BIG INTERVIEW
Connecting the
business products world
Dr Benedikt Erdmann, Soennecken February 2020
INSIDE THIS ISSUE l
Shackles off for Clover l Amazon complaint stalls GSA platform l Novexco buys SPR Canada l 2020 visions: before and after
l Paperworld’s Michael Reichhold in focus l The rise of flexible working l EOPA preview l The core principles of disaster recovery
CONTENTS 16 Big Interview Soennecken’s evolution and its role in the German business supplies market 24 Hot Topic A new decade has begun. What will it bring for our industry, its various protagonists and the products they (used to) sell? 28 Interview Michael Reichhold promises new initiatives to keep Paperworld relevant 30 Category Update The writing instruments sector continues to evolve as consumers dictate the type of products they want 34 Category Update Technology is irrevocably changing the way people work, but it’s not all good news – there are risks too
Big Interview: Dr Benedikt Erdmann, Soennecken Talk about the German business supplies industry and soon the name Soennecken as an integral part of it comes up. One of the two dominant dealer groups in the country, Soennecken has had a long and often chequered history. However, despite plenty of upheaval in the market in general and within the group in particular, Soennecken now stands solid as a rock among its contemporaries. And that’s in good part due to the long-time leadership of Group Chairman Dr Benedikt Erdmann. HOT TOPIC: 2020 VISIONS
40 Research Flexible working is here and it’s here to stay 44 How to... The six core principles of efficient disaster recovery 48 Preview: EOPA New services, solutions and products plus outstanding personalities and operators – it’s time for EOPA 2020 54 Preview: Partnership Speed (business) dating at its best at OPI Partnership
REGULARS 5 Comment 6 News 56 5 minutes with... Helen Wade 58 Final Word Mike Gentile
February 2020
In the coming years, we will see fewer – but larger and better – players in our industry as the consolidation process continues at all levels in the distribution channel. I believe this will result in the development of just a few dominant players [...]. For example, in a local market we will only have one prevailing distributor, one large reseller, one specialised retail chain and one online operator. Declining demand and pressure on margins will force ‘suffering’ players to merge, sell, consolidate or disappear. Wholesalers will strengthen their position as online sales continue to outpace traditional growth.
36 Advertorial International Paper on ‘making the conscious choice’ with its REY range
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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
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A new decade: be niche, be big or be gone
elcome to the 2020s – a new decade is underway! What will it bring – gloom and despair or success and growth? A bit of all of the above I should imagine. Nothing gets the imagination going at the beginning of the year quite like the annual Consumer Electronics Show (CES) in Las Vegas. Much of what is shown at CES is conceptual and might never see the commercial light of day. What it undoubtedly does, however, is occupy the mind and get the innovative and creative juices flowing in a way that few other events do.
It is bold that our industry needs to be in the next decade in order to survive and, better even, thrive Yes, it’s all about technology, rather than about pens, pencils, paper, stamps, shredders and office furniture. But aren’t all of these products and the industry we work in intrinsically linked to technology these days? Our two Category Updates on writing instruments and office tech (pages 30 and 34 respectively) state they are. Our Big Interview with Soennecken’s Dr Benedikt Erdmann (page 16) shows how important tech savviness is in terms of attracting and retaining end consumers. Our Research feature (page 40) illustrates that one of the biggest trends at the moment – flexible working – completely relies on technology. So, smart mailboxes to stop ‘package thieves’, next-generation voice technology or solar-powered tricycles might all be a bit ‘out there’, but it’s not difficult to see potential applications in our industry. It is bold that our industry needs to be in the next decade in order to survive and, better even, thrive. As soft-carrier’s Peter Damman says in our past, present and future-gazing Hot Topic (page 24) – and I’ve stolen a good quote again for the headline of this column – “Be niche, be big or be gone.” Talking of the past and looking backwards for another moment: very recently, in mid-January, our CEO Steve Hilleard celebrated 25 years at OPI, a real milestone and indeed the vast majority of OPI’s life itself. It would be no exaggeration to say that Steve has well and truly shaped OPI during those 25 years, always looking forward, coming up with new ideas, products and projects while making sure that the existing ones remain current and relevant. I’d go as far as to say that he is OPI, representing all that the brand stands for. Congratulations Steve and here’s to the next decade – or indeed 25 years! To all our readers, and for now, have a HEIKE DIECKMANN, EDITOR good month!
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February 2020
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5
NEWS
Analysis: Shackles off for Clover Imaging
Freed from the burden of its Wireless division, Clover Imaging is now looking forward to controlling its own destiny
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On 16 December 2019, Clover Imaging Group confirmed the closing of the acquisition by its executive management team in partnership with private equity firm Norwest Equity Partners (see News, OPI December/January 2020, page 9). It marked the end of a period of uncertainty for the world’s largest ink and toner cartridge remanufacturer following financial issues that became public a few months ago. Speaking to OPI, Clover Imaging President Eric Martin was relieved but also excited about the future, now that the company has been freed from the constraints of its previous 4L Holdings ownership and the relationship with former sister company Clover Wireless. While he admitted that changes in a supply agreement between Xerox and HP had resulted in a loss of business for Clover Imaging, he played down the significance of that in the overall debt repayment problem of 4L and on Clover’s own business operations. “Without Wireless, there is no issue,” he stated, “and we have a strong, healthy balance sheet.”
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PAINLESS SEPARATION Clover Imaging – which is dropping its CIG abbreviation – has been decoupled from the Wireless business in terms of shared services, and a small number of Wireless staff moved out of the Chicago-area premises in December. Apart from that, there were no meaningful synergies between the two companies, and none in terms of distribution facilities, etc, so the separation has been relatively painless.
Clover Imaging will keep its Clover name while the Wireless unit – which recently announced the acquisition of leading electronics recycling firm Teleplan – will look to rebrand. Financial details of the Norwest transaction were not released, but Martin said the remanufacturer – with annual sales of around $450 million in 2019 – has maintained a healthy working capital as well as lender retained cash. “The management [Martin himself, Chairman Jim Cerkleski and CEO George Milton] has put its money where its mouth is and we are really looking forward to operating as an independent company again,” he said. This was something echoed by Cerkleski in a social media post: “I’ve never been more excited than I am today. Happy to get back to our roots!” he wrote when the acquisition closed. Of course, there are still secular declines in the print industry that Clover will have to contend with, in addition to disruptive strategies by the OEMs and the growing presence of the new-build cartridge manufacturers. However, Martin believes that increased public awareness of environmental credentials will play to Clover Imaging’s advantage. He pointed to recent market share wins in the enterprise space, as large corporations demand more sustainable solutions, and momentum across a range of channels as the environmental message resonates with more clients. Initiatives such as the Silver Bullet programme aimed at HP customers have been successful, Martin said,
The management has put its money where its mouth is and we are really looking forward to operating as an independent company again
Eric Martin
and the impact of recent industry consolidation in the managed print space will also likely be beneficial to Clover Imaging, he noted. There are no plans to make sweeping changes to how the business operates across its 43 global markets. The management team will drive efficiencies as it always has, Martin affirmed, but the change of ownership won’t mean a period of disruption. On the contrary, he firmly believes it represents a fresh opportunity for Clover Imaging to grow and once again be the master of its own destiny.
Canadian multichannel operator Novexco has acquired the local operations of S.P. Richards (SPR) from the wholesaler’s parent company Genuine Parts. SPR Canada services office products resellers across the country from five locations in Vancouver, Toronto, Calgary and Edmonton. Its sales in 2019 were approximately US$50 million. Novexco CEO Denis Mathieu said the acquisition was complementary to his group’s current distribution channel, expanding its presence in the west of the country and enabling it to better service buyers in the east. SPR Canada distributes more than 16,000 products of both branded and private label business supplies and Novexco said its clients would now have access to a broader selection. A long-term agreement has also been put into place with SPR for the continued
availability of its private label brands across all Novexco customer channels and markets in Canada. Genuine Parts CEO Paul Donahue commented: “We are very pleased to complete the sale of S.P. Richards Canada and take another step forward in our strategy to optimise our portfolio. Novexco is a leader in the industry and an excellent partner for our Canadian customers and our employees. We want to thank the entire S.P. Richards team, and in particular our team in Canada, for making this transaction possible.” SPR CEO Rick Toppin added: “The sale of S.P. Richards Canada allows us to focus our business on the US market. In undertaking this process, it became clear that Novexco was the best partner for our Canadian customers and our employees. We will be working very closely with the Novexco management
Mutschler named Chairman as FireKing is acquired
Denis Mathieu
team to help ensure a smooth transition for our employees, customers and supplier base.” The deal – for which financial details were not revealed – was effective from 1 January 2020. Genuine Parts said it would use the cash proceeds of the sale “in line with its disciplined capital allocation strategy”.
Cott makes water move
International consumer and professional beverages distributor Cott is evaluating strategic alternatives for its coffee, tea and extract business segment as it moves towards becoming a pure-play water solutions provider. The North America-based group has engaged a financial advisor to evaluate the options available to its S&D coffee and tea unit. This business has annual sales of $600 million and is a major player in office coffee services in both the US and Europe. As part of its new focus, Cott also announced plans to acquire North American rival Primo Water Corporation in a $775 million deal. Primo is a leading provider of water dispensers, purified bottled water, and self-service refill drinking water in the US and Canada with annual sales of more than $310 million. The transaction – which is expected to close in March – will create an entity with around $2 billion in annual water sales and a presence in 21 countries.
February 2020
Office products industry veteran Jay Mutschler has been named non-executive Chairman of FireKing International following the company’s acquisition by Champlain Capital. Mutschler – a former US Office Products (USOP), Corporate Express and Staples senior executive – will be working again with ex-USOP CEO Warren Feldberg who is a Managing Partner at Champlain. FireKing President Gary Weisman has also been confirmed as CEO of the manufacturer of fire-resistant filing cabinets. “Our mission is to invest in good companies that provide Jay Mutschler customers with meaningful products and services combined with a history of solid financial performance. FireKing fits this mission perfectly,” said Feldberg. He added: “Jay and I will be working with Gary and the FireKing management team in a variety of collaborative ways, including strategic planning, providing capital for infrastructure, marketing, acquisitions and accessing a network of outside resources.” FireKing – which operates in over 80 countries – will continue to manufacture at its current location in Indiana, maintaining its status as the only US manufacturer of fire-resistant filing cabinets. The company was previously owned by Chicago-based private equity firm Pfingsten. Founded in 2002, Champlain typically invests in manufacturing, consumer products, distribution, healthcare and service businesses with EBITDAs of $3-$15 million. It uses a ‘one-stop’ approach that provides all the equity and debt capital to fund acquisitions without the need for third-party lenders.
