OPI APP NOVEMBER 294 B by OPI

BIG INTERVIEW

Connecting the

business products world

Steve Horne, SPOT Group November 2019

INSIDE THIS ISSUE Amazon Business targets corporate procurement l Big box sell-off continues in Europe l Hamelin acquires Unipapel assets l Fullerton leaves Winc l Imaging supplies under the microscope l The MRO/PPE opportunity l Sugru: transcending categories l

CONTENTS 16 Big Interview Adding value and delivering growth – that’s Steve Horne’s remit at SPOT Group 24 Hot Topic The battle lines are drawn in the consumables market as OEMs, remanufacturers and new-build compatible cartridge makers are staking their claims 28 Category Update Plenty of M&A activity and strategy changes – it’s been a year of upheaval in the imaging supplies and print sector 32 Category Update Everyone needs MRO, PPE and safety products. Get some expertise and jump on board is the advice for resellers

Big Interview: Steve Horne, SPOT Group Steve Horne joined the Spicers-OfficeTeam (SPOT) Group in March of this year, stepping into the big boots of OP veteran Jeff Whiteway. Industry-specific knowledge he may not have, but an unbiased approach and the ability to take a fresh look at the group’s two core entities is what Horne most definitely brings to the table. Not to mention years of experience in supply chain-related issues and a keen desire to always add value and deliver growth – all attributes that SPOT and its private equity parent Better Capital need at this time. HOT TOPIC: THE STRUGGLE FOR SUPPLIES

38 Advertorial A new chapter begins at uni-ball Corporation 40 How to... ...differentiate in marketing. Making it personal is the way to go 42 Research All you need to know about Generation Z

REGULARS 5 Comment 6 News 14 Social Spy 46 Generation Game Beth Freeman 48 5 minutes with... Michael Lewis 50 Final Word John Williams

November 2019

There are signs even the [new-build compatible cartridge] makers are aware that fighting on price alone isn’t necessarily the right path to take. In Europe, Print-Rite now owns the respected Pelikan aftermarket brand and the company brought in well-known imaging executive Steve Weedon earlier this year to run its European operations. On the face of it, it’s a similar brand strategy to Ninestar’s 2016 acquisition of Lexmark and, in the PC sector, to Lenovo buying IBM’s computer hardware business back in 2005. In both cases, it gave the China-based parent company a foothold in a credible, higher-margin branded business and moved away from a race to the bottom on price.

36 Spotlight As operators in our industry seek new revenue streams, tesa’s new brand Sugru is branching out into OP

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

If it’s broke, fix it

ou will see later on in these pages that I stole the headline for this comment from our Spotlight article (see page 36). It seemed appropriate. Although – except for this actual feature – looking at this issue of OPI, the “if it’s broke, fix it” advice should be taken figuratively rather than literally. And clearly, there are some things that appear to be broken. Let’s start with our Big Interview (see page 16) where industry newcomer Steve Horne refers to a new approach and a fresh look at SPOT Group. An insufficient product range and dealer apathy at the Spicers wholesale unit are just two things he needs to fix at the group which has been going through some challenging times.

[A better work-life balance] is certainly something that needs fixing in the hearts and minds of many industry peers The imaging supplies sector is another part of our industry that’s seen some upheaval in recent times. Our Hot Topic (see page 24) refers to HP Inc and its new supplies strategy, for instance. Here’s another case of realising there’s something amiss with the previous ‘sell printers at a loss and make all the money on supplies’ status quo and an endeavour to changing it to something that will bring long-term success. Moving on, marketing is a topic that’s evolved immeasurably since social media has started to pervade every aspect of our lives. As Marc Pinner points out in our How to... guide (see page 40), marketers ‘fixing’ their strategy is of paramount importance – differentiation and personalisation are the key words here. Marketing and how to best execute it is also closely linked to customer demographics. As our Research feature illustrates (see page 42), Gen Z is upon us and this age group has some different expectations and priorities that operators in our industry would do well to pay attention to – both from a customer as well as an employee point of view. But while Gen Z is about to enter the workplace, millennials are already a core part of it. And they’re not so very different from other generations, says Beth Freeman (see page 46). The most prominent difference without a doubt is a desire for a better work-life balance. This is certainly something that needs fixing in the hearts and minds of many industry peers. HEIKE DIECKMANN, EDITOR Have a great month.

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

November 2019

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NEWS

Analysis:

Amazon Business makes procurement inroads

The day began with a keynote address by Todd Heimes, Director of Amazon Business Europe. “We see a huge opportunity for us to impact change within the procurement function,” he told the audience as he ran through some of the features of Amazon Business, such as guided buying, volume and progressive discounts, and the Amazon Day delivery option.

Around 400 delegates from the European B2B procurement and supply chain industries gathered in London, UK, on 9 October for the inaugural Amazon Business Exchange (ABX) customer conference. Amazon has always said it wants to work with businesses of all sizes, from freelancers to major enterprise and public sector accounts. But ABX was all about the top end of the procurement food chain and invited speakers included senior purchasing executives from behemoths such as General Electric, Siemens, Bouygues Construction and travel group TUI. Amazon Business has been present in Europe for less than three years and is now established in five markets – Germany, the UK, France, Italy and Spain – but delivers all over the continent. It already works with 75% of the firms listed on Germany’s DAX 30 index and more than half of London’s FTSE 100-listed companies. Why are these companies attracted to Amazon Business? The reasons are similar to those being given by the US General Services Administration regarding the establishment of its federal e-marketplace solution: modernise and simplify the purchasing experience, control off-contract ‘rogue’ spend, make better use of data, and free up purchasing department resources for more mission-critical tasks.

CONTROLLING ROGUE SPEND Something that came out of the customer presentations was just how much uncontrolled corporate spend has already been going through Amazon even before an Amazon Business solution is implemented. General Electric revealed that $2 million a year was being spent on Amazon – which prompted the company to begin its Amazon Business journey. Meanwhile, Keelie Leahy, Director of Innovation at childcare services provider Busy Bees, disclosed that £200,000 ($258,000) worth of credit card purchases were being directed through Amazon even though centre managers were prohibited from doing so. In addition to having no visibility on these purchases, she referred to the hidden back-office costs of processing a large number of transactions. In the UK, Amazon Business has recently started a framework agreement with public sector purchasing organisation YPO which, incidentally, was one of the main sponsors of ABX. Deputing Managing Director Paul Smith told OPI that around 100 entities were already using the contract; at this stage, it is more a question of previously uncontrolled Amazon spend now going through established processes that allow these purchases to be monitored and analysed. An enlightening and well-received presentation was made by Dietmar Harteveld, Head of Supply Chain Management EMEA at Siemens who is responsible for strategic sourcing in excess of €2 billion ($2.2 billion). He went through the reasons for engaging with Amazon Business, the internal challenges involved and the results so far.

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The first Amazon Business Exchange event in London in October demonstrated the reseller’s growing popularity with Europe’s purchasing community

ABX 2019 was hosted by Todd Heimes, Director of Amazon Business Europe

If [traditional suppliers] want to stay in the game, they should start to make their catalogue [...] competitive with the marketplaces that are out there He showed a graph that highlighted the increased number of orders going through Amazon Business, underlining that each of these represented the elimination of a free-text order. “This allows us to focus on other areas and reduce the management of transactional activities,” he said. “We still do these free-text orders, but I don’t believe we will be doing anything like the same number in 12-18 months’ time.” Even though the customers presenting at ABX were handpicked by Amazon, it wasn’t all about simply patting the company on the back and

saying what a great job it was doing. “We have been running and walking with Amazon over the past two years,” said Harteveld. He noted the technical difficulties involved in getting Amazon Lockers on Siemens’ sites and the current lack of an EDI interface, although you can guarantee that these are things that Amazon is working on to make happen. OPI had the opportunity to speak one-to-one with a number of customers at ABX, including Harteveld and Leahy. Something that came out of those interviews was how procurement is changing and how the traditional models are being challenged by technology. Leahy revealed that stationery is a critical category for Busy Bees and that her organisation is currently undergoing a supplier review and bid process. Nevertheless, she admitted scrapping these types of tenders is something the company would consider providing it still had control over purchasing. While she also recognised the value in face-to-face meetings with suppliers, she praised Amazon Business for its “unrivalled” account management. For Harteveld, disruption in the traditional procurement process is inevitable, but also a positive thing. “I genuinely believe that the category and contract management [situation] – which procurement has driven for the past two or three decades – while it won’t die, will fundamentally change over the next ten years,” he stated. “Will we then be contracting in the same way as we did in the past? I don’t think we will. Why would we for non-critical items?” His message for traditional suppliers? “If they want to stay in the game, they should start to make their catalogue and related deliveries competitive with the marketplaces that are out there. And they should start to push back on the likes of Siemens about what we really want over the next 3-5 years.”

NEWS

His starting point was not the need to save a specific amount of money; it was more about providing a real-world experience for purchasers, dealing with the inefficiencies related to manual, free-text orders. He was also keen to reduce the number of active suppliers while at the same time offering more buying choices. Improved pricing was a goal, but this was viewed as something that would be achieved if all the other components of the programme were successfully implemented. Harteveld admitted there had been a disconnect between how users viewed the initiative and what the company’s somewhat conservative hierarchy made of it, and that it had been challenging to get all functions on board. He had overcome these obstacles by a clear, inclusive internal communications strategy and agreed values that fostered a willingness to solve challenges and force change.

AMAZON BUSINESS HOLDS FIRST-EVER CUSTOMER AWARDS

November 2019

ABX 2019 wrapped up with the inaugural Amazon Business European awards for enterprise and public sector customers. Florian Böhme – Director of Amazon Business Germany – hosted a short awards ceremony in three categories: Customer Empowerment, Agile Procurement and the Visionary Award. In the Customer Empowerment category, the runner-up was Lloyds Bank while the winner was Spanish energy firm CEPSA, Amazon Business’ first Marketplace customer in Spain. UK local authority Walsall Council – which launched on Amazon Business in just three days – was named as winner in the Agile Procurement category. Germany-based washroom, hygiene and safety giant CWS was the runner-up. The winner in the Visionary Award category was Swiss/Swedish multinational ABB. It saw a double-digit drop in free-text orders after using the Amazon Business Marketplace. The runner-up spot in this category went to Denmark-based facilities services company ISS following an Director Amazon Business Germany, Florian Böhme (second from left), Director Amazon Business Europe, Todd Heimes (far right), and the ABX 2019 awards winners initiative led by its UK team.

NEWS

IN BRIEF Wulff makes board change Scandinavian reseller Wulff has named new CEO Elina Pienimäki as its Chairwoman. She replaces former Chairman and group CEO Heikki Vienola. Herman Miller raises Hay stake Herman Miller has taken its ownership stake in Denmark-based office furniture company Hay to 67%, paying $78 million last month to purchase a further 34%. New MD at Lyreco France Eric Avril has taken over as Managing Director of Lyreco France following the retirement of Stéphane Bossut. Avril joined Lyreco France in 2016 as its Marketing Director. Domtar to reduce capacity North American paper manufacturer Domtar is closing two uncoated freesheet (UFS) machines in the US. The closures affect mills in Arizona and Michigan and will reduce its UFS capacity by 185,000 metric tonnes. Willert joins Static Control Aftermarket imaging giant Static Control has appointed Annie Willert as its Director of MPS Solutions. She was VP of Sales & Marketing at remanufacturer LMI before the company went into receivership. Its assets were acquired by Clover Imaging Group in September. Staples Inc to open more Studios Staples’ US retail network has confirmed the opening of four more Studio co-working locations in Massachusetts. A Studio is also scheduled to open in Manhattan, New York, in 2020.

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Green Light for VOW VOW Wholesale will be imminently holding its two annual Green Light events. On 21 November, the VOW team will be in Dublin for Green Light Ireland. On 5 December, the wholesaler is expecting a record 800 delegates at the Chateau Impney Hotel and Exhibition Centre in the UK’s Midlands region.

UOE sells B2B business UK reseller UOE has sold its B2B operations to fellow dealer Quills Group in order to focus on its growing high street retailing and Post Office business.

Fullerton leaves Winc

Darren Fullerton, CEO of Australian office products reseller Winc, left the company in October. He took over from Jay Mutschler as CEO of Staples Australia at the beginning of 2016, leading the company through its acquisition by Platinum Equity the following year and then through the subsequent merger with OfficeMax in Australia and New Zealand. “As we head into 2020, we need to focus our attention on the next phase of transformational change,” wrote Platinum Principal Renee Koontz in a note to staff. “This is vital to ensure that Winc’s business achieves long-term, sustainable growth. At this point in our journey, our CEO Darren Fullerton has decided that this is the right time for him to seek an opportunity outside of Winc.” Taking over the CEO role on an interim basis while the search for a permanent successor to Fullerton is carried out is Adelle Howse. A seasoned Darren C-suite executive, Howse previously had a Fullerton spell at Winc as its interim CFO.

Essendant sells industrial business US wholesaler Essendant has divested its industrial products division to private equity firm One Equity Partners (OEP). The corporate carve-out transaction involves Essendant’s ORS Nasco, Medco and Nestor (now collectively known as ORS MEDCO) automotive, safety and industrial supplies operations. The business has 1,100 employees and 35 facilities that serve more than 15,000 independent distributors, national distributors and online resellers across North America. In 2017, the last time Essendant published its full-year accounts as a public company, the industrial supplies unit reported sales of approximately $590 million. As an independent company, ORS MEDCO will be headed by CEO Chris Kempa, the former Grainger executive who had been running Essendant’s industrial group since 2017. He will work closely with Manny Perez de la Mesa, the recently retired CEO of swimming pool supplies distributor Pool Corporation, who will serve as Chairman. Following Essendant’s acquisition by Sycamore Partners in early 2019 and the closer ties with Staples, it was difficult to see the rationale for keeping the industrial business, so the spin-off of the division makes sense. Financial deals of the transaction were not disclosed.

