and to promote efforts together “to further expand the potential held by Pentel”, but it is not yet clear what Pentel makes of the situation. According to the Japanese press, Pentel is “evaluating” its response, so it would appear to have been taken by surprise by Kokuyo’s move. It will be interesting to see how the relationship between these two major brands develops over the next few months.

WHO’S WHO IN OP

Top 100 new entry 2019: Patrick Murphy, Codex

Patrick Murphy took over the role of CEO at Ireland-based reseller Codex at the end of March. Now at the helm of the family business that was founded by Brendan Murphy in 1979, Patrick has ten years’ experience in the business and was previously Director of Operations. He took over the reins from Siobhan O’Connor, who stepped aside from the daily running of the business to take on an ambassadorial business development role for a transitional period. Murphy’s appointment came as a number of new developments got underway at Codex, including the launch of a new online offering and the Codex.ie rebrand later this year.

GLOBAL WASTE PAPER RECYCLING MARKET TO REACH

$50 BILLION BY 2023

Jennifer Smith, CEO of US dealer Innovative Office Solutions, has been named as the honouree of this year’s Business Solutions Association (BSA) Leadership Award. Smith’s career spans 34 years in the business products industry. She began her professional life working for department store chain Dayton-Hudson and then proceeded to join Town & Country Office Products, US Office Products and Medcare Products. She founded and became the CEO of Innovative Office Solutions in 2001. Smith will receive the BSA Leadership Award at the President’s Awards Dinner on 5 September during the 2019 BSA Annual Forum which is taking place in her home town of Minneapolis, Minnesota.

PICTURE OF THE MONTH

IN BRIEF New CEO for JP Gould US-based paper distributor JP Gould appointed Michael Trachtenberg as its CEO, effective 1 May. Trachtenberg – who was the company’s COO – took over from David Berkowitz who had held the reins since 2015.

NEWS

BSA award for Innovative’s Smith

Antalis still working on ownership structure Paper distributor Antalis has said that the process of putting its new shareholding structure in place is progressing as planned. This is despite its majority owner Sequana going into receivership in mid-May. Staples Canada and FedEx collaborate Staples Canada has announced a major shipping partnership with FedEx Express Canada. The deal will see 305 Staples locations across the country house full-service ‘FedEx Authorized ShipCentres’. It marks the single largest Canadian retail roll-out in FedEx’s history. Office Central buys school supplies reseller Ontario, Canada-based office products dealer Office Central has confirmed the recent acquisition of Baldwin School Supply. The day-to-day operations of Baldwin will remain separate and the team will continue to be headed by Jack Book who has co-owned the company for over five years. ISSA sets up in South Korea Cleaning and hygiene trade association ISSA has opened an office in the South Korean capital, Seoul. The ISSA Korea office is run jointly by ISSA and the Korean Institute of Cleaning Science, led by local industry leader Danni Lee. OfficeZilla confirms SPR switch US OP dealer franchise network OfficeZilla has announced a new first-call wholesaler relationship with SP Richards (SPR), stating that SPR “has pledged its support and endorsement of the OfficeZilla affiliate model”. The deal will see SPR proactively working to provide dealers with “aggressive pricing, competitive freight programmes, rigorous service level commitments and robust sales support”. Takkt buys foodservice company B2B supplies reseller Takkt has bought Netherlands-based foodservice supplier XXL Horeca in a deal that could be worth more than €20 million ($22.5 million). XXL Horeca is an e-commerce business that was established in 2013. Last year it achieved sales of around €14 million. CNG’s Spicers makes acquisition US paper merchant Spicers Paper – owned by Central National Gottesman – has acquired Premiere Packaging Industries (PPI), a California-based full-line packaging supply distributor. PPI will continue to operate as a separate division and be run by current President John Luyben.

June 2019

Aidan McDonough (r), CEO of Integra Business Solutions – pictured with non-executive Chairman Carl Dovey – celebrated 25 years with the dealer group last month. He joined National Dealer Alliance in May 1994 and, following its merger with Instat in 1997, became Group Marketing Director of the newly-formed dealer group Integra. In 2007, McDonough was named Managing Director, subsequently becoming the group’s CEO.

BIG INTERVIEW

Brothers IN ARMS Comercial del Sur has been a beacon of stability and positivity at a time when the Spanish wholesale sector has been rocked by the struggles and ultimate demise of its biggest competitor. Comercial’s mission? To inspire confidence that office products wholesaling has a bright future in Spain and beyond

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he Spanish business supplies market has frequently hit the headlines over the past few years, but mostly for the wrong reasons, as the country’s largest wholesaler ADVEO has been on a downward spiral, finally reaching checkmate at home and in several of its European markets at the beginning of this year (see also News, page 7). Fellow Spanish wholesaler Comercial del Sur has been quietly reaping the benefits, not only solidifying its position at home, but also expanding into neighbouring France. Indeed, most recently, it bought the assets of French office superstore chain Hyperburo by acquiring the goodwill. It’s the second – albeit quite different – deal that continues several years of investments in France and a lot of hard work, all with the aim of becoming a notable player in that market. At the end of April, just a few weeks after the Hyperburo deal became effective, OPI’s Heike Dieckmann travelled to Comercial’s headquarters in Malaga in the southern Spanish region of Andalusia to talk to Carlos and Rafael Benavides, the rainmakers of the company’s French evolution and indeed sons and heirs of this successful and progressive operator.

OPI: It’s almost ten years since your last Big Interview with OPI. As a quick recap, can you provide a snapshot of Comercial? Rafael Benavides: Sure. Comercial del Sur is a 100% family-owned business that was founded by our father Rafael Benavides Liébana in 1958. Broadly speaking, we are a wholesaler, manufacturer and exclusive distributor of stationery, office and school supplies. The main focus is on wholesaling – our product portfolio consists of 20,000 SKUs in permanent stock, plus another 20,000 temporary and occasional products. We also have six trade-only cash-and-carry stores – one here in Malaga where we’re headquartered, the others in Valencia, Granada, Cadiz, Seville and Madrid.

L-R: Carlos and Rafael Benavides

In addition, we have a manufacturing facility in Malaga where we make our Liderpapel range of paper and cardboard products, such as notebooks, copy paper and ring binders. In total, we have over 1,000 SKUs in the Liderpapel portfolio. As you know, we are closely associated with the European alliance Interaction and sell its Q-Connect range – this accounts for about 2,000 SKUs. Lastly, we’re the exclusive distributor in our markets for a number of international brands which include Citizen, Artline and Pentel. Geographically-speaking, we now operate in Spain, Portugal and France, with distribution through four logistics centres. Two of these are in Spain – one in Guadalajara which is about 50 km from the capital Madrid, and one here in Malaga. The other two are in France – one in Rouen in the north, the other in Lyon in the south. The Portuguese market is served completely from our two facilities in Spain. We currently have about 380 staff – 280 in Spain, 80 in France and 20 in Portugal. Our customer base is made up of about 10,200 companies, including wholesalers, stationers and small papelerias, department stores and larger office supplies resellers.

BIG INTERVIEW Rafael and Carlos Benavides

We are pure wholesalers and it’s really important to us that we’re exclusive to the reseller community We are pure wholesalers and it’s really important to us that we’re exclusive to the reseller community. We do not sell direct to the end customer and therefore remain completely faithful to the channel – unlike some of our competitors.

OPI: Revenues in 2008 were in the region of €50 million ($55 million) I believe – how is that looking now? RB: 2018 generated about €110 million, so revenues have more than doubled over the past decade. Out of that, 62% comes from Spain, 30% from France and 8% from Portugal. OPI: OK, let’s begin with Spain and perhaps the biggest elephant in the room – ADVEO and its demise. What impact has that had on you as a company? Ten years ago, Unipapel and

June 2019

OPI: Those facts and figures are quite different to when we last spoke. What would you say have been the most fundamental milestones over the past ten years? RB: As you say, a lot has happened in these ten years and our services have evolved significantly in all respects. If we had to highlight the most important milestones, they would probably be, in chronological order:

• entry into the French market with the acquisition of the assets of RP Diffusion • the complete automation of our logistics operation in Guadalajara with the Dematic system and the acquisition of 23,000 sq m (230,000 sq ft) of additional land to build another 15,000 sq m warehouse • the opening of our cash-and-carry stores in Valencia and Madrid, as well as the opening of a showroom and convention centre in Madrid (above the cash-and-carry store) • the acquisition of the assets of French office superstore chain Hyperburo

Rafael and Carlos Benavides BIG INTERVIEW

Spicers – which became ADVEO – were your biggest competitors and they’re gone now, in Spain at least… Carlos Benavides: There has been a lot of talk about the ADVEO impact and the advantages that some wholesalers have gained as a direct result of its troubles. And it’s true, of course the bankruptcy has had an impact on our revenues – and those of other wholesalers – but less so than you might expect. The sales that ADVEO lost in 2017, for example, in no way tally with those that all the wholesalers gained. We firmly believe that the biggest beneficiaries have been the manufacturers – many have seen an opportunity in the ADVEO crisis to improve their own logistics and distribution capabilities and their direct commercial network, and began competing with the wholesalers. This is where much of the lost business has gone, not just in Spain, but in all the European countries where ADVEO was or still is operating. We are certainly the biggest wholesaler in the Spanish market now and we have gained considerably in Madrid which was ADVEO’s stronghold and, if you will, our weak spot. But we ‘only’ grew 12% in 2018, not nearly as much as you might expect. Also, many of the large professional resellers were very loyal to ADVEO because in the past they had received a very good service in terms of catalogues, logistics, IT support, etc. As such, the biggest gains we’ve seen didn’t happen over the past five years when ADVEO clearly had been going downhill, but last year when it became obvious the wholesaler wouldn’t survive and loyalties finally ran out. All these resellers needed a new professional partner and we are now that partner. But, like I said, a huge slice of the ADVEO cake went to manufacturers that decided to skip the wholesale channel and go directly to the resellers.