NEWS
Novexco buys SPR Canada
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NEWS
Analysis: Trouble for GSA e-commerce platform? Amazon protest delays the roll-out of the US federal government’s $6 billion e-marketplace initiative
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The efforts of the US General Services Administration (GSA) to implement a commercial e-commerce platform for federal purchasing have hit a roadblock after Amazon – the company seemingly in pole position to win a major chunk of sales from the initiative – filed a protest with the government agency. In a story first reported by radio station and publisher Federal News Network, Amazon filed an agency-level protest with the GSA in November that challenged several aspects of the proposed e-commerce platform. There is an irony to this, given that when the whole idea was first mooted back in 2017, it was done so very much with Amazon in mind; the legislation was even nicknamed ‘the Amazon bill’. However, as OPI has stated previously, some of the GSA’s terms and conditions (T&Cs) – regarding areas such as use and ownership of data and following government purchasing requirements, for example – were likely to grate with Amazon. It was reported that the GSA has re-evaluated the solicitation and its response to the Amazon protest is likely to take several more weeks. Whether there will have to be an amended request for proposals (RFP) is not yet clear, but the whole process is going far less smoothly than the GSA would like, as it tries to get the pilot phase of this programme off the ground.
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WATCHING WITH INTEREST Mike Tucker, CEO of US office products trade association NOPA, told OPI his organisation was keeping a close eye on developments. Tucker had been backing attempts by independent
dealer national accounts platform EPIC Business Essentials to be involved in the GSA’s e-commerce platform. With purchases only to be made up to a limit of $10,000 and involving commercial off-the-shelf items, office supplies are bound to be one of the main categories in the initiative, with total annual spend through the platform estimated to be in the region of $6 billion, according to the GSA. Tucker provided some insight into the reasons for Amazon’s protest, saying the e-commerce giant was arguing that the terms of the GSA’s RFP were inconsistent with commercial practice. “The [Amazon] protest challenged GSA’s market research and compliance with laws such as the Competition in Contracting Act, Federal Acquisition Streamlining Act (FASA), and Section 846 from the 2018 National Defense Authorization Act,” he explained. “Under both FASA and Section 846, it is established federal policy that commercial terms and conditions are to be used only ‘to the maximum extent practical’,” he added. “This language reflects the government’s obligation to balance its responsibility to the public against a vendor’s T&Cs. “Amazon has a history of dictating its T&Cs to customers and vendors, and is clearly trying to pressure the GSA to do things the Amazon way.” Tucker confirmed that EPIC did not bid on the initial RFP because it did not meet all the requirements for an e-marketplace as defined by the GSA. However, he is not ruling out the prospect of EPIC being part of a wider online procurement solution.
Amazon has a history of dictating its T&Cs to customers and vendors, and is clearly trying to pressure the GSA to do things the Amazon way “The GSA has said it will test the other types of platforms it has identified, but has not given a timeline,” he noted. “Therefore, we can’t really plan any alternative/federal initiatives until more information is available on the platform or platforms it has decided to do a pilot with.” However, Tucker did confirm there is legislation pending that would require the GSA to include the EPIC type of platform in its pilot programme. It will be interesting to see to what extent the GSA has to make compromises in order to keep Amazon in the frame. The current situation is that federal purchase card holders are already spending millions of dollars in ‘rogue’ purchasing on Amazon. If the GSA decides to make life too difficult for the online operator, it may just prefer to keep things the way they are.
Acme United has acquired the assets of First Aid Central, a Canadian first aid and safety supplier based in the Quebec city of Laval. First Aid Central – which produces and sells a complete line of first aid kits, refills and safety products to a broad range of industries and end users – has been operating since 2007 and has annual sales of around C$4.3 million (US$3.3 million). Acme, meanwhile, has been in the first aid business for over four decades and has been growing strongly in this category over the past few years: in addition to its own PhysiciansCare brand it, acquired US suppliers Pac-Kit and First Aid Only in 2011 and 2014 respectively. “We intend to use the Laval location to expand production,” confirmed Acme CEO Walter Johnsen. “We believe our global customers will benefit from local production and service of our product line in Canada.”
Court dismisses Essendant class action suit
A US court has dismissed a class action lawsuit brought against Essendant’s former board of directors and Sycamore Partners over allegations of breaches of fiduciary duty. At the end of October 2018, Essendant shareholders filed a complaint in a Delaware court. They alleged the company’s board had failed to obtain the highest reasonable value for the wholesaler by agreeing to be acquired by Staples’ owner Sycamore Partners ahead of a bid by S.P. Richards owner Genuine Parts. A motion to dismiss the case was approved by the Delaware Court of Chancery at the end of December 2019, with Judge Joseph Slights siding with the defendants on all counts. This ruling does not affect a separate, ongoing lawsuit filed against Essendant by Genuine Parts which is being heard in the same court – a motion by Essendant to dismiss this case was rejected by Slights last September.
Complete buys Quality
EBP acquires ink maker UK-based remanufacturing company Environmental Business Products (EBP) has completed the acquisition of German ink supplier Compedo. Based in Iserlohn, Compedo supplies bulk ink to inkjet manufacturers, including EBP, as well as being a supplier of ink bottles and finished product inkjet and toner cartridges. Management reshuffle at Kimberly-Clark Aaron Powell, President of Kimberly-Clark Professional (KCP), has been named President of the group’s Asia-Pacific consumer business. He takes over from Achal Agarwal who has taken on the newly created role of Chief Transformation Officer. A successor to Powell at KCP has yet to be named. Search continues for Antalis Paper and packaging distributor Antalis has said it is still attempting to set up a new shareholding structure. The process – started almost a year ago following the collapse of France-based majority shareholder Sequana – also includes discussions with its main financing partners. Crayola names CEO Children’s art and stationery manufacturer Crayola has appointed Rich Wuerthele as its new CEO. Wuerthele – who has more than 30 years’ experience in the consumer goods industry – joined the Hallmark-owned company from Newell Brands. NY dealer rebrands New York state independent dealer FM Office Express – which bought Stevens Office Interiors in 2018 – has consolidated its businesses under a single brand called Intivity. CEO Fabricio Morales said its previous four go-to-market trading names had made it difficult for customers to relate to the company and its identity, hence the rebranding to a completely new corporate name. Leadership change at Diversey Mark Burgess, CEO of cleaning and hygiene solutions giant Diversey, resigned in early January after just over a year in the job. CFO Phil Wieland has been named interim CEO while the company searches for a permanent successor to Burgess. Former Diversey Care executive Todd Herndon has rejoined the jan/san supplier to take on the CFO role.
February 2020
Complete Business Solutions, the UK’s largest independent dealer, has made another significant acquisition, adding Quality Business Solutions to its growing portfolio. Quality Business Solutions is a £20 million ($27 million) reseller based near Wolverhampton in the West Midlands that also has locations across the country. Like its new owner, Quality was also an active player in the M&A market under the management of Ed Barnshaw, Jon Khan and Dave Phelps. Both Barnshaw and Khan have left the dealership following the transaction, but Phelps and the rest of the Quality team are staying on, confirmed Complete CEO Rich Coulson. The acquisition puts Complete’s annual sales run rate at more than £165 million. Coulson told OPI that there would now be a period of consolidation at the company in order to bolster and expand its services proposition before looking to add more dealers.
IN BRIEF
NEWS
Acme makes first aid acquisition
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NEWS
Pentel to remain independent Japanese stationery and office furniture group Kokuyo has failed in its attempt to acquire a majority stake in Pentel after the writing instruments manufacturer’s shareholders decided to support a rival bid by stationery group Plus Corporation. Last November, Kokuyo launched a tender offer for Pentel’s shares as it aimed to make the pen maker a fully consolidated subsidiary. Kokuyo had already become Pentel’s largest shareholder in May 2019 after acquiring a stake of almost 38%, but made its hostile bid for a majority holding after strategic discussions between the two companies’ management teams broke down. However, despite upping its offer twice to ¥4,200 ($39) per share, Kokuyo only managed to acquire a further 7.9% of Pentel’s shares during the tender period that ended in December. Although that raised its shareholding to almost 46%, it meant it was unable to make Pentel a consolidated subsidiary of the Kokuyo Group. Instead, around 200 of Pentel’s 300 shareholders (representing about 30% of the company’s shares) decided to accept a lower offer made by the Japanese Stationery Consortium (JSC), an entity formed by another local stationery group, Plus Corporation. The JSC arose out of friendly talks between Pentel and Plus that were aimed at guaranteeing the independence of Pentel, something that has now been secured. The Pentel shares owned by JSC as well as those controlled by management account for “well over” 50% of the company, the pen manufacturer stated. Pentel said it would now look at ways to further its collaborative relationship with Plus and abandon a previous agreement it had to “build a cooperative relationship” between itself and Kokuyo. In a statement of its own, Kokuyo left the door open for Pentel stockholders to still tender their shares and said that, as Pentel’s largest shareholder, it would consider how it could help increase the manufacturer’s corporate value.
Euroffice Italy sold
UK-based e-tail and technology operator EO Group has confirmed the sale of its Italian subsidiary to local player GECAL. The company said the move would allow it to focus strategic efforts on strengthening its technology suite and position as a leading e-commerce platform provider. “The rapid change within the Italian office supplies market means that it makes perfect sense to have an Italian owner and partner, allowing Euroffice Italia to use broader local expertise as well as fully utilise all the features and functions of our technology to enable the next chapter of growth,” said EO Group CEO Simon Drakeford. GECAL – which is based near Milan – was founded in 1986 and operates in a number of sectors: office supplies, print, ICT, signage and display, and technology leasing. It has annual sales of more than €34 million ($38 million). The company’s President Michele Ambrosini said the acquisition represented “an extraordinary opportunity” to expand GECAL’s market coverage”.
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7,000 VISITORS AT THE 2019 BIG BUYER SHOW IN BOLOGNA, ITALY
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SOURCE: BIG BUYER
New CEO for Jalema Loet van de Kimmenade
European office products manufacturer Jalema has named Loet van de Kimmenade as its new CEO. The appointment came a few months after Jalema became part of the T3L Group that includes well-known OP brands names such as Tarifold and 3L. It became effective 1 December 2019. Van de Kimmenade has had a varied career in sales and management for firms such as BP, energy company Vattenfall and industrial landscaping group CRH, but this is his first role in the OP industry. As such, he said his first priority was to get to know the company and the industry better.
Imperial Dade continues spending
Fast-growing US jan/san and foodservice distributor Imperial Dade has announced two more acquisitions in early 2020. The latest additions to the Imperial Dade platform are Texas-based reseller Wagner Supply and Californian distributor American Paper and Plastics (APP). Wagner operates mainly in the west of Texas, with three locations in Odessa, Lubbock and Wichita Falls, while APP is headquartered in City of Industry, near Los Angeles. Imperial Dade has now made 27 acquisitions under the stewardship of father and son team Bob and Jason Tillis since their private equity-backed takeover of the company in 2007.
Leading Romanian B2B office supplies reseller RTC Proffice has been acquired by Complet Electro Serv (CES), an IT equipment manufacturer and distributor that is part of the Altex Group. Altex – which is owned by Romanian businessman Dan Ostahie – is a €700 million ($780 million) retail and distribution group that operates more than 100 stores under its own name and some 20 Media Galaxy outlets. RTC Proffice was founded in 1994 and was originally part of the RTC empire owned by another Romanian entrepreneur, Octavian Radu. It was acquired by Sweden-based investment firm Oresa Ventures in 2011 after RTC ran into cash flow problems. It employs more than 200 staff and had 2018 full-year sales of approximately €27 million. The sales price was reportedly between €4-€5 million. The deal will enable CES to expand the product categories it supplies in Romania and give it another distribution channel.