GSA issues e-commerce marketplace RFP

At the beginning of October, the US General Services Administration (GSA) published the request for proposal (RFP) for its highly anticipated commercial e-commerce platform initiative. Potential contractors had just 30 days to respond to the RFP, and there will now be an initial selection process. Candidates will then have to go through a second round which will include a live test demonstration to GSA officials and a performance work statement addressing a number of specific topics: supply chain risk management, use of mandatory sources (eg AbilityOne), cybersecurity, data capabilities and fee remittance. The RFP came three months after a draft document was released outlining the US government’s requirements to enable e-commerce marketplaces to sell commercial off-the-shelf (COTS) products to federal agencies. The addressable market for COTS is estimated at $6 billion and GSA research put the amount spent by agencies in 2018 via online portals at around $260 million. A three-year proof of concept period is on track to begin in early 2020.

NEWS

Analysis:

Big box break-up continues

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Office Depot Europe has joined the divestment party after agreeing to sell its Czech and Slovak businesses to PBS Holding

Office Depot Europe has agreed to sell its subsidiaries in central and eastern Europe (CEE) – located in the Czech Republic and Slovakia – to Austria-based multichannel operator PBS Holding for an undisclosed sum. Office Depot entered these markets when it bought leading B2B player Papirius in 2006 – a year that also saw the acquisitions of $300 million US dealer Allied, Best Office in South Korea and a majority stake in Office Depot Israel. In our 2018 Big Interview with former Office Depot Europe CEO Neil Maslen (see OPI June 2018, page 18), he identified CEE as one of the company’s growth markets. Office Depot said the CEE business – which focuses on serving larger contract customers – had grown organically and achieved market share gains over the past two and a half years. The product and service offering in the region has already been expand into adjacent areas such as office furniture, personal protection equipment, cleaning and hygiene, and managed print services. Richard Scharmann, CEO of PBS Holding, confirmed that the acquisition would add around €65 million ($72.5 million) to his group’s top line (for reference, Papirius had annual sales of about €56 million when it was acquired in 2006). “[Office Depot CEE] is a perfect fit for our existing structures in these markets and provides significant potential to the PBS group,”

Scharmann told OPI. “It has been extremely successful in its online operations and with the transformation into growth categories – both of these are key strategic investment areas for PBS.” Scharmann confirmed that once the transaction closes, PBS would work on the future set-up with local management. “We will focus on further developing their strengths, share best practice among the group and define key investment areas together,” he stated. SELL-OFF STRATEGIES The halcyon days of international big box expansion appear to be well and truly over. Following the sale of both Office Depot and Staples’ European operations to private equity firms Aurelius and Cerberus respectively, it has been very much a question of getting these businesses back on a sound financial and operational footing and then, more recently, of selling off assets. Staples Solutions was first out of the divestment blocks, having offloaded retail operations in the Netherlands and Germany to Office Centre, its Ireland business to local dealer Codex and, in a deal which closed on 7 October, its subsidiaries in France, Italy and Spain to packaging group RAJA. The messages coming out of both camps are similar: these transactions will allow the local businesses to flourish under new ownership and enable Depot and Staples to better focus their resources on core areas. It’s a communication strategy that can probably be taken with a pinch of salt. As assets are sold, these formerly huge resellers diminish in scale and reach, weakening their purchasing power and almost losing their raison d’être as international organisations. The question therefore arises: what’s next? The transactions so far have involved strong, local and international trade players acquiring assets they will roll into their existing operations. That is probably the preferred outcome for stakeholders, but could become more problematic when dealing with the larger businesses such as Staples in the UK and Germany, or the Office Depot Viking unit and its subsidiary in France – who would the acquirer be?

We will focus on further developing their strengths, share best practice among the group and define key investment areas together We might see some creative outcomes here, such as management buyouts or even business combinations between Staples and Office Depot entities. The European Commission blocked the coming together of their contract operations in Europe in 2016, but the procurement landscape has changed since then, and competition authorities should have a more favourable view going forward on this type of merger.

The National Business Products Industry has raised a record-breaking amount for the City of Hope medical research institute. At this September’s Spirit of Life Gala Dinner at the historic Navy Pier in Chicago, Illinois, more than 500 executives from the US business supplies industry gathered to honour VP and General Manager of 3M’s Stationery and Office Supplies Division Brad Graves, who collected the 2019 City of Hope Spirit of Life award. Graves spearheaded this year’s Science Creating Hope campaign which raised a colossal $15.5 million. Next year’s honouree is HP’s Stephanie Dismore and the 2020 Spirit of Life Gala Dinner will be held on 17 September at the Swissôtel in Chicago.

PICTURE OF THE MONTH

‘‘

NEWS

Record year for City of Hope

US promotional products organisation AIA moved into its new headquarters in Appleton, Wisconsin, in early October. CEO Matt Gresge performed the traditional ribbon-cutting ceremony flanked by members of the AIA head office team.

Hamelin buys Unipapel assets

ISG relaunches Next

US dealer group Independent Suppliers Group (ISG) has announced a revamp of the Next young leaders programme. Next provides a support network, engagement and development programmes to foster the growth of future leaders, executives and principals in the independent dealer community. A new Next steering committee – with Herald Office Solutions’ Myers Jordan as Chairman – has been formed and met recently to discuss the vision, structure and future initiatives for the programme. The group will convene at the ISG Prevail 2019 event which takes place in Indianapolis, Indiana, this month.

New Regional Manager for Staples Solutions

November 2019

European reseller Staples Solutions has named Christian Grosse as its Regional Manager for Germany, Austria and Poland, and Managing Director for Staples Germany. He took up the position in mid-October, replacing VP Central Region Stefan Rennig who stepped down for personal reasons. Grosse has years of experience in sales and marketing as well as extensive knowledge of the B2B channel. He joins Staples from Takkt subsidiary Kaiser+Kraft, where he was Managing Director of Sales. His previous roles also include Director Sales & Support EMEA at Datacolor, General Manager Sales & Marketing at Nik Software, and interim Christian Manager for Sales & Marketing DACH at Grosse Wacom Europe.

Stationery vendor Hamelin has spent several million euros on acquiring machinery from bankrupt Spanish manufacturer Unipapel. The company spent €3.4 million ($3.8 million) on equipment – located at the former Unipapel facility in Logroño, Spain – that had been put up for auction. Hamelin CEO Eric Joan confirmed to OPI that the France-based manufacturer won the auction about six months ago, but it appears that access to the equipment had been stalled by what he called a “complicated” legal process. He added that the machines will allow Hamelin to develop its production capacity in Spain, France, Poland and Germany. Unipapel’s Logroño facility was its main production unit for notebooks and was formerly run by manufacturer Papyrus until it merged with two other companies in 1976 to create the Unipapel entity. Unipapel’s manufacturing operations filed for insolvency in 2016, two years after they had been acquired from ADVEO by Swiss investment firm Springwater Capital. Although Springwater ran the business, it leased the property and equipment through an arrangement with ADVEO. The wholesaler itself, meanwhile, had to fight a two-year legal battle in order to be able to sell off these Unipapel assets. The Logroño manufacturing site was sold to Turkey-based automotive accessories giant Standard Profil in January 2019.

NEWS

Numbers up at Insights-X

The fifth Insights-X stationery trade show that took place in Nuremberg, Germany, earlier this month attracted 5,669 trade visitors from 85 countries. Attendance was up 3% on last year’s figure, with more than 40% of visitors and almost 60% of the show’s 321 exhibitors coming from outside Germany. Although OPI noted some very quiet aisles, overall it was a worthwhile event to attend for those interested in developing their back-to-school sales. There were also some very well-attended stands with good discussions taking place, especially among the larger manufacturers. The show included a partner lounge that was available exclusively to 20 associations and buying groups. First-time attendees this year included Turkish trade association TÜKID and German buying groups Prisma and Büroring. Next year’s Insights-X will take place in Nuremberg from 14-17 October.

SPOT Group appoints Commercial Director as Moore leaves

The Spicers-OfficeTeam (SPOT) Group has named experienced retail and B2B executive Richard Oates as Commercial Director while Purchasing Director Robert Moore has left the company. Oates joined SPOT in October and has more than 20 years of corporate experience across the trade distribution, retail and automotive sectors. He has worked at a number of major organisations including Ferguson, Morrison Supermarkets, Kingfisher and Home Retail Group. At SPOT, he will be in charge of the procurement and commercial functions, ultimately making him responsible for the company’s profit margin. As Oates was appointed, SPOT Group’s Purchasing Director Robert Moore departed. Moore’s career with the group went back to 1997 when he was Purchasing Director at Stat Plus, a role he then continued in at OfficeTeam and at SPOT when it was created in 2014. Richard Read this month’s Big Interview with new SPOT Oates Group CEO Steve Horne on page 16.

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Dochelli gives Essendant update

Harry Dochelli, President of US wholesaler Essendant, has provided an update on the company’s progress since it was acquired by Staples Inc owner Sycamore Partners in January. In a comprehensive interview with OPI, Dochelli revealed details of a new managed print and promotional products offering for Essendant customers that has been made possible by the new relationship with Staples. He also explained that Essendant would be able to raise service levels for dealers by tapping into Staples’ distribution network and how the wholesaler’s Vertical Markets Group has been made more competitive due to increased purchasing power. To read the three-part online interview which was Harry published on 15-17 October, go to opi.net and run a Dochelli search for ‘Essendant’.

IN BRIEF WH Smith expands in travel UK-based retailer WH Smith has agreed to acquire US travel retailer Marshall Retail Group (MRG) for $400 million as it looks to expand in this profitable segment. Jespers acquired UK stationery and fine writing store Jespers – which has been in business since 1901 – has been acquired. The retailer was bought by the local Morris and Vickers families. Morgan Morris is CEO of workplace products reseller Slingsby. New GM at BIC Cello BIC has named Manos Nikolakis as General Manager of its BIC Cello operations in India. He has been with the writing instruments manufacturer for 15 years. Synaxon names UK MD Technology reseller group Synaxon has named Mike Barron as Managing Director of its UK business. The appointment comes a few months after Synaxon UK became a fully-fledged subsidiary of its German parent company. Pentel approves Kokuyo deal Pentel has approved the transfer of all shares held by PI Investment to fellow Japanese stationery manufacturer Kokuyo. With a 37.45% holding, this now makes Kokuyo the biggest shareholder. Paper subsidiary saved Arjowiggins Creative Papers has been saved after a management buyout of its UK operations. It had been trading in administration following insolvency proceedings against parent companies Arjowiggins and Sequana. New CEO for Stora Enso European packaging, pulp and paper manufacturer Stora Enso has appointed Annica Bresky as its new CEO. She will take over from Karl-Henrik Sundström. Knoll sues Senator Office furniture manufacturer Knoll has sued UK-based rival Senator for alleged patent infringement related to a design feature on Knoll’s Pixel tables.

SOCIAL SPY Social media highlights from the business products industry around the world Manutan Group

Philippa Scurlock-Davies

Marketing Manager, Avery UK

A few days ago, our Dutch subsidiary, Manutan Nederland, participated in World Cleaning Day. With safety jackets, garbage bags and pincers, our colleagues went to clean up the area around the Den Dolder forest. Results: 50 kg of bottles, cups, cigarette butts and plastic packaging were found.

Had a great day last week collaborating with our European counterparts – great insights and exciting planning! #avery #teamworkdreamwork

Irongate Group

Office Depot France

@irongate_group

@officedepotfr

Thanks to you, your loyalty and your votes, Office Depot France won the prize for Best Retail Chain of the Year 2019-2020 in the stationery and office supplies category!

What a fantastic day it’s been at Irongate Live! Thanks to everyone for coming, we hope you all enjoyed it!

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The Navigator Company

Navigator marked the tenth anniversary of its production sites, Navigator Tissue Ródao and Navigator Paper Setúbal, with two ceremonies that gathered about 80 associates.

Ravi Saligram

President & CEO, Newell Brands

Today I begin my journey as President and CEO of Newell Brands, and I couldn’t imagine a better way to kick it off than hosting a town hall for all employees. It was an honour and a pleasure to meet with and exchange ideas with so many bright, promising individuals. #WeAreNWL

Egan Reid Group @EganReid

Congratulations to our Managing Director Martin Reid, who yesterday received the Freedom of the City of London in a prestigious ceremony at London Guildhall!

BIG INTERVIEW

POISED Driving out cost while adding value to customers has become de rigueur for many operators in our industry, none more so than the wholesalers. And that is eminently possible, says SPOT Group’s Steve Horne, especially with the help of digital technologies

for growth

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teve Horne joined the Spicers-OfficeTeam (SPOT) Group in March of this year, stepping into the big boots of OP veteran Jeff Whiteway. Industry-specific knowledge he may not have, but an unbiased approach and the ability to take a fresh look at the group’s two core entities is what Horne most definitely brings to the table. Not to mention years of experience in supply chain-related issues and a keen desire to always add value and deliver growth – all attributes that SPOT and its private equity (PE) parent Better Capital need at this time. OPI’s Heike Dieckmann joined Horne at Spicers’ regional offices in Waterbeach near Cambridge, UK, in late September to find out more about his SPOT Group ambitions, plans underway and in the pipeline.

