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BIG INTERVIEW

Connecting the

Eric Joan, Groupe Hamelin

business products world

March 2020

US/China trade war

Special Issue HEALTH & WELL-BEING

SURVIVAL OF THE FITTEST?

Special Issue

VENDOR SPECIAL

Special Issue

INSIDE THIS ISSUE l

Special Issue HEALTH & WELL-BEING

Coronavirus concerns l Office Partners thinks big l ACCOâ&#x20AC;&#x2122;s balancing act l Brexit: transition time

Speciall Issue l Manufacturers making headlines l Vendors open up about resellers Paperworld: down but not out

VENDOR SPECIAL

WELL-BEING Special Issue HEALTH & WELL-BEING

Special Issue CONTENTS HEALTH & WELL-BEING 20 Opinion Brexit is “done”, but uncertainty remains during the transition period

38 Research Customer 4.0: who are they and how do we serve them?

Special Issue

VENDOR SPECIAL

40 Review: Paperworld Numbers were down, but Paperworld organisers were pleased with the 2020 event

Special Issue Special Issue

VENDOR SPECIAL

Big Interview: Eric Joan, Groupe Hamelin

An accomplished multitasker with his hands in many pies, Groupe Hamelin’s Eric Joan is a firm believer in the power of the company’s brands, using them to drive the vendor forward. Indeed, at a time when product diversification is a popular path to combat stagnant or declining sales, Joan continues to innovate from Hamelin’s core. In the process, he blends the traditional with the modern, thereby successfully leading the manufacturer through the transition that’s happening in our industry right now. VENDOR FOCUS: MAKING HEADLINES

14 Big Interview Despite a deep-rooted focus on its core offering, Groupe Hamelin’s Eric Joan is always on the lookout for innovative additions 22 Hot Topic Under the microscope: vendors’ thoughts on the dealer/reseller channel 26 Vendor Focus What are today’s vendors doing to future-proof their businesses? Take a look... 32 Feature Tom Schinkel explores the US trade war with China and its effects on our sector 36 Spotlight CEO Kim Berg talks about the importance of T3L’s new critical mass 42 Interview HP Inc’s Stephanie Dismore on being this year’s City of Hope Spirit of Life Honouree

REGULARS 5 Comment 6 News 44 5 minutes with... Mark Wilkinson 46 Final Word Matthias Schumacher

March 2020

In the once-a-year special issue, manufacturers of business supplies are given the opportunity to shine. For our Vendor Focus, it becomes an annual discussion within the OPI team about which companies to include and why. Taking into consideration many factors, this year’s choices prove beyond doubt that a strategic focus, innovation and, crucially, sustainability are key to not just surviving but thriving. In today’s business climate, it is also imperative to get the next generation on board, not only as future OP purchasers, but for our own recruitment purposes to maintain the relevancy and development of the sector.

VENDOR SPECIAL

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

Earning their stripes

arch is our Vendor Special issue, the edition of OPI where we focus on the companies that shape our industry with the products they make. Once upon a time, these manufacturers would have all fallen under the umbrella of ‘traditional office products’. Not anymore. The net has long been cast much wider. Perhaps the two most crucial reasons for this are: a) demand for ‘core’ OP is diminishing, so manufacturers have no choice but to broaden their horizons and expand beyond that core; and b) end users in the workplace are demanding a superior and more comprehensive range and resellers in our space – also in an effort to survive and thrive – had better step up and offer what they want. If they don’t, somebody else will. For more on ‘Customer 4.0’, take a look at our Research feature (page 38).

[Fellowes and HP] epitomise what’s happening in our industry – constant and relentless change But back to the manufacturers. If you take a look at our Vendor Focus where we shine a light on players that are doing a great job in future-proofing their businesses (see page 26), most names are familiar. Many are from the very traditional OP space, while others are ‘outsiders’, typically from the jan/san, tech and imaging supplies sectors. Only two vendors have been featured in every single Vendor Special issue since its inception: HP and Fellowes. These companies epitomise what’s happening in our industry – constant and relentless change. Not only are they evolving with it, they’re driving some of that change. Another operator doing the same is our Big Interview vendor this month, Groupe Hamelin (see page 14). This is a firm that successfully innovates, but very much from within its traditional category. As CEO Eric Joan says: “I am extremely cautious about veering too far from our core [...] I believe Hamelin has a duty to really bring innovation into this market – it’s what our reseller and distributor partners expect.” It’s this need for more collaboration that is also highlighted in these pages. In our Hot Topic (page 22), for example, Michelle Sturman investigates the relationships between vendors and resellers while tesa’s Matthias Schumacher urges the industry as a whole to create better networking opportunities that facilitate the sharing of ideas to address today’s challenges (page 46). Have a good month! HEIKE DIECKMANN, EDITOR

Connecting the

business products world

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March 2020

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NEWS

Analysis: An evolving situation

Source: Print-Rite

The coronavirus outbreak in China has had a minimal impact on business... so far

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Without doubt, the biggest global news story recently has been the outbreak and spread of COVID-19, a coronavirus which – at the time of writing – had resulted in almost 2,000 deaths and infected tens of thousands of people in China. Inside the country, travel restrictions have been imposed as the authorities try to limit the spread of the virus and there are reports of places being in a virtual lockdown situation. Obviously, this has affected the lives of millions of people living and working in China. David Gibbons, Director of Recycling Times Media, who lives in Zhuhai, provided a snapshot of the situation on social media. “It feels like we are living in post-apocalyptic times,” he wrote in early February. “Streets are totally empty of vehicles and people [and] all businesses, schools, factories, movie theatres, restaurants, shops and public events remain closed. It has to be seen to be believed.”

TAKING PRECAUTIONS A company that Gibbons knows well, aftermarket supplies manufacturer Print-Rite, is also located in Zhuhai, which is approximately 1,200 km (700 miles) from the coronavirus epicentre in the province of Hubei. The firm has been providing updates of the circumstances and given details of some of the measures it has been taking to prevent cross-infection among its employees. These have included measuring people’s body temperature when they arrive for work, specially located rubbish bins for the disposal of face masks, and regular disinfection of human touch points such as door handles and elevator buttons. “We will continue to serve you to the best of our abilities,” said Print-Rite in a statement. The longer-term impact of coronavirus on the business world remains to be seen and clearly depends on how the issue evolves in the coming weeks.

Short-term, there have been some high-profile developments: major technology show MWC 2020 that was scheduled to take place in Barcelona, Spain, at the end of February was cancelled at short notice; numerous airlines have stopped or reduced flights into China, hampering business travel; and companies have banned trips in and out of the country in line with recommendations made by national and international authorities and the World Health Organization. While Paperworld in Germany at the end of January was not noticeably affected by the coronavirus outbreak (see also Review, page 40), the virus was partially blamed for a drop in attendance at Ambiente, another show organised by Messe Frankfurt in mid-February. In China itself, all activity at the home of the China Import and Export Fair (Canton Fair) in Guangdong has been suspended until further notice. This raises serious questions about Phase 3 – which features office supplies – of the 2020 event which is due to start at the beginning of May. The impact on trade would probably have been more severe so far, had the initial coronavirus emergency not coincided with the Chinese New Year. As Interaction Managing Director Jan Van Belleghem – who oversees the Q-Connect brand – explained to OPI, it is customary to hold a higher level of inventory at this time of year to cover for the annual closure of factories and any potential disruption that may cause.

It feels like we are living in post-apocalyptic times

Source: David Gibbons

Therefore, the order by the Chinese government to keep factories shut until 10 February should not, in itself, have had a significant disruption on supply levels. How that plays out over time depends on whether the virus continues to spread. Many migrant workers in China were unable to go back to work on time, so ramp-up of production has been patchy, with those companies that employ a local workforce able to return to normal at a faster rate. There is also the question of bottlenecks up and down the supply chain. According to maritime consultancy Sea Intelligence, shipments out of China have been reduced by the equivalent of up to 350,000 containers per week and there has been a spike in the number of cancelled sailings. In its earnings conference call in mid-February, Newell Brands said it expected to take a 1% coronavirus-related hit to its top line in the first quarter – that’s approximately $20 million. The vendor is currently assuming that this decline is temporary and will be limited to Q1. Of course, in circumstances such as these, there is a silver lining for some. Supplier AF International – which manufacturers a range of antiseptic wipes and rubs – told OPI that it had been seeing a significant uptick in order patterns as consumers are taking extra precautions.

US business products dealer group Office Partners has announced the development of a direct-buy programme for larger dealers. The initiative – which is called OP Direct – has come about as a result of what the group says have been numerous enquiries from larger independent dealers over the past few months. The first dealer on the programme is Hawaii-based HSC Office Products (formerly Hawaii Stationery). “During our 22-year history, we have supported resellers as large as $200 million in revenue as well as small to medium-sized independent dealers,” said Office Partners President Matthew Hebert. MyOfficeProducts (MYOP), bought by Staples in 2018 and now part of its Business Advantage delivery organisation, was historically Office Partners’ largest member. Speaking to OPI, Hebert said the relationship with MYOP had been built on a straightforward, ‘keep-it-simple’ way of doing business and that it would be no different with this new initiative. “OP Direct dealers are part of the Office Partners family, and they will be treated the same as all our other members. We put the programmes together and then basically let the dealers get on with their own thing – they like our hands-off approach,” he told OPI.

OP Direct dealers are part of the Office Partners family and they will be treated the same as all our other members Hebert also confirmed that services for OP Direct members are the same as those for the group’s other dealers – the differences relate to separate buying programmes that reflect the needs of resellers with bigger direct purchasing power. “We had to change round some of our programmes just like any other group for large dealers would do to accommodate those kinds of dealers,” he added.

Matthew Hebert

NEWS

Office Partners launches group for larger dealers

While Hebert said other large dealers were in talks with Office Partners about joining OP Direct, he isn’t setting targets or making an aggressive sales push within the dealer community. “With the combination [of Independent Suppliers Group and TriMega], we are pretty much the only other dealer group out there,” he noted. “If the new entity doesn’t suit some, then we are another option and I’m just a phone call away.” 2019 was a strong year for Office Partners in terms of dealer membership. Hebert referred to numbers growing by about 25 to currently stand at 110 members in total. However, he was quick to play down any suggestion that this was a result of dealers switching groups. “Most of these new members were not previously aligned to a group,” he affirmed. “They were just looking for a no-frills option and liked the fact that we treat all our members like family.” Although there has been talk of an Industry Week in the US later this year, Hebert confirmed – in 2020 at least – that Office Partners would be holding its own event in Tampa, Florida, in October. “We don’t do all the ‘extra’ stuff so we can keep expenses down for the manufacturers and dealers,” he stated. “We do what we have to do, and then get back to work.”

OPI opens industry recruitment service OPI has announced the launch of OPI Jobs, a dedicated area on the OPI website that enables employers and job-seeking candidates to connect easily and affordably. The new service ties in perfectly with OPI’s tagline and mission of ‘connecting the business products

Thanks to a successful pre-launch, there are already numerous exciting new opportunities advertised on the site from some of the world’s leading manufacturers and dealers. More details can be obtained by emailing jobs@opi.net or calling +44 20 7841 2950 (10 am-6 pm UK time, Mon-Fri).

March 2020

world’. The launch is being supported by an extensive awareness campaign that will reach tens of thousands of industry participants across OPI’s database contacts and social media channels. To register as an employer, hiring companies simply have to register on the jobs.opi.net website. For those seeking their next opportunity in the business products industry, registering online is free. Personal details will be stored securely and only be visible to dedicated job board personnel, and not be made available to OPI editorial or commercial staff.

for the business products world

NEWS

Special Is Analysis:

Inside ACCO’s FY results

Special Issue

VENDOR SPECIAL

Full-year results please Wall Street, as vendor’s share price makes double-digit leap

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ACCO Brands continues to navigate the bumpy road of office products with a certain aplomb and posted a positive set of yearly results in February. In fact, a fourth quarter earnings beat and a good earnings forecast sent its share price up by more than 10% on the day the results were published. Nevertheless, despite exceeding expectations, it was a case of a solid – rather than a stellar – quarter for ACCO. On a comparable basis – excluding last year’s Foroni acquisition in Brazil and currency translation – company revenue was down 1.3% and declined in all three reporting regions: North America, EMEA and International. Having said that, North America’s 1.3% drop was a significant improvement on last year’s Q4 decrease of 9.2%, while EMEA was down just 0.4%. It should be noted though that the signs of resilience in its two largest regions were due to the impact of higher pricing, with volumes declining and expecting to drop further in 2020. Earnings were also boosted by the timing of the Foroni acquisition – ACCO got the benefit of the Brazilian supplier’s all-important fourth quarter, which generates its best sales and profits in the run-up to the local back-to-school (BTS) season. Taking the year as a whole, the outstanding achievement in the annual results was the BTS performance in North America, especially in Q2 when comparable sales were up by more than 9%. This, and the 3.5% increase in the third quarter (which was also BTS-related), essentially ‘carried’ the rest of the year and indicate the importance of BTS for ACCO. It also helped the company’s overall full-year

Boris Elisman

VENDOR SPECIA

sales to grow by a comparable 0.8% – the best rate it has achieved in a decade. ACCO’s business in Australia, meanwhile, continues to face challenges. It appears that declines at Winc (formerly Staples Australia) have had a knock-on effect on ACCO down under and this has led to some restructuring actions at the manufacturer. The performance in 2020 is expected to be an improvement on 2019, but full-year sales are not predicted to climb. Elsewhere, in Europe, after benefitting from the uplift in shredder demand in 2018 – due to GDPR – ACCO’s EMEA unit did well to keep comparable sales flat last year. This was achieved as share gains were made in categories such as lever arch files, DIY tools and computer accessories. During the earnings conference call, ACCO CEO Boris Elisman highlighted the seasonal differences in the US between the BTS-weighted second and third quarters, and the first and fourth quarters which – for the manufacturer – are skewed towards its B2B customers. He made the distinction between “healthier” mass retail and e-commerce channels (calling out Walmart, Target and Amazon) that are important for school products and some “more challenged resellers” in the office space. By this, he presumably meant the superstores, having pointed out the “great job” independent resellers were doing and inroads made by Amazon on the business side.

How ACCO balances its office versus school offering and then develops adjacent or new categories is an interesting strategic question BALANCING ACT How ACCO balances its office versus school offering and then develops adjacent or new categories is an interesting strategic question for Elisman and his team. So far, the education sector has been less impacted by the paperless trend than B2B, although it is still heading in the same direction. That’s why the Foroni acquisition made sense. What will ACCO’s next move be? Elisman confirmed that acquisitions remained “core” to the company’s strategy, but – understandably – didn’t provide any specifics and said he didn’t know if there would be a transaction in 2020. “We are patient and prudent buyers [and] we want to make sure we don’t overpay,” he stated. Does the reference to overpaying suggest that ACCO has looked at potential targets, but not been happy with the price? Possibly. Last August, it was rumoured to be interested in smartphone accessories supplier Zagg, but things have been quiet on that front since then. Whether Zagg is the right fit or not is questionable, but an acquisition to bolster the Kensington technology side of the business would be consistent with the desire to diversify the product range – and would reduce ACCO’s dependency on paper-related products.