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OPI: That must be a huge frustration to you. CB: It’s part and parcel of the channel changes in many European markets, but with the ADVEO situation and the resulting distrust of the wholesale channel that we’ve seen, it’s been magnified. It’s not so much the big and well-known companies – they are happy with the wholesaler system, have confidence in their own brands and get plenty of exposure. But the more minor players with brands that are not so strong have been going directly to dealers to gain an advantage. Manufacturers promoting their brands is great for us in particular and the industry in general, but those promoting their distribution infrastructure – that’s not so good. This is another reason why we’ve worked incredibly hard – and continue to do so – on our service proposition over the past few years.

OPI: What specifically are you doing in that regard – can you elaborate? CB: Excellent logistics and 24-hour service from our various warehouses to our customers in mainland Spain, France and Portugal are a given. But what we’ve also done is dedicate an extraordinary amount of human and monetary

resources into improving our marketing tools and IT services, and offering our customers an outstanding range of solutions that will help them grow their sales. This has become a real differentiator for us. Our marketing department develops a complete range of brochures, customisable catalogues, weekly and monthly offers, exclusive promotions and newsletters in four languages, for instance – that’s unusual. OPI: What’s the fourth language – judging by where you operate I can guess at Spanish, Portuguese and French… RB: Catalan is the fourth, to acknowledge the special importance of the Catalonian market. Our IT department, meanwhile, provides integrated and customisable web support that enable our customers to self-manage their web stores with comprehensive online management software that works in tandem with Comercial del Sur’s systems. CB: We also run their websites for them if they want us to. It’s their name on the site, but we manage the back-end in terms of putting up the products, descriptions, photos, etc, and for that they pay us a monthly fee. OPI: With web shops in mind, I guess Amazon has a big role to play and is setting the bar high? RB: It’s shaken up the traditional part of the market and the retail sector. It’s definitely a challenge. This type of competitor raises awareness and makes the whole industry more attentive towards the changes that are occurring. Nobody in the supply chain is safe. The office products cake is big, but more and more players want a slice of it. Amazon and other online stores are here to stay – we just have to work hard to help our customers be online-savvy and hopefully we can co-exist, with all operators playing to their own strengths.

Carlos and Rafael Benavides in Comercial del Sur’s student education centre

We are certainly the biggest wholesaler in the Spanish market now and we have gained considerably in Madrid which was ADVEO’s stronghold OPI: Are a lot of your smaller dealer partners involved with Amazon Marketplace? RB: Some are quite focused on Amazon and are doing a good job. But some aren’t. With our own Liderpapel products in mind, for example, or indeed Q-Connect, often the information provided by third-party sellers isn’t very well displayed or even correct in terms of product specification. That’s a concern. We deal with Amazon to ensure that the correct and complete information about our products is published and to help our customers sell these products on the platform. CB: What I think is important to note is that, while the influence of Amazon is big and ever growing, it doesn’t – in our markets at least – spell the end

BIG INTERVIEW Rafael and Carlos Benavides

of the traditional sector. Stationers or dealers are not going to close down because of Amazon. If they don’t survive, there are several other things that weren’t right.

OPI: You mentioned that as a result of the demise of ADVEO in Spain, you’ve gained greater access to the large OP reseller segment. Who are your typical customers now? RB: Historically, we’ve been strongest in the traditional sector – regional independent dealers with a retail presence, for example, and small stationery shops. This is a channel in very slight decline year on year. But like we said, thankfully we’re getting much stronger with the larger OP resellers because of our extensive service offering. OPI: Who’s the best operator in the market, among your customer base? CB: Lyreco, without a doubt. It’s the number one office supplies reseller in Spain. Great revenues – about €140-€150 million I believe – and very profitable. They’re doing a brilliant job. Staples Solutions and Office Depot are making progress, but are still nowhere near Lyreco’s figures. OPI: You’ve already referred to changing customer shopping habits. Would you say these have changed fundamentally? CB: It very much depends on the customers and also the countries you mean. In Spain, for example, our cash-and-carry stores remain very important to our smaller customers – that’s how they like to buy, frequently and with no minimum order values.

June 2019

OPI: So what does the Spanish market look like now overall? RB: There is actually very little data in the country on market segmentation in the office products industry. Generally speaking, three or four broadline wholesalers co-exist in Spain, complemented by a considerable number of small regional players that mainly provide services to traditional papelerias in their markets. Because of the ADVEO situation, many of these wholesalers have a good chance of growing their market share a little. That said, with digitisation and the significant rise of e-commerce, their opportunities are somewhat limited as they haven’t got the resources – both in terms of finance as well as technical expertise – to really excel in this area. Comercial, on the other hand, is in a more fortunate position. The disappearance of ADVEO in Portugal but above all in Spain has meant better access to a customer segment where we weren’t that strong in in the past – large, professional OP resellers. However, with that also comes a new level of customer service expectation. We have been improving our facilities for several years and are well placed, but we are investing a lot more this year and in 2020 to be prepared for the significant organic growth potential that exists. Our competitors are also investing though. Overall, I would say there’s very healthy competition between the three or four major wholesale operators in Spain. CB: On a slightly different note, we have a serious demographic problem in Spain caused by very low birth rates. 2018 was the worst year since records began. Essentially, we have an ageing and hugely decreasing population; that results in considerably

less demand and also puts the welfare state at risk in the medium to long term. And while the younger generations are greatly reducing in numbers, their shopping habits are changing too. For us specifically, it means that an increasing proportion of our customers in Spain, for example – about 70% – now prefer to place their orders and manage their accounts entirely online. As such, we need to adapt all of our services and communications to meet that demand; if we do, we have a great competitive advantage.

Rafael and Carlos Benavides BIG INTERVIEW

There are commonalities too. There is no doubt that price is a determining factor for most of our clients, with Portugal being by far the most price-sensitive market. In all countries, customers are asking for help with IT, data and the whole ordering process. They haven’t got the expertise and are asking us to provide it. What we’re finding across all the countries we operate in is more confidence in us as a supplier because we are a ‘pure’ wholesaler and we don’t sell to the end user. The market is changing, no doubt, but we intend to continue with this strategy. OPI: You’ve just mentioned Portugal. Tell me a bit more about your presence there. RB: We started from scratch in Portugal in 2002. As I said, we have 20 staff in the country – teams that are very well-established and have extensive experience. It’s only a small part of what we do and all the logistics are done from the warehouses in Malaga and Guadalajara, but we’ve been growing in Portugal year after year and are a main operator in the market now. OPI: What about France? Last time we spoke you didn’t have a presence there at all and now it’s 30% of the business. What happened? CB: We entered the French market in May 2015 by acquiring the assets of RP Diffusion, a wholesaler that had gone into liquidation. Following the purchase, we renamed the company Comlandi, although the dealer franchise network with its 320 associates retained its name Rouge Papier. The circumstances of this fellow former Interaction member were complicated – there was a lot of debt as well as serious stock shortages; it was doubtful we could even deliver for the back-to-school season that followed the acquisition of RP. Customer confidence was incredibly low. Overall, we went to a country that we barely knew and certainly one where nobody knew us. It was difficult. We put in a huge amount of human resources from the Spanish parent company and gradually we regained the trust of customers and established ourselves in the market. But we had a couple of very tough years and in the initial period we lost 20-25% of the business on a weekly basis, with customers threatening to leave us because they didn’t want to wait any longer for their goods. We are now a profitable and growing company in France. Last year, sales increased by 6% which we were very happy about.

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OPI: At least you had the luxury of ‘inheriting’ a sizeable number of customers through the Rouge Papier dealer franchise network. CB: That’s correct. But those dealers weren’t bound to us – they could go elsewhere.

OPI: What does the latest acquisition Hyperburo add now? RB: The purchase of SHN’s assets – the owners of Hyperburo – very recently was an important step in our strategy in France. The chain – which is being folded into Comlandi – offers a network

We entered the French market in May 2015 [...] Overall, we went to a country that we barely knew and certainly one where nobody knew us of 55 points of sale, in-depth market knowledge and experience and, importantly, an excellent reputation. It’s completely different to where we started from with the bankrupt RP Diffusion. It is a much safer bet in every way. It is too early to draw any conclusions with regards to teams, leadership, etc. We have only just begun the process and are in ‘evaluating’ mode. Our International General Manager Roberto Frates and the Hyperburo management team are in the process of analysing and extracting the synergies that will help to carry out all functions more effectively. OPI: What about the competitive landscape in France – what does that look like? RB: The situation in France hasn’t changed fundamentally since we entered the country four years ago. Office supplies is a stable market with a slight downward trend. Customers have a choice of suppliers and it’s difficult to achieve organic growth – that’s why you have to be on your toes all the time if you want to become an influential competitor in the sector. That is definitely our plan. OPI: How does the market differ fundamentally from, say, Spain? CB: I would say there are two main differences. Firstly, our customers – dealers, stationers, small to medium-sized resellers basically – like to be organised under an umbrella group in France. In Spain, we have three important franchise groups such as Carlin, Alfil Be and Folder, but by and large, operators prefer to be independent. In France, meanwhile, there are many networks in which resellers band together – Calipage, Hyperburo, Rouge Papier, Buro Plus, Majuscule – and that is certainly a preference. Secondly, France has some very strong manufacturers and as such these are very powerful. Exacompta Clairefontaine, BIC,

Rafael and Carlos Benavides BIG INTERVIEW

management. That’s an area we’re investing in and it’s a main topic in all our meetings.