OPI: We’ve covered your background in some detail before, most recently in the last issue of OPI (see Top 100, OPI October 2019, page 26). So rather than going through it again, let me ask you this: what do you think you bring to the SPOT CEO job in terms of experience and leadership qualities? Steve Horne: My previous career has been quite mixed. I’ve worked in most areas of the value chain, everything from manufacturing, wholesale, distribution and retail. And all that across a number of industries which I guess speaks to some breadth of experience. From Better Capital’s point of view, I believe not having any of the baggage that often comes with being from inside the industry played a role in the PE firm choosing me for the job. It’s been said before – the industry needs to change. And despite all the good that comes with having a lot of insider knowledge, it can also confine you. You only know what you know. What I bring to the table is different experiences from other industries and an understanding of what roles each of our businesses should play. Spicers, for example, should be a true wholesaler that adds value to the customer while a contract stationer like OfficeTeam needs to provide excellent service consistency and a complete solution. A fresh look at the overall business and a new approach is what was needed at SPOT Group I believe.

OPI: What did you see when you arrived in March of this year? SH: Better Capital representatives and SPOT Group Chair Octavia Morley were very honest in their appraisal of the market and in terms of their expectations. I had done a fair bit of due diligence before I joined, of course, and when I arrived, I felt there were no real surprises. In fact, I saw quite a few similarities to my last job at Euro Car Parts. One of the things people often say in this industry is: “It’s unique”. It’s not. This will sound like a weird analogy, but one of the areas that I used to run at Euro Car Parts was the collision repair market. The body shops that we dealt with are very similar to dealers – sole traders, single or regional multisite, operating in tight geographical areas. Technology has and is changing that market, in terms of paint evolution, crash avoidance systems and aluminium body repairs while customer expectations for transparency and quality of service were also accelerating. These factors, combined with work providers squeezing margins, mean that body shops are having to either adopt new technology or look for other revenue streams. A lot of these operators have gone into car service, MOT and mechanical repair rather than just collision to diversify their businesses and

BIG INTERVIEW Steve Horne

A fresh look at the overall business and a new approach is what was needed at SPOT Group I believe looked at other areas where they can grow. In addition, similar to the dealer situation, there’s been a huge reduction in body shops over the last ten years because of those market dynamics. Then, at Euro Car Parts itself, I also looked after the national accounts which is very similar to the contract stationery market. I would be dealing with your Kwik Fits and Halfords, etc, and their demands are the same as what I’m seeing from OfficeTeam customers.

OPI: How is the group positioned now? SH: The overall SPOT Group is just over £280 million in sales. Last year, it had £500,000 EBIT, but that was heavily influenced by some of the network change programme that was going on.

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OPI: So these body shops have gone bust or consolidated? SH: A bit of both. Like the traditional OP dealers, these were lifestyle businesses. There was no succession and with all the challenges they had, they either just closed down or sold the business.

OPI: So what was your brief from long-term investor Better Capital which presumably has an exit strategy? Carry on what Jeff had been doing for the past five years or change tack? SH: I think it was a mixture of both, to be honest. PE firms are driven by building value and at some stage they want to realise that value, as you say. The remit, as such, was always going to be the same, whether it’s to Jeff, I or someone else altogether. The question is how you build that value. My career has always been about growth. When I joined Euro Car Parts in 2009, revenues stood at £160 million ($200 million). When I exited at the end of last year, we closed the books with more than £1 billion. 80% of that was through organic growth, not acquisitions. Similarly, when I worked with Wickes Building Supplies, it was about growing profitably and adding value. The business was bought by Duke Street Capital for about £350 million; three years later we sold it for £950 million. That’s what I want to bring to SPOT Group – growth.

Steve Horne BIG INTERVIEW

Breaking it down, OfficeTeam – including Zen Office – was about £146 million in revenues and £5.4 million EBIT. Spicers was £165 million but, as I said, because of the infrastructure changes we made that predominantly affected the wholesale side and were a big investment, we had a £4.9 million EBIT loss. On the plus side, Spicers by the end of this year, on run rate, will become a profitable business again and that bodes well for the future. OPI: Pretty up and down then. Under Jeff’s guidance, the wholesaler returned to profit in 2017 and then back into the red in 2018. SH: Correct. But the challenge is to keep growing the profits while absorbing inflationary factors. OPI: What’s the size of SPOT Group in terms of about staff numbers, etc? SH: We have about 900 staff in OfficeTeam and roughly 350 at Spicers, so the whole group operates with just over 1,250 people. The registered head office for SPOT is in Croydon, just outside London, but we have several sites around the country, such as this one here in Waterbeach. OPI: Tell me more about these network changes you’ve mentioned. They really affected your various locations, didn’t they? SH: They did. We’ve basically simplified the supply chain, moving from four Spicers distribution sites and consolidating them down to two – one in Manchester and the other in Greenwich. Our Smethwick site in Birmingham, meanwhile, services OfficeTeam clients. Overall, the change has improved stock availability and service to customers. It’s also taken huge cost out of the business, made us more efficient and released a lot of working capital.

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OPI: And all this change is now complete? SH: Yes. The last customer migration was in July. The whole project was delivered under budget, on time and we don’t talk about it anymore. Let’s just move on with what else is important.

OPI: Which is? SH: My priority and one of our key growth strategies is to build out our ranges. On the shelves at Spicers we now have between 12,000 and 13,000 SKUs, compared to between 18,000 and 22,000 at OfficeTeam. The latter varies a lot because so many are customer-specific products. In today’s world, you don’t have to stock everything on the shelf, however. With good infrastructure and systems, you can deliver a drop-ship proposition to a customer that’s absolutely seamless. It’s my belief that in 3-5 years’ time we can have 300,000 products on our database that a customer can order. Not everything will be next day, but the vast majority will be. It will be our carrier that picks up the goods from the vendors, so they will be fully tracked and traced. I envision an almost Amazon-type experience: you’ll know where the order is, when it’s due to arrive and when it has arrived. There will

be an electronic POD and everything will integrate into dealers’ and directly into their customers’ systems. This is where we’ve been investing a lot of time and money over the past six months.

Over the years, dealers have heard about lots of initiatives from us. [...] Some of them didn’t live up to the promise OPI: This is where SmartPad and Spicervision 2 come in as well I guess? SH: Absolutely. Our procurement platform SmartPad and Spicervision 2 were critical to this strategy because they’re the B2B tools that will facilitate it. SmartPad is fully launched and we’re in the process of migrating our customers to it. We’ll have 80% of our customers and 90% of the volume on there by the end of the year. It will give a business control of spend – by person, department, budget and product. It provides great management information, consolidated invoicing on trading terms and backed up with great transparent service as well as the loving touch of an OfficeTeam account manager. Spicervision 1, which is our Spicers integrated B2B transactional platform, was introduced with the Advantia customer acquisition at the beginning of 2018. Vision 2 is literally just about to start rolling out to dealers bringing enhancements in self-service functionality, integrated with our new service and support software, Zendesk; improved search facility and improved product information which is critical with the launch and development of our extended ranges. Continued developments of Spicervision 2 will roll out during the first half of next year. We’ve invested heavily in these platforms and I see them as a key driver for new business, but also to get a bigger spend from our existing customers. OPI: What’s been the response from your dealer customers to those platforms? SH: It’s early days, that’s probably the best way to put it. Over the years, dealers have heard about lots of initiatives from us – and other operators too,

Steve Horne BIG INTERVIEW

for that matter. Some of them didn’t live up to the promise, so there’s a fair amount of scepticism and cynicism out there among some dealers. But SmartPad and Spicervision 2 are here and they’re working extremely well; it’s our responsibility now to make sure we deliver exactly on what we said we would and continue to develop these platforms. OPI: Who are these reluctant dealers? SH: Well, I segment our resellers into two groups: traditional dealers that run a lifestyle business, are quite happy with where they are, have very good relationships with their customers, but still mainly trade in traditional products. They typically, because of some of our previous failures, are the slow adopters and the cynics we have to convince. At the other end of the spectrum are the progressive dealers. They today only have about 40% or maybe tops 50% of their revenues coming from traditional OP. They have already diversified into areas such as furniture, workwear, PPE, educational supplies, jan/san and so on. And these progressive dealers absolutely see the benefits and want the new systems; they see they will help their businesses grow and bring efficiencies. Within the companies in our group, Zen Office is a good example. Only about 40% of its purchases are traditional business supplies, the rest is all the other categories I’ve just mentioned. Like I said earlier, we need to truly understand what role we play as a wholesaler. That role is to make products available efficiently to our dealers. What they want is changing and ever-expanding, so we need to do the same but ideally be leaders, not followers.

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OPI: How much of what’s in your warehouses is still traditional as opposed to jan/san, etc? SH: Traditional probably accounts for 50-60%, jan/san 20-25% and then some specialised products make up the rest. As you can see from those figures, we are still heavily reliant on the traditional category which is obviously a challenge as that market is declining, by as much as 5-8% according to some.

OPI: If up to 85% is made up of traditional OP and jan/san and then the rest are ‘specialised’ products, where is the workwear, PPE, furniture and so on that you’ve just mentioned? SH: The additional 15-20% of specialised product would include short ranges of workwear and PPE, but the majority is provided by our vendor partners either direct to the customer or delivered to one of our warehouses and cross-docked to the customer. We simply have to get better at introducing new products and then generating growth of at least 5-8% with them for our dealers. Over this last quarter, we are introducing a lot of new products which will be launched in our 2020 catalogue. It has a more modern layout and feel with interactive QR codes that, when scanned, show videos which give fantastic product information. The new SKUs are across all categories including general office supplies, facilities, technology and furniture. The last lot is due to come out in December. I hope they will

excite the market and people start to view Spicers differently again – more like they used to many years ago when it was always at the forefront of what was happening in our industry, progressive and anticipating change, rather than reacting to it. OPI: How does the OfficeTeam offering compare to that of Spicers in terms of the overall mix? SH: It’s completely different. Being in the contract market with a consolidator proposition, a substantial amount of OfficeTeam’s products are customer-specific, quite different to the mostly off-the-shelf offering of Spicers. That’s another reason it made sense to keep the logistics infrastructure separate, with OfficeTeam being served from Smethwick. It makes for a much better and cleaner customer service. On that OfficeTeam note, I think there’s a real opportunity for us to drive new business into the company as we tender for contracts. When I joined SPOT Group, I had never heard of OfficeTeam, so I think we are probably one of the best kept secrets out in the wider world. One of the first structural changes I made earlier this year was to double the size of the new business team – comprising sales people, researchers, lead qualifiers, etc – from 20 to 40 people. We are already seeing the benefits of that. It means, for example, that a sales person has a clean data list of target customers to go after that have been pre-qualified. I believe there are at least 8,000 customers out there which we don’t have a relationship with. That’s what I call an opportunity. We’ll be targeting big retailers, manufacturers, distributors and the service industry. The role we play is that of a consolidator, particularly now we’ve got SmartPad with all the different products and functionalities on there. If I was a procurement manager in any of these organisations, I would be hugely frustrated to be dealing with 200 or 300 suppliers. On top of that, a lot of the employees in these firms would be buying from places like Amazon because there’s no other solution available to them – or so they think. OfficeTeam can give them that solution. SmartPad gives procurement managers control and they can set authorisation levels by person, department, spend level, product, etc. It also offers

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them drop-ship visibility whereby they can track and trace everything. And it provides them with a consolidated invoice. On top of that, they’ll get the personal touch from an OfficeTeam sales person who will make sure that everything is absolutely as it should be. OPI: Going back to Spicers, you referred to some dealer apathy. What’s the overall feedback you’re getting? And what is your outlook on the partnerships you have? I haven’t heard anything about your Brilliant and Alliance partner programmes for some time. SH: Interesting that you should mention those. The most common feedback I get is that over the years Spicers has lost its community feel a bit and become too transactional. We have always had huge loyalty from our dealers and we need to reward that. We’re going to relaunch our partnership programmes and involve dealers much more in the business. I want our dealers to be part of the decisions that we make going forward because there’s no point the board making a decision if it isn’t what the customer wants. So we’re very closely looking at the Brilliant and Alliance programmes. I don’t think they, in the past, always had the right added value. The Alliance programme – which is what the Advantia group is on plus a few other big dealers – is obviously the ultimate whereby a dealer is moving everything into Spicers and going for a completely stockless approach. It takes a lot of cost out of the supply chain, but it’s a huge decision for a dealer to give up that control and align fully with Spicers. I think there needs to be much more of a stepping stone journey to get there by building trust – or indeed the option to stop somewhere along the way. For both Brilliant and Alliance, we have to have the right added value at each stage which then, I’m convinced, will attract more dealers to join our programmes and again feel part of that community. We’re hoping to announce something before the end of the year and then run with it in 2020. OPI: The topic of Advantia has come up a couple of times. You gained a lot of dealers and a very big customer in early 2018 when Advantia parted with Truline. But you soon ran into problems too. Jeff referred to that time as reaching “a cliff edge” and Spicers having to “throw the cheque book” at servicing this contract in its early stages. What’s the situation now? SH: I attended an Advantia meeting recently and the feedback was unanimously positive. There were some concerns about service during our network changes, although they didn’t materialise and Advantia saw little if no adverse effects. I am sure there will be issues in the future, but the close working relationship we are developing will help overcome them quickly and efficiently. Going forward, we’re also going to support the group’s members with the upgraded Spicervision platform which will add further value to them. With regards to the initial servicing issues, when you onboard a contract of that size, there almost

inevitably will be some difficulties in terms of resources and systems. It was also partly a case of us understanding them and them understanding us. I’m second-guessing here a bit because I obviously wasn’t there, but we took on a big customer and didn’t adapt to its demands quickly and efficiently enough. But the problems didn’t last long and I would certainly say it’s a true partnership now where both parties invested a lot of time in resolving any issues we had; it was not a case of pointing the finger and while I don’t want to speak for the group, I believe we’re in a good place now. OPI: You briefly mentioned Amazon earlier, albeit in an OfficeTeam context, saying more or less that it’s become the go-to place when other avenues are failing. SH: Absolutely it has. It’s my complete conviction that we let Amazon get a foot in the door and contributed to its growth because we haven’t been a great wholesaler to the vendor or the customer. Whatever people are buying from Amazon in the B2B environment we should be able to provide. Our loss has been Amazon’s gain. You simply have to respect this operator and what it’s achieved. For me, it’s been a wake-up call that helped my team and I to define what some of our growth strategies need to be. It’s been said many times before – Amazon is still a very transactional business, so Spicers as a wholesaler and indeed OfficeTeam as a dealer have got a great opportunity to add that wrap-around service. Do all the things that Amazon is extremely good at as well as you possibly can, and then add the service and the personal aspect. Amazon is in everyone’s market and if it’s not there yet, it will be. As I left the automotive industry, Amazon really started to go after it. You can take two decisions with this e-commerce giant – see the opportunities and embrace them or fight it.