Private equity firm invests in Cartridge World US
The brand licensing rights of Cartridge World throughout the US have been acquired by private equity firm Blackford Capital. Headquartered in McHenry, Illinois, the Cartridge World US business operates nearly 230 franchised retail store locations across the country. Blackford said it intends to help franchisees grow their companies by capitalising on certain business model changes and taking advantage of key industry trends, such as bundling hardware and supplies, establishing longer-term contracts with customers, and focusing on the small and home office markets. “[Cartridge World] has settled into a highly profitable niche segment of the market, and its wealth of resources and ability to service home, small, mid-sized and enterprise customers without the dependency on expensive hardware will undoubtedly serve as a catalyst for industry disruption,” said Blackford Capital founder and Managing Director Martin Stein. Blackford invests in lower middle market manufacturing, distribution and service companies throughout the US. In addition to Cartridge World US, it has 11 active portfolio companies, and extensive experience and executive relationships in the imaging supplies industry. This includes previous investments and strategic leadership in Online Tech Stores, Quality Imaging Products, Rhinotek and Bond Street. The transaction does not involve the actual sale of the Cartridge World brand in North America – this is still owned by Cartridge World Australia.
IN BRIEF HSM makes senior US appointment HSM of America has named Marshall Eubanks as VP of Sales and Marketing. Eubanks has been with the shredder and baling manufacturer since 2004, most recently serving as its Senior Product Manager. His promotion comes after leadership changes at the US-based subsidiary at the end of 2019.
NEWS
RTC Proffice changes hands
Management changes at Sigel Office products manufacturer Sigel has announced that 3M executive Goetz Stamm will become its new Managing Director on 1 July 2020, taking over from Joachim Roth who is stepping down. Another departure is that of International Sales Director Sven Reimann who has left to join Germany-based toy giant HABA. Bunzl acquires Joshen UK-based distribution giant Bunzl has acquired Joshen Paper and Packaging, a Cleveland, Ohio-based supplier of janitorial, packaging and other not-for-resale goods to the grocery sector. Joshen has a presence in 11 US states and its 2020 sales are expected to be in the region of $300 million. Fuji Xerox to change name Fuji Xerox will be known as Fujifilm Business Innovation (FBI) from 1 April 2021 after deciding not to renew a sales territory and brand licensing agreement with Xerox. The move paves the way for FBI and Xerox to compete with each other from that date onwards in the Asia-Pacific, European and North American markets. New MD for Staedtler France Staedtler France has appointed Nadège Helary as its new Managing Director. Helary is a familiar face in the French writing instruments sector, having spent 14 years at BIC where she held purchasing, sales and key account positions.
February 2020
Office360° expands Kentucky’s largest independent office products dealer Cardinal Workplace Solutions has been acquired by Indianapolis-based Office360°. The transaction is the tenth acquisition for Office360° since the brand was launched in 2008. It takes annual sales to an estimated $65 million.
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NEWS
PICTURE OF THE MONTH
Helen Wade, Marketing Director at VOW Wholesale, takes on Henkel’s Loctite Hanging ‘Man’ challenge at the company’s Green Light event at the end of last year (learn more about Wade in this month’s 5 Minutes With... on page 56).
www.opi.net
SYNNEX to split
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McKeever to leave Advantia
Advantia has announced that CEO Steve McKeever is to leave the UK office products dealer group after accepting a senior role at a plc company outside the business supplies industry. “I am leaving Advantia when it is on the cusp of some major developments that will make it stand out from the crowd,” said McKeever, who joined the group at the end of 2018. “Working with the team over the past 13 months has allowed us to put the foundations in place to move forward and reinforce Advantia’s position as a groundbreaking group. The innovation is there, the tools are there, the people Steve are there and now is the time for it to step forward McKeever positively into 2020 and beyond.” Advantia Chairman Mike Heaps added: “Although we are really sad to see Steve go, we appreciate that he helped us to redefine our vision of what a great dealer group should be in the coming decade, and provided us with both the foundations and systems to make it happen. I think it’s fair to say he came to Advantia at the perfect time, when we were looking for someone who could think outside the box and deliver ways to make us innovative in the future.” Along with the news of McKeever’s forthcoming departure, Advantia announced two executive director appointments. Dealer Development Manager Steve Carter is joining the Advantia board while Commercial Project Manager Clare ffolkes has been appointed to the board of Comgem, the technology solutions company Advantia has a 50% stake in. Steve Keen, who retired at the end of December after 25 years with the organisation, has also been retained as a consultant. Advantia described Carter as an “integral part” of the key projects that are in progress and said he would take forward many of the initiatives brought to the table by McKeever over the past year. He will also investigate other potential growth and diversification opportunities for the group’s members. The dealer group confirmed to OPI that, with a strong executive team in place, it was not immediately looking to fill the CEO role. Director Bev Boden will head up the business in conjunction with Heaps, as McKeever transitions out of his role over the next couple of months.
SYNNEX plans to spin off its Concentrix business services division and become two separate publicly traded companies. The transaction is expected to be completed in the second half of 2020 and will result in two entities: SYNNEX Technology Solutions, a $19 billion distribution, logistics and integration services company for the technology industry; and Concentrix, a $4.7 billion CRM services provider. SYNNEX said it made sense to separate the businesses given their distinct differences. It is something it has considered doing in the past, but the ahead-of-schedule integration of Convergys (acquired in 2018) into Concentrix made the timing right this year, the company explained. Current CEO Dennis Polk will continue to lead SYNNEX following the split while Concentrix President Chris Caldwell has been chosen to head the standalone Concentrix company. It was also a good 2019 for Technology Solutions as sales increased by more than 10% to $19.1 billion and adjusted operating margin grew by 30 basis points to 3%. The PC, software, cloud and networking product categories were called out for their “solid growth” while the US was the main geographical driver of the revenue improvement.
Moore named CEO of Victor Stationery
Robert Moore, the former Group Purchasing Director at UK business products group Spicers-OfficeTeam (SPOT), has been named as CEO of manufacturer Victor Stationery, the Northern Ireland-based manufacturer of the well-known Rhino Stationery brand. Moore left the SPOT Group last October after more than 20 years with the company, while his career in the office products industry stretches back even further to 1992 when he joined Dudley Stationery. He told OPI that he would be working closely with Victor’s senior management – including owners Gareth and Carey McClay and Managing Director Nick Gosling – to continue to drive the business forward, both in terms of manufacturing excellence as well as developing new products and markets.
5 . 3 BILLION CUSTOMER PACKAGES DELIVERED GLOBALLY BY AMAZON’S LAST MILE NETWORK IN 2019 AZON SOURCE: AM
18.8% GROWTH IN US ONLINE SALES DURING THE 2019 END-OF-YEAR HOLIDAY PERIOD
SOURCE: MASTERCARD
BIG INTERVIEW
Solid as a ROCK
The business supplies sector in Germany may lack fireworks, but it remains a consistent burner. Its biggest dealer group Soennecken is very much part of that consistency and continues to act as a bright and steady beacon for its members in an evolving market
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alk about the German business supplies industry and soon the name Soennecken as an integral part of it comes up. One of the two dominant dealer groups in the country, Soennecken has had a long and often chequered history. However, despite plenty of historic upheaval in the market in general and within the group in particular, it now stands solid as a rock among its contemporaries, many of which have wobbled or indeed crumbled. And that, in good part, is due to the long-time leadership of eminent Group Chairman Dr Benedikt Erdmann. Since starting as a member of the group’s board in 1996, he has witnessed the dark days of the late 1990s and early 2000s, but turned the dark into the bright and the deeply traditional into the modern. Indeed, Soennecken has over the past few years gained a reputation for being one of the best and most progressive employers in the small- to medium-sized company category in Germany. As regards its dealer membership, while numbers have declined – they peaked at about 900 in the group’s heyday and are now down to about 500 – Soennecken’s dealers are typically strong operators which, thanks to consolidation and their own organic growth, generate sales through the cooperative of a combined total of €440 million ($488 million). OPI has been following Soennecken’s fortunes for many years, but the latest comprehensive look at the group dates back to 2013. Heike Dieckmann recently caught up with Dr Erdmann to get an update on the evolution of Soennecken as well as glean an insight into the latest chapter of the broader German market.
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OPI: The names Soennecken and Benedikt Erdmann have become almost synonymous. But there was a (professional) life before Soennecken for you, wasn’t there? Benedikt Erdmann: (laughs) Quite a brief life, yes. Before I joined Soennecken, I worked at the Institut für
Handelsforschung (Institute for Retail Research) which is part of Cologne University. I started there as an assistant and was Managing Director for four years before I left in1996. OPI: Soennecken must have been quite a different proposition from that first job in academia. And the group wasn’t in the best place back then either, was it? BE: There had been challenges and the business posted massive losses at some point, that’s true. During that time, companies such as Netherlands-based Bührmann-Tetterode and Guilbert in France were buying a considerable number of large contract stationers and almost all the German ones were Soennecken members. It was a difficult time. But Soennecken survived and the rest, as they say, is history. OPI: Let’s get a current perspective. First of all, you’re still a cooperative, aren’t you? BE: Yes, Soennecken is 100% owned by its members and there are no plans to change that. OPI: You pay your members dividends and invest the remainder of your profits back into the group, is that correct? BE: Correct, but the dividends actually account for about 99.8% of our profit.
BIG INTERVIEW Benedikt Erdmann
The stockless dealer concept has really taken hold in Germany now and 99% of orders are delivered directly to end users
OPI: That’s interesting because when we last had this conversation in 2013, you said that the whole stockless concept was not really accepted in Germany, with dealers far preferring to have their own warehouse. I think it had to do with an inherent distrust of signing entire functions of the business over to someone else. So there’s been quite a fundamental change in that attitude?
February 2020
OPI: So what are the numbers now? BE: Soennecken as a group has revenues of €678 million. To give you an overview: we have two major business models. The central billing business is the biggest part and accounted for €440 million in 2019. It covers the purchases our members make through Soennecken from our manufacturer partners. We have about 500 members right now. The number fluctuates a little between 490 and 510, but overall the market is stable. We are losing about 20 members every year and replacing them with new ones. As a general rule, the volumes purchased by each member are getting bigger. About 170 of our members are retailers. In addition, we have our traditional office supplies contract stationers of varying sizes – that’s about 250 members – and our printer and copier dealers
as part of our MPS division. The number of these output specialists amounts to 140 dealers. We also own Nordanex, an IT services company that we bought just over two years ago. Several of our members are active in more than one channel or division, hence the total is more than the 500 I mentioned. The segmentation is not rigid at all and there are a lot of overlaps. The second part is our wholesale operation LogServe – that’s about €164 million. It’s the fastest growing part of Soennecken. As you know, LogServe had some very serious challenges in the past as well, particularly when it was part of the old Büro Aktuell group. But for the past ten years, it has been profitable and also been growing. In 2019 alone, LogServe grew about 9%. The stockless dealer concept has really taken hold in Germany now and 99% of all orders are delivered directly to end users.