The Benavides brothers in the manufacturing facility in Malaga

Hamelin – these are huge names and they rule the roost. In Spain, it’s the combination of wholesalers and manufacturers that works, but there’s no dominance. In France that’s different.

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OPI: So you’re now very established in Spain and Portugal and making good progress in France. Where next? RB: We’re not interested in putting flags on the map just for the sake of it, but we are open to further opportunities in the three countries we’re in, for sure. Spain is solid, but in the other two there’s plenty to do. In France, we finished with the integration of Comlandi into the parent company, but now we have the same task with Hyperburo; it’s going to be a lengthy process. Also, we need to do a better job of selling to the big guys in France and Portugal. Yes, we sell to Staples Solutions and Lyreco, for example, but we could do more. It’s difficult, especially in France. One thing that works in our favour here too is that we’re a pure wholesaler. That gives confidence to the bigger operators because they know we’re not going to start competing with them. Overall, we must continue to achieve greater penetration in the markets we’re in at present – that’s our main goal. In order to do so, it is necessary to continue improving and perfecting our services, and continuously adapting them to the needs of our customers. CB: Naturally, logistical excellence is vital for a wholesaler and we have a big investment plan in place. Rafael mentioned earlier that we’ve already bought an additional 23,000 sq m of land to complement our current facilities in anticipation of growth in several areas.

OPI: What are these areas of growth? We haven’t actually talked about products so far. When we spoke years ago, you mentioned EOS as a great opportunity. Adimpo, which was very strong in that space, has obviously disappeared now with ADVEO. CB: Our strongest categories are still traditional office products and school supplies. The EOS effort hasn’t really happened because this category is so massively price-sensitive. Where we really have big plans is in facilities supplies and

OPI: Is it a strong category for you yet? CB: No, it’s not. It’s what you might call a slow burner. We have growth, yes, but it’s a long way from where we want to be. And it’s obvious we need to be in that space, as sales of traditional products are decreasing. RB: On that note, it’s interesting where growth can come from sometimes when you don’t expect it. One of the lines where we’ve been experiencing the best growth with over the past three or four years in Spain is lever arch files. ADVEO was a big producer of lever arch files in the country, but as soon as Unipapel disappeared, there was a gap in the market and we’ve been filling it with our own range. It’s only in Spain, but it’s growth and it’s an opportunity and that’s positive. OPI: Other than these types of gaps and niches, where do you think the main opportunities lie for Comercial and other wholesalers of your ilk going forward? RB: We need to demonstrate that a consolidated wholesale operator with a competent presence in three countries offers real opportunities to resellers. I believe it is hugely important to convey confidence in the stability and future of our sector. Many resellers depend heavily on their preferred wholesaler, but their trust has been weakened after recent events with the main operator in Europe. As such, the degree to which both manufacturers and resellers should rely on this channel has been called into question. Comercial and other Interaction members across Europe need to show that we are ready and able to deliver effective solutions and services to our industry – and remain solvent in the process. Our logistics, marketing and IT services are completely different now to what they were ten or even five years ago. The market has demanded those changes and I hope we’ve risen to the challenge. OPI: Final question – do you have any succession plans? Who comes after you two? RB: No, not really. Our children, nieces and nephews are all still quite young. They need to finish their education and then choose for themselves what they want to do and whether they want to be involved in the family business. In the meantime, we are putting outstanding people in our senior management team. To be quite frank, Carlos and I are not hugely involved in the business now. It is run, across the three countries, by our excellent International General Manager and many different teams that help him with that job. In fact, Comercial del Sur is more professional now than it was ten years ago when Carlos and I were involved in the day-to-day operations. I’m not quite sure what that’s saying about us, but it’s true. OPI: You’re clearly doing something right! Thank you for your hospitality and for allowing me a glimpse of Comercial del Sur – and beautiful Malaga!

HOT TOPIC Amazon is raising the stakes with its next-day delivery promise, but is it really a game changer? Michelle Sturman asks around...

On YOUR

MARKS…

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hen Amazon makes any kind of announcement, the ripple effect tends to send shudders through executives in at least one of our industry channels. The online giant’s latest moves to control the logistics sector at large, coupled with the disclosure to provide Amazon Prime and Prime Business members with free one-day delivery on the majority of orders, are no exception. The news was delivered by Amazon CFO Brian Olsavsky during the company's recent Q1 earnings call: “We’re currently working on morphing our Prime, free two-day shipping programme into a free one-day shipping programme. We’re able to do this because we’ve spent 20+ years expanding our fulfilment and logistics network, but this is still a big investment with a lot of work to do ahead of us.” Clearing up any misunderstanding over the myriad of Prime delivery options which already include faster than two-day shipping, Olsavsky said that same-day and Prime Now will be offered on an accelerated basis. However, he added that the initial $800 million investment in Q2 is to enable the free one-day proposition. The CFO also said the company will be building more one-day capacity with its transportation partners throughout the rest of 2019. Amazon has so far refused to be drawn on how many SKUs will be available for this delivery time slot from the outset, but did say the programme will be global. In terms of Amazon Business, its Prime programme is currently only available in the US, Japan and France (although personal Prime membership can be extended to business accounts). Speaking to OPI, a spokesperson for Amazon Business UK confirmed that, as yet, there is no specific timeframe for its launch in the country.

Although Amazon has been experimenting with different formats to drive convenience for its Prime customers in terms of delivery times, much of its product selection is still only available in two days. Olsavsky stated that cutting this time in half will open up a lot of potential purchases which will be “groundbreaking” for Prime members. According to RBC Capital Markets, the online reseller is already able to reach almost three quarters of the US population with faster than two-day deliveries.

We’re able to do this because we’ve spent 20+ years expanding our fulfilment and logistics network GROWING EXPECTATIONS Amazon has been busy raising the bar in relation to delivery expectations in recent months, targeting the entire logistics chain with some innovative ideas – and we’re not talking about mini robots and drones either. At the beginning of the year, the online giant announced the availability of Key for Garage for Prime members. Using its Key Smart Garage Kit, customers can have parcels delivered to their garage, are able to check the status of the garage door in an app and remotely open or lock it. Another new service for US Prime members is Amazon Day which enables customers to choose a day of the week for delivery as well as other options for items they don’t wish to be included. Amazon says it forms part of its Shipment Zero sustainability programme – the company’s vision to make its shipments net zero carbon – with a target of 50% of all shipments being net zero by 2030.

OPI.NET POLL

Will Amazon’s one-day delivery have a big impact on the B2B market?

Yes 73% No 27% 7%

Amazon sees logistics not as a necessary evil of e-commerce, but as a positive marketing tool In addition, the company said it will play an “active role” in terms of helping interested parties with consistent delivery volume from Amazon, providing access to its delivery technology, hands-on training, and discounts on a suite of assets and services, including Amazon-branded vans, uniforms and insurance. So what, if anything, does it all mean for the office products industry? There has been a mixed reaction from all channels, but as the opi.net poll (top right) suggests, there is considerable concern about the impact that Amazon’s one-day delivery will have on the B2B sector.

HOT TOPIC Logistics

BUILDING ITS LOGISTICS STRENGTH It’s no secret that Amazon has been steadily building up its ground, air and sea logistics strength as it seeks to take control of its distribution network. The operator has now debuted an online freight shipping brokerage platform – www.freight. amazon.com – which, according to data and content provider FreightWaves, is undercutting prices by up to 33%. At the time of going to press, the service was available in five Northeast US states including New York, Maryland and Pennsylvania. As Morgan Stanley analyst Brian Nowak said in a widely-reported quote: “We see this as a Trojan horse for Amazon to grow its next disruptive business – a third-party logistics network.” In mid-May, Amazon decided to expand its Delivery Service Partner programme with an incentive for its employees in the US, UK and Spain to start their own business which involves owning and operating a package delivery company. It said it will fund the start-up costs to the tune of $10,000, as well as the equivalent of three months of the former employee’s last gross salary.

Next-day delivery in the OP industry has been the standard for many years and for some still plays an important part in providing good customer service. According to Innovative Office Solutions CIO & CMO Jason Player, the reseller continues to use this delivery timeframe as a business differentiator, but recognises that B2C expectations in e-commerce are influencing the B2B market. He says that consumers are more accepting of a longer delivery time due to the ‘norm’ that has been established in B2C buying where two-day delivery seems fast. “While end users seem more willing to accept two or more days for delivery, this latest move by Amazon likely illustrates that it sees it as important enough to remove it as an obstacle and win more share of our industry and others,” he comments. Distribution Management Director of Marketing Bill Erpelding concurs with Player’s observation that B2B purchasing is shifting more towards e-commerce in general, adding that it will likely put pressure on all manufacturers and merchants, especially those involved in the supply chain, to keep up with Amazon. He says: “According to research by Internet Retailer, Amazon is now outpacing Google for product searches, with 67% originating with the former. This behaviour is evident from both business and consumer buyers.”

June 2019

UNIQUE OR NOT? David Jinks, Head of Consumer Research at UK-based online parcel delivery service ParcelHero, says of Amazon’s recent manoeuvres: “Amazon sees logistics not as a necessary evil of e-commerce, but as a positive marketing tool. Where other companies try their utmost to keep delivery and returns costs down, Amazon believes they are an incentive to entice more members to its Prime and Business programmes, and it isn’t afraid to go large when it comes to winning new Prime members.” Jinks points to Amazon’s 2018 shipping costs of $61.7 billion, up by a “mind-boggling” $14.7 billion from 2017 which, he says, is because Prime members spend twice as much as non-members and delivery options are the hook that lures them in.