Adding value was my brief and that’s very much what I’m here to do OPI: Let’s move on to the competitive landscape away from Amazon. Your rival EVO Group announced a big strategy review this summer – whatever that might result in – while Exertis Supplies won a European Office Products Award in March for all-round wholesaler excellence. Where do you stand on these two? SH: Competition is good. Exertis Supplies seems to have come in as a disruptor – markets need that because it sharpens the mind and causes everyone else to up their game. I’m in a privileged position in many ways. I’m new, come from a different industry, so have no hang-ups about our competitors. I’m observing and learning. And ultimately, we all want the same things, because the industry has to grow for us all to survive. Yes, we fight day-to-day out on the pitch and try and win, but back in the boardroom we need to jointly talk about how we can improve and I believe that all our competitors are open to those kinds of conversations.

OPI: One perennial question for any company owned by a PE firm, especially one as long-term as Better Capital: what’s the exit strategy? SH: Whenever you’re owned by private equity, you’re up for sale 24/7, that is just a fact. If someone comes in with an offer and it’s going to give value, then you’re going to sell. Adding value was my brief and that’s very much what I’m here to do. That said, I don’t believe Better Capital has a short-term exit plan at the moment. OPI: Is that what happened to SPOT’s OPS (Oyez Professional Services and Waterlow Business Supplies legal and HR forms and software businesses) when it was sold earlier this year – it added value to Better Capital? SH: It was more of a speculative approach that drove a lucrative exit. And it sat outside the core of the group, so as such it was an easy decision to sell. It was one of the first calls I had to make coming into the business. It was a good one and helped strengthen the rest of the group. OPI: When the time comes and Better Capital does sell all or part of the business, do you think Spicers has a good chance of making it as a standalone company again? SH: I don’t know what Better Capital will sell. But to part-answer your question, Spicers is already operating as a wholesaler on its own today, but it’s still very much part of the SPOT Group too. OPI: Let’s wrap up. Coming from the outside as it were, what’s been your overriding first impression of our industry? SH: One of great heritage and tradition. I said earlier that there were no great surprises when I started at SPOT. But one thing that did surprise me in the following few months as I got to know the industry and the people a bit better was this quite astonishing negativity in the sector. Yes, the market is declining and there are plenty of challenges, but there are some really good things going on too and some really big opportunities for all channels. If we can adapt to the new realities, I’m certain we will have many sustainable businesses going forward. There are no real silver bullets, more stepping stones again. Adding different categories into your proposition and building them out is one of these stepping stones. Overall, it’s about embracing digital technologies and providing a robust platform that has a much bigger offering than what we have today supported by world-class customer service. That is what our customers tell us they want – a truly consolidated approach.

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For more exclusive content from the interview, including Steve Horne’s views on 5 Star and the wholesaler versus dealer group role debate, please visit the Magazine section on opi.net.

OPI: What do you think you’ve achieved so far and what’s next? SH: SmartPad is something that was talked about and initiated before my arrival, but it’s absolutely at the centre of our growth strategy. We’ve now got a digital director on board. He will own not just the platforms, but the commercial side of digital too. He’s currently looking at how we sell our products and how we can build a digital transformation proposition to help our customers go through the digital world. Why shouldn’t we be the go-to people for SMEs and help them through their digital journey? I want to focus on that. We’ve been working for the past two or three months on our detailed three-year plan. What are the costs, the benefits, the resources required for the initiatives we have planned? I’ve brought in a Product Management Office – or PMO – which gives us strong strategic governance with a clear joined up view of where we’re going to be and how we’re going to get there. Having this will stop us from taking one-off quick decisions that actually may not be right for us although we still have to maintain agility. The SPOT Group board will have two away days at the end of October (after OPI went to

press) where we can share strategies and make sure we’re all aligned and understand the dependencies on each other. Many of the strategies and initiatives are already in the pipeline, of course, but these days in October will help in getting everyone completely up to speed, knowing what their roles are in terms of delivering results, owning their specific part and also giving everyone full visibility of what we’re doing.

BIG INTERVIEW Steve Horne

OPI: What are the opportunities for dealers and vendors then? SH: No brainer – diversifying and growing their businesses. Not everybody is in decline, so let’s shout about those successes – maybe other dealers will jump on the bandwagon and move forward too. From a vendor point of view – and I’ve been seeing a lot of them in the past few months – they are coming up with great new and innovative products. Let’s talk about them too, not just the ones where pen sales are declining.

HOT TOPIC

The STRUGGLE for supplies

In the context of a declining print market, the rise of new-build compatible cartridges is putting pressure on the OEMs and remanufacturers – by Andy Braithwaite

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n early October, when HP Inc announced at its annual securities analyst meeting (SAM) that it was changing its imaging supplies strategy, it signalled a shift away from the ‘razor and blades’ business model – sell printers at a loss and make the profit on the supplies – that has existed in the print market for the best part of three decades (and which HP helped create). While the OEM continues to make good progress in subscription-based and contractual relationships with clients, it has had major concerns about how to profit from its massive global installed base of some 150 million devices and how it goes to market with new printers. “The model of driving mass adoption of hardware by selling printers at a loss has gone too far,” said Tuan Tran, the company’s new President of Imaging and Printing, at SAM. The heart of the problem for HP is a loss of market share to aftermarket new-build compatible (NBC) cartridges that are increasingly available online. This is being most keenly felt in the EMEA region where HP's supplies sales have been falling in the double digits (see News, OPI October 2019, page 8). “[We have] created an attractive opportunity for others,” Tran suggested. “Alternative supplies competitors are growing without having to invest in hardware development, production or placement costs. They profited from online marketplaces that reduced their barriers to entry and caused customer confusion with HP original supplies.”

Now HP is hitting back in an effort to protect its aftermarket share. For its installed base, the OEM is preparing a major PR campaign based on the print quality, sustainability and the security benefits of its own brand supplies. It is also stepping up actions to protect its intellectual property (IP), saying that the biggest blight is alternative products being passed off as HP originals. So far this year, HP has taken down almost 50,000 online listings, and it says it will continue to work closely with its partner Canon to root out counterfeits. As regards new printers, HP is adopting a dual approach to achieve what it calls a “rebalance of system profitability”. In a nutshell, this means no longer giving away printers which customers can run on cheaper aftermarket cartridges. It will offer consumers a choice: one, an HP ‘end-to-end’ solution that will provide a subsidised printer but which will lock the customer in to using only HP supplies; and two, for the customer to pay the full price for the printer, but to have flexibility when it comes to the choice of supplies. BALANCE OF POWER HP says it expects to lose sales as it introduces this new model, but that actual profit dollars will increase. Nevertheless, its choice of strategy illustrates a key dynamic in the supplies channel, namely the shifting balance of power between the OEMs, remanufactured cartridge suppliers

QUALITY IMPROVEMENTS One criticism that is often levelled at NBCs is that they are inferior in quality to OEM and remanufactured products and are prone to malfunctioning or even damaging print hardware. While this may have been true in the past, and there are undoubtedly very low-cost products of dubious quality circulating in the market, the ability of these large China-based manufacturers to deliver on the quality aspect should not be underestimated.

The model of driving mass adoption of hardware by selling printers at a loss has gone too far This win for LD came shortly after it received positive results from third-party testing organisation Buyers’ Lab (BLI) for the Gold Line series. It was the first time new-build or extended yield cartridges had successfully completed BLI’s testing procedures. HARMFUL SUBSTANCES That said, studies have also shown that cheaper aftermarket products can contain harmful or banned substances. Last year, excessive levels of decabromodiphenyl ether (decaBDE), a flame retardant that has been prohibited in the EU since 2008, were found in some HP compatible products. Tests later carried out by the European Toner and Inkjet Remanufacturers Association confirmed high levels of decaBDE in products that it had tested, and OEMs have been quick to publish findings from their own research. For example, Xerox’s Analytical Services Department tested a widely available aftermarket toner for its Phaser 6510 printer and said it was “shocked” to discover levels of volatile organic compound styrene of 650 parts per million (ppm) versus the Xerox genuine product’s 4 ppm and the company’s own guidelines of under 25 ppm. The NBC manufacturers have been quick to react. Print-Rite, for one, has issued statements and documentation confirming that its Pelikan-branded products are decaBDE free after going through both internal inspections and third-party testing. In addition, there are lingering IP uncertainties involving NBCs. Canon and Epson have been leading the way for the OEMs with a string of lawsuits, while Brother recently upped its efforts in the battle against patent-infringing products when it filed a complaint against 32 companies. So where does the rise of the NBC suppliers leave the remanufacturers? The recent demise of US vendor LMI Solutions and the news in August that the sector’s market leader Clover was experiencing financial issues certainly point to a challenging state of affairs.

November 2019

Samsung-branded toner cartridge from HP Inc

This was evidenced recently at October’s RemaxWorld Expo event in Zhuhai where US-based distributor LD Products – which sources NBCs in China – won the 2019 Quality Leader award for its Gold Line series. This was the first time in the event’s 12-year history that an NBC product had won this accolade over a remanufactured product. “Winning this award sends a clear message to dealers that they now have a proven quality alternative to OEM and remanufactured products,” said Christian Pepper, President of LD Products’ Channel Partner Division.

HOT TOPIC Supplies Battles

and the NBC manufacturers. The latter are mostly China-based firms, including powerhouses such as Ninestar, Print-Rite and Hubei Dinglong. One person who understands extremely well how these companies work is David Gibbons, Director at imaging supplies publishing and events company RT Media. Based in Zhuhai, China, Gibbons has been involved in the imaging channel for many years. He points to the distinction between what are termed ‘clone’ cartridges – exact replicas of OEM products – and other NBCs which have been developed using proprietary third-party IP that offer workaround solutions to OEM patents. “The term ‘clone’ tends to be used in a derogatory sense, but that can be appropriate when it is just a straight copycat of the original,” he says, adding: “We don’t support those, and we encourage everyone in the industry and the buyers to respect IP.” Gibbons also notes a certain level of flexibility when it comes to what kind of products Chinese manufacturers will produce depending on the market they are destined for. “In markets where the OEMs are vigorously defending their IP, these manufacturers will absolutely respect these patent rights and only offer products that have their own IP content,” he states. “However, they will make ‘clone’ products for those markets where patents are not registered, simply because there is a market for them.” This can give rise to counterfeit product issues, most notably in the Middle East and Africa where clone cartridges are passed off as OEM originals, something that Gibbons believes is “a huge concern”. He contends, though, that this is not necessarily the fault of the manufacturer. “The company that made these products may not have intended for them to be used this way and was simply fulfilling an order for ‘white-box’ cartridges,” he notes. “But the items are then repackaged with a fake OEM label and box and sold as a genuine OEM article.”

Supplies Battles HOT TOPIC

plastics. They can be regarded as a reliable, safe and compliant choice that is promoting the circular economy and preventing empties from ending up in landfill.

Says Gibbons: “Clover’s business model is based on a very expensive collections programme it is locked into. It cannot produce an aftermarket cartridge as cheaply as a quality NBC manufacturer that doesn’t have the overheads of collections and everything else that goes with that.” Indeed, remanufacturers have been able to compete on price versus the OEMs, but not against the growing NBC presence. Nevertheless,

Remanufacturers have been able to compete on price versus the OEMs, but not against the growing NBC presence the remanufacturers clearly take the higher ground when it comes to environmental and sustainability issues. As public awareness of single-use plastics grows and the need for an end-of-life supplies solution for managed print contracts becomes more commonplace, the NBC makers cannot – or do not want to – compete. Remanufacturers have other trump cards to play as well. The fact that their products are derived from OEM original cores preclude them from issues related to IP infringement and harmful

A DIFFERENT CONVERSATION What weight all those arguments carry is largely down to consumers and whether price is the determining factor for them. Yet there are signs even the NBC makers are aware that fighting on price alone isn’t necessarily the right path to take. In Europe, Print-Rite now owns the respected Pelikan aftermarket brand and the company brought in well-known imaging executive Steve Weedon earlier this year to run its European operations. On the face of it, it’s a similar brand strategy to Ninestar’s 2016 acquisition of Lexmark and, in the PC sector, to Lenovo buying IBM’s computer hardware business back in 2005. In both cases, it gave the China-based parent company a foothold in a credible, higher-margin branded business and moved away from a race to the bottom on price. The discussion on brand value is certainly one that Weedon wants to have with resellers and it will be interesting to see how this kind of strategy develops.