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Benedikt Erdmann BIG INTERVIEW
BE: Absolutely. Two things happened. Firstly, we have a much wider assortment now with about 25,000 SKUs. It’s impossible for an independent dealer to handle that type of range. Secondly, you need a lot of capital to run a wholesale or warehouse operation. You have to finance the real estate, the stock, all the technology in the warehouse, etc. It’s much cheaper to have one big warehouse as opposed to 50 little ones. In my opinion, you need minimum sales of about €5 million to have your own warehouse and make money with that. OPI: Duplication of cost is one of the hottest topics for anyone these days, but it seems to have taken some time for German dealers to accept that and embrace better models. BE: Exactly. But the progressive ones have realised this and moved on. OPI: Also on the logistics side, LogServe has a facility in Kiel in the far north of the country. How is that going? BE: The new warehouse opened in July 2019 and it’s going well. There’ve been the usual teething problems with getting a new logistics operation up and running, but after the first couple of months everything settled down and now members can expect the same service from the Kiel facility as they can from our warehouse at HQ in Overath. OPI: The Kiel warehouse has been built in cooperation with one of your members, hasn’t it? BE: It’s owned by Soennecken, but is geographically close to our member Hugo Hamann. It basically serves Soennecken members in the northern part of the country, but Hugo Hamann is definitely the biggest customer.
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OPI: There seems to be quite a big focus on logistics now. In terms of group objectives, has anything fundamentally changed? BE: You’re right about the logistics part – that’s much more important to us now. As you know from talking to other people in that channel, it’s a difficult operation to run as the margins are very small, you need a lot of IT support and it’s expensive to build these warehouses. It’s a challenging business for us, but it’s also very successful. The other thing that has changed is that digitisation is forcing us to look at a wider range of categories and products. We have to be much less reliant on the paper business which was our mainstay once upon a time.
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OPI: I also believe the way Soennecken works has been adapted slightly in that dealers don’t have to opt-in to all that the cooperative has to offer. Is that correct? BE: Yes, that’s right. Dealers have to use the central billing system and purchase through us to get the dividends, but they don’t have to sign up to LogServe. That’s something different too. OPI: Let’s talk about your direct business which is serviced by LogServe. You changed
your bylaws in 2014 to allow Soennecken to go after a section of customers directly. How big a part is that for you? BE: It’s about 18% of LogServe’s revenues. OPI: That’s substantial and much more than I was aware of. Who are the customers? BE: 50% of that business comes from our large key accounts and the other 50% from servicing small e-commerce platforms. OPI: In the aftermath of that change, you lost your two biggest members – Plate in the north of the country and Kaut-Bullinger in the south. That must have been a considerable hit. BE: I’m not sure whether or to what extent those departures were related to the change in bylaws and our direct business approach. OPI: Rumour has it that the loss of Kaut-Bullinger was largely due to that operator’s financial standing? BE: (laughs) No comment. OPI: I take that as an unspoken affirmation. What about Plate? It was a very long-standing Soennecken member… BE: I don’t know, I didn’t talk to the management team at the time. OPI: They’ve obviously both joined your ‘rival’ Büroring and appear to be happy there. Let’s go back to the direct business. You compete in the large account space for tenders, government contracts, etc. How many of your own dealers are in the size bracket where they would compete as well? BE: We only have about 20 members with revenues over €10 million in the office supplies business; they predominantly deal with these types of large contracts.
SOENNECKEN MILESTONES 1875: Friedrich Soennecken establishes publishing company Soennecken 1926: Buying group cooperative of German office supplies dealers called GdB is created 1983: GdB buys the Soennecken name 1992: GdB is renamed Soennecken 2002: Soennecken merges with buying group Büro Actuell and is named Branion 2007: Branion reverts back to the Soennecken name 2009: Soennecken’s warehouse LogServe in Overath becomes operational 2014: Change of bylaws to allow direct business by Soennecken
Benedikt Erdmann BIG INTERVIEW
OPI: Is that ever an issue? BE: Not really. We are only supplying contracts that are not blocked by our members. The minimum value of a tender is about €500,000 and we don’t go below that. Most are actually over double that and as such are not in the realm of the vast majority of our members. But, like I say, we don’t have a conflict, because they can block us. This is sometimes annoying for us, but that’s the way it is – members very rarely accept competition from their own cooperative. It’s a fair point. OPI: Also on the direct note, you bought Cologne-based dealer Ortloff in 2015, a sizeable operator with revenues of €5 million, so effectively you’re competing with your other retail members with that store. But when I spoke to your colleague Margit Becker at Insights-X last October, she said something that struck me as really interesting. The Ortloff store is partially being treated as something of a testing ground – an experimental guinea pig of sorts – by Soennecken where you can trial new things before you offer them to your members. BE: That’s right. But it’s more than that. It’s always good to have a deep knowledge of the business of your customers. It’s been a real eye opener to the Soennecken staff in Overath to see and hear directly about the challenges that retailers across the country face. As such, the competencies of our staff have really increased. They know more about what makes customers want to go to a store and the kind of experience they expect and want to have there; they’ve learned about converting a browsing to a buying customer and about the potential importance of social media in the purchasing experience. All that knowledge is processed and incorporated into our service offering, be that through training, range of assortment, delivery options or anything else.
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We are only supplying contracts that are not blocked by our members. [...] This is sometimes annoying for us, but that’s the way it is
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What we also did in the Ortloff store is install things like price scanners, self-service points and an iPad check-out. Another, potentially huge, benefit to other members is our new cloud-based ERP system that was developed for Ortloff and which comprises 150,000 SKUs. It’s paid for from the profits of the shop, but all our members can use it, starting this year, for a relatively low fee. It’s what we call the endless digital aisle – not only for the Ortloff store and its customers, but for all members. How it works is that end consumers visiting the store can order products through the system that we don’t have in stock and decide whether they want to collect the goods from the shop
or have them delivered directly to their home. Soennecken members can do the same if they sign up for it. OPI: What are the major obstacles for your members nowadays? BE: One of the biggest challenges for small independent businesses and perhaps particularly for retailers – and I’m sure that’s not a Soennecken or even a German phenomenon – is the average order value. It’s been declining steadily. What we’ve managed to do is help our members increase that value, by 25% typically over the past couple of years. OPI: How so? BE: By changing the assortment we offer. We have expanded our range in some segments, for example gifts and leather products. These are not necessarily new categories, but we substantially grew our portfolio of products with a higher price tag, leading to bigger invoices. OPI: How has your Soennecken private label brand developed over the years? BE: We haven’t broadened it much; it’s about 1,800 SKUs right now. But while there’s not a massive focus on it, it’s very important for us from a yield point of view. Margins are considerably higher and it’s a profitable part of our offering. OPI: Let’s talk about friends and foes, as it were. You’ve had a long-standing relationship with PBS Deutschland. Is that still going strong? BE: It is and it’s a very good cooperation. OPI: But it’s also competition to LogServe. BE: It’s marginal. PBS Deutschland is strong in terms of delivering to retailers, so it’s our retail members that are typically customers of PBS. LogServe, meanwhile, predominantly delivers to our contract stationery members. OPI: What about ADVEO? What impact has the demise – in Germany certainly – of that operator had on LogServe and its current success?
Benedikt Erdmann BIG INTERVIEW
BE: It helped! We posted 9% growth last year in the wholesale business. This was due to three things, pretty much in equal parts: the first was the growth of our members’ businesses and therefore the requirement to deliver more to them; the second Soennecken acquiring new members that we are now delivering to; and the third was what we call the ADVEO effect. OPI: And soft-carrier? BE: It’s a competitor for our wholesale business, but we don’t really focus on that operator a lot – it’s a different proposition. OPI: I believe Staples Solutions is in the wholesale business again in Germany as well after getting rid of the stores to concentrate on the contract side of things? BE: We heard about that too. It’s odd to tell customers in the first instance that they are no longer wanted and then approach them again fairly shortly afterwards. We are just observing the situation, but so far have hardly felt any impact. Above all, dealers want continuity and reliability, that’s what I think. OPI: The wholesale landscape in the country has changed quite a bit over the past decade or two, perhaps more so than any other channel from a consolidation point of view. Would you agree? A few years ago there were about 50 to 60 wholesalers still in existence, mostly small and regional, with just a few big operators. How does that compare to now? BE: I don’t know the exact numbers – maybe 20 to 30. But I’m convinced this consolidation will continue even quicker in the near future. The good businesses will get bought by the larger wholesalers, the bad ones will just disappear.
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OPI: What about the reseller situation? There’s plenty happening at Office Depot Europe and Staples Solutions, as we’ve just said, and that disruption I guess can only be positive for you and your dealers. But there are some formidable operators in the picture too, with Lyreco, Printus, Böttcher, etc. BE: Lyreco is certainly the strongest competitor we have and one of the best-performing ones. It’s doing a good job, which is perhaps not that difficult given the upheaval that Depot and Staples are going through.
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OPI: Printus and OTTO Office? BE: They are both excellent competitors, but in a different market. Lyreco serves the large-account customer – companies with 50 employees and up – while Printus and OTTO Office cater for 50 staff and down. We have strong members that are in the contract business with bigger accounts and those that serve smaller customers in the regions. Both are very important markets for us. OPI: How about Böttcher? It looks like a phenomenal success story.
SOENNECKEN FAST FACTS Founded: 1875 by Friedrich Soennecken Headquarters: Overath (near Cologne), Germany Group Chairman: Dr Benedikt Erdmann Staff: circa 491 Members: circa 500 Total revenues: €678 million ($752 million), split into members’ central billing business (€440 million), wholesale operaton LogServe (€164 million), Nordanex (€69 million) and Ortloff (€5 million)
BE: Absolutely. Böttcher is one of our strongest competitors in the online sector. It makes life difficult for us every day, but I have to acknowledge the remarkable entrepreneurial achievement of Udo Böttcher. Well done to him. OPI: Most dealer groups today, in an effort to remain relevant beyond greater purchasing power for members, are increasingly focusing on expanding their service offerings. You’ve also introduced quite a wide range of initiatives and sales tools I believe. Can you elaborate on some? BE: Sure. One is our Raumbuch (Room Book), now in its second year, which is a high-end sales tool for our office furniture dealers. It’s a catalogue without products, essentially a guide that sells services and atmosphere and shows today’s working environment and culture. Also with our office equipment dealers in mind, we have developed a programme called ‘wir sind raum’ (‘we are space’). This is currently in its pilot phase and involves 12 dealers that are working on a wide range of project and consultancy tasks which can be added to their other planning, installation and product expertise and become another tool to improve customer retention. OPI: You’ve launched an outsourcing programme for smaller dealers as well – what exactly does that entail? BE: It’s basically a centrally managed multichannel contact strategy, mainly for small accounts.