Logistics HOT TOPIC

However, as Essendant Senior Director of Marketing Kevin Casey points out, next-day delivery has appeal but is not a unique selling point. “Customers that choose OP resellers are not selecting them for delivery speed alone, but also the additional delivery benefits that are unmatched by Amazon. The opportunity for independent dealers is to enhance their communication around the broad package of delivery benefits they provide,” he states. These advantages include service, shipping from one source, shipping in one box, desktop delivery and familiarity with the delivery driver, in addition to other value-added services such as assembly and set-up that can enhance the offering further. Gary Naphtali, Managing Director of UK-based reseller Anglo Office Group, says that while the introduction of next-day delivery negates the only general differentiator the OP industry currently has over Amazon, the relationship and personal contact a dealer provides remain a key benefit. But he warns that it doesn’t mean a large segment of the business supplies sector does not have Amazon as a significant and continually growing threat. "The fact Amazon Business has seen so much success lies not only in its distribution network, next day or not, but in the sheer simplicity of being able to identify, source and buy almost anything from it.” To help combat this, Naphtali advocates the extension of dealers' portfolios into more product and service categories, especially ones that cannot easily be standardised or commoditised.

to place fewer, less frequent orders in order to be conscious of cost, sustainability as well as efficiency. He adds: “Moves by Amazon to next-day and same-day delivery and making it ‘normal’ for customers to order purely based on convenience gives us the opportunity to continue differentiating through customer intimacy and customised programmes.” INSTANT GRATIFICATION While Amazon is clearly striving to make next-day delivery an e-commerce de facto standard, the next logical step is same-day delivery. Amazon already has Prime Now, for example, with one and two-hour slots available. But, says ParcelHero’s Jinks, products are largely sourced from neighbouring stores using local couriers, that tying that to an Amazon Business account is likely to be

Customers that choose OP resellers are not selecting them for delivery speed alone

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Print is an example, due to its bespoke content. Distribution Management’s Erpelding agrees, adding that fast delivery is clearly not a competitive advantage for the office print segment, particularly with managed print services becoming more commonplace. “Our mpsSELECT platform, for instance, analyses user data to automate the supply chain and ensure orders are fulfilled before supplies run out,” he explains.

SUSTAINABLE? As with most decisions in today’s business climate, any environmental impact needs to be taken into consideration as well. Logistics and the supply chain are undergoing ever closer scrutiny as companies and customers demand greener credentials, especially from service providers. “Dealers can definitely use the environmental angle. An environmentally-supportive, last-mile delivery combined with multiple service and product categories with local stockholding on a simple ‘catch all’ ordering and management platform is all you need. Easy to say, not so easy to do,” observes Naphtali. Innovative's Player draws attention to the work being done by many dealers in the OP channel

some way off yet. Still, he admits that where the battle for our spend is really taking us is same day. Speedy delivery has been available from some OP resellers for a few years already. Both Office Depot and Staples in the US offer same-day options, and Staples Canada has just signed a deal with Instacart to pilot a scheme. In its fight with Amazon, Walmart has responded with one-day delivery without a membership fee but minimum $35 spend. Others provide the service when requested, as Player explains: “Innovative and other dealers like us have always offered same-day service when requested in emergency situations, but it’s more of a manual service and not commonly required. A broader move to same-day delivery would require supply chain and logistical investments for many in the OP channel. Time will tell if it’s really necessary.” Whether receiving orders within 24 hours is in fact essential is quickly becoming a moot point, however. As Jinks sums up: “Online shoppers are moving ever closer to instant gratification, whether that’s for personal or business orders. It’s true we might not really need next-day deliveries, but we still increasingly expect them. Here, Amazon is creating a new benchmark.”

FOCUS

e-procurement THE NEXT GENERATION OF

Manutan Deputy CEO Pierre-Olivier Brial tells OPI about the latest e-procurement developments at the pan-European business products reseller which form part of its ongoing digital transformation journey

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rance-based reseller Manutan said its partnership with procure-to-pay (P2P) platform provider Ivalua was set “to revolutionise” e-procurement after the two firms unveiled a new purchasing solution at an event in Paris in April. The product is called Search360 and is the fruit of an exclusive collaboration between Manutan and Ivalua designed to bring a familiar B2C purchasing experience to B2B procurement. This is something that, in the view of Pierre-Olivier Brial, Deputy CEO of Manutan, has so far been elusive in the enterprise purchasing world. “Until now, there have been just two ways for a supplier such as us to be connected with a P2P solution,” argues Brial, “and neither of them are particularly satisfactory.” The first, says Brial, is a hosted supplier catalogue that is integrated into the client’s P2P tool. “The advantage for the customer with this is that all the products are located in one place and will appear when the customer runs a query through the search engine.” However, he also points to some serious drawbacks in terms of catalogues that are neither up to date nor connected directly to the supplier’s own system. This, for example, can lead to a frustrating experience when a customer orders a product that is, in fact, out of stock with the reseller. “Furthermore,” he notes, “the quality of the content in these catalogues is generally lower

than what is provided on our own e-commerce platform; it is something of a compromise solution so that the client can have content from numerous suppliers. However, users don’t have the same experience as they would have with an e-commerce website.” Brial points out that the hosted catalogue concept has been going out of fashion in favour of punch-outs which provide a link between the client’s P2P software and the supplier’s website. The advantage here is that users go into suppliers’ websites via a secure connection and ‘bring’ products back into the basket of whatever e-commerce tool they happen to be using, meaning they get the same quality data as those using the suppliers’ websites directly.

Manutan and Ivalua set out to create a solution that would deliver a ‘best of both worlds’ B2B purchasing tool COMPROMISE Again, it is something of a compromise solution, says Brial. “One of the main drawbacks is that there is no search function within the P2P software, so purchasers are going from one supplier platform to another with a different customer experience each time. Therefore, it’s good in terms of content and stock availability, but less so when it comes to creating a seamless buying experience.” Taking the inherent weaknesses in the two incumbent systems as a starting point, Manutan and Ivalua set out to create a solution that would deliver a ‘best of both worlds’ B2B purchasing tool. The answer lies in the use of application

Manutan

AMAZON BUSINESS In this day and age, the word ‘marketplace’ in the B2B procurement world typically brings up the name of Amazon Business, but Brial sees a number of major differences between what Manutan is trying to do and what Amazon Business offers. “A big differentiator is that our content is really B2B focused,” he says. “I can see the reasons for using Amazon for some basic supplies or very hard-to-find items, but for the long-tail, more complex products that we sell, customers expect specialised B2B content, product knowledge and advice.” Brial agrees that companies could put a punch-out solution through Amazon Business, but questions whether its marketplace concept that has a multitude of third party sellers is the right fit

FOCUS

programming interfaces (more commonly referred to as APIs) that link the search tool of the Ivalua P2P software with the suppliers’ e-commerce sites. “Think of travel websites such as KAYAK and Booking.com – Search360 works in much the same way,” explains Brial. “For the users, it is a transparent experience; they stay on the P2P solution, do their search there and add items directly into the P2P basket. In the background, the P2P is ‘talking’ to the supplier’s website via the API, so there is a real-time information exchange.” Brial points to two key features on Search360 that optimise the experience: firstly, users can search and compare offers from multiple suppliers using a single platform, applying filters as required by purchasing departments; and secondly, access is provided to ‘live’ information such as pricing, stock levels and delivery times. It will be interesting to see how this concept develops and whether it will grow into an enterprise purchasing marketplace. Its success will largely be dependent on two factors: the ability of Ivalua to roll out its P2P product among enterprise customers, going head to head with the likes of Coupa and SAP Ariba; and finding other suppliers to sign on to the Search360 platform – currently Manutan is the sole reseller.

Source: Manutan

Pierre-Olivier Brial, Deputy CEO, Manutan

June 2019

for the procurement of Class C, long-tail products – the non-recurring, non-strategic items that make up Manutan’s bread and butter. “In categories such as safety, do you really know what you are getting with a marketplace? Customers require quality and compliance guarantees, for example. That is why we are not a marketplace, so we can provide a level of control between Manutan and the customer.” This ties in with what Brial calls the “procurement paradox” when purchasing Class C products: the less you order a product, the more you need to understand what you are buying and the higher the quality of the content needs to be. “A trend we are seeing is that customers want to rely on one or maybe two suppliers for their long-tail purchases, so your content has to be good,” he notes. “We do a lot of single orders and we have thousands of calls to our call centres – not to take orders, but to handle technical questions.” Manutan also provides other services – including its ‘360 procurement view’ – to educate customers on the hidden costs of Class C purchasing and to enable them to have more control over their spend. Now, the API with Ivalua is added to what Brial describes as these “assets”, as Manutan continues on a digital and broader company transformation journey that began about seven years ago. Several aspects of this journey have been challenging, in particular a move to a new ERP system in 2015, but the changes that the company has undergone in the past few years make a nice case study on how a company founded in the 1960s has successfully transformed itself for the 21st century. But, as Brial fully realises, the transformation is not over, especially in these fast-changing times. “When you close one door, another one opens,” he concludes.

SPOTLIGHT

FUTURE vision Achieving sustainable growth in these turbulent times is no easy task, but US independent dealer Eakes Office Solutions proves it can be done, as OPI’s Michelle Sturman finds out

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t’s not often a business leader admits to being behind schedule, but in the grand scheme of things, Mark Miller, CEO of Nebraska-based Eakes Office Solutions, isn’t too worried. Understandable, considering that while the company’s ‘2024 Vision’ for significant and specific top line growth is “slightly behind the ten-year plan”, its overall growth has nevertheless been substantial. Taking the long-term view, Eakes is sure-footed when it comes to this 2024 Vision and diligent in its strategy of acquisitions, organic growth and product expansion as it hits the halfway mark. “We are poised to make this happen,” Miller told OPI. Indeed, the past few years have seen the dealer successfully execute on its ambitious plan – most recently with the acquisition of fellow Nebraskan dealer Miller’s Office Products at the end of April.