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FIRMWARE STRATEGIES SPARK REACTION

For Tricia Judge, Executive Director at the International Imaging Technology Council (Int’l ITC), the recent change in HP Inc’s firmware strategy has not gone unnoticed. She called the OEM’s introduction of firmware that prevents a printer from operating with a non-original cartridge a “timebomb”. The development spurred her organisation – in cooperation with the UK Cartridge Remanufacturing Association – to file a complaint with the Green Electronics Council challenging claims by HP that its printer products meet certain criteria as defined by the Electronic Product Environmental Assessment Tool (EPEAT). The EPEAT criteria were developed over a two-year period by a group of stakeholders comprising government officials, OEM manufacturers – including HP – and members of the aftermarket community. They include standards which state that all imaging equipment will “allow the use of non-manufacturer cartridges and non-manufacturer containers”. Judge says HP’s new firmware is “outrageous” and “clearly contrary” to EPEAT. Nevertheless, it would appear unlikely that HP will be able to implement its firmware or prevent the use of remanufactured aftermarket cartridges in the US. The 2017 landmark ruling in the Impression Products versus Lexmark case means that OEM cores and cartridges can be collected from anywhere in the world, remanufactured and sold in the US.

Tricia Judge: “A timebomb”

Not all OEMs are taking a hard line. A recent move by Brother allows for the microchips on its newer cartridge models to be reset and therefore reused. This is something that has been welcomed by ETIRA, the European Toner and Inkjet Remanufacturers Association. ETIRA says Brother’s strategy represents “a key milestone” in the fight against single-use cartridges and is “a major step forward” in encouraging reuse and remanufacturing versus other end-of-life solutions such as recycling, landfill or incineration. “Chips can enhance cartridge functionality but must never hinder cartridge reuse,” notes ETIRA, which is calling on other OEMs to follow Brother’s example.

CATEGORY UPDATE

G N I G A N A M

To say that the imaging and print sector has had an interesting year in terms of M&A activity and strategy upheavals would be a gross understatement. But this could play quite nicely into the hands of OP dealers wishing to delve further into the category – by Michelle Sturman

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here’s no denying that the imaging supplies industry is facing immense pressure in terms of the ongoing decline of print volumes and sales of printer and print supplies, consolidation from both the OEM and dealer sides, the rise of sustainability, and the continual erosion of margins. On the surface, it paints a pretty bleak picture, but dig a little deeper and there are still plenty of opportunities for those willing to expand their outlook. It’s no secret that print volumes have been on a steady downward trajectory for a long time. As Monte White, VP of Product Marketing for Distribution Management, points out: “Declining volumes take a toll in such a competitive market where many major players throughout the supply chain are expected to find growth.” It brings us back to the perennial question of the paperless office and when it will happen. Not any time soon, according to the industry experts OPI spoke to, although they all agree that, especially for certain industry segments and applications, paper-lite or ‘less paper’ environments are becoming more of a reality. Technology, in particular digitisation, along with user behaviour, sustainability, workflow and, of course, cost, are all factors contributing to declining print volumes. Gary Downey, Marketing Director of UK-based Apogee Group, believes that while paper still has a vital role to play, it shouldn’t be the vehicle of choice for all communication nowadays. “If we are not helping organisations become paperless, we are failing. Perpetuating the same page volumes, device numbers and working practices should not be an objective for us as technology experts or for our clients, given the

changing working environment and the increasing functionality and integration capabilities of digital technology,” he says. STAYING RELEVANT Yet, printing currently remains important to 78% of end users, according to Quocirca’s Global Print 2025 report, although this figure does drop to 64% in 2025. Surprisingly, 41% still expect print volumes to grow. Unsurprisingly, on the other hand, all end-user respondents stated that the importance of paper will decrease, especially in the mid-market, while the public sector is most likely to reduce its paper usage. On a regional basis, some interesting trends appear: 58% of those surveyed in the UK expect print volumes to decline, while 47% expect to still rely on printing in 2025, down from the 80% that believe paper is important today. The French, meanwhile, are firm believers in the power of print with over three quarters (79%) presuming to remain dependent on printing with a rise in office print volumes (73%). Like the UK, 80% of US respondents say paper documents are important today, but this falls to 63% in 2025. Perhaps the most surprising revelations came from the millennials. Quocirca found that 69% of decision-makers in this age bracket think essential documents should be printed, with 63% being of the opinion that they are more durable than digital documents. In addition, 77% believe print will still be important in 2025, and over half think print volumes will increase. This last point could be related to the fact that 55% of millennials expect to see an increase in mobile printing. Although, as Downey points out, mobile printing is no longer viewed as unique due

SHIFTING FOCUS Although some of the aforementioned statistics are encouraging, they don’t negate the fact that the industry is also facing a slump in print supplies. Even the mighty HP Inc is not immune and recently announced a major restructuring, mostly related to diminishing printer supplies revenues, especially ink. While the supplies market is still worth a few billion to HP, FY2019 sales for the category are expected to fall 4-5% and remain flat in 2020. To combat this, HP has revealed a significant shift in the way it does business in the transactional arena. While its traditional model has revolved around subsidising the cost of printers and making up revenue through the higher cost of consumables, this will now be turned on its head. The new strategy will offer customers the option to pay full price for a printer with the ability to choose third-party supplies or pay less for the hardware and use HP supplies. This plan aims to deal with the decline in the sale of consumables and compete more effectively with the likes of Amazon, while addressing the aftermarket manufacturers selling cheaper alternatives to original HP ink. The contractual and services side of HP such as Instant Ink and managed print services (MPS) are unaffected by this move. This is understandable as these mark the company’s growth areas, along with the A3 printer and 3D printing categories where the vendor will concentrate future investment.

PRINT MANAGEMENT HP is not the only company where ‘as-a-service’ solutions and MPS are key focal points. In reality, all the major OEMs are promoting these areas as businesses look to control costs, become more efficient, address sustainability issues and minimise downtime. “For our traditional office products dealers, more and more are realising that they need to embrace contractual sales to ensure they don’t lose the business they already enjoy. Many are finding that it’s also a way for them to find new business as end users don’t want to have to deal with day-to-day orders for print supplies. Why spend time managing your company’s toner needs when your printer can do it for you?” comments S.P. Richards’ (SPR) Director of Technology Products and Services Jim Schebler.

If we are not helping organisations become paperless, we are failing

November 2019

The MPS sector alone is predicted to be worth around $60 billion globally by 2025 which, says Distribution Management’s White, points towards the continued adoption of MPS as a mainstream practice. “According to an IDC FutureScape study, by 2021 45% of all office printing worldwide will be associated with a print-as-a-service contract. Manufacturers have been observing this trend and are tailoring their programmes to support and incentivise contractual business,” he adds. The swing to services such as managed print accompanies the general movement towards the digitisation of the office, which is becoming more apparent as companies seek to streamline their business practices and remove associated administrative responsibilities. “The overriding trend of digital transformation remains strong as the ‘always on’ nature of our working lives has meant that ready access to information is a commonplace requirement for every employee. In this environment, document capture is simply a first step in unlocking data from paper and key to moving an organisation towards a digital future,” states Jason Rowles, Regional Sales Manager UK&I at PFU, Fujitsu. “In the future, I expect to see continued demand for imaging supplies and the integration of solutions into wider digital transformation projects, leveraging technologies such as OCR in the creation of automation solutions for data capture,” he adds. Apogee’s Downey agrees with the widening scope of the imaging and printing sector: “Cloud services including print, scanning and workflows are the latest concerns for service providers. It’s where we find strategic leaders are pushing for solutions.” It is in these kinds of areas, as well as MPS, that business supplies dealers can level the playing field with office equipment dealers and move from purely transactional deals to more service-orientated solutions.

CATEGORY UPDATE Imaging Supplies/MPS/Print

to a workforce that is increasingly on the move – all print infrastructures should support both on-site and mobile employees by default. According to the Mobile Printing Market – Forecasts from 2018 to 2023 report, the global mobile printing market is expected to grow at a CAGR of 32.5% over this time period. However, driven by employees armed with smartphones and tablets, along with a rise in centralised printing environments and cloud storage technologies, mobile printing also represents a heightened security risk. Many OEMs are addressing this issue and, says Downey, it offers an opening to support customers in developing a cohesive security strategy across all endpoint technology, not just printers.

Imaging Supplies/MPS/Print CATEGORY UPDATE

Over and above the OEMs, there is no shortage of other avenues to pursue when it comes to selecting an MPS partner. Dominique Moine, Director of MPS Professional Services for Clover Technology Group EMEA, for example, says that its MPS programme responds to dealers’ issues by providing a full range of services including supplies management, a dedicated call centre and IT support team, salesforce training and printer supplies. Indeed, major players in the US OP space have also begun making significant moves in this arena, with the likes of Staples Inc buying manged print firm DEX Imaging earlier this year. Staples’ MPS offering will ultimately extend to Essendant’s independent dealer channel – currently scheduled for Q4 – while SPR already offers its own PrintSmart solution to dealers. In the UK, the SPOT Group bought OP and MPS dealer ZenOffice last year to expand OfficeTeam’s print solution.

We’ve observed partners looking to build a successful MPS practice recognise the need for dedicated selling resources with subject matter expertise White argues that, in the past, it seemed MPS didn’t fully fit the model of OP dealers which managed their own delivery because it eliminated the additional touchpoint as part of their customer experience. “This may still be true for some today, but we believe managed print can be layered into those relationships successfully. Beyond that, we’ve observed partners looking to build a successful MPS practice recognise the need for dedicated selling resources with subject matter expertise. Previously, we didn’t see much of that happening within the business supplies channel, but it is beginning to change as many are realising the benefit,” he says.

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SURVIVAL OF THE FITTEST This increase in interest from our industry bodes well for the future, and there are ever-increasing options available which enable dealers to enter the MPS market or increase proficiency levels for those

already invested in the sector. In fact, Schebler is confident the expected growth in MPS will be huge for SPR dealers, but says a lot of them believe they can handle these sales with their normal OP rep. “Those dealers with dedicated resources quickly realise that they are more successful than their counterparts which don’t have them,” he adds. White believes we are now beginning to see the survival of the fittest in the MPS sector: “Margin erosion has been well underway for the past several years as participants are under pressure to protect their customer base and capitalise on growth opportunities when they arise.” However, he says: “At a certain point, if you cannot deliver a trouble-free, reliable MPS service or product, you cannot sustain your business, regardless of how low the price.” The MPS market may not be pumping out radically innovative solutions, but it is maturing and evolving, which means it is now enjoying higher adoption rates within the SMB market. Sustainability is another driver spurring on some businesses to explore MPS thanks to the associated reduction of paper and print volumes and a new generation of eco-friendly printers. Both Downey and Moine have the view that MPS is a sustainable option. “A solution such as ours, which is largely based on the supply of remanufactured consumables, ensures products are built based on a fully functional circular economic blueprint, part of which is a sophisticated waste management process, with the end result being a sustainable product which has a minimal impact on our environment,” says Moine. Downey, meanwhile, advocates recycling schemes for empty toner cartridges, explaining that Apogee is seeing an increase in uptake with the programmes it provides. “We also leverage the schemes provided by manufacturers and some, such as the HP programme, are superb examples of best practice that are winning the hearts of clients wanting to minimise their environmental impact.” Overall, despite the obvious declines in the imaging and print supplies market, there are still plenty of opportunities – particularly involving MPS and the digital office – to ensure a thriving industry.

CATEGORY UPDATE

MRO, PPE and safety are product categories all companies need to tap into to run successful businesses. By the same token, operators in our industry have much to gain by jumping on board and playing a role – by David Holes

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eeping the workplace operating smoothly and safely is a crucial part of the day-to-day running of any business. The maintenance, repair and operations (MRO), personal protection equipment (PPE) and safety categories underpin the foundations of these vital aims and, as such, are experiencing something of a boost in today’s work environment. Established operators in these segments are reporting excellent results. Global MRO reseller Grainger forecasts revenue growth of between 2-5% this year, despite a slowdown in the US and Canadian markets. The company’s close relationship with its clients gives it a unique competitive advantage, according to CEO DG Macpherson: “Our goal is to accelerate the pace and intensity with which we demonstrate value to our customers. This is one way in which specialised resellers in this sector can differentiate themselves from the likes of Amazon.” Grainger says that it currently has a 6% share of US MRO sales and 4% of the global $284 billion market, with some 3.5 million customers worldwide. Its growth targets are even more ambitious and it has implemented several steps to help it achieve these. They involve doubling the SKU count on Zoro.com – its no-frills e-commerce site – from 2.5 million to 5 million by the end of next year, with an eventual aim of stocking around 15 million items. Additionally, the company wants to better organise its product categories, with a view to improving services tailored to specific markets – including hospitals, government agencies and public safety departments.