Up until now we have been lucky because our business has obviously not been a focus for [Amazon] This is why we have been offering this fully outsourced marketing programme since 2017. It is a combination of print, email and shop promotion. Every dealer can select the optimal contact strategy for the sales potential of single customer segments. Our job is to execute this from our HQ. That way, the dealers can concentrate with their field sales organisation on larger and more relevant clients. OPI: So how many dealers have you got on board that use that service? BE: We started with six in 2018 and are now up to 15 members. OPI: Are there any other projects that are either in the pipeline or have recently been introduced by Soennecken? BE: We offer a lot of training courses and constantly expand their range and scope. They are very popular and we see good uptake. OPI: What do you make of the state of the independent dealer community as a whole? There have been many gloomy predictions over the years, but have they actually come true? Amazon, in that sense, has been both a curse and an opportunity for many I guess. Germany was the first country where Amazon Business was launched after the US. What’s your view? BE: Let’s start with Amazon. I don’t think it has really focused on our industry or on the B2B market in Germany very much so far. Yes, it’s here and there are some activities, but it’s not as strong as I thought it would be.
OPI: Other online businesses such as Printus? BE: Yes. OPI: Why? Because they just can’t compete with the pricing? Or lack of range? BE: Because they have the same customer structure and the same customer expectations. OPI: On that note, you offer a couple of online solutions, don’t you? BE: We do. SoProcure is a closed shop e-procurement system that all members are able to use, provided they are willing to pay for it. It’s not cheap, but it’s one of the best systems in Germany. Right now, we have about half a million end users on it, with the platform generating about €200 million in sales. It’s very important to our members. The system offers all the typical e-procurement functions. Together with our members and based on their customer requirements, SoProcure has been steadily expanded over the past 20 years and is now state-of-the-art in e-procurement. Most recently, we have expanded the system to serve as a procurement platform for catalogues and we will soon be able to offer a plugged and priced assortment of over one million items. With that, our members will have a real advantage when they compete for medium and large customers. SoCommerce, meanwhile, is an open shop – like Printus, OTTO Office or Staples – so every B2B customer can use it. It’s much smaller, but it’s growing at a rate of about 10-15% a year. OPI: Let’s wrap up. What would be your advice to any of your members for 2020 and beyond? BE: First of all, I think the dealer community is fairly steady at the moment. There will be losses, yes, but I don’t think we’re teetering on any cliff edge right now. The big challenge is digitisation. The paperless office is still a long way off, at least in Germany. As such, so far the impact of digitisation has only been creeping into our industry. I think that’s dangerous, because it can change quickly to become more dominant. This will not only affect office supplies operators; our MPS business will also be impacted to some degree. Every dealer would be well advised to prepare for a time when these products become much less relevant. Don’t get me wrong – we have a stable and profitable business right now. But our dealer members expect Soennecken to anticipate change and look after and take care of their – and our combined – future. And that is what we’re doing.
February 2020
OPI: With trends like remote working and the growing importance of the SOHO sector, I’m quite surprised that smaller operators are not suffering more at the hands of Amazon Business. Why aren’t they? BE: I’m still waiting for that to happen. I anticipate it will change in the next couple of years, but then again that’s what I said two or three years ago. I believe that, right now, other online operators have much more to fear from Amazon than small independent dealers which can offer regional
services in order to escape the online competition at least in part. But I don’t want to gloss over this. Amazon is the most professional competitor by far; it’s just that up until now we have been lucky because our business has obviously not been a focus for this operator. If and when that changes, the repercussions will be huge. Especially for the traditional mail order and online businesses.
BIG INTERVIEW Benedikt Erdmann
Typically, more than 65% of a dealer’s customers have fewer than ten employees. They are often price and promotion-driven and not very loyal. This leads to pretty high cost-to-serve ratios for our dealers, especially because of the highly field sales led approach. Few dealers have the infrastructure, staff or budget to serve these type of customers effectively.
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HOT TOPIC
2020 visions
What have been the main changes in the OP industry over the past ten years? And how will things evolve in the decade that has just begun? Some leading industry executives share their thoughts with OPI
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en years ago, the OP industry – like every other sector – was recovering from the Great Recession that had hit the global markets in 2007 and 2008. A dip back into the OPI news archives from 2010 highlights the busy M&A activity that was taking place at the time: Staples completed its acquisition of Corporate Express in Australia, Hamelin and Bong created Europe’s largest envelope manufacturer, Lyreco expanded its presence in Iberia, Esselte in the US bought Ampad and Pelikan completed its acquisition of German stationery supplier Herlitz. These were just some of the transactions taking place that year, as those that could afford it looked to offset 24 months of declines by growing externally. At the time, all the financial issues and the resulting drop in purchases by customers arguably contributed to masking the secular declines in traditional office products which the industry is still coming to terms with even today.
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THE RISE OF AMAZON Interestingly, a name missing from OPI’s annual news review of 2010 was Amazon. This may well have been due to our underestimating the influence the e-commerce giant was starting to have on the OP industry. If so, we were certainly not the only one guilty of that. Here are three extracts from Amazon CEO Jeff Bezos’ annual shareholder letter from 2010: • Technology infuses all of our teams, all of our processes, our decision-making, and
our approach to innovation in each of our businesses. It is deeply integrated into everything we do. • As I’ve discussed many times before, we have unshakeable conviction that the long-term interests of shareowners are perfectly aligned with the interests of customers. • Invention is in our DNA and technology is the fundamental tool we wield to evolve and improve every aspect of the experience we provide our customers.
The rise of Amazon will also be a very strong factor in terms of consolidation on the supplier side A focus on technology and the customer as a way to drive shareholder value? You probably won’t find too many investors who bought Amazon shares ten years ago arguing with this! The point is that the OP industry in general has perhaps been a bit too inward-looking during the past decade and not paid enough attention to what and how customers want to buy. In part at least, this is down to specific industry dynamics. In the past few years, the world’s two largest speciality office supplies resellers – Staples and Office Depot – have been focused
BIGGEST CHANGES OVER THE PAST TEN YEARS I see two main changes. Firstly, dematerialisation has slowly but surely decreased the market size of several traditional product families in the office supplies world. Secondly, the arrival of Amazon has changed the rules of the game and put a lot of pressure both on traditional distributors and suppliers. PREDICTIONS FOR 2020 AND BEYOND We felt a clear slowdown of the market in mid-2019, and I expect this trend to continue in 2020. Over the next few years, digitisation and the continued rise of Amazon will represent the main challenges. Having said that, I do believe there will be opportunities offered by new ways of working and the move towards more flexible workplaces. Therefore, the furniture category should keep outperforming the overall market.
on ‘deglobalisation’ and there are still question marks about their future strategies, go-to-market models and ownership. The wholesaling channel, meanwhile, has undergone major changes on both sides of the Atlantic – new business models, and debates regarding ownership and long-term sustainability are still the order of the day in 2020. And at industry events, there are still murmurings of discontent between independent channel stakeholders over topics such as ownership of data, rebate programmes and product availability. What will all this mean for the next ten years? As we enter a new decade, we quizzed some key industry figures on what they believe the main changes have been in the OP world in the past. We also asked them to look into their crystal balls and predict how things would evolve in the 2020s.
HOT TOPIC 2020 – Before and After
CÉDRIK LONGIN, MANAGING DIRECTOR, CEP OFFICE SOLUTIONS
THE INDUSTRY IN 2030 For the traditional OP that is affected by digitisation, I predict that resellers will have a much more limited offer – one entry-level range and one medium-market range should be sufficient. This means there will be a strong concentration of operators in these segments as the future market size definitely won’t be able to absorb current global production capacity. I expect offices to keep integrating products that are usually associated with the home, as we have already seen with sofas, video games, etc. The offering of OP distributors will therefore include more of these ‘home-style’ items. This will make sense as employees increasingly alternate between the office and the home as their place of work. I am fairly sure that Amazon – which already has the largest offer in the market – will be the leader in the OP market. This will result in a new benchmark for ‘cooperation’ between distributors and suppliers which I believe will mean fewer meetings and less human interaction, with most decisions being made through digital portals. Furthermore, as only the biggest vendors are able to have face-to-face meetings with Amazon and enough leverage to negotiate with it, the rise of Amazon will also be a very strong factor in terms of consolidation on the supplier side. Consequently, I would expect there to be no more – or very few – medium-sized operators ten years from now. Each period of change creates a lot of opportunity for external growth, and this should again be the case in the years to come, in both the reseller and manufacturer channels.
opi.net poll
Which of the following is the most important for you in 2020? 12% 22%
38%
28%
February 2020
n Developing closer relationships with customers n Making better use of data n Increasing gross margins n Improving digital capabilities
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2020 – Before and After HOT TOPIC
SEAN STARKEY, MANAGING DIRECTOR, DURABLE UK
BIGGEST CHANGES OVER THE PAST TEN YEARS The biggest change is unquestionably digitisation – because of its impact both on volumes of filing-related products and also on the changing of values, such as the growth of Amazon at the expense of ‘traditional’ channels and routes to market. In recent years, Brexit has resulted in pressure on currency rates between the British pound and the US dollar and the euro. This has hit margins due to what are effectively cost increases. There is also a lack of consumer and general business confidence.
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PREDICTIONS FOR 2020 AND BEYOND I believe we will witness continued channel switching to online. I also expect to see the success of China-based e-commerce platform Alibaba in Europe, including in the UK. Traditional players will have to keep diversifying into new channels and product categories as a result of volume declines and price pressures in core OP. Challenges could include economic stability – or lack thereof – due to widespread political change in many Western European markets, and the impact of Brexit, the effects of which are still to come (save for the aforementioned currency and demand issues). On the other hand, a weakening currency brings opportunities in export competitiveness and the possibility of new markets and channels opening up.
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THE INDUSTRY IN 2030 I think we will have seen significant consolidation in the dealer channel, potentially with dealer groups as well. There will be less dependence on core stationery, with many survivors adopting new channel and product strategies to meet consumers’ appetite for the changing workplace, particularly in areas such as ergonomics and home-from-home. Cost-to-serve efficiencies and cost reductions will have been implemented. These will include a change in logistics since many resellers cannot access or supply the wider range supported and marketed by Amazon, Alibaba, eBay, etc. As a final point, I predict continued digital disruption, with artificial intelligence playing a very significant part in driving marketing activity and consumer behaviour and demand.