MOVING FORWARD In addition to its vision statement, Eakes has also been following a strategic planning process for 20 years which has guided its overall activities, part of

which is a clear and aggressive acquisition path. Averaging around one purchase per year, this strategy has not only boosted product categories, but expanded its geographic horizons as well. In 2017, for example, Eakes bought South Sioux City-based Janitor Depot, which conducts most of its business in the neighbouring state of Iowa. However, as Miller explains: “Our focus is not on geography nearly as much as it is on dealers that share our customer service values and will work to make a smooth transition for their clients. What determines if we go forward is when both the seller and us get a win out of the transaction.” It hasn’t always been as simple as “we’ll buy this dealer” and it has taken time to develop a good acquisitions team and a reputation as a dealer that treats prospective sellers in a positive, respectful way. “We’ve found that smaller dealers just can’t be efficient enough in pricing, marketing etc, to make ends meet. As a result, most of our earlier acquisitions were small. Nowadays, businesses of all sizes call us to initiate the process,” comments Miller.

Mark Miller

FAST FACTS Founded: 1945 Headquarters: Grand Island, Nebraska, US CEO: Mark Miller Staff: 280 Locations: 13 Coverage: Midwest of the US

STRONGER TOGETHER Eakes operates in a predominantly agriculturally-based and largely rural market and services a wide range of customers – not just office-based ones – which is achieved through various vertical marketing programmes. The importance of leveraging technology to drive efficiencies within the business is also recognised – and it helps to have the former IT manager at the helm now! “All of us at Eakes understand the need to ‘keep step’ with the technological offerings of our national competitors. From that perspective, our route to market is ever-changing.”

What sets us apart is the fact we make the experience of shopping for these commodities better

EXPANDING HORIZONS Safeguarding itself against industry pressures through vision and sustained and precise strategic planning, the Eakes team is also aware of the trailing sales of traditional office products. That said, core OP still constitutes its largest revenue category, albeit by a slim margin now. In total, Eakes offers four distinct product categories: Office Supplies, Office Machines, Office Furniture and Janitorial Supplies & Equipment – with the last one expected to grow at a rapid pace. The company is currently in the final stages of developing a fifth category – Professional Services – which will pinpoint greater sales possibilities as it expands into an “unlimited number of office services”. This is an extension of its existing Services portfolio for which the dealer has partnered with several companies that provide expertise in managed IT solutions. “It has already led to opportunities in areas such as account control, fax services, workflow and cloud-based software,” comments Miller. The OP industry may be going through exciting and tough times, but Miller is confident that Eakes will be a “bigger, better company because we are identifying opportunities and creating and executing plans to leverage them”. He concludes: “Change is happening at such a rapid pace that I can’t predict what the company will look like in the future. But this is what is so satisfying and exciting about being in our business right now.”

June 2019

L-R: Howard, Ron and Dan Eakes

However, one aspect that remains constant is what Miller refers to as the “touch”: “Our people across every division understand that what sets us apart is the fact we make the experience of shopping for these commodities better. The nationals can’t do this as well as we can. We must always understand and preserve that.” Unsurprisingly, Miller is a huge advocate of the independent dealer channel (IDC), and while he expresses some concerns around the acquisition of dealers by the big boxes, he still believes that there is room left in the IDC for strong independents in the times ahead. Future-proofing the IDC, according to Miller, requires smart people with a vested interest in the unified success of the dealer channel working together to identify issues and execute plans to tackle them. Continued consolidation of the industry as a whole is a prime example, as is the pending dealer group merger between Pinnacle, TriMega and Independent Suppliers Group. Eakes was one of the founding members of Pinnacle. Miller is proud of the organisation it had become and hugely supportive now of its efforts to help make the merger happen. In fact, he adds that the coming together was critical in order for the IDC to maintain its relevancy. “As one of the many IDC leaders who took a run at getting the three groups together over the years, we all knew it needed to happen. There were a number of hurdles to overcome, but now it appears it will happen this time, so kudos to all those involved.”

SPOTLIGHT Eakes Office Solutions

ler

CUSTOMER SERVICE Founded by typewriter repairman Howard Eakes 74 years ago, his two sons Dan and Ron took over the running of Eakes in the 1980s and 1990s, with Miller at the helm since 2000. During this time, the dealer has weathered many different storms and emerged on the other side stronger each time. Part of its success revolves around a combination of nurturing new product categories and having a razor-sharp customer focus. Miller was recently reminded by Dan Eakes – who remains an active board member and company shareholder – that, having watched many competitors come and go over the past 40+ years, the industry can seem quite unbeatable from the outset. But, in Dan’s words: “If we take care of our customers, work hard, employ great people and look after them, and take steps to control and address outside threats, we set ourselves up to come out ahead.”

CATEGORY UPDATE

The visual communications sector remains an OP success story, with vendors in this category being particularly positive – by David Holes

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urging revenues in the visual communications (viscom) category show no signs of abating, with some of the sector’s largest players reporting strong demand and delivering bullish forecasts. “2018 was a record year for us as a company,” says John D’Agostino, COO at GMi Companies in the US. “We saw double-digit growth across our entire business. 2019 has started strongly too, and in a traditionally slow part of the year we’re continuing to break records.” A similar narrative emerges from Bi-silque’s core European markets of the UK, Germany and France. “The visual communications market is still going strong – we have been growing in the double digits each year over the past decade,” comments European Sales Director Danny Berendsen. “We foresee further growth of this market in the next ten years as demand

for communication and collaboration solutions in and beyond the office space is still increasing. The viscom category contains predominantly high-ticket items with healthy margins; sectors like these are needed to counter the price pressure in bread-and-butter categories such as paper, ink and toner.” Far from it being just a US and European success story, Simon Larard, Visual Communications Product Marketing Director at ACCO Brands EMEA, refers to steady organic growth in the viscom market throughout Europe, the Middle East and Africa, adding: “Our brands, led by Nobo, have seen very healthy sales development across the whole EMEA region and we see this positive momentum continuing.” GMi’s Ghent glassboard collection

VERTICAL TAKE-OFF Vendors in this sector cite a burgeoning need for viscom products across a wide range of different verticals as one of the key drivers behind the continuing success in this category. Bi-silque, for instance, employs a strategy with the tagline ‘Beyond Office Supplies’ and with this is taking products to businesses outside its regular market. “Communication is required in every workplace, not just the traditional office environment,” says the company’s Marketing Director Joaquim Damas. “This includes the warehouse, production facilities, restaurants, schools or even just a home office. Therefore, we have developed a full range of differentiated product solutions for each vertical which are adapted to the specific needs within these different environments. For example, to cater for the hospitality market, we have created a full range of blackboards with rustic wooden frames,

MATERIAL CHANGE In terms of materials used, demand for glass has never been greater, according to GMi’s D’Agostino. That said, cost can be an issue and where an all-glass product doesn’t fit the budget of the project, it’s vital to have a range of alternative solutions. He adds: “As a US manufacturer, we

The viscom category contains predominantly high-ticket items with healthy margins; sectors like these are needed to counter the price pressure in bread-and-butter categories

Part of Bi-silque’s range (l-r): the Rustic Board and the Industrial Ultrabrite Revolver Whiteboard

can tailor our offering to meet specific demands in terms of size, colour and applications, while technological investments allow us to provide far more customisation than we’ve been capable of historically. The market is responding positively.” Ongoing research into evolving customer preferences is vital. As Bi-silque’s Damas comments: “Previously, there were just three

main surface types for whiteboards: melamine, lacquered steel and ceramic. Now we are launching the fourth – a 0.25 mm glass layer over a lacquered steel base – it has the benefits of a glass board, but without the weight issues. We’ve also developed a new type of dry-wipe marker which has special ink that is far easier to erase than the standard equivalent.” HEALTHY OFFICE, HEALTHY PLANET Consumer trends around issues such as employee wellness and sustainability are sweeping all sectors of the OP industry, so it’s no surprise to find them having a big impact on viscom too. “Health and wellness initiatives are very hot topics right now,” says Scott Bowers, Director of Product at GMi Companies. “Not only are employers looking for ways to ensure their employees remain safe and healthy at work, they are also scrutinising the composition of the products they select for their interiors, with a view to the impact they’re going to have both within the office space and the wider global environment. That’s why we’re continually looking at the materials we use to make sure they’re sustainable by, for example, using water-based paints on our glass boards because they are less polluting to air and water resources.” Bi-silque’s range of Earth products, meanwhile, boasts cradle-to-cradle (C2C) sustainability certification. “It’s our fastest-growing global product line and the most comprehensive eco-range in the viscom market,” says Damas. “The C2C certification assesses the amount of recycled content used and the recyclability of each component. It additionally requires a study of the components’ chemical composition to ensure that when they break down, no harmful substances are released into the environment. An appraisal of the amount of renewable energy and water stewardship used in the manufacturing process, together with an employee and wider societal impact assessment, are also required.”

CATEGORY UPDATE Viscom

while for the industrial market there are suitably robust, mobile and versatile viscom solutions, all displaying the high-visibility characteristics required in these locations.” Larard also cites the industrial sector as the source of some key opportunities. Changes in the way consumers use viscom products have been a significant driver behind ACCO’s drive to diversify its product range and tap into this new demand, he says, adding: “Our recently launched line of Nobo boards and easels, featuring widescreen formats for optimal viewing and much slimmer 6 mm frames, brings the range into the 21st century. While they will appeal to consumers in traditional office areas, they will also not look out of place in any modern and tech-driven environment alongside digital displays and TVs. “Other important verticals in which we’ve identified market opportunities include the commercial training and creative sectors, where viscom users are looking for products designed to work with techniques such as ‘scrum’ and ‘agile’ project development.”