STRENGTH THROUGH DIVERSITY This broad sector has also caught the eye of traditional office suppliers looking to diversify into new markets and find new revenue streams. At the end of 2018, global operator Lyreco for example signalled its intent to become a major force in the European PPE market with the purchase of Intersafe and Elacin (IEV) – a specialist in this field – it was one of the first acquisitions it has made outside the conventional OP categories. “We’d already had very rapid growth with PPE and wanted to accelerate this massively,” the company said at the time. “This acquisition sent a strong signal that we aim to be a strategic, multispecialist partner and a one-stop shop for our customers, mixing PPE with core OP and providing new value chain solutions.” Lyreco first made moves into the industrial market in 2013, having identified this sector as an attractive, growing market likely to be driven to new heights by stronger European regulations around workplace safety. PPE, in particular, was seen as an area where consumable products aimed at legislative compliance would boom; it was also viewed as a door opener to other industrial categories. “Expertise was key to our success in this segment,” says Arnaud Bouchez, Lyreco’s Group Category Director for Industrial Products. “We recruited a great team of over 100 product and market experts and quickly demonstrated a credible PPE offering that enabled us to lock in some very big customers. This helped to leverage volume and further strengthen our attractiveness.

HEALTH AND SAFETY FOCUS UK-based VOW also refers to strong annual growth in this segment for the range it offers – it doesn’t, for example, stock a wide range of clothing due to the considerable variation in sizes and styles. Disposable protection products and gloves are in particularly high demand, says Marketing Director Helen Wade. “This category is about needs, not wants. Employers have to provide suitable PPE for staff and, where necessary, customers and visitors too. Dealers need to have stocks of disposables available for next-day delivery, but also consider other products, such as signage, that fall into these segments as well.” It’s a similar story in the US, where an increased focus on employee health and safety has been fuelling demand. A tougher regulatory environment is not the only factor at play here, however. More and more, businesses are supporting any measures that can benefit employee health as they’re seen as methods of increasing productivity, reducing staff turnover and, in turn, bringing greater profitability. Wholesaler Essendant realised some time ago that the need for companies to focus on the health and safety of their employees would be perennial and indeed become an effective driver of workplace productivity. It believes that manufacturers are now looking for local services above and beyond those supplied by the large

CATEGORY UPDATE Safety/MRO/PPE

MRO distributors. This, in turn, presents an opportunity for resellers to gain an entry into, or in fact increase exposure in this particular vertical. “There is untapped potential for MRO products and related equipment and one that can have a sizable impact for resellers in 2020,” says Helanie Fisher, Director of Category Management at Essendant. “The PPE market remains a huge opportunity, yet some dealers have been hesitant to compete here given the challenges of SKU proliferation. This is caused by the vast array of options they must provide to meet the personalisation requirements for safety equipment. Additionally, they are being put off by the additional level of safety knowledge needed to be compliant with Occupational Safety and Health Administration (OSHA) requirements in more complex businesses, such as restaurants and hospitals.”

“Initially, our core offering was dedicated to low-risk industries, as we knew we had to move step by step and not get involved in safety-critical areas until we could provide the right level of expertise. Hand and ‘above the neck’ protection was a key focus for us, but we also enjoyed strong volumes in foot- and workwear. Our growing expertise means we can now handle high-risk sectors and companies all the way from SMEs to multinationals.” He adds: “On the back of this, the company had already grown sales towards €100 million ($110 million) at a rapid pace. With the IEV acquisition, we are now a €225 million player and again seeing high double-digit growth this year.”

There is untapped potential for MRO products and related equipment [...] The PPE market remains a huge opportunity, yet some dealers have been hesitant to compete here She adds: “All this means a ‘one-size-fits-all’ approach to equipment and a rudimentary level of safety knowledge will not suffice in this space. We see many resellers remaining unsure of how to enter this area. Our advice is that they must consider hiring an in-house safety specialist to join their ranks – someone who can provide expertise on which products will best support formal safety management systems. This is vital to helping customers make informed product decisions. Expertise can also guide resellers in terms of strategically increasing inventory by expanding into those product categories known to have a strong ROI.” ZOLL Medical’s automated external defibrillator

November 2019

FIRST AID IMPORTANCE The requirement for first aid equipment such as automated external defibrillators (AEDs) within workplaces and public spaces is also driving the sector. “The overall market for our products has shown steady growth of about 10-12% annually,” reports John Pennington, Strategic Distribution Manager at ZOLL Medical, a US company that develops cardiac resuscitation devices. “Growth opportunities exist across most verticals, but the strongest demand has been from the education, utilities, law enforcement, retail and banking sectors, particularly now there’s increasing awareness that legal liability is not a legitimate concern, with all US states offering ‘good Samaritan’ protection to AED users. These products enable lay responders to provide care to seriously injured victims prior to the arrival of emergency medical services. The fact that they’re only available about 2% of the times they are needed means states are now passing legislation requiring them.” ZOLL Medical recently acquired Mobilize Rescue Systems. Its products include

Safety/MRO/PPE CATEGORY UPDATE

stop-the-bleed and trauma kits, which have received heightened interest in response to several, highly-publicised acts of violence. The kits address the most common medical emergencies and comprise first aid products and an app that allows users – trained or untrained – to assess a medical condition and provide appropriate treatment. Says Pennington: “Early intervention from bystanders can have a significant impact on survivability and longer-term patient outcomes. There’s a significant gap in the market for these types of products that are often overlooked by resellers. They need to educate their customers as to the scope of the problem and the need for these items.”

If distributors can provide these three pillars – compliance, rationalisation and cost control – and guarantee premium supply chain options and reliability, they will win the game

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SECTOR TRENDS Worldwide, 2019 has seen another increase in the spread of malevolent bacteria and viruses – the US measles outbreak being a prime example. Confirmed cases rose from just 371 in the whole of 2018 to 1,215 cases by the end of August this year – the largest number ever recorded since the disease was first declared eliminated. A total of 30 states were affected, with detrimental effects on businesses caused by staff absenteeism, leading organisations to become laser-focused on employee health. Operators in the business supplies sector have seen the knock-on effects through increased demand for new technologies related to single-step disinfectants and sanitisers that can prevent the spread of illness. Other technological trends, such as the use of artificial intelligence in the workplace, is leading to major changes in how organisations track employees’ needs and workplace experiences. This includes the emergence of apps that monitor supply usage to better understand and anticipate what staff members need to do their job effectively. Although this technology is relatively new, it will likely impact on demand for certain products as businesses begin to incorporate its feedback into their resupply strategies. Lyreco also predicts huge growth in eye and ear protection and the use of embedded technology to produce smart safety devices, which will improve

the efficacy of protective devices. Beyond this, it envisages a role for ‘augmenting’ workers with exoskeleton machinery and augmented reality devices in the not-too-distant future. REGULATION INCREASES Regulatory tightening is having an impact on this broad sector with, for example, the California Cleaning Product Right to Know Act starting to come into force in January 2020. This bill requires suppliers to disclose and list ingredients in order of significance on a wide range of items covered by the MRO category – from automotive and general cleaning products, through to detergents, polishes, floor maintenance solutions and many more. As Fisher predicts: “Although these regulations are specific to California, I anticipate we’ll see a trickle-down effect to these products that are manufactured, distributed and sold nationwide, including a likely increase in demand for versions that are gentle on humans and environmentally safe. This will accelerate as compliance rolls out further in 2020.” Simply complying with ever-tougher regulations is not enough these days, however, adds Lyreco’s Bouchez: “Businesses must now go above and beyond to demonstrate their CSR values to customers. This means being highly proactive and raising ethical standards to unprecedented levels. We see this as an opportunity to leverage our investment in green products across these categories. This will be huge in the coming years and, as a global company, we will have a lot to say in this area.” THE INDUSTRIAL LINK The MRO, PPE and safety categories all have a strong focus on industrial markets. As such, it comes as no surprise to find that demand for MRO products, for instance, is hugely affected by what’s happening in major manufacturing industries. The recent downturn in the German automotive sector, for example, has had a direct impact on this year’s spend on abrasives, paints and gloves. “Customers are seeking one-stop solutions and better control of outlay, particularly during periods of economic downturn,” reports Bouchez. “Compliance is top of mind in these segments. Multisite companies in particular are looking for rationalisation across all their premises and the reductions this can bring to overall spend. If distributors can provide these three pillars – compliance, rationalisation and cost control – and guarantee premium supply chain options and reliability, they will win the game.” In summary, these are all categories that are lucrative and won’t go away. Indeed, with an increasing focus on workplace safety, coupled with ever-tightening regulatory regimes, they are booming and will continue to do so. All resellers can have a role to play and advice from those that have already started their journey is clear: start at the lower risk end of the market and invest in category experts who can provide the necessary expertise and help customers make informed product decisions. That’s the way to success.

SPOTLIGHT Products outside the traditional OP realm are becoming more important to resellers as they seek out new revenue streams. With a stronghold in the DIY sector, Sugru – with the help of new owner tesa – is beginning to transcend categories and move into the office channel

If it’s broke,

FIX IT T

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he story of Sugru – from accidental discovery of the world’s first mouldable glue to partnership with one of the largest global adhesive tape manufacturers – is an intriguing one. OPI’s David Holes spoke with Sugru’s inventor and CEO, Jane ní Dhulchaointigh, about the company’s journey and the product’s future.

OPI: Tell me a bit about the history of Sugru. Jane ní Dhulchaointigh: We sold our first pack of Sugru – named after the Irish word for ‘play’ – nearly ten years ago, but the product was in development for several years prior to that. The company behind the brand, FormFormForm, which is based in London, UK, was founded in 2004 with a mission to reduce the amount of waste in the world and a view that fixing things, so they last longer, is a great way to achieve this. The discovery of the product itself was actually a happy accident. I was studying sculpture and product design at the London Royal College of Art, experimenting with the use of new materials. One of my experiments resulted in a mouldable material that, once cured, would maintain its rubbery, flexible properties. I got hooked on the idea that this could be a tool to mend broken objects, so I set up the company with an entrepreneur as well as my future husband. We then collaborated with some universities and experienced silicone scientists to further develop the material over the next five years. OPI: So exactly what is the product? JnD: When you first get the material out of its pack it feels like playdough – children’s

modelling clay – as it’s soft and malleable in the hand. You’ve then got about half an hour to shape and apply it, before leaving it to fully cure overnight. The next day you’ll find it’s maintained its shape, but is now a flexible solid. One of its special properties is that it bonds really well to a vast range of materials, from plastic to glass, wood and even fabric and leather. That’s the key to its versatility, you don’t need separate glues for different jobs, Sugru pretty much covers it all. OPI: Who uses it and what are some of the typical applications? JnD: It’s particularly popular with resourceful DIY types who hate throwing things away. They use it on a wide range of items around the home – fixing cables, chargers, headsets, printers and other electronic gadgets – often expensive products that just require minor repairs to keep them working. Uniquely, unlike conventional glues that just stick things together, Sugru can actually be used to rebuild a part where some of it has gone missing. It can also be used in appliances such as fridges, washing machines and dishwashers, where its waterproof properties and ability to withstand hot and cold temperatures – yet still stretch and flex without cracking – are a major benefit. The product is also popular in creative arts and design environments – in animation projects where figures can then move as required or for building product prototypes, often in conjunction with 3D printers. OPI: What are your primary sales channels? JnD: We started out selling through our website, with Amazon becoming a great channel for us

OPI: You were bought by adhesives manufacturer tesa in May of last year amid, I believe, some financing issues. Can you tell me a bit more about that? JnD: Sure. Driving awareness of the product has been harder and taken much longer than anyone imagined. We came to a critical juncture at the end of 2017 when our bank pulled back from a £1.5 million ($1.9 million) debt financing. It left us very exposed. We had been talking to tesa for a few years about distribution into Europe. We had always marketed the product in English with a focus on the UK and North America. Accordingly, the European market had remained untapped. We saw tesa as a great fit, both because of its access to new customers and for its long-standing reputation in the repair sector. It also had a similar ethos to ours on sustainability and corporate responsibility. Obviously, the benefits of being part of a larger company with its ability to manufacture Sugru in far greater quantities were attractive to us – our own facilities were small-scale by comparison. From tesa’s point of view, I believe the company was impressed with our marketing and online business model, areas where it wanted to increase its own focus and where we could bring something valuable to the table. Tesa also had nothing like Sugru in its product line-up, being primarily known for its repair tapes. It had recently begun a move into mounting technologies – hooks and no-drill applications – and saw the versatility of Sugru in this space as an ideal addition. OPI: How has tesa broadened your target audience and reach? JnD: It opened up new markets, for sure. We’ve launched German and French-language websites this year and also made inroads into European retail, through OBI Next in Austria and Bauhaus in Sweden. With tesa’s exposure to the office supplies channel, this vertical is a new target audience for us that we’re really excited about. We’ve seen several examples of Sugru being used in a professional environment, solving problems that other products couldn’t – from the breakroom and examples I gave earlier to the warehouse where employees use it for fixing headsets that easily break.

Jane ní Dhulchaointigh

With tesa’s exposure to the office supplies channel, this vertical is a new target audience for us OPI: Looking to the future, what ambitions do you have? JnD: We’re constantly innovating and looking to improve the formulation. Ultimately, we want to make Sugru a household name and a product that everyone keeps in their kitchen or office drawer. Sales have consistently grown over the past ten years and with tesa on board we’re looking to take those to the next level over the coming decade.