ECI CEO Ron Books has told OPI that an article in private equity publication PE Hub about a possible sale of a stake in the company is “only partially correct”. PE Hub wrote that ECI’s majority owner Apax Partners was looking to sell half of the company, quoting sources “familiar with the process”. The article said that ECI generated EBITDA of $111 million in 2019 and that Apax was looking to command a sale price which could value the software firm at as much as $2.5 billion. Books confirmed ECI had been approached by a number of private equity firms (“as we always are”) and that several high-level meetings had taken place. One outcome, he said, has been that some of those firms “have requested our owners consider a potential 50% deal”. He added: “Our owners have and will always consider any offers, especially based on the aggressiveness of the market right now.” However, he confirmed that ECI had not appointed an investment banker “at any point” and “nothing [was] imminent by any means”. Quite the opposite, he contended. “We haven’t even decided if we want to sell the business at all, let alone 50%.” While Books acknowledged that the parts of the PE Hub story relating to meeting with interested firms were true, he added that there were “many things in the article that are just wrong”. He concluded: “We are a private company so we don’t disclose financials, but once again I will reiterate that some of the data is inaccurate.” Apax acquired ECI in 2017, although former owner Ron Books Carlyle Group still holds a minority stake.

BOSS announces LOTF speakers

UK trade association BOSS has put together a strong speaker line-up for its Leaders of the Future (LOTF) conference later this month. The event – which will be held on 26 March at Stationers’ Hall in London – has quickly become a staple of the UK office products calendar. Hosted by BOSS Chairman and EO Group CEO Simon Drakeford, LOFT 2020 is going by the theme of ‘Disrupt or be Disrupted’. It will explore changes in the OP sector and help delegates understand what they and their companies need to do in order to survive. The day will feature a keynote ‘In Conversation’ session where OPI’s CEO Steve Hilleard – recipient of the BOSS Outstanding Achievement award last November – will interview Steve Horne, CEO of SPOT Group. Other presenters include Tom Dickinson, Sales Director at dealer OSI, Nicky Pattinson of Advanced Connection Expert, and business coach Mark Shayler. More information on the event can be found at lotf.bossfederation.com.

Fellowes makes senior EU operations appointment

US jan/san manufacturer GOJO responded swiftly to a warning letter from the US Food and Drug Administration (FDA) in January. The FDA sent a strongly worded letter to GOJO warning it over marketing claims on its website and social media channel that had been made about the health benefits of its Purell brand of hand sanitiser. The watchdog objected to assertions that use of Purell products were directly linked to reductions in student and teacher absenteeism and that they may be effective against viruses such as Ebola, norovirus and influenza. GOJO was told to take prompt steps to correct its “violations” under the threat of seizure and injunction. The company was quick to reply, revealing that it “took immediate action” to respond to the FDA’s claims. “Our intention has always been, and continues to be, to adhere to FDA guidance while advancing and sharing the latest hygiene science to help improve public health,” the company’s Corporate Communications Senior Director Samantha Williams said in a statement. “To that end, we have begun updating relevant website and other digital content as directed by the FDA and are taking steps to prevent a recurrence.” Williams added: “It is important to emphasise that the FDA letter was not related to the safety or quality of our products, or our manufacturing processes. Our products can and should continue to be used as part of good hand hygiene practice to reduce germs.”

March 2020

Fellowes Brands has appointed experienced financial professional James Hargreaves as its European Operations Director. Hargreaves started in his new job in January and joined the business products supplier from logistics giant DHL where he had spent more than 13 years. His most recent role included responsibility for a digital transformation project that delivered a live blockchain solution at DHL. At Fellowes, Hargreaves will be responsible for the company’s supply chain, distribution, quality and after-sales service teams. He has also joined the European leadership team and will play a key role in the development of Fellowes Europe. “[James’] knowledge and experience gained operating in a large global logistics company will be invaluable as we look to continue to build and expand our business in Europe while providing the best James possible service to our customers,” said Michel Van Hargreaves Beek, President of Fellowes Europe.

GOJO takes action after FDA letter

NEWS

ECI’s Books responds to article

NEWS

Expansion work begins at Böttcher Fast-growing online office supplies reseller Böttcher has revealed details of its new state-of-the-art distribution and office facility. The Germany-based company began construction work at the 80,000 sq m (800,000 sq ft) site in Zöllnitz near its Jena headquarters at the end of January. When it is fully operational in mid-2022, the distribution centre will consist of an automated, four-level warehouse with space for 30,000 pallets. There will also be an office complex that can accommodate 600 staff members. The reseller said its employees had played an active part in the design of the new workplace. The result will be a facility that corresponds to modern working practices and trends as Böttcher looks to attract high-calibre staff. It will include relaxation areas, an 800 sq m terrace, a roof garden, massage and fitness rooms and a children’s playroom. Böttcher is already planning a recruitment drive ahead of the phased opening of the new facility which is planned for the summer of 2021. It said job interviews will take place in the middle of this year as it looks to add staff in the areas of logistics, product management, e-commerce and software development. The company enjoyed another year of double-digit growth in 2019 as sales surged to around €430 million ($473 million).

Wayfair makes commercial furniture move

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Online furniture giant Wayfair has announced the launch of its first-ever commercial-use office line of products. Called Upper Square, the range includes almost 700 office-ready items of furniture and décor for businesses ranging from start-ups to large enterprises. The line is designed to accommodate a variety of workplace environments such as private offices, collaboration spaces, reception areas, kitchens and cafés. Upper Square is offered via Wayfair’s Professional division and is being pitched as “an affordable solution for businesses to create dynamic spaces for all workplace activities” in an era of agile and activity-based working. Wayfair Professional tends to fly under the radar in the company’s earnings presentations and the division’s numbers aren’t broken out. Overall, though, Wayfair has been growing its top line by between 30-40% over the past couple of years and has annual sales of around $9 billion – although it is still not profitable.

Consolidation activity for Victor Tech

North American business products manufacturer Victor Technology has acquired the assets of Officemate International. Officemate is a well-known OP provider of paper clips, binder clips, clip boards, letter trays and other office organisation products. Victor said the combination would leverage its core capabilities, relationships and infrastructure to enhance scale and relevancy in the business supplies channel. “The two companies have many common customers,” said Victor Technology CEO Jordan Feiger. “The Officemate product range is a great complement to Victor’s line-up of calculators, standing desk products, desk accessories and E-Z read rulers.” Following the transaction, Officemate’s long-time owners Peter and Sue Chen will retire. Officemate LLC, a new, wholly-owned subsidiary of Victor Technology, will continue operating out of Edison, New Jersey. Financial details of the acquisition were not disclosed.

Private equity buys Europel

European OP distributor Europel has been acquired by a Dutch investment firm called Findyour Equity Partners. Europel was founded by Peter Pelser in 1990 and distributes its own HF2 and OPUS brands as well as acting as a distributor for several international brands in the Benelux and wider European markets. The transaction means that Pelser will now retire from the business, but Commercial Director Peter de Vré is staying on and will be responsible for day-to-day sales operations. Findyour said it hoped to find synergies between Europel and another of its portfolio companies, hospitality products wholesaler Bentley. The private equity firm also said it expects to grow Europel both organically and via acquisitions.

NEWS

IN BRIEF Changes brewing at Unilever? Consumer brands conglomerate Unilever is conducting a strategic review of its tea portfolio, which includes household names such as PG Tips and Lipton. The company’s €3 billion ($3.3 billion) tea business has been hit by changing consumer preferences for herbal drinks.

Winc revives Corporate Express brand Australian reseller Winc has refreshed the Corporate Express brand as part of its private label strategy. The new product offering focuses on office essentials, and includes name-card accessories, lanyards, key holders, pens and calculators.

PICTURE OF THE MONTH As part of its drive to reduce carbon emissions in the UK capital, Lyreco is trialling a cargo delivery service in Central London with start-up Pedal Me.

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ducts Own brand pro ese Japan introduced by the reseller Askul in nt curre first half of the financial year

Interim President for UFIPA French office products trade association UFIPA has appointed Stabilo’s Christophe Le Boulicaut as interim President. He will remain in the role until a permanent successor – from the reseller channel – is elected in June this year.

$40 million Cost savings achieved by ACCO Brands in 2019 New boss at KCP Newell Brands exec Russ Torres has been named as President of Kimberly-Clark Professional (KCP). Torres will take over at KCP on 9 March. His appointment comes after former incumbent Aaron Powell was named President of the Kimberly-Clark Asia-Pacific consumer business at the beginning of January.

Canadian change for Schneider Writing instruments manufacturer Schneider has entered into an exclusive distribution agreement in Canada with Dominion Blueline. The Canadian firm is also the exclusive North American distributor of Letts of London and Filofax – the iconic stationery brands that are now owned by its President, Harolde Savoy.

$50,000 NOPA’s scholarship fund for the 2020/2021 academic year

More than 60% of purchasing managers and chief procurement officers are currently learning about artificial intelligence and machine learning, or are currently implementing the technologies Dave Brittain, Head of Amazon Business UK

Frixion pen wins consumer award Pilot’s FriXion Fineliner erasable marker pen claimed the top prize in the office supplies category at Product of the Year USA 2020, the country’s largest consumer-voted award for product innovation.

March 2020

OPWIL’s fundraising drive for COH The Office Products Women in Leadership (OPWIL) group is supporting City of Hope through a fantastic Kentucky Derby-themed raffle prize for a lucky winner. OPWIL has put together a package worth more than $2,000, including two grandstand tickets to see the big race on Saturday, 2 May 2020. Raffle tickets can be purchased for $100 each, with the prize draw taking place on 8 April. For more information, see https://opwil.com/education/.

Neenah names CEO Speciality paper manufacturer Neenah has promoted COO Julie Schertell to the role of CEO. She will take over from John O’Donnell who is retiring in May after nine years in the job.

NEWS

US stationery retailer to close down

Papyrus, the US-based speciality retail chain, is to close its more than 250 stores. The company – part of the Schurman Retail Group (SRG) – confirmed that all its 254 outlets would close over the next few weeks after rescue attempts failed. The closures will result in the loss of about 1,400 jobs. Papyrus was founded by Marcel and Margrit Schurman in 1950 as an importer and wholesaler of fine greeting cards and stationery. It opened its first store in Berkeley, California, in 1973 and by 2004 operated more than 100 shops. In 2009, SRG was formed with the acquisition of around 300 American Greetings shops, with many of these rebranding to Papyrus. The news that the chain will close comes a few months after arts and crafts retailer AC Moore said it was shutting its 145 outlets. In January, high-end audio products manufacturer Bose announced the closure of 119 stores in North America, Europe, Japan and Australia.

Interaction revamps packaging

European business products purchasing organisation Interaction has said that efforts to develop sustainable packaging for its products are going well. Speaking to OPI, Managing Director Jan Van Belleghem explained that the project to reduce the use of plastics in the packaging of the group’s Q-Connect brand was approximately halfway through. Changes have included replacing PVC wallets used for packs of pens with cardboard alternatives and eliminating plastic blister cards for scissors. Single-use plastic will also be reduced in a new line of repositionable notes that are made from recycled paper and are packed in cardboard boxes without any foil wrapping. Interestingly, the new packaging is proving to be no more expensive than previous versions. Much of it also has the added advantage of offering a larger printable surface for displaying product descriptions and marketing collateral. Van Belleghem said that manufacturing partners were being very cooperative in helping Interaction achieve its packaging goals. The initiative is part of a wider multi-year sustainability effort by Interaction. There is also a drive to achieve eco-certifications on as many Q-Connect products as possible. As well as having FSC- and PEFC-certified paper products, Van Belleghem stated that Interaction was the only distributor to have obtained the Nordic Swan label for some of its Q-Connect alkaline batteries.

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Big box declines weigh on SPR

Fourth quarter sales at business products wholesaler S.P. Richards (SPR) fell by more than 6% to $456.8 million. Speaking on the quarterly earnings conference call in February, Paul Donahue, CEO of SPR’s parent company Genuine Parts (GPC) said the decline was due to continuing softening demand for traditional office supplies and technology products, industry dynamics and lower sales to national accounts customers. On a positive note, the facilities, breakroom and safety (FBS) segment was up and now represents approximately 35% of SPR’s total sales. In a separate interview with OPI, SPR CEO Rick Toppin provided some more colour: “In addition to the positive growth in the FBS category, we also saw positive Q4 sales comps in the

independent dealer, the internet reseller and the jan/san distributor channels – all of which are important growth segments for us,” he noted. For the full year, SPR’s revenue of $1.88 billion represented a comparable decrease of 1.7%. Fourth quarter operating profit at the wholesaler fell by 46% to $14 million, while the full-year figure was $77.7 million, a year-on-year drop of 12.5%. Q4 2019 operating margin was 3.3% (Q4 2018: 5.7%) and full-year operating margin 4.1% (FY2018: 4.6%). GPC CFO Carol Yancey also confirmed an $82 million non-cash impairment charge at the Business Products Group in Q4. “Several factors that developed in the quarter, including greater uncertainty associated with the longer-term

industry trends as well as a competitive environment, led us to this decision,” she said during the conference call, adding that this “effectively eliminates the goodwill for this business segment”. In its 2020 outlook, GPC forecast a revenue decline at the wholesaler of between 1-2%, excluding the impact of the recent Garland C Norris and SPR Canada divestitures.

UK business supplies group Spicers-OfficeTeam (SPOT) is aiming to take its sustainability credentials to a new level after appointing a CSR Manager. Naheeda Howard joined the organisation at the beginning of the year in this new role. Reporting to Group Marketing Director Kelly de Silva, Howard has been tasked with creating an overarching strategic plan to deliver CSR across SPOT’s operations and supply chain. Naheeda Howard With more than ten years’ CSR and sustainability experience, Howard joined SPOT after providing consultancy services to Tesco where she focused on organisational change within its retail operations. Prior to this, she formed part of the senior management team at Global Action Plan, a charitable consultancy specialising in behavioural change. She also served as the Retail CSR lead for Argos and built her foundation in this field while working in the public sector. Howard has a solid grounding in social justice and sustainability issues, having obtained an MSc in Environment and Sustainable Development from the Development Planning Unit at University College London. She is also a Practitioner Member of the Institute of Environmental Management and Assessment.