SALES AND MARKETING METHODS There’s no doubt that the shift away from traditional office spaces to a more open plan concept is affecting the types of products being requested in this category. “We continually hear from people

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Viscom CATEGORY UPDATE

who are looking for ways to divide an office space and create huddle zones or semi-private meeting spaces using our products,” says Susan Claus, Senior Marketing Manager at GMi Companies. “Viscom products are becoming central design features and resellers need to focus on using technology to showcase how products will look without having to present them in an actual, physical space.” On the vendor side, Bi-silque has found email marketing and online media advertising much more effective than other communication channels in this sector. Essentially, it’s because this is a mature market that values expertise and the manufacturer finds these channels are the best way to deliver that message. A complete range of viscom solutions, with sub-categories offering both value and premium items, is also part of its strategy as it offers the opportunity to upsell to higher-ticket items with better specifications and improved quality. “It’s vital to provide the end user with all the tools needed to make the right choice to solve a problem,” says Damas. “We provide clear

infographics that explain the differences between surfaces, icons that enhance product specifications and multiple detail and lifestyle images showing how the product looks from all angles. This approach is crucial in this category.” Larard believes that in the past there has been a tendency to dismiss viscom products as more functional than stylish. However, new designs and materials now offer vendors the chance to break away from this stereotype and help resellers move beyond traditional OP buyers and appeal to key decision-makers across a range of different markets. Consequently, he sees a bright future for this category, adding: “Technological developments such as interactive boards and displays were once seen as potential threats to traditional viscom products. But this has been proven wrong and there’s a general acceptance that products such as dry-erase boards and flipchart easels will continue to have a place in modern working environments, sitting comfortably alongside the new tech-based items. The fundamental and intuitive need to write and draw continues.”

ACCO Brands’ Nobo Classic Nano Clean Mobile Easel

THE RISE AND RISE OF DIGITAL SIGNAGE OPI spoke to Richard Glückman, CEO of Sweden-based technology solutions provider Evoko, about the viscom sector and the rise of digital signage in the workplace.

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OPI: How has the viscom market evolved for your company? Richard Glückman: Evoko has experienced strong growth ever since we entered this market in 2009, but over the past six months we’ve seen our sales growing faster than ever on the back of continued demand for technology in this sector and for digital signage in particular. More and more entrants are coming into it, small start-ups as well as large established players that are broadening their product portfolios into adjacent areas. We’re ahead of the game thanks to our experience in the category; we know what works both from a usability perspective and in terms of integrating the technology into the IT infrastructure. We focus on providing fast, specialised support which is highly appreciated by our end users.

OPI: What are the most important aspects companies should focus on when looking for a digital viscom solution? RG: We’re constantly surrounded by screens in our daily lives and, regardless of what’s being displayed on them, they tend to fade into the noise and go unnoticed. To make sure the information displayed has a genuine effect, facilities, HR and marketing managers need to look for display mechanisms that stand out from the crowd, are eye-catching and which command the attention of people in their vicinity. Our Evoko Pusco is a product receiving considerable attention in the viscom sector at the moment. It represents state-of-the-art digital signage and we brought it to market

to enhance public space communications. It’s designed for use in entrance lobbies of buildings, for example. The idea behind it is to make sure staff get updated quickly on the latest information, building a sense of context and belonging while strengthening the company culture and image. Pusco also aims to have an impact on visitors, welcoming them as guests, guiding them to relevant meeting rooms and enhancing a company’s brand. OPI: How are changes in the way we work influencing the need for solutions like this? RG: Trends such as remote and flexible working, particularly in the Nordic countries, the Netherlands and the UK, are changing the role of the office. For example, we expect to see half of the UK workforce working remotely by 2020. We as a company are focused on developing the right technology needed to support this shift and ensure communication and collaboration don’t suffer. Crucially, any product must be easy and intuitive to use and take into account both the needs of the organisation and its staff. If we can achieve this, despite employees spending more time away from the workplace, the office space will maintain its relevance as a social entity where they meet, interact and share information in the most natural way possible.

Richard Glückman, CEO, Evoko

Evoko’s Pusco digital signage product

CATEGORY UPDATE Conventional wisdom has it that the traditional OP sector is a contracting market. But poke beneath the surface and you’ll find it’s not all doom and gloom – by David Holes

Core

STRENGTH G

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oogle ‘traditional OP market’ and it will throw up some worrying hits – ‘declining sector’, ‘companies spending less and less’ and ‘sales slump’ are typical phrases seen – and you would be forgiven for thinking this was a category in terminal decline. But dig beneath the headlines and you will discover some significant success stories, with both suppliers and resellers still finding ways to make core office products work for them. Indeed, The State of the OP Industry 2018-19 report, recently researched and published by Martin Wilde Associates in association with OPI (see Research, OPI May 2019, page 44), indicates that, to paraphrase Mark Twain, reports of the death of this sector have been grossly exaggerated. Research conducted across the US, Canada, Australia and several key European countries showed that while overall demand for traditional OP is steady at best, 67% of respondents reported a rise in overall sales in 2018 and were even more positive about their prospects for the year ahead, with 81% predicting a further increase.

A BROAD OVERVIEW In the US specifically, it’s a rather mixed picture. While there’s a general consensus that the value of the core OP market has declined over the past 12 months, some operators think the worst is over. One multichannel distributor said in the report: “Five years ago, we were all saying, ‘better sell something else, this business is declining because of digitisation’. But I think we’ve now hit the bottom, the economy is robust and we’re growing again.” In the UK, stationery and office supplies High Street chain Ryman is a noticeable core OP success story despite the many challenges in the retail space. Kypros Kyprianou, Group CEO of Ryman’s parent company Theo Paphitis Retail Group, reveals that a focus on manufacturer

brands is key to its strategy: “This is where we feel the value-add is. While it’s tempting to build an own-brand range – and it’s appropriate in certain elements of office supplies – you can’t replicate the quality of the best brands in this sector. A few years ago, I was nervous about our industry. I didn’t see the innovation I thought was needed, but that’s changed. Vendors have really put their minds to it and are now introducing new products which keeps our customers interested.” (See also Big Interview, OPI May 2019, page 16).

Key to mitigating the overall decline in core OP sales is knowing what your customers want and ensuring product ranges answer a specific consumer need Fellow retailer WH Smith has had a lot of bad press recently – including being voted the worst retailer on the UK High Street in a 2018 survey of more than 10,000 consumers. But traditional OP sits right at the heart of its business and represents some positive news for the company. In the six months ended 28 February 2019, comparable stationery sales, for example, grew by 2%, outperforming other product segments. WH Smith describes this product area as its most attractive and highest-growth category, with Group CEO Stephen Clarke saying: “It now generates around half our High Street sales and 60% of store contribution. This market remains robust.” The category additionally benefits from WH Smith’s commercial agreement with the Post Office, with more than 200 outlets expected to be operating in WH Smith stores by the end of this year. Cross the Atlantic to South America and reports from Brazilian traditional OP manufacturer Acrimet

“Key to mitigating the overall decline in core OP sales is knowing what your customers want and ensuring product ranges answer a specific consumer need.”

CATEGORY UPDATE Traditional OP

show that it is also optimistic: “The election of a new President has brought increased confidence and the economy continues to improve,” reports Export Manager Jaime Nascimento. “Price pressure from fierce competition is intense, but our brand is performing well, helped by a reputation for quality and longevity – criteria people are prepared to pay for. Interestingly, we still see in-store sales leading the market, though we are looking closely at how online shopping and associated digital tools are influencing the way consumers choose their purchases.” One of the biggest news stories from this category is that French supplier of traditional office products Exacompta Clairefontaine looks likely to acquire Switzerland-based filing manufacturer Biella, a move overwhelmingly supported by its shareholders. Barring any unforeseen issues, the acquisition should close soon. The UK side of the business, known as ExaClair, has grown by over 6% in the past year, with strong 2019 sales increases in books and pads (27%), fine arts products (12.6%) and filing (3%). Marketing Manager Clement Rouillard attributes this growth to the company’s philosophy of branching out into new markets. “Our new Exacompta Lean Management range is a perfect example,” he says. “It features products that help businesses minimise waste while increasing productivity. It includes magnetic wall planners, team-assigned ‘to do’ lists, as well complementary display pockets and wall sorters. The range provides project management and forward-planning tools that help streamline processes and communicate progress to all stakeholders. With global millennial spending power estimated at $2.4 trillion annually, this generation now represents a powerful consumer collective pushing for change. Manufacturers and resellers are naturally targeting this cohort which, research shows, tends to ‘buy less, but buy better’ and is keen to choose products and services that make a difference. ExaClair sees this audience as a crucial market and is continuing to build its brand among social media communities. It now has over 100,000 followers worldwide. “We’re using trends popular with this age group – such as colour, productivity and the environment – to grab users’ attention and help tell our brand stories,” says Rouillard.