November 2019

OPI: How do you market Sugru? JnD: Aside from the multilanguage content in Europe that I mentioned, we are continuing with our digital marketing campaigns and building our online community through the use of social media – Facebook, Instagram and Twitter, plus

our email list. Our reach is quite diverse and spans the age groups. As such, we want to give the different demographics the choice to interact with us through whichever platform they prefer. Our online presence is aimed at encouraging people to share what they’ve achieved with Sugru, particularly in terms of the more unusual applications. There has always been a great community spirit associated with the product – users love to tell the wider world about their ideas and inspire others. We’ve also had some publicity recently when Ben Heck – a popular US YouTuber – used Sugru to adapt a controller for a famous disabled gamer named Vivek, allowing him to play games despite his muscular dystrophy. Heck published a video of how he had achieved this using our product to shape and bond the controller.

SPOTLIGHT Sugru

more recently. Right from the start, we sold internationally, exporting to 20 countries initially. This has grown to around 170 nations by now. In the UK specifically, we also have excellent retail exposure through Robert Dyas (editor’s note: Robert Dyas is part of the Theo Paphitis Retail Group) and Hobbycraft outlets.

uni-ball:

A new DAWN

ADVERTORIAL

As uni-ball Corporation begins a brand new chapter in its history, the scene is set for innovation, creativity and connection

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here is a new day dawning in the life of uni-ball in North America. With Mitsubishi Pencil Company – the Japan-based parent company behind the uni-ball brand – having ended its long-standing distribution agreement with Newell Brands’ subsidiary Sanford, the now standalone uni-ball is ready for business. And there’s plenty to look forward to, says uni-ball Corporation President Mike Parker: “We are fortunate in that we can draw on the richness of 132 years of excellence in the design, development and delivery of exquisite writing and art solutions. Despite pervasive changes in consumer preferences and consumption patterns in recent years, one thing has remained constant – the desire in all of us to create and connect. Accordingly, this is where we draw inspiration for our vision – to deliver unique solutions that enrich the lives of our customers by inspiring creativity and connection.” He adds: “2020 is just the beginning of the reinvigoration of the uni-ball brand. With a renewed focus on product development, innovative marketing, advertising support and new logistics technology, we are ready and equipped to provide a seamless transition for all of our channel partners.”

SEAMLESS TRANSITION Headquartered in Wheaton, Illinois – just west of Chicago – Parker oversees a seasoned executive team that includes sales, marketing and operations professionals. They are dedicated to ensuring a seamless transition and finding creative new paths to growth.

2020 is just the beginning of the reinvigoration of the uni-ball brand. [...] We are ready and equipped to provide a seamless transition for all of our channel partners All operational infrastructure elements such as order processing, fulfilment, technology and full supply chain logistics are in place, and the new company is ready for business in the US, Canada and Mexico. In line with its vision of creativity and connection, uni-ball is excited to be supporting retail partners with brand new marketing and merchandising. Parker adds: “We have made significant investments in the development of refreshed creative assets for the advertising and marketing of uni-ball products, comprising product photography and video, catalogue design, print media and advertisements. These assets will empower our customers as we look towards our future and work to deliver creative solutions and sustained growth across a wide array of digital, print and store merchandising platforms.” To further promote its updated brand direction, uni-ball has also developed new packaging that focuses on clearly communicating each product’s unique feature set. A reinvigorated rich red merchandising template ensures that each uni-ball product stands out on the shelf.

ADVERTORIAL uni-ball Corporation

OMNICHANNEL OPPORTUNITIES “Today’s omnichannel world provides endless opportunities. To strengthen our brand identity, we’re taking progressive steps in developing a reinvigorated and cohesive communication strategy across all active channels,” Parker points out. “By maintaining a consistent brand presence and by curating online content and conversations, the company seeks to stimulate both e-commerce and retail growth. Through digital content creation and social media engagement, we look to strengthen our long-lasting relationships with consumers and build new ones. We’re excited about enriching lives by inspiring creativity and connection – and this is just one of the many new ways to seeing that vision become reality.” Investments in this new vision are already in place. The company has introduced advanced digital marketing strategies, launched a refreshed website – uniballco.com – and established omnichannel advertising tactics to build consumer brand awareness for the ‘new’ uni-ball in 2020. Ahead of the transition, the team has been engaging with artists, writers and pen enthusiasts on social media. This growing community is already becoming a forum to share artwork, ideas and creative inspiration.

PRODUCT INNOVATION Extending uni-ball’s long-standing reputation for product innovation and engineering will be the bedrock of the new company. Customers are already familiar with the company’s expansive portfolio of products which includes Vision Elite rollerballs, 207 gel pens and the super-smooth Jetstream ballpoint pen range. Heading into 2020, these popular product lines will be further expanded with additions such as the 207 Plus+, 207 Mechanical Pencil and the Jetstream Elements ballpoint pens.

Our vision [is] to deliver unique solutions that enrich the lives of our customers by inspiring creativity and connection

November 2019

There’s plenty more innovation in the pipeline. The company will be expanding its target audience with the addition of the brightly-coloured Chroma Mechanical Pencil and the new wrapped 207 Fashion designs which include Artistic Abstract and Stepped Ombre, all perfect for the back-to-school selling season. Parker concludes: “As we look ahead to our future, we hold fast to our timeless belief that ‘the finest quality is the best service’. It is this ideal that has served as the guiding principle for the Mitsubishi Pencil Company for over a century and will perpetuate our position as a global leader in the products that we provide. We celebrate this rich legacy, and we are invigorated by our path forward. “We are excited, equipped and ready for business in 2020. Uni-ball Corporation looks forward to strengthened channel partnerships, new innovative writing solutions, and deepened consumer engagement that enriches lives by inspiring creativity and connection.”

HOW TO...

Make it

PERSONAL In the final part of this marketing series, Marc Pinner takes a look at ‘Marketing 102’. It’s not just the basics you need to get right, it’s all about differentiation. And digital is the perfect tool to achieve that, he says

According to the Data & Marketing Association, “62% of consumers who switched brands in the past 12 months did so because other brands successfully attracted them, rather than a bad customer experience pushing them away”. That’s a myth buster if ever I heard one.

NO “BUSINESS AS USUAL” It’s hugely fashionable among the business community to promote anything that is new – trends, innovations, start-ups, scale-ups. Newness is what makes the headlines, newness is marketable. The opposite can be said of established, old or legacy businesses. They don’t have the same kudos – you know what they’re about, they’re set in their ways, you expect certain things and take them for granted too, as you’re blind to most things that might actually be new. Has their marketing approach evolved? In some cases it has, in others it very much hasn’t. Businesses can sometimes get into a cycle of doing the same things, but just better. ‘Just better’ works to a point, but it’s often about survival without the necessary impetus required to really transform a company to adapt in this digital age. ‘Better’ could be superior customer service – keep them happy, retain them for life – that popular misconception. No!

DIGITAL OPPORTUNITIES Digital marketing has brought with it so many opportunities for companies to do great things. Current studies among some of the leading FMCG brands in the UK have shown significant declines in value. This is not revenues we’re talking about, it’s the financial asset that the firm puts on its balance sheet. These legacy businesses, often top-of-mind in research studies, are struggling because of some key PESTLE factors – political, economic and technological primarily. Less obvious is their inability to keep up in the digital marketing age. Big brand campaigns are all well and good – they demonstrate a prowess of leadership and marketing muscle – but they talk to the masses and audiences are increasingly blind to mass-targeting. In fact, the very word ‘mass-targeting’ is a complete misnomer. That billboard on a road side, that 30-second ad during half-time of your favourite sport on TV – they are just PR, brand-building and keeping a product or company top-of-mind rather than being ‘for you’ and something that will translate into a sale.

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arketing is meant to challenge your business to tackle the big issues and create positive impact. It’s the one discipline that transcends all departments in a company. When industries are moving at an accelerating pace, simply taking the time to review and reenergise the business is not enough. You have to take a decisive marketing approach – a Marketing 102 – that will help steer the business in a positive direction.

In the digital age, marketing is personal. Personalisation – or targeting – must be on the to-do list of every marketing professional. Data, like in the pricing article in part one of this series (see How to..., OPI September 2019, page 42), is at the heart of this revolution where brands can begin to develop a one-to-one relationship. Facebook has had some bad press, but isn’t every large organisation cannon fodder when it gets too big for its boots? What you cannot deny is Facebook’s marketing advantage – brilliantly defined data that is so granular, the opportunity has never been greater for perfect targeting.

Your people are some of your best brand guardians, advocates who are experts on your product or service and can represent the best interests of the company externally

EMPLOYEE ADVOCACY Marketing needn’t just be the role of the marketing department. In fact, many businesses don’t have that luxury of resource. When marketers increased the original core 4Ps to seven, one of those 7Ps was people. They should be at the heart of everything. Internally as decision-makers, challengers and teamworkers, externally as personas, suppliers, customers and consumers. Influencer marketing is a hot topic as it’s relatively cheap and further adds to personalisation. But as with many new things, especially when social media is the primary channel, regulation, authenticity and consistency are scarce or at a premium. What starts out as genuine can be exacerbated by negativity and fake news if the influencer is not the best pick. Word of mouth is one of the most pertinent marketing strategies in this regard and where better to look for this than within your own team. Employee advocacy is the way to go. HR professionals should love this. Your people are some of your best brand guardians, advocates who are experts on your product or service and can represent the best interests of the company externally. In social media, people are 16 times more likely to read a post from a friend than a brand, according to Cisco. Hootsuite, meanwhile, asserts that you can achieve 24 times more re-shares when employees share content. Making marketing more personal can be hugely influenced by your staff. But remember that in many countries, disengaged employees represent over 70% of the workforce. Staff absolutely need to be engaged in the efforts of your business, regardless of the department they work in, and they need to be loyal. This can lead to significant other benefits like productivity, retention and profit. COMMUNICATE, INNOVATE, DIFFERENTIATE Marketing itself is transforming and it’s also helping to transform the business landscape. Don’t brush off disruptors as just being different and another competitor. They will accelerate and become the norm. And the best ones are agile enough to put personalisation at the heart of their effort. These companies often have three things in common: they communicate, innovate and differentiate to stay ahead and remain relevant. My simple message is this: make your marketing even more personal to make the most of your opportunities!

November 2019

The old rulebook of a marketing mix based around a vague audience can be confined to history. Targeting broad groups such as 16 to 25-year-old males is no longer relevant. What you need to do is develop personas, understanding and targeting everything that matters to, say, Jack. It’s now about Jack, college student, urban, hates sport, loves music, frustrated by you name it. Understanding Jack and his peers, getting the tone right, appreciating where he most consumes media, and delivering your proposition, is ultimately your marketing role. I’ve worked with companies that have always struggled in certain geographies because of

culture, buyer specifications, preferred brands, etc. In this scenario, distributors and resellers will come under more pressure as brands will be able to bypass this straitjacket by talking to the right personas, giving them what they need, want and desire. Brands will be increasingly brave and intermediaries must be open to change to remain relevant. This in itself can revolutionise office products.

HOW TO... Personalised Marketing

Marc Pinner is a marketing consultant who adds value and improves an organisation’s marketing performance. He has spent many years in global leadership positions, developing businesses, modelling and executing strategy, and creating and managing change.

RESEARCH

Top have w to a

ARE YOU READY

for the next generation? Generation Z is now knocking on the door of our offices, wanting to join the workforce. But what do businesses need to know about these digital natives to keep them happy and engaged? Michelle Sturman finds out…

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he office products industry is not the only one bemoaning the fact that enticing younger generations into the sector and, more importantly, keeping them, is a constant uphill battle. Bearing this in mind, the next age group – commonly referred to as the iGeneration, post-millennials, or more popularly, Gen Z – is now entering into employment and the people’s needs and wants are in many ways very different to previous generations. Depending on which research you read, Gen Zers were born roughly between 1995 and 2013 and this year will constitute 32% of the global population. In the US alone, they will make up 40% of the populace and 20% of the workforce by 2020; they are also the country’s most diverse generation yet, with almost 50% non-white. To truly understand each age bracket, the cultural, political and economic landscape during their formative years needs to be taken into consideration – this is where the nuances between the generations become apparent. Millennials were shaped by the Great Recession (for more on millennials, see Generation Game, page 46), whereas most Gen Zers are entering the workforce during a period with a relatively strong jobs market and global economy. On the face of it, Gen Zers are pretty similar to millennials in terms of their liberal attitude and outlook on racial and social issues, according to a 2018 Pew Research Center report. They seek

to make the world a better place as they deal with the climate emergency and a politically unsettled world. Research on Gen Zers generally agrees on several elements: they are highly pragmatic, value uniqueness and individuality, and are far more ethical and inclusive than any previous generation, eschewing many traditional ‘labels’. DIGITAL FIRST Post-millennials were practically born with a smartphone in their hand, the internet has always been there to provide answers to everything (and now, of course, we have digital voice assistants such as Alexa and Siri), they read on a Kindle, are educated on tablets, and send in homework via email. Technology not only connects Gen Z instantly to a global community, but it is this age group’s main method of communication. They are consummate multitaskers, seamlessly switching between tasks and social media applications and possess

Generation Z RESEARCH

a can-do attitude and entrepreneurial spirit. According to Harvard Business Review, 70% of US-based Gen Zers, for instance, set up their own money-making schemes online during their teenage years. WORKPLACE HARMONY So what does this mean for Gen Z in the workplace? The office conflict stemming from the two previous generations – Gen X and baby boomers – against the millennials when they became employable has been well-documented. But now with four distinct generations all working together in close proximity, will the newest age group bring harmony or disruption? Joint research conducted by Universum, the INSEAD Emerging Markets Institute and The HEAD Foundation, and based on over 18,000 students and professionals from 19 countries – covering Gen X to Gen Z – found that these age groups would prefer to start their own business, work for a start-up, or alternatively be employed by an international organisation. The preference expressed by Gen Zers for entrepreneurship makes sense when, according to a survey of 1,400 Gen Z individuals at the 22nd EY annual International Intern Leadership Conference last year, over 80% believe that failing on a project will make them more innovative while 17% think it will enable them to take on more risks, Additionally, an overwhelming majority (97%) are receptive to feedback on an ongoing basis or after finishing a project, while 70% believe that an open mind is more valuable than a specific skillset.