Bureau Vallée expands outside France

NEWS

SPOT announces CSR appointment

France-based office and school supplies retail group Bureau Vallée has taken another step in its international expansion by acquiring Belgian office furniture and workplace design specialist Buro Market. Buro Market was founded in 1980 and has six retail outlets that act mainly as showrooms. It has annual sales of approximately €6.5 million ($7.2 million). The transaction – for which financial details were not disclosed – will take the number of Bureau Vallée outlets in Belgium to ten. The French firm also owns a Belgian fine arts retail store called Papel’Art. Bureau Vallée’s Director of International Development Bernard Cloquet told OPI that acquiring Buro Market represented a good opportunity to expand into the country’s cities such as Brussels, Gent, Liège and Antwerp. Having ten stores also means greater scale for marketing and communication efforts that, in turn, could enable Bureau Vallée to develop its core franchise business across the country. Cloquet said his team had identified five Buro Market outlets that will be rebranded with Bureau Vallée facias. However, he added that the locations will continue to include Buro Market workspace design areas and there are no plans to abandon the furniture/design offering on which Buro Market has built its reputation.

March 2020 13

BIG INTERVIEW

FOCUSED on the core

Special Issue

VENDOR SPECIAL

At a time when product diversification is a popular path to combat stagnant or declining sales, Groupe Hamelin’s Eric Joan chooses to innovate from the core, in the process marrying the traditional with the modern

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ith an educational background in engineering – an area he worked in for the first ten years of his career at material handling manufacturer MPR – Eric Joan joined the office products industry in 2001. At the time, Stéphane Hamelin ran the French business of family-owned manufacturer Groupe Hamelin. As Hamelin continued its European and global expansion, Joan’s responsibilities grew as well, from his role of France-based Managing Director to run the company’s worldwide books and pads business in 2005. A few years later, in 2009, he became group CEO of Hamelin’s entire business. While acknowledging and hanging on to its deep traditional roots, Joan’s core task is to lead this family operator through the major transformation that is happening in the business supplies industry right now. That, he tells OPI’s Heike Dieckmann, is challenging and exciting in equal measure, especially given that the pace of change has vastly accelerated. It’s a constant balancing act of always looking ahead, anticipating and reacting to major industry trends while, at the same time, dealing with the typical hands-on, day-to-day operational CEO duties. An accomplished multitasker with his hands in many pies, Joan is a firm believer in the power of the brands he represents, using them to drive the company forward.

OPI: Hamelin has been around for a very long time – about 155 years. As a quick recap for our readers, what have been the major milestones over those years? Eric Joan: As you know, the company was founded in 1864. It started as a small operation based in Caen, in the Normandy region of France, producing accounting books. It was a very local business and stayed like this for a long time. After the Second World War, Hamelin expanded into school exercise books. Again, it was a regional effort to start with. At the time, there were probably

20 manufacturers in France of exercise books, all small and local. It was the beginning of paper products being used in schools; beforehand, paper was extremely rare and expensive, and not readily used in the education sector. The next major step for Hamelin came in the 1990s. It was 1993 to be exact, when we made our first acquisition abroad, buying Enri in Spain. OPI: What about the 40+ intervening years? EJ: Hamelin developed and grew, but only in France. As I said, we started as a regional operator that, by the 1990s, had evolved into one of the biggest three or four manufacturers of exercise books in the country. A lot of consolidation happened in those 40 years and Hamelin benefitted from it. The other well-known name you know is Clairefontaine, of course, a company that still exists now and also hugely profited from consolidation in the market. OPI: Let’s go back to the start of your European expansion. Who was running the company when Hamelin bought Enri? EJ: Stéphane Hamelin was part of the fourth generation running the family business at the time. It took several years to turn that Spanish business around and it eventually became a success thanks to Stéphane’s perseverance.

BIG INTERVIEW Eric Joan

While we’re still owned by the Hamelin family, we have transitioned to a company that is non-family run Further acquisitions followed, with the next major milestone probably occurring in 1999 when we bought the Elba Bantex Group. It gave us a big foothold in the Central European market. Elba was a German company and Bantex Danish. Elba had gone bust a few years prior and was acquired by Bantex. The combined group got into more trouble which is when Hamelin bought it. Today, both entities are very strong brands which have given us an excellent base in Central and Northern Europe.

OPI: Just to reiterate – Hamelin is still family owned, is that correct? EJ: Yes, we are still family owned and very proud of it. In fact, I believe it’s part of our differentiation in the market. That said, while we’re still owned by the Hamelin family, we have transitioned to a company that is non-family run. I’m the CEO and Stéphane is currently the Chairman of the board. But further changes are imminent, whereby this spring we’re moving to a supervisory board structure. Stéphane will be the Chairman of that supervisory board while I will be the Chairman of the executive board.

March 2020

OPI: Another acquisition I remember is John Dickinson. It was when Spicers in the UK consolidated into a pure wholesaler and was looking to divest this manufacturing operation. EJ: Yes, that’s right. That was in 2005. John Dickinson was perhaps best known for the Black n’ Red brand. We’ve bought a lot of companies over the past 20 years and our success is as much due to organic growth as it is to our acquisitions.

OPI: Talking of brands, Hamelin is synonymous with some very well-known names, the most obvious one perhaps being Oxford. It’s not a Hamelin created brand though, is it? EJ: No. We bought into Laroche-Joubert, a manufacturer based in the south-west of France, in 1982. This was a big integrated group that manufactured paper and converted it into books, pads, envelopes, diaries and so on. But it went bankrupt and the various assets of the company were sold. We acquired the books and pads business and with that came the Oxford brand. We have owned that brand in France and in several other countries for many years. But we didn’t own the name in the UK until 2003.

Eric Joan BIG INTERVIEW

It’s another step to evolve from a group run by its owners to one run by professional managers. OPI: As a private company, you don’t have to tell me this, but what are your revenues? EJ: I can give you a vague revenue figure of €440 million ($486 million). OPI: Where is the geographical focus? EJ: It’s definitely Europe. We sell in a lot of countries around the world, but remain a very European-focused company. 95% of our sales are generated here. OPI: What about your manufacturing locations? EJ: We have ten manufacturing plants in total. About a decade ago there were more than 20, but we intensely consolidated our capacity. Our facilities are now much bigger, and they contain a very high degree of automation in the various processes. If you want to be successful today, you have to be extremely lean and efficient – having fewer units definitely helps with that efficiency. Most of our factories are in Europe, with two exceptions. We have a facility in Turkey and another one in Tunisia. OPI: Nothing in Asia or the US? EJ: No, nor in Australia. Hamelin had a facility in China for about ten years that we closed in 2019. The cost of manufacturing in China is extremely high now, compared to what it used to be. Also, the supply chain with China is very long and complicated. The market today demands short lead times, agility and a highly efficient supply chain and we weren’t getting any of these things from our plant in China. I would add that in the current context of the coronavirus epidemic, a lot of distributors are becoming very concerned about the potential disruption of their supply chain for the next back-to-school (BTS) season. Consumers are scared of the risk of contamination through the products coming from China. I am happy we made that decision last year.

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OPI: You’ve just mentioned Australia. You’ve been dipping in and out of that geography I believe, but are back in and have a pretty good brand recognition there… EJ: That’s right. Hamelin first went down under in 1999 when it bought the Elba Bantex Group and ‘inherited’ a company there as a result of it. But all the restructuring which followed that acquisition took place in Europe; it was incredibly complex and time-consuming, so we decided to divest the Australian business. It was just so far away and we couldn’t give it our proper attention. But in 2018, Hamelin had an opportunity to go back. It fitted our global growth strategy for our books and pads business, so we took the plunge.

OPI: And how is that going now? EJ: (laughs) It’s still very very far away. We introduced our Oxford products in the BTS season which has just finished in Australia. It’s gone really

well, especially through Officeworks which, as you know, is a big and dominant player in the market. Amazon is also slowly appearing on the scene and wholesaler GNS is beginning to focus more on the office supplies market. OPI: What about the US? That’s a pretty new market for you, isn’t it? EJ: It’s very new. Hamelin made its first foray into the US last year. We don’t manufacture there and essentially push products that are extremely different from anything that US consumers know. We’ve recently launched Hamelin as a brand in the US. The core products are notebooks. They have the same attributes as Oxford in Europe, but we don’t own the Oxford brand in the US, so used our corporate name instead as the brand. Hamelin is tiny compared to the big players in the country. But our value proposition is very different, so we’re hopeful we can successfully penetrate that market. OPI: Different in what way? EJ: In terms of quality. School exercise and notebooks is a category that is very commoditised in the US. Notebooks are typically made with 55-60 gsm paper, which means low quality whereby you can see the ink going through the paper, for example. We are entering the market with products that use high-quality, thick paper – 90 gsm – and with that quality comes a higher price point. The functionality of the products is also quite different and they all are compatible with our Scribzee app, so that’s another differentiator.

Hamelin had a facility in China for about ten years that we closed in 2019 [...] I am happy we made that decision OPI: Let’s talk some more about your brands. The name Oxford keeps coming up which, I believe, is the biggest and most recognisable one. But there is also Elba, Unilux, Scribzee... EJ: We have over 30 brands in our portfolio right now. But, as you say, Oxford is certainly the biggest and highest value one. We conducted a survey in December 2018 across Europe. About 15,000 people were interviewed about the brands they knew and used in the notepad, filing and diary categories. Oxford came out as the number one in terms of awareness and purchase penetration in the 11 countries we surveyed. It’s a key asset, no doubt, but there are other important brands in our range. You mentioned Unilux. That’s a brand we bought over 20 years ago which has very successfully penetrated the office segment with lighting products. OPI: Just one more question about Oxford. Have you seen a decline in sales for that brand because of the general decline in traditional paper-based office products? EJ: In short, no. First of all, the core of the notebook and pads market is still in education. This sector

has never been impacted as much as others by the digital revolution, certainly nowhere in Europe, but not even in the US to my knowledge which is ahead of us in terms of digital penetration. The use of paper-based products in education has never declined and I’m hopeful and confident it will stay that way. Our children are still learning to read and write using paper products. Yes, that’s changing too, but not fundamentally so. It’s different in the office, however. Here, the volume of paper-based products has definitely declined. But at the same time, their value has increased. When I joined Hamelin nearly 20 years ago, the key paper product for the office was a notepad that was glued or stapled. The core product was a basic pad with no cover – we made them in the millions at Hamelin. Today, the typical note-taking product in the business environment is very different. Take Moleskine as an example. What that company has achieved with a very traditional product is amazing. It’s created a brand new category at a very high price point around the same function – taking notes with a pen and paper. Oxford is not as highly priced as Moleskine, but we’ve also added lots of functionalities. By doing that, we’ve introduced products with higher purchase values, in the process offsetting any declines. Of course, there are other ways of taking notes nowadays, in a business setting as well as in the higher-age student environment. Tablets, laptops, smartphones – they are all there and are increasingly being used for the same tasks. Importantly, however, I don’t think one is replacing the other – they are all complementary and will remain so for a long time in my opinion.

OPI: Elba is another name we referred to earlier. I believe this is being changed to the Oxford brand for the next BTS season. Is that correct? EJ: It’s partially correct. What we are transitioning are all the B2C products under the Elba brand, so they are being rebranded to Oxford under our education umbrella. But we’re keeping the Elba name. It’s over 100 years old and an extremely strong brand of organisational and filing products in the B2B market, especially in Central and Northern Europe, so Hamelin is definitely continuing to develop this. It made complete sense for us to consolidate Elba with our Oxford products in the education segment though. OPI: You had another brand – Canson – which was sold in 2016 because it didn’t fit in with your core markets of education and the office sector. EJ: Canson was a nice company, one of the leading vendors in the fine arts business. But it had sales of €100 million in a segment that’s worth €20 billion, so it’s a tiny drop in the market. The fine arts business is also extremely fragmented. I just don’t think Hamelin could have been a successful player in that market without being much stronger and bigger, so we took the decision to divest Canson. OPI: Canson was something of an adjacent category for you. Do you feel there’s enough growth potential left in your core segments? EJ: Absolutely. We can still innovate in our existing categories and bring to the market products that are attractive and bring value to our reseller partners. Innovation has always been a key focus at Hamelin. Not all new products and ideas are successful, but you have to keep trying. At the Consumer Electronics Show (CES) in Las Vegas in January, for example, we launched our new flashcards with Scribzee functionality. Flash 2.0 is our first global product in the education sector. Flashcards are small paper cards where you typically write a question or notes on one side and the answers on the other. They are hugely popular with school children and university students. Scribzee, as you know, is our note management app, meaning the flashcards can be scanned and then used both in an analogue and digital format. So in addition to the physical, handwritten flashcards students can have their digital versions to hand all the time and easily revise on the bus, the train or whenever they have time in between lessons and lectures, etc.

March 2020

OPI: Going back to Unilux for a moment: several other players in our industry have got involved in the lighting category in the past few years by way of diversifying and making up for declines in other categories…

BIG INTERVIEW Eric Joan

EJ: They have. Thankfully, we have the first mover advantage here. The global market for lighting and desk lamps is huge, but distribution through the office supplies channel is actually very small. Hamelin has a sizeable market share of this segment which is fantastic. Unilux is doing well and we’re growing and expanding the brand around other desk and office organisation products such as coat racks and stands, coat hangers, clocks, even ergonomic footrests. We are planning to grow these categories and tap into the current well-being trends.

Eric Joan BIG INTERVIEW

The CES launch attracted a lot of attention and we were amazed at the positive reception we got. People often have this image of Hamelin being a low-tech company that was created in France over 150 years ago. And then we receive a prize at CES – the temple of the electronic gadget. OPI: What’s the target audience for this product? The higher education sector? EJ: It’s essentially all the students in the world. But as you typically use a smartphone with it, the core target market is probably students from the age of 14 to university graduates. OPI: It might not affect everyone in the same way, but the decline in sales of traditional office products categories can’t be denied, surely. EJ: Definitely. Digitisation has become a megatrend and the whole industry, from manufacturer and distributor to reseller, is affected. Everyone has to find a way through this rapid transformation. Some products are ‘safe’ and will always be needed, but many aren’t. Differentiation, constant innovation and a real effort to combine the analogue with the digital world are absolutely key. OPI: Universally recognised and reputable brands must be so important in that context. EJ: Yes, it’s going to become extremely difficult for pure commodity manufacturers to survive in this market. We see consolidation happening everywhere in Europe and indeed the wider world. OPI: Hamelin bought pro | office in 2017. That’s a pure private label manufacturer with a focus on Germany, Switzerland and the Czech Republic I believe. How’s that going? EJ: It’s going well. We have managed to turn this business around, which has not been easy, but pro | office was key for us in terms of our market position for the niche category of sheet protectors and presentation products. We already had a strong market share in parts of Europe for these products through the higher-end Elba brand, but pro | office has helped us to increase our coverage further. These are still very important items for school and office users.