TRENDS AND INNOVATION At the end of April, the annual Stationery Show London showcased all that is new in the core OP category, featuring a huge selection of writing and paper products from around the world. The event also included presentations, workshops and hands-on sessions, put together with retailers in mind, and a heavy emphasis on trend analysis for 2019 and beyond. Phil Pond of forecasters Scarlet Opus revealed that for Christmas 2019, for instance, the theme will revolve around a return to the ‘Roaring 20s’ of 100 years ago. Products that are forward-thinking, yet maintain a traditional feel with a focus on quality, will do particularly well as consumers buy into the feel and fashion of this era over the festive season. Dark woods such as walnut, and metals including brass and blue steel, will feature heavily, with Art Deco styling particularly prominent across a wide range of products. Anything that can evoke feelings of a vintage, bygone era and first-class travel will be in demand, according to Pond, with ‘gentleman’s gifting’ around organisational products likely to be a big seller. Glamour and class are the key buzzwords, with a colour palette of rich blues and burnt umbers coupled with materials such as smoked glass, velvets and fine leathers particularly in vogue. Manufacturers and retailers that can ride this seasonal wave, will reap the rewards, Pond assured the audience. ASIAN INFLUENCES Further ahead, trends as we enter the next decade are likely to be heavily influenced by upcoming events such as next year’s Tokyo Summer Olympics and then, in 2022, the Winter Olympics in Beijing. This media focus on Asia and Japan in particular will introduce the Japanese concept of ‘Satori’ – a yearning for simpler, more natural products – to a global audience and will have a huge influence on design and colour palettes in the next few years. Products that can embody a sense of “calmness, grace and composure while symbolising integrity” will play into this trend, said Pond. “A sense of the analogue to counter our

Below: Stationery Show London where visitors checked out the latest products (l) and Phil Pond gazed into the future (r)

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Traditional OP CATEGORY UPDATE

digital world, with less clutter and more space will be increasingly popular. Hand-crafted items in deep, indigo blues, ‘Koi carp’ reds and with motifs featuring cherry blossom, Japanese ‘raked gravel garden’ patterns and flying cranes – symbolising longevity and happiness – will be huge.” ENVIRONMENTAL FOCUS Other trends referred to as ‘Fellowship’ and the ‘Game Changer’ will be driven by ecological concerns and a desire to harness the collective power of humanity to create a better, fully-sustainable world. But Pond sounded a word of caution to any manufacturer hoping to pull the wool over the eyes of the consumer: “100% sustainability will be the only acceptable measure; a product claiming only 80% is effectively admitting that a fifth of its manufacturing process is harming the environment. Any attempt at greenwashing will be exposed and face a consumer backlash. Be transparent with your customers, admit your failings if they exist and promise to do better – but never lie.” Products made from waste or from plastics recovered from the ocean will be particularly sought after, even if they are more expensive than items made from new materials – research shows that many consumers are now willing to pay the extra. Companies pledging to donate a percentage of their sales revenues (not just their profits) to environmental causes will also benefit from an upsurge in consumer goodwill. Packaging and even the materials used for display purposes

in stores will be scrutinised for their eco-credibility, with the concept of the ‘zero-waste office’ ever more important in the minds of buyers. ExaClair’s Forever recycled polypropylene products made entirely from plastic bottles are firmly in line with this trend. The range includes ring binders, dividers, display books, desktop accessories, pen pots, magazine files, bins, letter trays and desktop drawers. “Sales of these items were up 15% in 2018 and projections for this year are for a further 20-30% rise,” says Rouillard. “At all our recent exhibitions, this is the range that’s drumming up the most interest and enquiries. With heightened focus on the environment and climate change, it’s unsurprising that consumers scrutinise manufacturers ever more closely with regards to eco-friendly products.” A section of the exhibition was used for a comprehensive display that showcased the types of products epitomising these themes and giving visitors a preview of how OP design is likely to evolve over the next few years.

ExaClair’s Forever products made from plastic bottles

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ALSO FROM THE STATIONERY SHOW…

In an expo packed with interesting new products and ideas, some concepts and ideas stood out at the Stationery Show London. The LaunchPad zone, for example, introduced 30 new suppliers to the stationery industry that have a new product or service they would like to launch in the market. Award winners from this sector included Bloom Your Message, a Dutch company that produces ‘growing’ greeting cards and pencils made from recycled materials. They have plant seeds embedded in them and, once finished with, can be planted in soil to create a range of flowers, herbs or vegetables. This is the type of product that’s perfectly in tune with the ‘Game Changer’ theme mentioned previously. In addition, in an informative presentation by Rebecca Saunders, an independent consultant for retail and e-commerce, she set out her top five tips for retailers operating in this sector.

‘Growing’ cards from Dutch company Bloom Your Message

1. Being ‘of the moment’ in a way that’s relevant to your customer base is vital – use materials that are on trend and tune into the zeitgeist currently prevalent. For example, veganism is currently very fashionable – could you align your product offering to encompass this? 2. ‘Storytelling’ your product or brand can bring it alive – explain the thought processes behind individual items and show how you’ve brought them to market. Images of people actually using your products will help too. 3. Use impactful visuals that will literally stop customers in their tracks. This applies equally to the retail store environment or online as shoppers browse through your website pages. 4. Inspire and educate your client base. Teach them something they didn’t know or help them learn a new skill. Classes and events held in stores are ideal for this and it’s something the big online giants – such as Amazon – simply cannot do. 5. Think about collaboration with your ‘frenemies’ – synergies and economies of scale could benefit all. For example, UK retailer Next now combines outlets from Costa Coffee, Clarks shoes and other business within its stores.

HOW TO...

Attract

THE RIGHT TALENT Does your workforce reflect the demographics of modern society? Many businesses would certainly benefit from broadening their outlook, says Gordon Christiansen in part one of our How to… guide to recruiting and retaining talent

get it, we all have businesses to run – products to sell, margins to manage, customers to keep happy. It’s hard to juggle these tasks and at the same time think about how to best attract talent to your company. However, it could be argued that attracting people, especially the right people, to your business, should be a priority. Take a look at the cartoon strip on the next page. If it makes you smile, great. If it makes you grimace, even better. If you’re thinking, “I feel this guy’s pain”, then you’re probably a woman. In my experience, ‘casual’ and mostly unintentional sexism and racism are highly detrimental to your ability to recruit and retain talent. Just because we’ve done things the same way for

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Source: Cloverpop

the past 50 years doesn’t mean they’re right for today. In fact, they were never right, but all too frequently practiced and accepted. In my years of playing sport, I always felt that the best teams were a microcosm of society. This is true in business too. Does your company’s gender and race profile match the general population? According to the US Census Bureau, 62% of the US population identify as White, 17% as Hispanic, 13% as Black and 5% as Asian. Females represent 50.8% of the population and account for a higher percentage of college graduates. It follows that to maximise your opportunity to recruit the talent your company needs, you should look attractive to people of many cultural and ethnic backgrounds, as well as men and women. Does this sound like the business supplies industry we’re currently working in? Not remotely. All I would say is: too male, too pale and too stale. As ever, exceptions prove the rule, but for now, they remain just that – exceptions. DIVERSITY = CREATIVITY In a cognitive intelligence study carried out by MIT engineers, researchers observed that successful teams had three things in common: they gave each other roughly equal time to talk; they were sensitive towards each other (even in awkward situations); and they included more women. In other words, having different types of people on the same team can help others look at problems more carefully while also being more innovative, creative and inclusive about their solutions. That alone is a great reason to make your business attractive to as wide an audience as possible. As a man of a certain age (baby boomer/ Gen X cusp), I sometimes cringe when I hear the

Gordon Christiansen is COO of Highlands, a sales and marketing agency based in Atlanta, US, and with offices in the UK and Canada. Christiansen doesn’t regard himself as a guru on the topic of recruitment, but as someone who is aware of the issues and keen to address them. He will be hosting a roundtable session on attracting and retaining young and diverse talent during the OPI European Forum which takes place in Berlin, Germany, from 5-7 June. For more information, visit www.opi.net/EF2019.

To maximise your opportunity to recruit the talent your company needs, you should look attractive to people of many cultural and ethnic backgrounds 1. Matchmaking According to the report, millennials begin job searches by matching their skills with complementary companies and organisations. 2. Company culture A culturally innovative environment is a big draw for millennials who often bristle at bureaucraticallyregimented or assembly line-styled processes.

Source: Highlands

3. Importance of causes A company’s charitable causes are important to potential job applicants. Research statistics show that 92% of employed millennials believe they’re contributing to a business that’s making a positive impact in the world. They also show that 87% feel encouraged to volunteer in their employer’s charitable work. 4. Positive environment Millennials increasingly blend work life with their outside-of-work friendships in social media and other outlets, therefore creating a collaborative office environment is key.

HOW TO... Recruitment

term millennials. Millennials want this, they want that, they’re different from the rest of us, we need to cater to their special demands – the list goes on. The reality is, however, that not only is this group of people now the largest demographic in terms of age, it’s also the fastest growing one, so it would be foolish to dismiss it. But it may be worthwhile challenging some myths. According to the Harvard Business Review, for example, ping-pong tables and free beer aren’t necessarily high on the list of requirements for millennials. Contrary to popular belief, this age group places little importance on a company encouraging creativity or being a fun, informal place to work in. In fact, baby boomers are slightly more likely than millennials and Gen Xers to say that creativity and fun are “extremely important” to them when applying for a job. Instead, our youngest workforce needs to be convinced why and how an organisation will help them to learn and grow, and further their careers. Achieve, an agency based in Florida, US, undertook research over four years and found that the following five factors matter the most to millennials when job hunting:

5. Show you care and reward Millennials come from all backgrounds and cultures. Employers that intend to hire from a wide demographic should be aware of, recognise and reward staff for work carried out which affects social causes in areas that matter to them. The overall reality is that if your talent pool is young and diverse, it will look at you in a different way to what you might expect and are used to. MAKE AN IMPRESSION Preparing your business to recruit young, bright people could mean you need to make changes internally and re-evaluate how you project yourself on your website and social media. Take a look at your company’s LinkedIn posts or rummage around your website: do you think this pool of talented and diverse people will find your business attractive? When they come for an interview and walk around your office, maybe meet some of your team, what impression will they be leaving with? This may not seem important, but it is. You may also wish to consider the culture you have within your business and the behaviour of your current teams. Are both compatible with the talent pool you seek? If not, contemplate making changes. After years of networking and attending events and conferences in our sector, my observation is this: it’s hard to find great people, especially considering we work in an industry that’s not considered ‘sexy’. OK, so maybe we can’t compete with Facebook, Amazon, Google and Apple for the brightest and the best. But there are a lot of smart and talented people out there looking for exciting new opportunities. Get your company ready and well-placed to attract this talent – it will pay off.