PETER DAMMAN, NON-EXECUTIVE DIRECTOR, SOFT-CARRIER BIGGEST CHANGES OVER THE PAST TEN YEARS Undoubtedly, the biggest change in our industry has been the incredible growth of online businesses and e-commerce platforms which have totally changed the traditional distribution model. This trend has put manufacturers in their strongest position ever as they now have many, and quicker, routes to reach the end consumer – and the platforms enable them to offer an unlimited assortment to customers. Digitisation of the workplace has had an enormous impact on product offerings. Fewer items are needed and, so far, I have not seen anyone in the industry that has come up with good, alternative solutions for this situation. Wholesalers have regained ground as they are needed to fulfil a logistics role that online suppliers cannot or will not. Without wholesale support, online players are unable to deliver their orders in full. PREDICTIONS FOR 2020 AND BEYOND In the coming years, we will see fewer – but larger and better – players in our industry as the consolidation process continues at all levels in the distribution channel. I believe this will result in the development of just a few dominant players that generate the majority of their sales via online or e-commerce platforms. For example, in a local market we will only have one prevailing distributor, one large reseller, one specialised retail chain and one online operator. Declining demand and pressure on margins will force ‘suffering’ players to merge, sell, consolidate or disappear. Wholesalers will strengthen their position as online sales continue to outpace traditional growth. The challenge will be to become or remain a significant, relevant and differentiating actor in the market. This could be achieved by having the largest volume, best product or service offering, or the most efficient cost model. But it will only happen after more consolidation. On the plus side, this will help stabilise the market; it will have a positive effect on pricing and margins, and all distribution channels will benefit from that. THE INDUSTRY IN 2030 The consolidation process will be finalised and each market will consist of fewer, but relatively larger and more dominant, players. As a result, the traditional dealer landscape will have decreased significantly. On the other hand, logistics providers will have become even bigger as all distribution will take place from a few pan-European central warehouses. But specific niche players will still have a role to play, so I think it will be a combination of survival of the fittest and survival of the largest. Be niche, be big or be gone!
INTERVIEW
STAYING relevant
Paperworld 2020 is promising a number of initiatives to appeal to the modern business products buyer. OPI’s Andy Braithwaite caught up with Messe Frankfurt Director Michael Reichhold to find out more
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PI: How is this year’s Paperworld Frankfurt shaping up? Michael Reichhold: At Paperworld 2020, we are expecting some 1,500 exhibitors from all over the world. They include companies from the office and stationery sector that have been exhibiting at the event for many years, as well as young start-up companies that are attending for the first or second time.
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OPI: What is new this year? MR: There are only a few changes with regards to site occupancy – only the Remanexpo product area is moving into the newly renovated Hall 6.1. In terms of content, we have come up with a number of ideas. Many features in the complementary programme are given a new direction every year. We consider this to be very important because we want to reflect developments in the industry in order to provide future-oriented incentives for existing channel partners as well as for new target groups. Demonstrating new approaches, looking ahead, and conveying expertise in the sector – that is what we wish to represent. As an example, in 2020 the focus will be on the Future Office special exhibition while Paperworld Trends will highlight the latest colours, materials and styles for the coming season.
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OPI: Let’s talk about the Future Office. What’s new this year? MR: 2020 is all about smart solutions. At booth C51 in Hall 3.0, the focus will partly be on digital tools, but far more on holistic approaches. In the innovation area, we will illustrate how traditional tools can be combined with digital elements to solve challenges in a smart way.
In a series of lectures and product presentations – and with the help of best practice examples – we will transport the future of the office world onto the physical stage in Frankfurt. The target audience comprises architects, planners, facility managers and retailers while the product focus is on office supplies.
We will illustrate how traditional tools can be combined with digital elements to solve challenges in a smart way
Michael Reichhold
OPI: What is the Office Village that is also located in Hall 3.0? MR: The Paperworld Office Village is a whole new concept that will be implemented for the first time in 2020. What makes it so special are the fully equipped booths, a service that makes participation even more convenient for exhibitors. In addition to these exhibitor stands, the area will offer an info point, lounges, meeting rooms for networking and a catering area. We created this concept to provide manufacturers with an attractive presentation platform at the heart of the Paperworld office area. OPI: What are some of the key trends you are seeing in our sector? MR: In the area of stationery, for example, seasonal colour styles play a very important role. Trendy designs, such as last year’s jungle motif are also being taken up for notepads or other accessories. In this segment, consumers are very much guided by the latest market trends when shopping.
OPI: What are the other highlights of the complementary programme? MR: Last year, we launched a new event that focuses on the important topic of lifelong learning – the Future Learning ‘impulse area’ in Hall 4.0. Here, everything revolves around new and pioneering learning concepts, underpinned by daily specialist presentations. In addition, I would recommend the Förderareal (promotional area), Innovation Made in Germany, in Hall 3.1 to every visitor. This is where young companies present their new products; it is also an inspiring contact point for supplementary ranges.
We are always looking for new possibilities to support the industry worldwide OPI: You’ve alluded to this briefly already. With sustainability being such a hot topic right now, how is this theme covered at Paperworld 2020? MR: Sustainability stands not just for a product, but also for all aspects of ecological compatibility, social justice and economic performance. It is today a key issue worldwide with enormous reach and significance. As such, it very much relates to the paper, office supplies and stationery sector, and to Paperworld as a whole. Environmentallyfriendly materials and ecological practices play a major role within the extensive selections exhibitors showcase. It is becoming increasingly important for manufacturers to incorporate sustainability into their business activities. The trade fair has been addressing the ‘green office’ theme for many years and is now focusing on it even more closely. On the last day of the event, Paperworld’s Sustainable Office Day is dedicated to sustainable products and environmentally-conscious purchasing. Lectures and examples of best practice will present practical solutions for sustainable and environmentally-friendly office equipment. In addition, the Agency for Renewable Resources (Fachagentur Nachwachsende Rohstoffe) will be presenting itself in the foyer of Hall 4.1 with the Renewable Office. Also to be found in the foyer is the Forest Stewardship Council with an information stand.
OPI: You will hold the first fully branded Paperworld India event in 2020 [editor’s note: 19-22 March in Mumbai]. Why did Messe Frankfurt decide to invest in the Indian market? MR: Messe Frankfurt invests in high-growth markets, and India is such a market. With the onset of progressive industrialisation, the modernisation of workplaces, the innovative uses of crafts by educational institutions, and changing dynamics in the retail sector, India has witnessed a continuous increase in growth in the consumption of stationery products. OPI: In what ways is the show similar to or indeed different from Paperworld Frankfurt? MR: All Paperworld events worldwide are subject to the standards of the Messe Frankfurt trade fairs in terms of organisation, handling and, as far as possible, product mix and on-site presentation. For international exhibitors, it is therefore easy to book other Paperworld fairs as they have very similar requirements – it all falls under the Messe Frankfurt umbrella.
Paperworld takes place from 25-28 January 2020 in Frankfurt, Germany.
OPI: What scope do you see for further global expansion of the Paperworld brand? MR: We’re always keeping a close eye on international markets, including of course the paper, office supplies and stationery sectors, but also other, related industries. In India, for example, it is a tremendous advantage that Paperworld India takes place parallel to the Corporate Gifts Show and the Houseware & Kitchenware Show, which opens up significant synergies. We embrace new geographies and carefully examine local conditions, so Paperworld may well expand into other countries. We are always looking for new possibilities to support the industry worldwide.
February 2020
OPI: Are there any plans to give the Sustainable Office Day a more international flavour, with cooperation from non-German stakeholders and presentations translated into or even held in English?
OPI: There have been stories recently about counterfeit products being taken down from online marketplaces. What will your anti-counterfeit measures include this year? MR: When it comes to counterfeit products at Paperworld, we cooperate closely with an international customs office. Customs officials are out and about at the fair and actively pursue copyright infringements. It is important to note, however, that the customs officers are only able to take action if exhibitors have filed a complaint in advance with regards to which company is exhibiting copies of their brand or includes them in its portfolio. This allows customs to specifically target and inspect these potentially dubious firms. On top of this, customs and our lawyers provide an advisory service for exhibitors, which is always very well received.
Michael Reichhold
MR: Paperworld is an international trade fair, and only very few components of the complementary programme are not in English. The Sustainable Office Day is indeed only offered in German since it is organised by a German association. In the future, however, we would like to give the topic more space and thus a more international orientation.
INTERVIEW
Everything relating to sustainability and high quality is very much in demand currently. In addition, there is a general shift towards writing more by hand, which I find very encouraging. These developments are also reflected in Paperworld Trends in Hall 3.1, where designers from the bora.herke.palmisano style agency will create three trend worlds with selected products from exhibitors.
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CATEGORY UPDATE
ON THE TRACK
The writing instruments category continues to shift as consumer trends dictate the types of product required – by David Holes
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n an increasingly digital world, pens, pencils and highlighters may seem like an anachronism, but they still feature heavily within offices, schools and homes. As such, the writing instruments category is surviving, though the market’s shifting sands and the demands from this competitive sector mean that innovation is vital for success. German manufacturer edding is targeting three main segments which it calls Office & Education, Industrial and Private. They all come with their own distinctive challenges and opportunities. The first – Office & Education – is under the most pressure as a result of tough economic conditions in parts of its core Latin American markets, particularly Argentina. Add in continued reduction in demand due to digitisation, and this segment remains edding’s most challenging one. The Industrial segment, meanwhile, is a key growth area for the manufacturer, particularly in marking products. Says COO Thorsten Streppelhoff: “There is robust demand across the board and several new opportunities exist in niche markets such as medical research and scientific laboratories.” He adds: “The Private sector is a similar success story where we’ve seen substantial growth in Europe. It’s led by consumer demand for easy-to-use tools that encourage and support creativity and help upcycle paper, card and other materials to make decorative or practical items.” An alternative view from Germany is provided by Stabilo CEO Horst Brinkmann. His perception is that although the European writing instruments market is declining slightly, with rollerball pens suffering the most, sales of highlighters and basic graphite pencils are growing. This has helped the company increase market share and secure its number two position in this sector across Europe. Further afield, Stabilo’s range of Boss Original highlighters is proving a success in Asia and both North and South America, with its new pastel shade variations particularly popular in Brazil, where sales have doubled over the past year.