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OPI: But isn’t pro | office exactly the kind of commodity product you’ve just referred to that will struggle in this increasingly digital world? EJ: And that’s exactly why it had problems on a standalone basis. To survive in this market, you have to be lean in your manufacturing. As I said, we’ve done a lot of restructuring of this plant, which is located in the Czech Republic, to become extremely competitive. Having a private label commodity offering in addition to our high-end, branded products is essential to cater for all the demands of our distributor and reseller partners.

OPI: In terms of the challenges and how you address them, a lot of companies – Hamelin included – have tapped into trends like well-being and health and safety in the office.

What’s your view on branching out into completely new categories to compensate for declining sales in some segments? EJ: I am extremely cautious about veering too far from our core. Of course we’re looking at some complementary extensions around our core categories. We’ve been doing that for a long time, but I don’t want us to get distracted from what I think is our responsibility as a leader in these categories and this business. We offer exercise and notebooks, pads and filing products – that’s what we do and what we’re very good at. As such, I believe Hamelin has a duty to really bring innovation into this market – it’s what our reseller and distributor partners expect. They trust us to offer products that will help them to increase their sales and develop their market penetration inside these segments, because even though they might be in decline they will not disappear. It we went full speed into diversification, we would risk losing our focus. Hamelin is obsessed with innovation in our category, not outside of it. That’s why we developed the Scribzee app and why that is so successful today. OPI: You’ve done three BTS seasons with the app now, haven’t you? How is it going? EJ: Extremely well, but it’s a work in progress. We have a fully dedicated team in the company that develops the app and the functionalities around it. We currently have more than 1.3 million app users, with over six million pages scanned. In my mind, it’s just the beginning. Being able to bring digital functionalities to a very traditional product has enormous potential. The flashcards I mentioned earlier – Flash 2.0 – are another demonstration of what we can do with the app. It works both ways: we take a traditional product – Oxford notebooks, for example – and make it available digitally on the one hand. On the other

OPI: There’s been plenty of change in terms of consumer behaviour. Given the disruption at some of Europe’s former leading operators – I just say Staples Solutions, Office Depot Europe and ADVEO – has that impacted Hamelin’s route to market at all? Amazon is obviously one of the new routes I’m referring to. EJ: No, not really. The companies you highlight are all very important to us, depending on the product category and of course geographic location. We work with absolutely everyone and both the traditional channels as well as the newer hybrid and e-commerce entrants are significant to us.

Whether it’s a Carrefour, an Amazon, a Lyreco or a small ADVEO Calipage dealer, they’re all getting our products to the end consumer You’re right, however. Amazon has been the one big change to our distribution model in the past few years. It’s been a massive disruptor. But this happens every decade or two. In the 1970s and 1980s, it was the arrival of the modern trade channel and the big hypermarkets getting into school and office products – that was a huge disruption to the traditional retail stationers. Then we had the rise of the OP superstores in the 1990s. It happened earlier in the US, but not till a bit later over here in Europe. Another big period of disruption. Then there was the start of e-commerce, taken to new heights by Amazon and what that operator is doing now in the B2C as well as the B2B market. It occurs all the time, but it’s more disruption for the distribution channel than for the manufacturers. We have to adapt to these new channels and their different demands and behaviours, but at the end of the day, they all serve the same customers. There really is no friend or foe. Whether it’s a Carrefour, an Amazon, a Lyreco or a small ADVEO Calipage dealer, they’re all getting our products to the end consumer.

OPI: What’s your stance on selling direct to end consumers? That’s what you’re doing in the US, aren’t you? EJ: (laughs) I was expecting that question. Yes, when we entered the US, we launched our own web store as a first move. And I have to say it has never ever been questioned by any distributor. What might in Europe still seem to be a somewhat aggressive positioning by a manufacturer against the traditional distribution model has not been an issue in the US at all. OPI: Are you saying then that you wouldn’t do the same in Europe? EJ: No, I’m not saying that at all. I believe manufacturers have a responsibility to talk to end users and show their products directly to these consumers. Selling direct is just another way to go to market and needn’t impact the reseller route. That being said, I don’t see us putting the entire Hamelin catalogue on a big selling website. It would be a huge investment for a very low outcome – nobody is served by that. But in some cases, when you have a niche product where distribution is complicated, I certainly think going direct has a place in the market. I’m coming back to the flashcards again which are available from our web shop in the US. We’ve just started doing the same in France. The reason? We’re talking about 144 SKUs for just this one product. That’s a comprehensive range and I can’t see any of our retail partners putting these SKUs on their shelves anytime soon. So why not sell direct? Hamelin is a key player in this industry and we hope to continue in that vein. There’s plenty more scope in the categories we’re in and we intend to use a wide range of tools to maximise that scope. And quite often, from tiny seeds grow mighty trees.

March 2020

OPI: But some of these operators that have caused enormous headaches for the traditional supply chain – the Auchan and Carrefours and now Amazon: were they, or are they, ultimately good for the market? Or do they mainly drive down price? EJ: They do drive down price, no doubt about that, and they do put pressure on us. But there’s an upside too. If you take the example of the modern trade channel in France, which includes the big supermarket chains, the hypermarkets, etc, that’s been a tremendous challenger for us. It has put incredible pressure on the company to lower our

costs, but it’s also been a great coach to us in the sense that it’s helped us to become leaner and more efficient. I would go as far as to say that it has probably helped Hamelin to become the European group that it is today. Amazon is another operator that challenges you to become a better company. It has definitely made us a better marketer through the demand for better data, better visibility and better product marketing. In the traditional supply chain, we often had little control over how our products are put in catalogues or presented on the shelves as the marketing was taken away from us and done by the middlemen, be that wholesalers, dealer groups, retailers or dealers. Consumer marketing wasn’t something that was part of our core job – now it is. Don’t get me wrong. We have always marketed our products to end consumers. Hamelin has been doing TV ads during every BTS season since the 1970s, for instance. But now we are paying much more attention – the marketing is more precise and more targeted. We have different tools at our disposal as well, of course. Consumers are much more demanding now too, and we really have to give them tangible reasons as to why they should buy Hamelin products rather than someone else’s.

BIG INTERVIEW Eric Joan

hand, the app is spearheading the development of new physical products, such as the flashcards. We are here to sell the physical items, that’s our mission and how we make money, but what allows us to do that better is the free service that comes with the app. Consumers seem to like it.

OPINION

Brexit:

UNCERTAINTY CONTINUES

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rexit! It’s finally happened, 34 months after former British Prime Minister Theresa May invoked Article 50 and began the withdrawal process. For businesses, the transition period means little change in the way we do things on a day-to-day basis. Yet companies across the UK will be conscious that this ‘halfway house’ only lasts another ten months. If a trade deal hasn’t been reached by New Year’s Eve 2020 and an extension hasn’t been agreed, we’ll begin next year trading on World Trade Organization (WTO) terms. Should that be the case, in many ways, we might as well have had a no-deal Brexit after all. The Confederation of British Industry has already warned there will be “hugely damaging implications” if this happens. As with everything Brexit, certainty doesn’t last long.

DEAL OR NO DEAL? This new phase of negotiations will be much broader in scope than talks have needed to be so far. The key one we need to watch concerns the UK and the EU’s future economic relationship; most important, in that context, is hammering out a free trade deal. Usually, such deals take years to be agreed. What’s likely to cause difficulty over the coming months is the UK and the EU’s opposing views on regulatory adherence. The UK government wants a Canada-style agreement, with no tariffs but the ability to set our own standards. The former Chancellor, Sajid Javid, had claimed the UK will not be a “rule taker” and urged businesses to adjust to regulatory divergence. Brussels, on the other hand, is keen for the UK to stick to the “level playing field” of common rules in exchange for a duty-free, quota-free trade deal. At the time of writing (in mid-February), it remains to be seen whether the Prime Minister’s recent Cabinet reshuffle and shiny new Chancellor Rishi Sunak will affect the direction of trade negotiations. While a route to free trade is being determined, the Northern Ireland protocol also has to be implemented to prevent a hard border in Ireland. New government functions and policies must be decided, and the roles and responsibilities of new and existing public bodies will need reorganisation. The challenge for the government will be to get all this in place by the end of this year. If the UK had left the EU as originally planned on 29 March

2019, there would have been around double the time now available to work through the transition. As it stands, the remaining ten-month period can’t be extended – the Withdrawal Act includes a self-imposed time limit in order to “get Brexit done”. That said, if it really needed to, the government could legislate to overturn this. A little embarrassing for the Prime Minister perhaps – who has repeatedly and publicly committed to the planned time frame –- but with his healthy majority, not the end of the world by any means.

Carys Davis, Public Affairs Consultant, BOSS Federation

NOT OUT OF THE WOODS YET The challenge for industry, meanwhile, will be to adjust to a post-Brexit world and a new deal, potentially at short notice. For business groups, the priority will be engagement and involvement in what happens over the course of 2020. Trade associations such as the BOSS Federation are well placed to do this. One idea being floated is that trade agreements are made on a sector-by-sector basis, in which case direct engagement with industry representatives should be a prime concern for officials.

If you made a no-deal business plan in 2018 or 2019, don’t discard it just yet Companies will need to keep in mind the possibility that transition could end without a trade deal. If that was the case, border delays, tariffs and a fall in the value of the pound would be likely to follow closely behind. We’re not out of the woods yet, so it’s worth being familiar with any WTO tariffs that will apply to your goods if a trade deal isn’t reached in time. And if you made a no-deal business plan in 2018 or 2019, don’t discard it just yet. On the other hand and the plus side, the negotiations finalised so far have put the EU Settlement Scheme in place, so if you have EU staff, be sure to encourage them to sign up to the scheme and there shouldn’t be any problems. Whatever happens, 2020 will be an interesting and defining year at least.

For those OPI readers that are BOSS members, the Federation’s monthly Brexit bulletins and web resources provide the latest news, views and guidance. See www. bossfederation.co.uk

HOT TOPIC

Special Issue

VENDOR SPECIAL

Building RELATIONSHIPS What do manufacturers really think of the resellers and dealers that sell their products? What would the ideal relationship between the two channels be? OPI's Michelle Sturman finds out...

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n this fifth outing of our Vendor Special, OPI has offered a voice to manufacturers to discuss the relationships they maintain with resellers and independent dealers. And perhaps more importantly, as a new decade stretches ahead of us, what kind of partnership they would like to see in the future. The response from vendors comes against an enduring backdrop of rapid digitisation in the workplace, the threat from e-commerce, major consolidation across the office products industry, an increase in private equity-owned businesses, and a continuing squeeze on pricing and margins.

AMAZON APPEAL All of the above pressure points have forced many manufacturers to seek new revenue streams and distribution avenues over time. This has created a situation whereby Amazon is now often a vendor’s largest customer or is at least on the way to becoming one of the biggest. While this trend is unsettling given the e-commerce giant’s impact on the business supplies industry as a whole, there is still plenty of scope to enhance present relationships and promote new ones. One of the overriding requests by the manufacturers OPI spoke to is for a closer relationship with the reseller/dealer channel. Acme United, for example, is currently working to

deepen its connection with independent dealers through its sales team which, the company hopes, will result in greater interaction. “From our perspective, being closer to dealers is critical. We want to help, have them contact us and listen to their suggestions because ultimately, they are the face the end user sees. I want them to reach out more and inform us what needs to be sold and what the feedback is on the products, for example,” says CEO Walter Johnsen. It may provoke a sigh of relief across the dealer channel to hear that vendors would ideally like to bolster direct ties, even against the relentless march of digitisation. While the inclusion of digital technologies is imperative, boosting productivity and efficiencies as it does, it can't replace the human touch. As CEP Office Solutions Managing Director Cédrik Longin explains: “I always prefer a discussion between people to reading data entered into a portal. The future relationship between vendors and dealers will be steadily impacted by technology and we must invest in the relevant tools. But we also have to ensure we take the best of it – easier, faster and more efficient data exchange, for instance – while preventing it from destroying human interactions which remain the best way of exploring new ideas and identifying common opportunities.”

We may be under pressure to adopt a more direct selling approach going forward DELIVERY IS KEY One of the foremost pain points from the manufacturer point of view is still the lack of credible e-commerce facilities on the dealer side. “If you navigate many dealers' websites, you discover a lot of old images and content which makes them just about fit for purpose. It can take a dealer weeks to upload images or new content, keywords, etc, whereas with pure e-tailers this information is normally ready for customers to browse within 24 hours,” comments Avery VP of Sales for Europe Jonathan Smith.

One US-based OP vendor veteran who wishes to remain anonymous adds that dealers keep demanding more, but cannot deliver themselves, reiterating Smith’s viewpoint. He goes on to say that the poor state of products and information on websites is primarily due to the reliance of dealers on their internal resources which, in many cases, are just not up to scratch. Moreover, independent dealers must realise they will never be an Amazon, Staples, Office Depot or WB Mason. Additionally, he asserts, their relationship with the manufacturers is somewhat in conflict with their wholesale partners and will continue to act as a barrier between the two parties. Meanwhile, Acme’s Johnsen points to the use on Amazon of videos, graphics and explanations that are helpful for some of the technical sales of its products and are contributing to the company's continuing growth, particularly in the first aid area for industrial accounts. “We maintain a close cooperation with Amazon because we have a seat at the table there and in certain cases enjoy a better relationship than we do with some of the superstores,” he maintains. The squeeze on the traditional B2B sales channel may be getting increasingly tight as digital routes to market sustain their stranglehold, but it’s not all fire and brimstone. All the manufacturers OPI spoke to agree on the benefits of the tried and tested reseller/dealer routes which, rather perversely perhaps in light of today’s buying climate, could easily satisfy most customer demands with a little tweaking. “Our challenge with the traditional channels is to support and develop their transition from outlets that purely fulfil product demand to destinations of client experience and the creation of desire. I believe the increasing power of the customer will force both vendors and resellers to adjust their policies towards the core objective of realising expectations through joint efforts,” says Staedtler Germany Managing Director Karl-Heinz Raue.