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The culture of a workplace will also need to change to become more inclusive

ACCOMMODATING NEEDS A survey of 1,000 full-time US workers and 500 managers by performance management software firm 15Five argues that the work-life balance is no longer a definitive divide, but rather Gen Zers are searching for synergies between their career and non-working life. To ensure the health and well-being of Gen Zers, for examples, business owners will increasingly find it necessary to cater for a different set of criteria, including issues such as obesity and mental health disorders. The culture of a workplace will also need to change to become more inclusive, according to Pew Research Center. It will have to take into consideration the changing social norms of post-millennials such as the use of gender-neutral pronouns – 35% of Gen Z know someone who refers to themself in this way, while 59% hold the view that gender options should offer more than just ‘male/man’ and ‘female/woman’. One of the key traits of this generation is its tech-savviness, something which could provide great benefits to employers in the OP industry. Management consultancy firm Sparks & Honey

asserts that Gen Z multitasks across five digital screens compared to two used by the average millennial. This is hardly surprising as the GlobalWebIndex Gen Z Audience Report 2019 reveals that Gen Zers spend almost seven hours a day online, with YouTube topping the monthly usage charts, and mobile phones enjoying a considerable lead over the use of PCs/laptops due to their on-the-go accessibility. In addition, 60% say they have bought a product in the past month on a mobile phone. A new study from Future Workplace found that 20% of this generation spend at least half their day on a phone, video or multi-party call. It also revealed that 52% of Gen Zers are most productive when they are working around noise or talking to others in the workplace. Training is key to retention for Gen Z employees, although Kahoot!’s annual EdTrends Report for Corporate Trainers warns that not all coaching is created equal. 62% of trainers surveyed stated that Gen Z employees expect to use the latest tech and gizmos to undertake their workplace tutoring, with mobile apps the preferred method, followed by online learning, videos and social media. After salary, other top motivators, according to recent report The Gen Z Effect on the US Workplace by Nintex, are company culture and values, then career growth. Encouragingly, 60% expect to still be in their first job after one year, with 71% planning to stay for more than a couple of years. However, more than half (53%) expect a promotion after the first year.

TOP TIPS Don’t be alarmed by the constant flitting between devices of Gen Zers. Instead, embrace the tech-savvy nature of this generation and put it to good use in your business. Ensure your CSR and sustainability credentials are the best they can be. Keep Gen Z employees motivated with mentoring and providing training through whichever medium they prefer.

GENERATION GAME

What MILLENNIALS want

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am often asked what it means to be a millennial in the office products industry, which I sometimes find amusing. Older generations seem to think that we are vastly different from them and in some ways I’m sure we are, but I also believe that many of the key things we want from our work environment are not earth-shatteringly different. They are mostly just common human desires and values. The fundamental difference between millennials and previous generations is that our wants and needs have crossed over from being just in the personal arena to being in all of life, including the professional realm. Formerly, a clear and distinct divide existed between work and leisure. Those lines have become increasingly blurred in the past decade or so as millennials have entered the workforce, emphasising their commitment to a work-life balance and demanding a different kind of workplace than what our parents or grandparents knew.

JOB SATISFACTION PRIORITIES In my opinion, there are four main things that play an important role in millennials’ job satisfaction and in their desire to invest themselves wholeheartedly into an organisation. First up is speed. We do not like sitting still, literally or figuratively. It’s important for things to not stagnate. Employers must recognise this and work towards increasing the swiftness with which they approach challenges. This not only serves millennial employees well, but also customers. Speed is equally relevant when looking at the potential career path of a millennial; employers being idle in terms of professional development will quickly cause a millennial to look elsewhere for something that is fast-paced and challenging. And don’t mistake the aspiration for a defined path with unreasonable expectations in terms of pay and promotion – millennials mostly just want to know possibilities exist and being able to see the tangible steps to achieving their goals. Secondly, we have the need for ‘community’. Millennials want to feel connected and be a part of something; they want to be valued and have the space for learning from others and sharing their ideas. The problem is that this age group typically isn’t skilled enough to seek out or even create a community on their own. As such, businesses that intentionally foster this for their young workers will reap the benefits. This also ties directly into the third factor: purpose. We don’t want to work just for the sake of working; we want to do something that we believe is making a difference. That ‘difference’ doesn’t have to be world- or life-changing, but the mission that you are expected to work towards every day needs to be clear. In addition, we need to feel like there

are tangible things we can regularly contribute to fulfil that mission. The opportunity to work alongside a community of others pursuing the same goal is even better. I’ve saved arguably the most challenging demand for last – flexibility. This is probably the hardest one, and one that my generation catches a lot of flak for. We want to be able to work when, how and where we desire. In traditional organisations – and there are still many of them in our industry – this is viewed as bucking the system and can throw a wrench into daily operations in some cases. There’s often still the old-fashioned assumption that flexible work hours mean fewer work hours. It absolutely doesn’t have to be the case. Of course, the ability to accommodate a less regimented schedule will vary by job function and what is required of the specific role, but most can have some level of flexibility. It can be as simple as allowing shorter lunches, so you can get off a couple of hours early on a Friday. Permitting this type of flexibility actually motivates us to work harder, and we end up getting more done in a shorter period of time. It’s a win-win and who doesn’t want that? At first glance, this demand can seem unreasonable, but the underlying reason is that we value our time and want to spend it with friends, family and, yes, even at work.

Beth Freeman, EVP, FSIoffice

There’s often still the old-fashioned assumption that flexible work hours mean fewer work hours. It absolutely doesn’t have to be the case WORK-LIFE BALANCE Back to my original statement of how different millennials are from the rest of the workforce – the world even. In reality, we want many of the same things, but it’s probably fair to say that we compartmentalise our lives less. We want balance across the board and that means work too. If we can collaborate to achieve some of these things, I’m certain it will benefit all of us and result in healthier lifestyles, quicker results, purposeful work and time for our families. Beth Freeman won the Young Executive of the Year award at this year’s North American Office Products Awards, which were presented at S.P. Richards’ ABC event in San Diego, California, in August. She will be speaking at this year’s OPI Global Forum in Chicago on 19 November.

5 MINUTES WITH... CAREER Q&A

Michael Lewis

Describe your current job. As Associate Project Manager at Fellowes Brands, I’m a member of the Global Branding team, Fellowes’ in-house agency responsible for the strategy, coordination, execution and delivery of creative projects.

Describe yourself in one sentence. A confident, positive and goal-driven professional eager to make an impact and a laid-back but fun family man and friend who loves to entertain. What’s your life philosophy? People are the most important thing.

Michael Lewis, Fellowes Bra nds

What secret skill do you have? It’s a secret!

Your favourite gadget? The GoPro HERO5 camera. It’s so cool!

What scares you? Halloween haunted houses. Can’t do them.

Best way to spend the weekend? With my feet up and good company.

What makes you happy? My golden retriever puppy Cooper. He’s such a goofball. Optimist or pessimist? Optimist. The glass is definitely half full. What are you most proud of? I’m proud of many things, but most recently completing my first feature length screenplay. What’s your most prized possession? My man cave. It’s filled with movie posters, a big screen TV and surround sound. Bring on the movie marathons. Favourite author? Sherlock Holmes author Sir Arthur Conan Doyle. Such a brilliant mind.

If you could trade places with someone for a day, who would it be and why? Either late night host Jimmy Kimmel, Jimmy Fallon or James Cordon. They get to create funny sketches, meet talented artists and entertain people across the globe. That sounds like a great gig. What kind of music do you like? I listen to all music genres. Except country. Twang ain’t my thang.

If you weren’t doing your present job, what would you like to be doing? I’m captivated by the power of story, connecting with people and sharing their stories. That’s what I love to do and I can’t imagine doing anything else. Best moment in your career so far? Producing a television broadcast commercial for the 2016 NFL Super Bowl. And the worst? The moment my microphone and camera batteries died during an interview with an executive for a corporate video. A rookie mistake.

The industry figure you most admire? Why? My first thought is John Fellowes. He’s a visionary and a leading force behind the What would you cook for a ever-changing dinner party? needs and I’m a grill master at heart. I would developments in fire up the grill and cook burgers, the workplace. steaks, chicken or pizza. John has made significant Your pet hate? transformations Dog hair – it’s everywhere. es w llo John Fe which I believe are having an Your childhood ambitions? impact on the industry. I Growing up, I always wanted to be a famous believe in his aspirations and Hollywood actor or film director with my name the direction we’re headed. lit up on the silver screen. Where would you most like to visit? I would love to travel anywhere in Europe. Literally, anywhere. I’ve never been!

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Your best piece of advice to someone who has just joined the OP industry? Ask questions!

Favourite time of the year?

Autumn – not too hot or cold. Plus, I love the change in colours. It’s a peaceful and serene time of year.

What personal item do you have on your desk? A traditional family photo and a dashboard hula dancer to remind me that you need to enjoy life every once in a while.

2O PRESENTATION DINNER 9 MARCH 2020 The winners of the 19th annual European Office Products Awards (EOPA) will be announced at a networking and celebration dinner on Monday, 9 March 2020 at the Hotel Okura in Amsterdam, Netherlands

BOOK

NOW

To reserve your seats at this unmissable networking event or for more details visit www.opi.net/eopa2020 or email awards@opi.net

FINAL WORD

The rise of

SMART CITIES

s the world becomes increasingly dependent on technology for efficiency and success, a report by IDC – the Worldwide Smart Cities Spending Guide – shows an estimated two-thirds of global cities will be investing up to $135 billion in smart city technology by 2021. The National League of Cities, meanwhile, an organisation that serves the interests of 19,000 cities, towns and villages in the US, has analysed how these advances in smart cities could potentially impact jobs and skills, showing the fast-growing occupations between now and 2026 most likely to be automated. The research found that management and supervisory roles are the most secure, being less than 30% ‘automatable’, while low-paying positions involving manual labour are the ones most at risk, with 70% expected to be automated. Another study, ABI Research’s Smart Cities Report, places the UK’s capital London as the world’s third-leading smart city, following behind Singapore and Dubai, thanks to its advanced open data policies and thriving start-up ecosystem. TOP SMART OFFICE TRENDS As smart cities are clearly shaping the future of work, let’s take a look at some of the leading workplace trends for 2019 and beyond:

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Bring Your Own Device (BYOD) Many businesses are now allowing a BYOD policy, which means staff can use their own personal tablets, smartphones, laptops and wearable tech to complete their tasks and send work-related communications. According to research by Techjury, 67% of employees say they now use personal devices at work, and 87% of businesses rely on their workers’ access to mobile business apps. By allowing staff to take their favourite at-home tech and integrate it into daily work life, they are able to work remotely in more efficient ways.

Focus on wellness Workplace wellness is a growing trend. Employers are increasingly recognising the dangers of overworking, presenteeism, work addiction and burnout. In the US, 70-80% of companies believe that wellness programmes reduce absenteeism and boost productivity, according to a Global Wellness Institute Survey. This shows that more companies are looking to

make positive changes to improve the well-being of their employees, and tech is making this easier. For example, wearable devices like Fitbit and Jawbone allow staff to monitor their stats, from steps taken and calorie consumption to heart rate. This can empower them to take control of their health and practice better wellness habits daily. Smart offices can also make use of collected data from wearable devices by analysing it to identify potential health risks in the workplace.

John Williams, Head of Marketing, The Instant Group

As the wireless technology and BYOD movement accelerates, the need for advanced security tech rises with it Cybersecurity As the wireless technology and BYOD movement accelerates, the need for advanced security tech rises with it. More data is being stored in the cloud, and if it isn’t secured correctly, companies risk losing or leaking a lot of sensitive information. A recent US review by the Society for Human Resource Management found that nearly half of organisations surveyed (46%) are now using biometric authentication tech to protect data on smartphones. Flexible offices with excellent network security, a choice of shared and private workspaces, and 24/7, on-premises protection offerings are helping companies to operate in a safer and more secure environment. BENEFICIARIES OF THE SMART OFFICE Smart workplace solutions improve productivity and make it easier for teams to complete their daily tasks, using state-of-the-art tech to make the process smoother. IT companies, design studios and web development businesses can all benefit from a fully serviced and connected set-up. Beyond office life, those working in labs and research facilities, as well as manufacturing and warehousing operations, can operate safely with excellent security and data protection.

NEXT ISSUE Big Interview Mike Rowsey, CEO, Harbinger National Category Update l Health & well-being Events l Paperworld preview l EOPA shortlist l Climb of Life review l OPI Global Forum review