June 2019 41

EVENT

TOGETHER

stronger ABC PREVIEW

SP Richards reiterates its commitment to the independent dealer channel and the vendor community at this year’s Advantage Business Conference with poignant keynotes, focused seminars and, of course, the Business Solutions Expo

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t’s no surprise that the slogan for the 2019 SP Richards’ (SPR) Advantage Business Conference (ABC) is ‘Together Stronger’, as the US OP wholesaler serves up a schedule of events that reinforces its allegiance to the independent community. In the process, it hopes to provide delegates with the tools required to navigate the choppy waters of today’s business supplies industry. Held from 7-10 August at the Marriott Marquis San Diego Marina in California, the notion that working in partnership – vendors, wholesalers, dealers and customers – can make the industry and individual businesses stronger, features heavily throughout the ABC. After the welcome networking reception on 7 August, keynote speaker Jay Baer will kick off proceedings on the first full day of the event by tackling the subject of word of mouth influencers. How can dealers turn customers into walking billboards and their biggest fans, he will ask. A successful entrepreneur, author, and marketing and customer experience speaker and emcee, Baer is renowned for delivering inspiring, big thinking but real world guidance, and delegates are sure to come away with practical advice they can apply to their own businesses.

ABC OVERVIEW 7 August l Networking Reception 8 August l General Session & Keynote l Seminar Sessions 9 August l General Session l Business Solutions Expo & Prize Drawings l NAOPA l Evening Celebration

A FULL LINE-UP With four seminar sessions over the course of the day, the line-up is packed with speakers tackling important subjects across the sales and marketing spectrum. Following on from last year’s highly successful presentation on Amazon, NOPA CEO Mike Tucker is back at the ABC for ‘Chapter II’, where he will update delegates on the online giant’s latest growth initiatives – and how to combat them. Other seminars feature topics such as: utilising the KITS collaborator to increase furniture sales; generating powerful sales results; turning prospects into customers; and a guide to launching and sustaining a successful inside sales programme. SPR staff will also host a Facilities, Breakroom and Safety session as well as offer an online marketing guide for its digital marketing platform, CampaignAdvantageOne. Highlights for ABC 2019 will further include a talk by motivational speaker Rufus Stephens – sponsored by Office Products Women in Leadership – and a dealer panel moderated by Jennifer Schulman which will focus on marketing to the workplace of the future. With the conference hotel perfectly situated on the marina, ABC attendees have an opportunity

Now in their tenth year, the North American Office Products Awards (NAOPA) set the industry standard in the US and comprise a total of six Dealer and Vendor Awards. Organised by OPI in conjunction with SP Richards, all the winners will be revealed on 9 August, the final day of the 2019 Advantage Business Conference. Dealer Awards • Young Executive of the Year • Professional of the Year • Industry Achievement

Vendor Awards • Business Product of the Year • Innovation of the Year • People’s Choice

For more on the NAOPA, visit www.opi.net/naopa2019. The shortlist will be published this month on opi.net, followed by a comprehensive preview in the July/August issue of OPI.

to explore the eighth largest city in the US, for example visiting the famous Gaslamp Quarter at the end of the day one, just a short stroll from the event venue. For sports fans, there is the chance to take in a baseball game when the San Diego Padres take on the Colorado Rockies.

The Expo [...] will host over 200 of the industry’s biggest names in business supplies THE WINNERS CIRCLE Day two of the ABC will begin with the second General Session, followed by the Business Solutions Expo at the San Diego Convention Center. During the day, all the winners of the North American Office Products Awards (see ‘NAOPA 2019’ above for more information) will be revealed. The Expo, meanwhile, will host over 200 of the industry’s biggest names in business supplies,

EVENT Advantage Business Conference

NAOPA 2019

including HP Inc, 3M, ACCO Brands, Sanford, Fellowes Brands and HON, with all manufacturers showcasing their latest product offerings and innovations. The always popular prize drawings will take place at the end of the Expo, a chance for some lucky winners to walk (or ride) away with prizes that in the past have included products, cash, trips or, indeed, a Harley-Davidson. Celebrations will commence in earnest on the final evening, with SPR taking a trip down memory lane and highlighting the amazing cities that have hosted the ABC since 1999. It starts in Florida and criss-crosses the country taking in the sights of Washington DC, Nashville, Miami, Las Vegas, New Orleans, and several more. It will certainly be a night to remember and a fitting way to toast 21 years of the Advantage Business Conference. The ABC will not take place in 2020 as SPR cancelled plans to host the event after pledging support for the BSA and Industry Week which, for the moment, remains a work in progress.

June 2019 43

5 MINUTES WITH...

Frank Indenkämpen

CAREER Q&A Describe your current job. Managing Director of Novus Dahle. I am responsible for sales and marketing as well as product management.

Describe yourself in one sentence. A fair and focused team player who loves what he does – most of the time anyway. What’s your most prized possession? Something I don’t possess, but am allowed to take care of – my family. What is the hardest thing you’ve ever had to do? Recover from a major health issue that almost cost me my life. However, I like to focus on the positives that followed this terrible time. Your favourite gadget? I don’t really have gadgets. I only own useful things. That’s what I think anyway, but I’m sure my wife would disagree. Your favourite app and why? A variety of news apps. I like to stay informed! Where would you most like to visit and why? I love New York. If the world had a President, who would you vote for? I can’t think of anyone who would be fit for that job.

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What do you do in your spare time? I love reading, the movies and being outdoors with my wife and dogs. I also try to do some kind of exercise every day.

Frank Indenkämpen, Novus Dahle

If you could trade places with someone for a day, who would it be and why? I wouldn’t want to swap with anyone – I quite like being myself. What would be a good theme song for you and your life? The story and theme music of Rocky. What was your last online search for? A motorbike. What was the last gift you gave someone? A watch to one of my daughters. What’s your favourite food? Mediterranean cuisine. That said, there’s not much I don’t like!

Best moment in your career? When a new division we established turned out to be a very significant factor in the future development of the company. What do you like best about the OP industry? The office is a place where many ambitious plans are developed, created and turned into reality. I like the idea of making this process as comfortable and inspiring as possible with our products.

If you could change one thing about yourself, what would it be? I would like to be more patient. What’s humankind’s greatest invention? Technically – the wheel. Academically – philosophy and literature.

What personal item do you have on your desk? A little toy statue of Darth Vader. No comment as to why!

FINAL WORD

THE NEED TO RIDE

the technology wave

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uch has been written about the digital workforce and the trend towards mobility and flexible working. Much has also been written about the difficulties many traditional managers have embracing these trends and their reluctance, or inability, to modify their management styles and to trust remote workers to satisfactorily fulfill their responsibilities (see also ‘Digital transformation? A work in progress’, OPI April 2019, page 46). The trouble is, resisting these shifts is doomed to result in failure. The emerging workforce is far more inclined to work according to their preferences rather than those of old-school companies and their legacy managers. Consequently, employers that fail to embrace these changes will surely run out of staff and hand an advantage to their forward-thinking competitors which do. Underpinning the trend that staff don’t need to attend a central office in order to perform their responsibilities is technology, of course. These days, documents that used to be printed, then printed again and again after rounds of amendments, are never printed at all. They can be prepared at any time, and from anywhere, and then delivered electronically for collaboration and approvals. With digital filing cabinets accessible 24/7 from a web browser, the physical location of the individuals involved in the life of a document, from inception to multi-person approvals, has become irrelevant – the tether to the corporate office is gone. Eliminating that tether facilitates greater employee flexibility and productivity because the unproductive time that used to be spent on the daily commute is also gone.

FAR-REACHING IMPLICATIONS The implications of remote working reach far beyond the reduction of print volumes. The need for office equipment and even for actual space is decided by the expected utilisation of that equipment and space. If businesses miscalculate and don’t use the assets they committed to, their average cost will be greater than planned. As such, firms that encourage remote working will develop a significant competitive advantage over those that don’t. Less space not only means that the need for printing equipment and supplies is reduced, but also for desks and all the other items typically needed to operate an office. Furthermore, the throughput capacity needed for the remaining devices is lower which typically means they are less expensive to acquire in the first place.

PERFECT STORM All of these developments are coming together to create a perfect storm for traditional resellers as customers spend less on capital outlays as well as supplies needed to operate their business. In fact, they will have a strong bearing on how independent dealers fare in the coming years – they certainly will be selling fewer products. This scenario is accelerated by the fact that the rapid trend towards remote working results in the use of assets that have been paid for by someone else besides the business owner, such as the home office, Starbucks, etc. Furthermore, when remote workers need new equipment or supplies, chances are they will get reimbursed by their employer for the expense. However, two behavioural characteristics typically come into play: firstly, the purchase is left to the last minute; secondly, there is less perceived responsibility for obtaining the lowest cost possible when spending someone else’s money.

Ian Elliott, Founder/CEO, E&S Solutions

Last-minute [buying] decisions often play into the hands of operators like Amazon Resellers that continue to operate on legacy technology platforms and fail to recognise these shifts will have little chance to compete with those that do the opposite. Going back to buying behaviour, last-minute decisions often play into the hands of operators like Amazon (see Hot Topic, page 24), which perfectly leverage technology to deliver quickly while also providing low – sometimes the lowest – cost. To survive, resellers must provide a technology-based value proposition and offer products at competitive prices which are properly sized to customers’ capacity needs – Special minimum order valuesIssue spring to mind. Orders must then be TECHNOLOGY delivered quickly to multiple SOLUTIONS locations under a technology umbrella that provides business owners with enough control over spending decisions which increasingly take place outside their direct control. Look out for the July/August issue of OPI where Ian Elliott will explain how resellers can stay ahead of the curve and not be trumped every time by Amazon and the like.

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