March 2020

RELATIONSHIPS MATTER These kinds of changes seem hard to imagine, but in reality they're not too much of a stretch. Who else knows their customers so intimately through personal relationships? “Dealers know the products and the clients and go above and beyond in terms of service. I think they constitute the most critical part of the whole channel. They are driving thoughtful and caring relationships, and that is invaluable,” comments Johnsen. What stops some manufacturers servicing B2B end users directly and where considerable value is placed on wholesalers and dealers is their reach. As Smith explains, while direct-to-consumer is ideal for speciality or niche products, it is not viable for broad product ranges: “We need dealers as they are the ones with the relationships, the service, logistics and systems which have been honed over decades.” Despite this, questions are being asked concerning value within the chain. The impression is that fewer dealers are implementing the marketing initiatives provided by the wholesalers,

HOT TOPIC Buiding Relationships

The interplay must be mutual between dealers and vendors if relations are to be reinforced and enhanced moving forward, Geoff Betts, Managing Director of Stewart Superior, points out: “Our model is very much direct to the reseller and we are loathed to alter this as we would no longer be supporting our traditional customer. However, we see very little reciprocation, and we may be under pressure to adopt a more direct selling approach going forward.” If Stewart Superior does venture down the direct B2B or B2C end user path, it wouldn’t be the first vendor to do so, nor will it be the last. Increasingly, business supplies manufacturers are turning to e-commerce platforms, particularly Amazon and Amazon Business, as viable routes to market. This is not news to anyone in the office supplies industry, yet it is surprising how little from the reseller side is being done to counteract it. As our Research feature (see page 38) reveals, the B2B customer is changing, with the majority of purchasing decisions already made through online research before a supplier is even contacted.

Buiding Relationships HOT TOPIC

while dealer groups claim their schemes are fully utilised. “None of us know where the precise value is added, but it’s not multiple times as a product makes its way through the supply chain. Simplistically, we need thoroughly efficient low-cost box shifters as wholesalers and good added-value marketing by the dealer groups or dealers, all with our support,” remarks Smith. The anonymous US vendor suggests the days of the buying groups controlling the manufacturer-reseller relationships are in the rearview mirror. "The balance has shifted due to fewer than half of the 20 or so large OP manufacturers left on the supply side. I would argue the Newell Brands and 3M businesses, for example, are so much bigger in other channels that office supplies are not as significant anymore. "Independent dealers need to be nimbler. Many mid-to-small ones believe their buying group or vendor partner is going to save them." Having said this, if all an independent dealer wants is low cost – as opposed to the benefits available from a wholesaler or dealer group – then an increasingly viable option is to buy direct from the manufacturer.

ON THE CASE OF STAPLES AND OFFICE DEPOT OPI asked several vendors for their thoughts on how the break-ups of Staples and Office Depot respectively and the continuing sell-off of their European entities have affected business. Here is a summary: Manufacturers are rightly renegotiating terms with the two companies, based on the difference in volumes from when they were global entities. The decline in the size of the large resellers has affected everyone as the sheer buying power they used to possess has decreased. Some vendors say they now walk away from business on the basis that the volumes no longer make it worthwhile at highly negotiated prices. Additionally, as one global manufacturer points out, under private equity ownership, these resellers are considerably harder to predict and consequently strategic planning has been reduced from 3-5 years to around 12 months. “It modifies the entire game,” one vendor told OPI, adding there is disbelief over the owners’ assertion of being in the business for the medium to long term when Staples Europe, for example, has already sold parts of its mail order and retail divisions. On the other hand, one vendor says the international consolidation of Staples and Depot has forced manufacturers to adjust their T&Cs at a global level. As a result, local dealers enjoy the benefits of the policies with the consequence that they are now very competitive today against the remaining subsidiaries of Staples and Depot, especially in Europe.

ADDING VALUE While many dealers and resellers have already expanded into adjacent categories such as furniture and jan/san to cope with the secular declines in traditional OP consumption, Longin notes that there is reluctance from dealers to list new items, instead preferring to focus on pricing and terms. “This is a pity as studies show new products are essential to generate growth and margins,” he says. At the same time, Johnsen laments how many product categories sold through traditional office products channels have been narrowed down to the bare bones, resulting in no margin for the reseller while the customer may not receive the best product.

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The markets aren't going away. The key is to sell the products that people want where they choose to shop

Stewart Superior's Betts agrees: “I cannot remember the last time customers asked us how to make them more money. I could likely add value to a reseller, but I am only ever asked for contributions or price reductions which in itself is a downward spiral. I would love it to change.” Raue admits it’s a continuous challenge for all vendors to resolve the contradiction between the margin request for the various types and levels of distribution and the resulting end price. Sticking with the monetary theme, various vendor representatives mentioned how the rise of private equity-owned firms is influencing industry dynamics. The overriding concern is the change from a marketing and sales-focused sector to one which is primarily finance driven. In Johnsen’s eyes, the resulting loss of merchandisers has eliminated “people who can sell with colour,

texture and emotion”. Betts believes once a company focuses purely on procurement, merchandisers lose their independence as someone who doesn’t understand the product, cost base or margin is brought in to undertake negotiations. “This happens not just in this industry; it’s always a sign that profits are under pressure and I can rarely point to a case where a company has benefitted. It destroys morale and weakens suppliers, although I’m sure it looks great on the balance sheet,” he adds. Another observation voiced several times is the ‘age’ of the industry. One vendor executive, who asked not to be named, sums up the sentiments quite bluntly: “Our channel is old! Except for the larger, smart and sophisticated ones – which rely on more than just their over 50-year-old veteran reps who are predominantly just order takers – traditional resellers and dealers are going to be hit with the Amazon locomotive and more. When your sales force is the same age as the owners, I would be hard pressed to tell a 30-year-old he/she will be able to sustain a 30-year career in this business.” Despite the many concerns, vendors remain positive, albeit realistic, about the future. As Johnsen puts it: “The markets aren’t going away. The key is to sell the products that people want where they choose to shop.”

Special Issue

FACILITIES SUPPLIES

VENDOR FOCUS Special Issue

FACILITIES SUPPLIES Special Issue

VENDOR SPECIAL

Special Issue

VENDOR SPECIAL

As the office products industry enters a new decade, the pace of change will likely become even faster, driven by the pervasiveness of technology. With this in mind, OPI's Michelle Sturman looks at those manufacturers that are future-proofing themselves for whatever may come next

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n this once-a-year special issue, manufacturers of business supplies are given the opportunity to shine. For our Vendor Focus feature, it becomes an annual discussion within the OPI team about which companies to include and why. Taking into consideration many factors, this year’s choices prove beyond doubt that a strategic focus, innovation and, crucially, sustainability are key to not just surviving but thriving. In today’s business climate, it is imperative to get the next generation on board, not only as future OP purchasers, but for our own recruitment purposes to maintain the relevancy and development of the sector. To achieve this, it is incumbent, particularly on the vendor side, to let the wider world know about the industry's achievements through creative marketing, advertising, PR and branding. After all, there’s no point in being brilliant, whether it be in product innovation, digital know-how, manufacturing, distribution or selling, if no one knows about it.

CLOVER IMAGING

It’s been a rollercoaster ride for ink and toner remanufacturer Clover Imaging in recent months, as reports of financial difficulties gave way to a management buyout of the company in conjunction with private equity firm Norwest Equity Partners (NEP) last November. The $450 million business is presently back in the hands of its experienced executive team. Now free from the constraints of its sister company, Clover Wireless, it possesses a healthy balance sheet and the freedom to be more flexible. With its new independent status, Clover says it's business as usual across the 43 countries it operates in, while the backing of NEP provides support to expand and grow.

Over and above the new ownership development, Clover was already laying the groundwork for growth when it was quick off the mark in purchasing the assets of the now-defunct LMI Solutions last year. It also launched programmes such as Silver Bullet aimed at HP customers. Recently, the firm added industry veteran Peter Klauck to its team.

HP INC

Rarely out of the news in the past year, HP Inc has made the Vendor Focus list once again, for a myriad of reasons. Starting with the most recent newsworthy story, the battle with Xerox, HP has certainly held its own against the onslaught of activist Carl Icahn and done so with dignity. Replying to Icahn and Xerox CEO John Visentin’s fairly aggressive tactics and public announcements with measured responses, HP had spurned Xerox’s acquisitive push by the time this issue went to press. With Xerox determined to steamroll ahead, it had informed HP that it would nominate 11 directors to replace the current board in June. On 24 February (after OPI went to press), HP was readying itself to respond to Xerox's increased bid of $24 a share. If the offer is rejected, there is likely to be an ongoing battle that will last for some time. HP has been sticking to the statement that its current strategy – announced last October – is the best course of action for the company's future, executed by new CEO Enrique Lores. The restructuring of the firm, which is part of this new strategy, saw the vendor reorganising into ten geographic regions, resulting in an employee headcount reduction of 7,000 to 9,000. The most significant move, however, is designed to address the perpetual decline in supplies by becoming more services-led. While its Instant Ink programme and managed print segment are doing well, HP is remodelling the transactional side of the business and introducing two models. The first will be the availability of a subsidised printer that locks buyers into using HP ink supplies; the second will see customers pay full price for the printer but have the ability to purchase non-HP supplies. In addition to implementing some bold strategic moves, HP is also to be lauded for its uncompromising sustainability efforts that underpin its very foundations. In the past year alone, HP has raised the bar for the industry in terms of its corporate social responsibility and environmental objectives. This includes the release of several products containing recycled and closed loop plastic, a carbon neutral printer and a zero-deforestation target for paper-based product packaging. Other key initiatives comprise LEED-certified and SITES-endorsed facilities, the increased use of renewable energy, forest restoration, and continued reductions in greenhouse gas emissions.

COLOP

EMERALD BRAND The past year has seen US sustainable supplies manufacturer Emerald Brand ramp up its solutions and services, all of which are intended to drive its vision of a more environmentally conscious world. The vendor’s new Eco-Squad offers client consultation on implementing green strategies, while 70 dealer partners have completed the Emerald Sustainability Accreditation aimed at developing expertise in sustainability. Putting its money where its mouth is, the company has relocated to new LEED-certified headquarters and is planning to open additional distribution sites. GREENSPEED Cleaning solutions specialist Greenspeed continues to prove and enhance its sustainability credentials. Its innovative Probio products represent the first range of professional, probiotic cleaning agents worldwide to be awarded the EU Ecolabel. The Probio range was only launched in 2018, and now has the distinction of being the first to obtain Cradle to Cradle Certified gold status. Last year, the company released a ready-to-use, fully biodegradable disinfectant spray, Lacto Des, which is made from 100% plant-based ingredients that can be used in the breakroom.

March 2020

There are times when a simple tweak can elevate something traditional into something genuinely innovative. In COLOP’s case – and it probably wasn’t that ‘simple’ – it was the introduction of the e-mark mobile printer. Changing with the times and keeping current is not always easy for OP manufacturers, but COLOP’s e-mark hits the spot. Not only is it a mobile printer, but a digital stamp used in conjunction with an app – available for both Android and iOS – or with computer software. Data is delivered via wifi to the stamp which can then be printed on almost any surface. The product has already had several nods for its design innovation, including receiving a coveted Red Dot Award and being shortlisted for the 2020 European Office Products Awards. And new versions of the e-mark are in the pipeline. It's not just the product side where COLOP has been busy. Seeking growth in the UK, the vendor moved to new 7,500 sq ft (750 sq m) headquarters in Birmingham which were extensively refitted to provide warehousing and office space for future development in the country. Furthering its expansion plans, the manufacturer also created a new company, COLOP Arts & Crafts, through the acquisition of the creative stamp division of major European player RoyalPosthumus. All of the above are vital steps in COLOP’s global growth plans, which includes the Chinese and Indian markets.

BIC Dealing with secular declines in its stationery business, BIC is maximising its operations in regions where it sees plenty of growth potential. The African market is a good example. In West Africa, the company has bought Lucky Stationery Nigeria, the largest writing instruments manufacturer in the country. In Kenya, meanwhile, it has taken over the manufacturing and distribution of its products from long-time partner Haco Industries. Tackling growth opportunities head-on, BIC’s ‘Invent the Future’ strategy is well underway. Its main aim is to drive productivity and improve efficiency. To this end, it has appointed several senior executives over the past year to its leadership team, tasked with – among other things – helping to implement the transformation and reach a sales target of 10% to be derived from its e-commerce channel.

VENDOR FOCUS Manufacturer Excellence

ONES TO WATCH

Manufacturer Excellence VENDOR FOCUS

ESSITY In June 2017, forest products company SCA split into two entities, with its hygiene and health operations to be named Essity. Headquartered in Stockholm, Sweden, with just under 50,000 staff globally now, Essity is a force to be reckoned with. Its Professional Hygiene division is growing well organically, but its inclusion in this year’s Vendor Focus is primarily due to its efforts in sustainability and CSR. The biggest signal of Essity’s environmental intent lies in its signature of the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment, whereby businesses pledge to unite behind a vision of a circular economy where plastic never becomes waste. The manufacturer has set a goal of 85% renewable or recycled packaging material by 2025, with plans to reduce the environmental footprint of its solutions by 33%.

The company’s true vision, however, revolves around its innovative promotion of health and hygiene, in particular hand cleanliness and the fight against health-associated infections. The firm's Tork brand – which falls under the Professional Hygiene business – has developed and released an app that provides training for healthcare staff to improve compliance in accordance with the World Health Organization's '5 Moments of Hand Hygiene' approach. The Tork VR Clean Hands Training app places users in real-life situations using virtual reality and is free to download via Google Play or the App Store. In 2018, Tork launched the annual National Take Back the Lunch Break Day

campaign, encouraging co-workers to share photos on social media of how they step away from their desks and enjoy their lunch break. Innovative ideas such as these not only form part of Essity’s digital transformation, but also advance the Tork brand in the online world. Back in the ‘real’ world, the vendor curated a joint exhibition with the Swedish Museum of Photography for the third time, aimed at highlighting the effect of health and hygiene on people’s well-being. The most recent show in Stockholm – which began in November 2019 – features global, award-winning photographer Malin Fezehai.

The biggest signal of Essity's environmental intent lies in its signature of the Ellen MacArthur Foundation's New Plastics Economy Global Commitment FELLOWES BRANDS

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It’s been quite a year for US-based vendor Fellowes Brands, not least because of the Meet Emma – Our Work Colleague of the Future phenomenon which went global. A research study conducted by Fellowes in conjunction with ergonomics experts, resulted in Emma, a life-size model based on how office-based workers may look like in the future. It wasn’t pretty, but did highlight

the importance of health and well-being in the office. Emma was featured in media as diverse as The Independent, The Guardian, Huffpost, Fast Company, PRWeek, National Post, India Times, Yahoo! and Stuff New Zealand. Not only did this help push the topic to the top of the workplace news agenda, it also put

Fellowes at the forefront of the 'health at work' movement. Both the vendor and the Emma campaign in particular have been shortlisted in several categories of this year's European Office Products Awards (see Event, OPI February 2020, page 48). Elsewhere, intent on building a broad furniture business, Fellowes has boosted its contract furniture division with the acquisition of Trendway, a leader in office furniture systems, movable walls and seating. This builds on the 2017 purchase of ESI in the same space. But while the company is developing its office furniture business, it has certainly not abandoned its roots. Last year, Fellowes invested in certain assets of Belgium-based archival, storage and filing products firm Classicom which were integrated into the Bankers Box category.