HIGH STREET FIGHTBACK In the UK, Wendy Vickery, Marketing Manager at Pentel, says that while uncertainty still reigns, consumer purchasing power has stemmed some of the caution seen previously and encouraged manufacturers and vendors to be more creative
[Consumers] were [...] unimpressed by complicated, fussy designs and dark, drab colours, and put off by ‘in your face’ branding in their strategies to win business. She reports: “While the UK writing instruments category as a whole was down around 6% year on year to October 2019, new growth areas are now becoming apparent. The high street continues to face the biggest challenges, but even here there are some success stories with traditional stationers fighting back. By capitalising on their core strengths, expertise and product knowledge, they can provide a point of difference that gives them a commercial advantage in this sector. “In the B2B channel too, established category vendors are ensuring that their online catalogues are as user-friendly and interactive as possible in order to make the purchasing experience simple and convenient, without compromising the service levels that differentiate them from the newer players. It would be a brave pundit who predicts what 2020 will hold, but we can be certain that manufacturers will continue to launch new writing products to stimulate growth and drive consumer demand.” The writing instruments market may have remained flat over the past 12 months, but the importance of in-store sales should not be forgotten, says Ken Newman, Director of Marketing at Zebra Pen in the US: “Despite a noticeable growth in e-commerce this year, 80%
PEN TRENDS Astrid Canevet, Senior Communications Manager for Europe & APAC at fellow French operator BIC, agrees with Stabilo’s Brinkmann, saying that, while in general the writing instruments market is challenging, there are certain product categories bucking the overall trend and boosting this category: “Highlighters – particularly those in pastel colours – are very popular, as are writing felt pens. But the main growth over recent years has come from erasable pens which have proved a truly innovative product. BIC has been able to tap into these segments, strengthening its position and growing market share despite the overall declining market context.” She also notes that shopping behaviours are changing, with consumers being savvier these days. “More than ever, they insist on the right product at the right price and they want products that work, which means they
Pentel’s Izee retractable pen range
Stabilo’s iconic range of Boss Original highlighters
mustn’t leak, run out too quickly or stop working altogether – essentially, they must be 100% reliable. It’s a similar situation with back-to-school (BTS) shopping. Rather than simply buying what teachers puts on the list, parents check what children have left over from the previous school year and only replace the missing products. It’s a trend that’s been growing strongly over the past few years. At the same time, BTS has become much more channel agnostic, with e-commerce websites, discounters and specialised office stores all having entered the game and able to capture an increasing share of sales.” It’s not just consumer behaviour that’s undergoing significant change as we begin a new decade. According to Stabilo, one important social trend which is having an influence on the marketing of products in this category is the growing awareness of ‘gender fluidity’. As Brinkmann explains: “This is now having an impact across society and has to be reflected in any brand’s offering.”
February 2020
PRODUCT PROGRESS With fresh ideas and new approaches key to differentiating your company from competitors, it’s refreshing to note that innovation in the writing instruments sector is still buoyant. In January, Pentel launched a new ballpoint pen called Izee (pronounced ‘easy’), aimed squarely at the 15-25 year-old demographic. It’s the result of extensive R&D and focus group research that showed these consumers didn’t like the chunky barrels and triangular-shaped grips that have influenced pen design over recent years. They were also unimpressed by complicated, fussy designs and dark, drab colours, and put off by ‘in your face’ branding. “What they wanted instead,” says Vickery, “was a slim barrel, straight simple styling, with a linear appearance, a discrete metal pocket clip and a robust retraction button. They told us the grip didn’t need to be made from rubber – another departure from the industry norm – and bright, fashionable colours particularly appealed. “Izee is our response to this. It’s the first ballpoint pen from Pentel to be designed exclusively in Europe. It’s available in a retractable version or a cap style and comes in eight vibrant barrel colours. It’s refillable, with low-viscosity ink, which means it doesn’t skip or blob, and you can use it until the last drop without suffering any reduction in quality. We specifically targeted this age group because it represents the upcoming generation of office products users. If we can attract this demographic now – when young people are choosing pens for school, college and university
CATEGORY UPDATE Writing Instruments
of pen sales still take place at bricks-and-mortar locations. There’s also a distinct trend towards products used for creative applications, with larger pack sizes and greater colour assortments high on the list of consumer demands.” At Lyreco in France, Group Product Manager Huiru Zhang is less optimistic, having seen several years of decline culminating in a further 3% drop in sales volume across all major European countries in 2019. But again, it’s a mixed picture with different product families showing different dynamics. She explains: “Products which favour collaborative work, such as markers for whiteboards and glass boards, are selling in increasing amounts and the trend for pastel colours is also positively influencing the B2B market, generating new needs and a rise in sales. But the traditional writing instrument segment – ballpoint and rollerball pens, for example – have been suffering from significantly reduced consumption.”
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Writing Instruments CATEGORY UPDATE www.opi.net 32
– we hope they’ll stick with the Pentel brand when they enter the workplace. One day, they might also have responsibility for deciding the products their company uses.” NOT JUST FOR KIDS BIC, meanwhile, is responding to the growing appetite for art and is taking the approach that drawing pens are no longer products just for children, but for everyone wanting to express their creativity. Its Evolution Illusion range of erasable pens and crayons is now available in a set of 24 colours. “When you know you can rub things out and correct them if they don’t turn out as you expect, it makes it easier to be experimental,” says Canevet. “We’re also introducing Duo Magix, a range of triangular crayons for kids that can be used on multiple surfaces, including paper, glass and plastic, and for different colouring techniques such as aquarelle – a way of using layered, transparent colours – which can be easily wiped off.” In addition, the company sees an increase in adult consumers becoming collectors and wanting to purchase limited edition releases. “Our iconic 4 Colours pen which originally launched in 2019, for example, is now available in 20 different versions, with special variations released to mark significant events,” says Canevet. “They are keenly sought after by people viewing them as more than just writing tools – they actually develop an emotional attachment to these writing instruments.” BIC is also experimenting with new writing technologies and recently launched a stylus pen in Asia that can be used to cross the analogue/ digital boundary. “For us, the concept of traditional writing and digital use is not an either/or question,” says Canevet. “They can co-exist and complement each other. We need tools that can work on laptops and mobile devices, but why not combine them with the ability of a pen to take notes or express creativity?” While hi-tech digital developments are making inroads into this category, Stabilo’s philosophy is that teaching children to write by hand is still vital. The company has launched two new fountain pens in its ‘learning to write’ sub-category. Known as EASYbuddy and EASYbirdy, they are already experiencing strong growth. “This product segment is still quite new for Stabilo,” says Brinkmann, “but it fits in well with scientists’ recommendations that handwriting should be promoted earlier and more intensively in schools than is currently the case. Our ergonomic graphite EASYgraph pencil has also benefited from this development, particularly across Asia where an above-average number of parents now choose it to help their children learn to write.” GREEN WAVE Environmental concerns are having a huge impact across all parts of the office supplies industry. Unsurprisingly, the writing instruments sector is not immune from this influence, with a green wave of products being launched as companies seek to promote their eco-friendly credentials.
This will be a significant area of focus for edding in 2020 and beyond, for instance. Examples include a new emphasis on refillable products in its Ecoline range and a ‘return box’ scheme for empty markers. At BIC, the clamour for green products has led to items designed for maximum use, but with a minimum impact on the environment. Its well-known Cristal pen, for example, weighs just 5.8 grammes but claims it can write text totalling up to 3 km in distance. In recognition, the company has been awarded the NF Environment label (NF400), which is given to products that go the extra mile in sustainability. Additionally, its Ecolution range is now made from at least 50% recycled materials. BIC has also developed a partnership with TerraCycle – a recycling company specialising in the treatment of small and non-recyclable waste – which collects used writing instruments directly from consumer sites such as schools and offices. To date, this collaboration has resulted in the recycling of more than 45 million products across seven countries. Some of this material is in fact used to produce the company’s Ubicuity range of outdoor furniture, manufactured in partnership with Plas Eco, a business based in the Normandy region of France.
BIC’s Duo Magix crayons
Our core message is, ‘If You Love It, Refill It’, encouraging consumers to reuse their pens time and again Similarly, Pentel’s focus is on recycling, refilling and reducing packaging, with the additional aim of minimising or eliminating the use of single-use plastics. The concepts of its Recycology range – a collection of soft plastic display books and files made from at least 50% recycled materials – are currently being extended into its writing instruments offering. For example, the company’s EnerGel X retractable gel roller incorporates 84% recycled material and can also be refilled to maximise usage and minimise waste. As Vickery concludes: “Pentel UK will be marking an important occasion in 2020 as we celebrate the 50th anniversary of the company and the 20th anniversary of EnerGel by introducing a range of new products for businesses, stationery lovers and artists. To kick-start things, we’re promoting EnerGel’s sustainable credentials in the B2B channel by giving away 12 free refills inside a box of 12 EnerGel X pens. Our core message is, ‘If You Love It, Refill It’, encouraging consumers to reuse their pens time and again.”
CATEGORY UPDATE
The future
BECKONS Technological developments could herald a revolution in office working, but alongside these changes also come risks – by David Holes
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he pace of technological change can be staggering, with business practices that were unthinkable a decade ago now commonplace. But an increasingly connected world, with faster access to information and data from wherever you are located, brings its own challenges and makes businesses more vulnerable than ever before.
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5G OPPORTUNITIES 5G mobile technology has arrived. Currently, in the US and Europe, it’s expensive, only available in major towns and cities and with a limited number of handsets. But the direction of travel is clear and 2020 will only see an acceleration of its geographical rollout. It’s predicted that by 2024, up to 65% of the world’s population will have access to 5G internet. Due to its faster speeds – 100 times quicker than 4G – and better capacity, it will enhance mobile and remote working capabilities, enabling staff to operate faster and more efficiently from connected locations. However, it’s the ability of 5G to reach beyond just mobile working that is likely to see it have a catalyst effect on the way businesses operate. Near-instantaneous downloads and uploads of large files and the provision of high-definition video calls with no perceptible lag will enable real-time collaboration across continents – essentially the ability to interact with remotely-located colleagues as though they were in the same room as you. Heightened workplace automation will also become more possible as 5G-enabled, cloud-based programmes take on complex tasks, powered by access to more data, huge improvements in speed and the ability to run several processes in parallel. Consequently, it’s predicted that repetitive tasks will increasingly be handled by software and artificial intelligence solutions, potentially with fewer jobs available for people in these areas. The Internet of Things (IoT) has been on the horizon for some time, but the arrival of 5G could make it really take off. To date, its implementation has often been hampered by slow internet speeds
and limited bandwidth, but that’s about to be swept away. The much-hyped driverless car, for example, could become a genuine proposition and, within the office space, devices such as smart glasses with augmented reality abilities may become standard issue.
The IoT-enabled office of the near future will collect and analyse data on working habits in order to boost both performance and employee satisfaction As Josephine Lindevik, Marcom Manager at Sweden-based technology solutions provider Evoko, explains: “Smart solutions and the IoT will become more and more prominent in modern offices. This year, it’s estimated that there will be over 30 billion wirelessly connected devices on the market worldwide. The IoT-enabled office of the near future will collect and analyse data on working habits in order to boost both performance and employee satisfaction. This new ‘informative workplace’ will be able to track and optimise facility usage, suggest efficiency savings and alert companies to potential money pits.” SECURITY STRUGGLES On the considerable downside, cybersecurity breaches are predicted to substantially grow as we move into the new decade. The irony here is that they are only exacerbated by technological developments. A device can be exploited for nefarious purposes as soon as it’s connected to the internet; experts are already voicing concerns that the ever-expanding use of the IoT will exponentially add to the number of gateways cybercriminals could use to infiltrate their targets. 5G could also make it possible to launch attacks which are more sophisticated. Additionally, once security walls have been breached, data can be extracted at far greater speeds and before countermeasures can be activated.