ONES TO WATCH

Portugal-based paper firm The Navigator Company has more than stepped up to the challenge of sustainability in the past year and has taken a global lead in this area. Not only has the company publicly stated its intention to reach carbon neutrality at all its industrial complexes, but it will do so 15 years earlier than the EU goal of 2050. To achieve this, it will invest almost €160 million ($175 million) in innovative technologies and renewable energies, as well as plant forests. Navigator has also secured a place on the World Business Council for Sustainable Development – the only firm from the forestry sector and the first Portuguese company to have achieved this. In addition, it has attained a position on the Carbon Disclosure Project’s A list. Most recently, Navigator joined forces with National Geographic to eliminate 150,000 plastic bags by creating a paper envelope for subscribers to the magazine in Portugal.

HAMELIN BRANDS

AVERY

EPSON Print and technology firm Epson has been vocal about its sustainability efforts in the past year. It has even attributed its growth in business inkjet printing across Europe – with market share currently sitting at 29% – to increased environmental concerns from customers. Its commitment to reduce greenhouse gas emissions is one way in which Epson is demonstrating its serious intentions; it is currently on track to achieving the targets set by the Paris Agreement. The company has also been progressing with new additions to its EcoTank series of printers and has recently announced the start of ReadyPrint, a subscription service for both its EcoTank models and ReadyPrint-compatible inkjet printers. BI-SILQUE Portugal-based Bi-silque is a leader in the visual communications category. It's also a pioneer in sustainability in the segment, having launched its first environmentally friendly products in 2008. Today, Bi-silque offers the largest Cradle to Cradle Certified range of any viscom manufacturer, incorporating eight product families. The company is continuously working on improving its credentials under the economic, social and environmental pillars of sustainability while working collaboratively with its employees, the local community, suppliers, customers and other partners to secure a better future. Sustainability constitutes such a fundamental part of Bi-silque’s DNA that, in 2019, it was shortlisted in the Sustainability category of the UK's BOSS Awards. It's also in the running for the same prize at the 2020 European Office Products Awards.

March 2020

Under the guidance of acquisitive parent company CCL, the past six years have seen Avery steadily build and broaden its portfolio in the labels, identification and badges categories. At the beginning of 2020, CCL bought two UK-based direct-to-consumer companies (unrelated to each other) – ID&C and IDentilam. The former is a leader in live event badges and wristbands, while the latter develops software for event badges and ID cards, as well as digital printing services. The addition of these firms represents just the most recent acquisitions in a series that saw the company’s direct-to-end user business expansion. Late last year, Australia-based children's label

manufacturer Stuck On You joined Avery, while Colle à Moi, a Canadian online reseller of customised labels aimed at the education market, was added to the portfolio in May 2019. All these additions give Avery new capabilities in software and smart identification solutions while complementing its existing web-to-print propositions. They also build on the company’s direct-to-consumer digital printing franchises. The acquisitions, which take the total number to ten so far, have substantially helped drive the vendor’s sales with the direct-to-consumer segment, although the business is growing markedly on an organic basis as well.

FIREKING The acquisition of US-based security products vendor FireKing by private equity firm Champlain Capital bodes well for the future of the company. The deal provides FireKing with a firm commitment to aggressively grow the business and invest in the brand. It also puts office products industry veteran Jay Mutschler in the position of Non-executive Chairman of the firm. Mutschler will once again be dealing with Champlain Capital Managing Partner Warren Feldberg – the pair had previously worked together at US Office Products.

VENDOR FOCUS Manufacturer Excellence

THE NAVIGATOR COMPANY

Manufacturer Excellence VENDOR FOCUS

ACME UNITED

Under the guiding hand of CEO Walter Johnsen, Acme United has enjoyed a good year or so, as the company continues on its product diversification and acquisition journey. The manufacturer has already made its first acquisition of the year with the purchase of Canada-based First Aid Central in January, adding to its extensive line of first aid, refills and safety products. Indeed, Acme’s first aid business is performing well, in particular its SmartCompliance first aid kits, with gains in the implementation of its SafetyHub replenishment software which is taking an increasing percentage of the refill business. Behind the scenes, Acme has been positioning itself for sustained growth through a cost-savings programme that has included rolling out an ERP system and lowering its

EXACOMPTA CLAIREFONTAINE

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There’s no doubt that life is getting increasingly difficult for traditional OP manufacturers in this digital age. One company that is bucking the trend is Exacompta Clairefontaine. The European stationery firm has achieved growth in a declining category through acquisitions which expand its product range in new directions, all the while maintaining exemplary environmental standards. Intent on ensuring that it incorporates current technologies into its selection, Exacompta added to its digital portfolio late last year with a 60% stake in French start-up Fizzer. This addition to the vendor’s Photoweb subsidiary specialises in personalised postcards create by an app, selling three million of them annually.

cost to market. Efforts have also been made in warehousing and shipping, with efficiencies being created in both areas, setting the company up well for significant growth in its online trade. In addition and to future-proof the business, Acme is investing in areas such as hunting, fishing and the DMT sharpening categories while introducing new lines such as ceramic box openers to offset secular declines in products like rulers and pencil sharpeners.

The company's biggest news, however, was certainly its acquisition of filing firm Biella in Q1 2019 for €33.5 million ($36.5 million). One of the most notable advantages of the deal was that it provided Exacompta with a more prominent presence in markets such as Germany, Switzerland and Eastern Europe where Biella already had a developed brand, enabling Exacompta to concentrate on building its own name. At the same time as the Biella transaction went through, Exacompta also bought gift packaging firm Eurowrap which has production facilities in Denmark as well as trading and design operations in the UK. A pioneer in sustainability for over 40 years, the company is committed to best practice and leadership in areas such as energy, water, recycling and greenhouse gas emissions as well as supplying environmentally friendly products like its Forever PP filing range.

ONES TO WATCH PENTEL Kudos to writing instruments manufacturer Pentel for fending off a hostile bid by Japanese stationery vendor Kokuyo, which became its largest shareholder in May last year. Refusing to kowtow, Pentel’s other shareholders stood firm and decided to accept a lower offer made by the Japanese Stationery Consortium (JSC), an entity established by stationery group Plus Corporation. This deal arose following friendly talks which secure Pentel’s independence. Additionally, Pentel is looking to guarantee sales well into the future. Its new Izee ballpoint pen, for example, is aimed squarely at 15-25-year-olds. The ultimate goal is for these users to loyally follow the brand into the workplace when they enter it. ACCO BRANDS Despite tumultuous times in the OP industry, ACCO Brands has come out on top. This is due to, in part at least, to savvy acquisitions and innovative product launches with great brand awareness campaigns in traditional categories. The Foroni acquisition in Brazil last year, for example, is complementary to ACCO's existing Tilibra brand and positions the company well for more substantial growth in the country. Its GBC business, meanwhile, has been redefining the laminator and shredder categories. All round, it's been a good past year for ACCO, with particularly impressive results in its North American back-to-school performance (for further details, see News, page 8). The vendor is also executing well on a number of its strategic initiatives. These include dealing effectively with the US/ China tariffs situation.

Special Issue HEALTH & FEATURE WELL-BEING Special Issue

VENDOR SPECIAL

Special Issue

VENDOR US/China SPECIAL

trade war:

SURVIVAL OF THE FITTEST?

The ongoing US trade war with China is having an impact on businesses across the globe. In the first instalment of this two-part feature, Thomas Schinkel explores the history of the conflict and the effects it is having on the OP sector

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rade tariffs as an instrument of international trade policy are back in fashion. It’s reversing a narrative that for decades had supported free trade, and which sought to minimise the number of obstacles that were placed in its way. What has caused this reversal, what are the knock-on effects for world economies and, more specifically, how does it affect the office products industry?

BACKGROUND AND HISTORY Any discussion about import tariffs and the current difficulties in trade relations between the US and China cannot properly be understood without an appreciation of how global trading philosophies have developed over the past four decades. Back in the 1970s, Daniel Bell – one of the most famous sociologists of our time – came up with the concept of the ‘post-industrial society’ and the ‘information age’. He predicted the pre-eminence of the professional and technical classes and saw the rise of global economic competition. This would be coupled with the manufacturing base giving way to an international economy built on technology and services. In his view, manufacturing could then happily be outsourced to second- and third-tier countries. Several years prior to the publication of Bell’s seminal 1974 work, The Coming of the Post-Industrial Society, US President Richard Nixon had already begun opening the door to China, abolishing the gold standard and launching the Environmental Protection Agency, commonly known as just the EPA. Indeed, manufacturing was already being viewed with a negative slant, due to its impact on air and water pollution. The ‘Reagan Revolution’ of the 1980s solidified this thinking and introduced a host of policy reversals: deregulation, free trade with zero tariffs, globalisation and open borders, particularly

for goods, services and capital. Additionally, privatisation and, above all, the ‘financialisation’ of the economy took hold, which ultimately morphed into a singular emphasis on the gospel of ‘shareholder value’. With this all in place, the stage was perfectly set for a wealth of discontent 30 years later. In other words, the problems we are witnessing today. THE RISE AND RISE OF TRADE DEFICITS From the mid-1970s, the US has run a trade deficit with the rest of the world. China’s accession to the World Trade Organization in December 2001 was heralded by the international community as a victory for free trade and economic liberalisation. But from that moment onwards, US trade deficits, particularly with China, began to rise to unprecedented levels.

China’s accession to the World Trade Organization in December 2001 was heralded [...] as a victory for free trade and economic liberalisation The policies of outsourcing and, more particularly, offshoring became the new norm. A new generation of economists – now referring to their profession as ‘econometrics’ – confidently proclaimed that trade deficits did not matter, although the workers who consequently lost their jobs didn’t agree. Factory closures in the US became rampant, with many smaller communities badly hit. All the while, the trade deficit with China and the rest of the world just kept on soaring to new heights. This same 30-year period also saw the rise and eventual dominance of the big box retailers

VALUE-ADDED TAX In parallel at this time, most countries around the world started to adopt a value-added tax (VAT) system, with the explicit aim to slow domestic consumption and rebalance the flow of imports with increased production at home. Essentially, most countries decided to replace import tariffs with a policy of ‘VAT at import’, but in the US this didn’t happen. Although think tanks across the spectrum kept discussing the concept, the idea of giving the federal government this much authority over general taxation was seen as politically impossible. Individual states prefer to keep control over their own sales tax revenues and any move to a VAT system would require a federally-instituted collection system. As such, this was a policy that was never going to be accepted. The Trump administration astutely made the need to address the country’s structural trade deficit one of its signature issues and argued it needed to be resolved quickly. In early 2017, a scheme was proposed that would levy a special tax on corporate income derived from imports, and combine this with a tax rebate on income earned from exports. However, as is often the case with sensible ideas, this one ran into a brick wall of opposition from a broad spectrum of interest groups, including large sections of the retail industry, the US Chamber of Commerce and many others. When the proposed scheme failed to fly, the idea of import tariffs began to gain momentum, even though a large cadre of mainstream economists and econometrists opposed this approach. Today, the outcome of these conflicting forces means that the US continues to subsidise its imports while penalising its exports. And yes, there are winners and losers in this game. For

some who were best placed to capitalise on this imbalance, it’s been a one-way ticket to financial nirvana. But for most, it’s resulted in an environment of stagnation, income insecurity and rising debt, mitigated by the short-term benefits of cheap imports from China. It’s been dubbed as ‘prosperity on credit’ and the Trump administration has found widespread support for attacking this scenario, with import tariffs touted as the way to reduce the trade deficit. To see how this cauldron that’s been brewing for the past 40 years has impacted the office products industry, we need to compare the rate of change in imports from all countries (Fig 1 below) and contrast this with imports specifically from China (Fig 2 on page 34). Data goes back to 1997 and gives us a solid 25-year time span to look at. The product categories shown include office supplies, writing instruments, furniture and office equipment (fax machines, copiers, printers, etc). Fig 1 shows that US imports in general have tripled over the past 25 years. Although the OP industry is a small slice of the economy, the office supplies category has closely followed this pattern, while writing instruments, furniture and office equipment have lagged behind. Fig 2 shows an entirely different story. Firstly, note the explosive growth of office furniture imports from China. Additionally, see that the increase of office supplies imports from China has also outstripped the growth of overall imports. By comparison, imports of writing instruments and office equipment have lagged. Remember that this entire period was defined by the complete absence of import tariffs. The surprisingly flat import curve for office equipment is due to the massive cultural changes that have taken place in the workplace, with computers and the internet profoundly altering the type of equipment required.

FEATURE US/China Trade War

– Walmart, Home Depot, etc – which began to put enormous pressure on domestic manufacturers to deliver cheaper goods. When these retailers decided their efforts weren’t good enough – and they were never going to be – they forced them into operating out of China. And, if this did not work, they used direct sourcing as a lesson to teach everyone that from now on, retail was the new dominant force on the block. Pundits referred to it as a ‘paradigm shift’.

WHAT NEXT FOR THE OP INDUSTRY? To predict what impact import duties will have now they are in place and could be ramped up, we need to consider who is doing the importing. In the 1980s, most manufacturers produced at home, sold to domestic distribution channels and

FIG 1: US IMPORTS FROM ALL COUNTRIES 1997-2018 (INDEX 1997 = 100)

Trade Commission, US

Federal Reserve System

and author’s calculations

March 2020

Source: US International

US/China Trade War FEATURE

FIG 2: US IMPORTS FROM CHINA 1997-2018 (INDEX 1997 = 100)

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Trade Commission, US

Federal Reserve System

and author’s calculations

exported the balance of their production abroad. But that picture is far from today’s reality. Manufacturers still often import parts and raw materials, and yes, they export. But currently, distribution channels – especially the big box retailers – are perfectly capable of doing their own sourcing overseas, establishing private label programmes, and importing directly into their retail chains. For example, the two main OP players – Staples Inc and Office Depot Inc – employ hundreds of people in China, proactively scouting for products to import into the US. There is also a cluster of manufacturers that never fell for the temptation to offshore their production and can honestly claim that a major part of their product range remains ‘Made in the USA’, or at least ‘Made in NAFTA’ – the North American Free Trade Agreement area that includes Canada and Mexico. This means the effects of import tariffs will be unevenly distributed across the spectrum of producers, distribution channels and consumers. Firms that have stayed close to their roots and kept manufacturing at home have little to fear; those that do source from overseas will have to take action.

Source: US International

DISTRIBUTION CHANNEL IMPACT In the short term, manufacturers will try to absorb the increases, with only marginal rises in consumer prices being the result. But longer term, they are taking steps to redirect their sourcing away from China, with countries such as Vietnam, the Philippines, Indonesia and Malaysia being targeted more and more. They are also exploring innovative manufacturing methods, with micro-production, supply-on-demand and the automation of production processes on the rise. More fundamentally, the soaring costs of labour in emerging countries, together with the price of transport, insurance and other variables, have all focused minds on whether the use of very long supply lines is a viable model at all. My opinion is that the biggest impact of tariffs is likely to be felt in the distribution channels, especially those with private label arrangements sourced offshore. If your imports from China amount to $100 million or more, a 25% tariff hit will significantly hurt your bottom line.

WILL TARIFFS WORK? Ultimately, will the tariffs have their desired effect on the trade deficit? Perhaps in some categories, such as agriculture, this policy may work, but this is a very long battle with numerous moving parts. The options for sourcing from countries other than China make it unlikely to be an effective method of balancing trade with the rest of the world.

Looking at the impact of import tariffs in isolation is not the best way forward; the remedy is to develop creative, disruptive innovations that take all aspects of your value proposition into account Essentially, by rapidly shifting from a base of limited imports in the 1990s to offshoring in low labour cost countries, trading partners have introduced a deflationary spiral. This makes cash requirements for replenishing your inventories less for every cycle that follows. To reverse such a trend is problematic and requires careful balance sheet management, with a laser focus on payables, receivables and inventory. Fundamentally, it will come down to survival of the fittest. I believe many management teams learned this lesson the hard way when they got hit by the recession of 2008. Consequently, most will be well-prepared to deal with the challenges ahead. Looking at the impact of import tariffs in isolation is not the best way forward; the remedy is to develop creative, disruptive innovations that take all aspects of your value proposition into account. Trade tariffs may be a significant factor, but other issues such as the full introduction of 5G technology will have a far greater effect. Honing your entrepreneurial instincts will be your best guiding light during these turbulent times. There are many more aspects to this issue, including the United States-Mexico-Canada Agreement, Brexit and its consequent free trade arrangement between the UK and the US. There is also the effect of retaliatory tariffs on US exports to China and the rest of the world that needs to be considered. These topics will be covered in part two of this article in the April issue of OPI.

Thomas Schinkel is an internationallyrecognised business adviser who works with senior executives of large and medium-sized companies, exploring strategic issues including corporate value improvement, exit planning and growth through acquisition. Tom can be reached on Thomas.schinkel@ thomasschinkel.com.

HEALTH & WELL-BEING

SPOTLIGHT Special Issue

HEALTH & WELL-BEING

T3L CEO Kim Berg

Special Issue

VENDOR SPECIAL

STRENGTH

Special Issue

VENDOR SPECIAL

in numbers European manufacturing group T3L recently added Jalema to its brand portfolio. OPI discovers more about this growing supplier in our first-ever interview with CEO Kim Berg

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usiness products manufacturing group T3L celebrated its tenth anniversary last year. It was in 2009 that France-based Tarifold and Denmark’s 3L announced their tie-up with the aim of creating a family of specialist, niche brands that had the collective strength to be more commercially competitive. They were joined a year later by Probeco, another Danish manufacturer that had been set up in the 1990s by engineer and entrepreneur Kim Berg. After the quiet move into retirement of T3L CEO Yves Revenu at the end of 2018, Berg moved up to the CEO role. However, the leadership change has not resulted in a shift of T3L’s founding principles. “It’s always been our philosophy to leave the companies as they are as much as we can and let them develop individually,” explains Berg. “We don’t believe in creating synergies just for the sake of it by moving everything together. We want to establish independent operators that are able to grow in their own way, like family firms.” Over the years, a handful of bolt-on acquisitions have been made: Probeco purchased Danish plastics companies Due Plast and Johnsen Plast in 2013 and 2014 respectively; more recently, Tarifold bought the assets of France-based filing operator SmartFolder. However, the biggest transaction for T3L came in mid-2019 when it acquired another highly respected European brand, Jalema. Says Berg: “Jalema represents a big increase in the size of the group and is also very important for us product-wise. It manufactures a range of moulded and cardboard/paper items that we didn’t have before and now gives us a good range across our categories.”

Jalema will maintain its production facilities in the Netherlands. Indeed, local manufacturing is another part of the group’s philosophy that has not changed over the years, despite what Berg refers to as “some tough times” along the way. CRITICAL MASS The Dane views the increased scale of the T3L group following the addition of Jalema as an important factor as resellers rationalise their supplier bases. “If you remain a small, family company, you risk losing out to the one-stop-shop trend,” he explains. “Our concept is that by joining forces we are able to stay in business and supply a critical mass of volume and products to our customers.” The traditional ‘global’ office supplies resellers still represent a significant proportion of T3L’s annual sales. And while the group still does not have the financial clout of some of its larger manufacturing competitors, Berg is sensing a change in the conversation with these major clients. “We are talking much more about the products themselves which, for us as a niche specialist that doesn’t have a big chequebook, is a positive development,” he notes. So far however, he admits, it has been a question of “some small changes” in these relationships. Berg is a realist when it comes to recognising the secular decline in paper-related office supplies, but he believes there are still growth opportunities in specific verticals. As such, T3L has developed specialised offerings for the retail, graphics, industrial and library markets, mainly around the concepts of visual communications, display and presentation. He also thinks there is headroom for the company to take share in the shrinking, but still sizeable, office category.

We want to establish independent operators that are able to grow in their own way, like family firms The timing of Paperworld 2020 (see ‘Down but not out’, page 40) enabled T3L to present its four major units together under one roof to its international customers. There certainly seemed to be a positive atmosphere on the stand, with some familiar Jalema faces now tasked with selling across all the group’s brands. For Berg, a priority in the coming months will be what he calls the “cultural consolidation” of the entity which has now expanded to almost 250 employees representing 12 different nationalities. He stresses that the Jalema acquisition would never have happened, had it not been seen as a good cultural fit by both parties involved. “We don’t view ourselves as French, Danish, German or now Dutch,” he says. “We have our own T3L culture with a very interesting international mix of people. We see things differently sometimes and that leads to some good discussions. Sorting out issues together, isn’t that what strong families do?”

in the business products, '\ world 1

jobs.opi.net -

-1 I

KNOCK, KNOCK.

RESEARCH

Who’s there?

…Your customer. Your customer who? You should know who I am… – by Michelle Sturman

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he opening lines above are a corny derivative of the famous joke perhaps, but the point it makes is no laughing matter. Do you absolutely understand who your customers are and their needs? Sure, I hear you say. I precisely know who they are and what their business requirements are because I see what they buy from me. This is accurate – but only up to a certain point. The clients that you deal with are rapidly modifying their purchasing behaviour. Not only are they made up of diverse generations – and often getting younger – but they all have vast choices in terms of how they buy, frequently just with the click of a button. Welcome to the reality of Customer 4.0: they require their journey with a company or brand to be personalised, coupled with the ability to purchase products when, where and how they want – not when it is convenient for you, the supplier. It is frequently claimed this new way of purchasing is more applicable to B2C rather than B2B customers, and while in the past that may have been true, it doesn’t hold water today and affects every industry. As Gordon Christiansen, COO of sales and marketing agency Highlands, explains: “If we believe the modern consumer wants to buy anytime, anywhere, anyhow, then the question for resellers and manufacturers is whether they are enabling this today? I would suggest most are not.”

ACCELERATED SHIFT The change in customer behaviour has been accelerated and exacerbated by technology, but this is by no means the only defining influence. According to Future Retail Disruption 2020 by global information company Ascential, there are many factors that affect purchasers. One of the notable shifts represents the move to more “conscious consumption” incorporating sustainability and ethical supply chains. This will also tie in with

themes like veganism (worth $24.3 billion by 2026), and overall health and well-being. Ascential additionally notes the importance of video content in the purchasing process, especially for more recent generations. Research shows that 85% of millennials have bought a product after watching a video; the marketing format delivers up to 66% more qualified leads and a 54% increase in brand awareness.

If we believe the modern consumer wants to buy anytime, anywhere, anyhow, [are] resellers and manufacturers […] enabling this today? I would suggest most are not All of this is powered by technology and 5G heralds a new wave of fast mobile networks. As such, it will facilitate speed, data collection and analytics and the more rapid adoption of technologies such as augmented and virtual reality, the Internet of Things and cloud computing. In turn, this will drive the uptake of purchasing on mobile devices, with those accessing the internet solely on their smartphones rising to 73% in the next five years. Another notable change to procurement, although this is likely to emerge at a significantly slower pace in B2B, is engagement with social commerce. By 2024, sales in the US from platforms such as Instagram and Facebook will reach $84 billion, although this only represents the

57%

Percentage of consumers willing to change their purchasing habits to help reduce negative environmental impact Source: National Retail Federation and IBM’s ‘Meet the 2020 consumers driving change’

‘BUY NOW’ CALL TO ACTION Ultimately, providing a ‘buy now’ call to action on every platform where buyers are found will make it easy for people to purchase. Says Christiansen: “Dealers only tend to offer purchases through a gate. This is a barrier as it means they can only sell to people that have an established account. This may not be a problem; however, a single online transaction could lead to a wider relationship. This is where Amazon is strong and how it erodes sales for dealers and, for that matter, larger resellers. “Amazon offers a broad selection, good pricing, displays great content when available, and offers instant purchasing. Dealers need to make it easy for people to buy from them. This is easier said than done, of course, but would mark the first crucial step.”

According to Walker Information, the ‘old school’-style sales pitch is rapidly becoming obsolete as buyers have already done their homework using the internet as an information resource for products and solutions. ‘Insight selling’ represents the next step up from ‘solution selling’ and is focused on executing clients’ broad ideas and insights to assist them in navigating changes within the market.

The ‘old school’-style sales pitch is rapidly becoming obsolete A study undertaken with multinational companies found that Customer 4.0 traits are just as prevalent in B2B industries. The Customers 2020 survey by experience management services firm Walker Information reveals that clients dictate the journey. Put differently, they expect suppliers to know their business inside out and personalise the encounter to their individual specifications. Meeting expectations relies on being proactive by anticipating current and future requirements throughout the buyer lifecycle. These must then be delivered through different channels and platforms including online, mobile and social. Being forward-thinking applies to the entire experience, from R&D and marketing to sales and customer service. And while client relationships still require the personal touch, this digital world offers many channels of communication – figure out which ones customers prefer.

RESEARCH Customer 4.0

equivalent of 1.7% in retail sales. Nevertheless, in China, 51% of millennials and Gen Zers intend to shop on social media in the future.

CUSTOMER IMMERSION Highlands’ recent white paper Customer 4.0: Is your business ready for modern commerce? focuses on four key questions that business owners should ask themselves to satisfy the demands of Customer 4.0: 1. Branding – is the look, feel and message consistent across all touchpoints? 2. Purchasing – can products be bought on all digital platforms? 3. Delivery – is the drop-ship capability efficient and effective? 4. Content – is the point-of-purchase content developed with Customer 4.0 in mind? Most OP businesses are currently still working on the premise of Customer 3.0 where products and experiences rule the roost by inviting customers into their world. This is no longer the case. Companies and brands need to immerse themselves into their clients’ world and then figure out how to provide relevance to help them achieve their goals.

THE CUSTOMER JOURNEY

PRE 1950

CUSTOMER 2.0 Defined by: • Attributes of Customer 1.0 • Post-WWII consumerism • Print + radio + television • Marketing takes over: it creates brand identities, differentiation and stimulates demand and choice

2000-2015 CUSTOMER 3.0 Defined by: • Attributes of Customer 1.0, 2.0 • Globalisation • Internet • Customer experience drives loyalty and retention • Customisation

2015-2019 CUSTOMER 4.0 Defined by: • Attributes of Customer 1.0, 2.0, 3.0 • Outcome driven • Vast choices • Personalisation • Influencing • Everyone’s a publisher

2020CUSTOMER 5.0 Defined by: • Attributes of Customer 1.0, 2.0, 3.0, 4.0 • 5G • Augmented and virtual reality • 3D printing • Wearable technologies • Robotics • Artificial intelligence Source: Highlands

March 2020

CUSTOMER 1.0 Defined by: • Low choice • Customers were just happy to get the product • Power = Production + Distribution • People moved but weren’t mobile

1950-2000

EVENT

Down PAPERWORLD 2020 REVIEW

BUT NOT OUT

Numbers might be down, but Messe Frankfurt was still pleased with Paperworld 2020, reports OPI’s Andy Braithwaite

www.opi.net

espite a drop in both exhibitor and visitor numbers at Paperworld 2020 in Frankfurt, Germany, at the end of January, Julia Uherek, VP of Consumer Goods at Messe Frankfurt, remained upbeat about this year’s event. “In the current challenging market environment, this result makes us optimistic, in part because the level of internationality has once again increased,” she stated. “The conditions for guiding Paperworld into the future as the most important national and international industry platform could not be better. I am personally delighted with the open, constructive and very cordial exchanges we’ve had with our customers and partners. This motivates my team and I to create a genuine meeting place together with the sector.” Official figures from Messe Frankfurt show that just over 30,700 visitors attended the four-day show in 2020 – approximately 7% fewer than in 2019 – while the number of exhibitors fell by about 5% to 1,591. The show organiser explained that the declines were primarily due to the timing of the Chinese New Year which resulted in a drop in the number of participants from Asia. RemanExpo, for example, reported that exhibitor numbers were down by around 30 because of this factor.

CORONAVIRUS PRECAUTIONS There was no suggestion that the coronavirus outbreak – which had hit the headlines on the eve of Paperworld – had an impact on this year’s show. At the time the event took place, there had been no confirmed cases of coronavirus in Germany. Messe Frankfurt had been closely monitoring the situation in collaboration with the relevant local

Paperworld Village

authorities and medical advisors in the lead-up to Paperworld. Hand sanitiser dispensers were located throughout the exhibition grounds and first aid staff had been trained to deal with people showing signs of influenza. While there were a number of visitors wearing masks, people that OPI spoke to had not noticed a downturn in traffic to Hall 1 where many Chinese exhibitors were based. Once again, Hall 3.0 was the main focus for the office products sector. Unfortunately, as has been the case for a number of years, ‘A-list’ manufacturers such as ACCO Brands, Newell, Avery and 3M were conspicuous by their absence. This certainly takes the shine off Paperworld as being representative of the traditional office supplies category but, to be fair, buyers from most of the larger resellers – with Amazon reportedly being an exception this year – were in attendance. There was even a sizeable team from Staples that had made the trip over from the US. For Danny Berendsen, Sales Director EMEA at Bi-silque, Paperworld remains an important part of his customer-facing programme. “Our impressions of the show were good,” he told OPI. “Quality-wise, we were very pleased with the visitors to our stand. In terms of quantity, it could perhaps have been better, but that is following a trend we have seen for a few years anyway.” WELCOME TO THE VILLAGE With 2020 being one of the ‘alternate’ years when a number of the larger German manufacturers scale down their participation, Messe Frankfurt had introduced a concept called the Paperworld Village to accommodate some of these companies. This turned out to be a nicely thought-out area with small, open-style booths and a central meeting area with a range of seating options and

The next Paperworld in Frankfurt, Germany, will take place from 30 January to 2 February 2021.

cafeteria facilities. It appeared to serve its purpose well and there is even talk of maintaining the Paperworld Village next year. Also in Hall 3.0 was the Future Office area, an initiative that Messe Frankfurt has been working on for the past few years now. The presentations were well attended, especially on the Monday of the show when architects and facility managers had been invited. It was also good to see some innovative products on display that showcased how technology is being used to enhance productivity and collaboration in the workplace. These included a sophisticated smart office solution from German tech firm Thing-it, an impressive analogue/digital whiteboard offering from Legamaster and an upmarket office pod system by Woodtec.

The show organiser explained that the declines were primarily due to the timing of the Chinese New Year “We participated as exhibitors in the Future Office for the third time because it has proved to be an interesting concept for us,” said Burkhard Remmers, Director of International Communications and Public Relations at furniture manufacturer Wilkhahn. “On the one hand, the exhibitors are well integrated into the overall theme of the area while, on the other, the lectures increase the frequency of visitors. This provides us with additional high-quality contacts, including architects, for example, who visit our stand.”

Some visitors taking coronavirus precautions

FOCUS ON SUSTAINABILITY Sustainability was something of a hot topic at Paperworld this year. “Environmental protection and sustainability are not just short-lived trend themes,” stated the show’s Director Michael Reichhold. “On the contrary, an awareness of these issues has become firmly rooted in the paper, office supplies and stationery sector. If you want to stay fit for the future, you cannot afford to ignore this topic.” Paperworld has been holding its Sustainable Office Day for some time. Nevertheless, this initiative remains firmly focused on the German market. However, OPI understands that Messe Frankfurt is hoping to expand the programme next year to include more international participation – that would be a welcome development.

END OF AN ERA AT DURABLE Horst-Werner Maier-Hunke (l) with incoming Managing Director Rolf Schifferens

March 2020

There was a strong sense of anticipation among journalists at this year’s Paperworld ahead of a press conference called by Germany-based manufacturer Durable. The company did not disappoint, with the announcement that office products industry icon Horst-Werner Maier-Hunke is retiring after 40 years at the helm of the family-owned business. Transitioning into the Managing Director role over the next few months is Rolf Schifferens, formerly a board member of Faber-Castell and Managing Director of the Faber-Castell Vertrieb subsidiary. He left the writing instruments manufacturer at the end of 2019 after 18 years with the company and is a well-respected figure in the stationery industry in Germany. Schifferens will take on responsibility for sales, marketing, production, development and logistics at Durable from Maier-Hunke, who will retire from all official positions at the end of April. The new executive management will not affect the current shareholding of Durable, it was confirmed. “I appreciate Rolf Schifferens for acknowledging the demands of the market – the success in his last professional roles underlines this,” said Maier-Hunke. “I am convinced that we have found a very experienced and competent manager in him.” Schifferens will be tasked with leading Durable through a period of strategic change. During the Paperworld press conference, Maier-Hunke spoke of an acceleration in the decline of paper-related office products, the need to develop new sales channels and the importance of driving a cultural evolution within the company itself. Now approaching his 82nd birthday, Maier-Hunke became Managing Director at Durable in 1980 and built the manufacturer into a €100 million ($110 million) business. He was recognised by his industry peers for his impact on the industry and also his work in German business circles when he received the Lifetime Achievement award at the first-ever European Office Products Awards back in 2002.

EVENT Paperworld 2020

MARK THE DATE

Special Iss INTERVIEW

Special Issue

VENDOR SPECIAL

Reinventing HOPE

s this year’s City of Hope campaign kicks off in earnest following February’s tour and Hall of Fame Dinner, Spirit of Life Honouree Stephanie Dismore talks about her aspirations for the 2020 Reinvent Hope campaign and why there’s still so much to be done. A seasoned HP executive – she is currently SVP and Managing Director of HP North America – both Dismore and HP have had a long association with City of Hope, a relationship that this year will be even further cemented.

www.opi.net 42

OPI: The NBPI’s annual City of Hope Tour in February served as the official campaign kick-off. Why is the tour so significant? SD: While it’s easy to see how important City of Hope’s work is to preventing, treating and curing life-threatening diseases, nothing compares to experiencing the City of Hope campus, meeting with doctors and researchers, and engaging with former patients first-hand. It is an incredibly enlightening event. I’ve participated several times, but each time I come away feeling more inspired and committed to supporting this organisation. OPI: What’s in store in terms of fundraising? SD: One of the most wonderful things about this campaign is that there are so many ways to get involved throughout the year, whether it’s through corporate or personal giving, auction donations, direct mail initiatives, crowdfunding or one of our many industry-hosted events featuring golf, skiing, curling and cycling. And in 2020, in the spirit of reinvention, we’ll introduce a few new elements to the campaign as well, including a wine tasting in Napa, California! OPI: What are your goals for your time as Spirit of Life Honouree? SD: Over the course of nearly four decades, the NBPI has helped raise more than $200 million for City of Hope. That is a remarkable achievement, and I look forward to building on that momentum in 2020 with both existing and new donors in our industry. Additionally, to ensure our sector’s legacy of support continues for years to come, we’ll also be focused on engaging the next generation of industry leaders in an effort to create awareness and excitement among those who will help advance City of Hope’s work in the future.

OPI: Please tell me about your – and HP Inc’s – involvement with the City of Hope. Stephanie Dismore: As you know, HP has been a long-time supporter of City of Hope. As regards me personally, I have become very involved as a member of its National Business Products Industry (NBPI) Council over the past few years. In that time, I have been inspired and humbled to witness not only City of Hope’s relentless focus on innovation and reinvention aimed at improving lives and providing hope for patients around the world, but also its unique, compassionate approach to caring for the whole person, not just the body. It is an honour and a privilege to support City of Hope’s life-saving work and to lead the 2020 Reinvent Hope campaign. OPI: Can you elaborate on this year’s campaign? SD: For more than 100 years, City of Hope has been at the forefront of patient care and medical discoveries in the fight against numerous life-threatening diseases, improving the lives of over 100 million people globally each year. Similarly, HP has been a leader and pioneer in the technology industry for more than 80 years, driven by its belief that technology can – and should – make life better for everyone. Both organisations understand the need for continuous progress and share a fundamental common value: reinvention for the sake of social good. As a result, the theme of the 2020 campaign is Reinvent Hope – a shared commitment to creating new, better and unprecedented possibilities. The campaign recognises that

VENDOR SPECIAL

good enough is never good enough; rather, we must always be looking for better, smarter, more creative and effective ways to improve patients’ lives and provide hope.

Spirit of Life Honouree, HP’s Stephanie Dismore

OPI: Why is it so important to get the next generation on board? SD: Thanks to organisations like City of Hope, we are making progress in the fight against cancer, diabetes and other life-threatening diseases, but the battle is far from over. The support and fundraising our industry provides every year – and will continue to provide – is critical to the constant pursuit of changing the future of health. Already, the NBPI’s contributions have had a significant impact on City of Hope’s main campus, funding the creation of some of its most transformative research and manufacturing facilities to date. With our support and that of the next generation, we’ll be able to help City of Hope deliver tomorrow’s life-saving therapies and reinvent hope for patients everywhere. This issue of OPI went to press just before the City of Hope Tour and Hall of Fame Dinner. Look out for April OPI for a round-up of the event.

IN SUPPORT OF

Office Products Women in Leadership (OPWIL) is offering a fantastic Kentucky Derby-themed prize for a lucky winner in support of City of Hope

Purchase a $100 raffle ticket for the chance to win l

For more information and to buy tickets visit: www.opwil.com/education

2 tickets to a Kentucky Oaks Cookout (Friday, May 1, 6pm) A Kentucky Derby 146 gift basket, complete with Derby glasses, Woodford Reserve Bourbon & more! A $200 gift certificate to the Bristol Bar & Grille restaurant (3 locations) 2 tickets to the 2020 Kentucky Derby Mezzanine Grandstand seating (Saturday, May 2) 2 tickets to the Kentucky Derby Museum and Barn & Backside Tour (Sunday, May 3, 11:30am)

$2,000 package value! Buy today! Prize drawing by City of Hope on April 8, 2020

visit us at opwil.com

Spe 5 MINUTES WITH...

Special Issue

VENDOR SPECIAL

Mark Wilkinson What would you be the patron saint of? Organisation – I’m a very organised person (most of the time).

What makes you happy? Spending time with my family on a warm and sunny afternoon in the local beer garden. Or perhaps, more rarely, Newcastle United winning a football match.

Mark Wilkinson ACCO Brands

Your pet hate? People being late. What are you good at? I am really good at Connect 4! I used to play it as a child as I love spotting patterns and being opportunistic. I just need my children to get a bit older so I can justify playing it again. If the world had a President, who would you vote for? Nelson Mandela. He had such charisma and humility. What is humankind’s greatest invention? The wheel!

What’s your most prized possession? I have a small gym room at home with a TV and sound system. It means I can exercise and get away from the chaos. Favourite author? I love historical and crime novels, so probably Hilary Mantel, CJ Sansom and Jo Nesbø.

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What’s your guilty pleasure? Chocolate.

Describe your current job. As Regional VP and General Manager of ACCO Brands UK & Ireland, I lead a talented and cross-functional leadership team, covering all aspects of that business. Your worst ever job? Before university, I worked for a bank filing cheques. It was very boring, but at least I learnt how to be punctual and discreet.

What’s your life philosophy? Try your best every day and always look to do better than the day before. What scares you? Heights and deep water. I went gorge walking recently with some friends in Wales and I managed to combine both fears in one activity. Not a good idea!

CAREER Q&A

Your childhood ambitions? I wanted to be a professional golfer, but the lure of the business products industry was just too great. What do you do in your spare time? Spare time is a relative concept, but I like tennis and curling.

Best moment in your career? When I was working as an account director a few years ago, I led a team that won a very large international contract. It was the culmination of a great piece of teamwork. The business or industry figure you most admire? Jeff Bezos for his vision and dynamism. Amazon is front and centre in our industry – its model is challenging everything and everyone on a daily basis. s zo Jeff Be Your best piece of advice to someone who has just joined the OP industry? Be ready to adapt to change and embrace it. Change happens faster than people think in our industry. What do you like best about the OP industry? Even though we are tough competitors, there is still a good level of friendship and camaraderie. This really comes across when you attend industry events such as OPI’s forums. If you could change one thing about the industry, what would it be? I would like to see the industry accept and embrace more comprehensively the challenges and opportunities of e-commerce and the wider digital world. Too many people are still hanging on to old business models without investing enough in future-proofing their companies.

VE SP

FINAL WORD

STRONGER together

here’s no doubt that digitisation is changing our sector and increasing pressure on all participants, both in manufacturing and in the trade, to transform their businesses. As such, I firmly believe that information sharing and networking within the industry is becoming ever more important, across countries and even continents. Digital has no borders and the largest global players are constantly changing the environment we all work in. It’s imperative that all operators – large and small, local or global – can benefit from all the information out there, learn from it and apply it to their own companies. LACK OF COOPERATION That said, if you take a closer look at the business and office supplies sector across Europe, cooperative activities appear to still be quite sketchy and, at best, selective. Once upon a time, international trade fairs were a real magnet for getting players from all channels together in one space. Yes, there were some really big stands and fabulous products on show. But also, attendees knew that their peers would be there – the draw was not just those booths or filling the order books, it was a meeting point of like-minded people discussing, debating and coming up with solutions to the most pressing challenges in our space. I’m obviously referring to Paperworld in Frankfurt which, in the past, was a must-attend event for all the above reasons. Not anymore. Yes, it’s still the biggest fair of its kind, but it doesn’t bring the industry together in the way it used to. Instead, we now have another event – Insights-X in Nuremberg – with its own, considerably narrower, focus. No doubt, it has its place too and fulfils a purpose for those in that niche, but it has certainly diluted the Paperworld experience even further. It’s not so much that trade fairs in general have a tough time. According to a recent poll by OPI, 59% believe that traditional trade shows still have an important role to play in today’s digital world. Perhaps the clue is in the word ‘traditional’. Organisers need to engage more in trying to do new and different things.

NO – 41

www.opi.net

– 59%

opi.net poll Do you think traditional trade shows still have an important role to play in today’s digital world?

All the associations in our industry are still very national in their make-up, with no meaningful single umbrella entity that drives discussion and change. The only European event I can think of that now brings together the top executives from across the continent is OPI Partnership in Amsterdam. DIY INSPIRATION It could be so different. Take the DIY industry as an example, a sector that tesa is very familiar with and involved in. This is a vertical that is also experiencing great pressure from digitisation. But it deals with it in a more collaborative way. For a start, there are two pan-European associations, one for the industry and one for the trade (the European Federation of DIY Manufacturers and the European DIY Retail Association respectively). As such, everything these associations has a broad outlook and Specialdo Issue focus, rather than a national and local one. HEALTH &

Matthias Schumacher, Director International Sales and Key Account Management, Consumer and Craftsmen Division, tesa

Special Issue HEALTH & WELL-BEING

Special Issue HEALTH & WELL-BEING WELL-BEING Let’s have open discussions in a setting where people want to Special Issue talk to each other, share ideas VENDOR and come up with new ones

The major platform for exchange for all industry participants is the annual Global DIY Summit. It takes place in a different European city every year (in 2020, its eighth year, it will Special Issue be held in Amsterdam from10-12 June). The VENDOR Summit is organised in the form of a two-day SPECIAL congress with around 1,000 participants. There are presentations, keynotes, breakout sessions as well as store tours. During the latter, participants have the chance to visit interesting retailing concepts as well as traditional big box operators for one day of the event, in the process gaining a good perspective of the retailing landscape in the host country. From a manufacturer point of view, the show organisers have been open to suggestions. One of these has been the ‘DIY Boulevard’, which was created a while ago and has brought many vendors back to the exhibition halls. I believe that the business supplies industry can learn from the DIY sector. Let’s have open discussions in a setting where people want to talk to each other, share ideas and come up with new ones. It would enable everyone to manage the much-needed transformation process more successfully. In my mind, there’s no doubt that together we are stronger.

SPECIAL

Special Issue

VENDOR SPECIAL

NEXT ISSUE Big Interview Mark Leazer, Executive Director, AOPD Hot Topic Brexit Category Updates l Paper l Education/ back-to-school Events l EOPA 2020 l OPI Partnership