Those in charge of security solutions will need to up their game. Indeed, legislative protocols to protect private data may have to be revised accordingly. Such changes can have a tangible effect on the kind of office equipment sought by businesses that are looking for compliance and simple ways to avoid falling foul of criminal activity. For example, the introduction of European GDPR legislation in 2018 boosted sales of any product that could help prevent data breaches. Revenues of paper shredders soared, with those offering the highest security levels particularly in demand. As Bruno Pluchart, International Category Manager for Print, Technology and IT at Lyreco in France, explains: “In Europe, most markets benefitted from this ‘GDPR effect’ and while 2019 didn’t show the same exceptional levels of growth as the previous year, they are still rising, both for large office and small personal shredders. Mobile scanning technology is also in high demand.” Mark Harper, Head of Sales UK & Ireland for German manufacturer HSM, also remarks on the big increase in the sale of shredders as a result of GDPR but admits this has now tailed off. “This is worrying,” he says, “as reports indicate that 77% of companies shred less than 50% of all documents containing sensitive or confidential information. Couple this with findings which reveal 40% of UK data security incidents are directly attributable to paper, and there’s an alarming number of organisations which have not sufficiently addressed this serious issue.
CATEGORY UPDATE Office Technology
Office technology needs to be agile and flexible, catering to the needs of different types of workers while enhancing and simplifying basic operations
“Companies currently employing an external shredding service are now starting to take a closer look at their data destruction processes. There’s growing awareness that there are multiple risks inherent in using such services compared to shredding at the point of use. Consequently, many are looking to change to an in-house solution.” He adds: “Statistics show that over 80% of office processes are still managed on paper, with the average member of staff using up to 45 sheets each day, of which two-thirds end up as waste. Aside from a robust shredding regime, having a clean desk policy, locking away documents at night and removing wastepaper bins will keep personal or commercially-sensitive information out of sight of visitors, cleaners and other staff not authorised to access such material.”
February 2020
CONNECTED WORLD Although they have increased the threat of security breaches, technology progress has resulted in mobile employees being able to connect with company systems and data from remote locations with much greater ease. As Lindevik reports: “This trend will only gain momentum as we move through the decade. Any product that can facilitate co-working, the rise in hot desking and the growing need to manage space and facilities will be very popular. We see the role of the traditional workplace changing rapidly with a corresponding shift in work culture. As such, office technology needs to be agile and flexible, catering to the needs of different types of workers while enhancing and simplifying basic operations.” Technology improvements will no doubt deliver massive opportunities for businesses, with developments such as 5G potentially bringing entirely new business models and ways of working – just as the arrival of broadband did previously. That’s on the plus side. At the other end of the spectrum, however, increased vulnerability to cybercriminals and data breaches are also likely and need to be taken seriously. As we enter this new decade, the full impact of these changes are likely to be massive, but are still hard to predict.
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ADVERTORIAL
Making the conscious
CHOICE
With a complete rebranding, International Paper’s REY range of office papers seeks to inspire positive change in the segment
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ustainability has become more than just a trending topic, with statistics showing that end users are increasingly searching for environmentally-friendly products – not just as a preference, but as a prerequisite. In response to this change in consumer behaviour International Paper EMEA has rebranded its REY range of office papers as ‘The Conscious Choice’. OPI spoke to Gerald Demets, Commercial Director for the European Papers business at International Paper, to find out more about what prompted the rebranding and the future goals for REY.
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OPI: What initiated the REY rebranding? Gerald Demets: For many years REY has had a strong reputation for being a well-established and reliable brand in the office paper landscape. Sustainability has always been part of the International Paper DNA, but we felt we never really actively shared this enough with our customers at a brand level. The REY rebranding is all about responding to the evolving buying behaviour of our customers. The REY brand also supports ‘The IP Way Forward’, which is International Paper’s strategic framework to pursue our vision to be among the most successful, sustainable and responsible companies in the world.
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OPI: What sets REY apart from other sustainable papers and makes it The Conscious Choice? GD: REY is all about inspiring positive interactions between people, their communities and our planet. Through community involvement, environmental stewardship and sustainable innovation, we want to inspire people to make conscious choices.
KEY BENEFITS OF REY: • Supports local community initiatives • Alignment with The IP Way Forward and the company’s sustainability goals • A 100% certified brand • Supports the reduction of plastic packaging REY is a registered trademark of International Paper.
Making those choices for our planet is at the heart of REY. Putting these words into action is crucial. We continually work to improve our ecological footprint at every stage of the paper life cycle and support a circular economy. We appreciate that there are many office papers on the market which position themselves as the sustainable choice. What differentiates REY is that it has been developed to align with a customer’s personal identity and values. From where the raw material is sourced to how the product is packaged – the entire REY story has been designed with our customers in mind. REY also ties in well with CSR policies within organisations, making it the preferred choice for businesses and end users sharing the same values. OPI: Do you believe that the sustainability of a product can support growth in paper sales? GD: A recent survey commissioned by Futerra of over 1,000 consumers in the US and the UK revealed that 96% of people feel their own actions, such as donating, recycling or buying ethically, can make a difference. And over half of them believe they can even make a big difference. There is demand for sustainable products, and it will continue to grow. For many customers buying paper has become more of a considered purchase in terms of individual preferences along with sustainability aspects. So yes, we believe that we will see continued growth of the REY range following our rebranding and positioning as The Conscious Choice. A positioning that is not only addressing the urgency in terms of environmental aspects, but also one that is promoting our shared social responsibility to support local communities wherever we live and operate. We strongly believe that together we can make a difference for people and our planet. Ultimately, we’re working to inspire consumers to make a conscious choice when they buy a ream of paper.
OPI: Has the REY product range or packaging changed at all? GD: One immediately noticeable change to the REY range is the new logo. We modernised and refreshed it while respecting its heritage, which was developed over ten years ago. We wanted to liberate the brand, so the original boxed design has been recreated to allow more freedom, and the lettering has been altered to bring more strength and character. The range itself hasn’t changed much, but we amended the packaging design completely. The entire REY range of white office paper is now wrapped in paper-based packaging. We also decided to discontinue our famous tear-strip, as this was made out of plastic. The ranges have retained their well-known colour-coding to indicate name and application,
ADVERTORIAL International Paper
OPI: What are you doing to support dealers in growing sales of the REY brand? GD: REY gives dealers a big opportunity to target customers who are seeking socially and environmentally-responsible products. It’s a strong, inspirational brand with a feel-good identity that people can easily relate to. The tools we have developed aim to stimulate interest, build brand loyalty and deliver profitable business for dealers. There’s a wealth of useful information and handy tools which are available on the new REY website, including downloadable flyers, web banners, 360° pack shots and interactive PDFs, all designed to equip sales teams. We will also offer marketing support for local sales initiatives and run campaigns highlighting the societal relevance of REY. In addition, customers can benefit from a range of sustainably-sourced promotional goodies. We’ve made significant changes to these by switching to more environmentally-conscious materials; our famous REY promotional plastic bags have changed to Fairtrade cotton ones. We’ve discontinued all our branded plastic pens, and instead use pens made out of sugar cane waste. And we’ve stopped using transparent plastic foils for our sample packs and moved to a fully recyclable paper envelope – we’re the first in the industry to do so. All of these individual actions show how REY is committed to inspiring people to make conscious choices wherever possible.
and have been upgraded with relatable tag lines to improve the dialogue with end users. To ensure a clean, crisp design, we have moved certification information to the back of the packaging as the majority of our sales is through catalogues and online where this information is easily available.
Ultimately, we’re working to inspire consumers to make a conscious choice when they buy a ream of paper
THE FULL RANGE The REY white office papers range consists of four key products: • REY Text & Graphics – Be creative • REY Superior – Be impressive • REY Office – Be efficient • REY Copy – Be productive
Finally, we changed how we talk about the product to create more engagement between the end user and the product. Instead of relying on technical jargon such as whiteness and bulk, we speak about the benefits the products offer end users such as applications and print results. To summarise, REY is set to lead the way in terms of a sustainable paper that also delivers on quality and value. I’m confident that the rebranding will inspire positive change in the segment. By making these small adjustments, we will see a big difference. More information about The IP Way Forward, the REY story and its new brand positioning can be found on International Paper’s corporate website – www.internationalpaper.com – or the new REY website – www.rey-paper.com.
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RESEARCH
The POWER of FLEXIBILITY With the continued evolution of the office environment and a focus on health and well-being, flexible/remote working is gaining in popularity – by Michelle Sturman
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he rise of flexible working over the past decade has been remarkable and is predicted to continue on a growth trajectory. Half the UK workforce, for example, is expected to work remotely in some form or another this year. The results of a 2018 survey undertaken by IWG – parent of workspace organisations Regus and Spaces – revealed that 70% of global employees work remotely every week and 53% carry out their duties somewhere other than the office for half the week or more. The company’s Flexible Working Survey brought to light the fact that while technology has been the predominant driving force behind the changing nature of how and where employees undertake their work, other factors also play a part – most of which fall under the broad umbrella of attaining a work-life balance.
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MORE MOBILE There are dozens of studies on health and well-being in the workplace. As a general consensus, they show that one of the biggest contributing factors to creating a happier workforce is the reduction in the time spent commuting. In fact, FlexJobs’ 8th Annual Super Survey on Flexible Work reports that the top reasons for seeking a flexible schedule are work-life balance (45%), family (45%), time saving (42%) and commute stress (41%). And it’s no wonder. According to the latest available data from the US Census Bureau, the average employee spends 26 minutes commuting to work, but there are those (17%) that take over 45 minutes, while mega-commuters spend 90 minutes getting to their place of employment each way, every working day. Meanwhile, in the UK, over 24 million people commute an average of 56 minutes a day. A study by the Royal Society for Public Health looked at the
impact of commuting on our health and well-being. Its Health in a Hurry report revealed that commuting can be detrimental to our mental well-being, physical wellness (such as blood pressure), the ability to spend time with family and friends, engage in physical activity and prepare healthier meals. An analysis of the 2005-2018 American Community Survey by Global Workplace Analytics on the work-at-home/telecommuting population confirms the trend for mobile working. The research showed that regular work-at-home time among the non-self-employed workforce has grown by a whopping 173% since 2005, which is 47 times faster than that of the self-employed population. That said, while 40% more US employers offer flexible workplace options than they did five years ago, there is still a disconnect in that only 7% make it available to the majority of their employees. Larger companies are most disposed to offer remote working, with full-time employees four times more likely to have work-at-home options then those working on a part-time basis. A HEALTHY BALANCE Around half of the US workforce is employed in a job that is compatible with at least partial mobile working, and approximately 40% work remotely at some frequency. However, between 80-90% of personnel would like access to this option. The overriding preference would be to work this way two to three days a week to maintain an equilibrium between concentrative work at home and collaborative work in the office. Flexible working makes sense for the economy, businesses and employees. Global Workplace Analytics estimates that national savings in the US would total over $700 billion if those with a compatible job worked from home just half the time. Companies would save on average $11,000 per half-time telecommuter a year, with an employee saving between $2,000 to $7,000
RESEARCH Flexible Working
per annum. Importantly, this would also equate to a significant reduction in greenhouse gases – equivalent to taking the workforce of New York state off the road permanently. As Global Workplace Analytics President Kate Lister explained to OPI: “Years of corporate belt-tightening has taken its toll on employees. Continually being asked to do more with less has pushed many to the limit. Across the globe, employees are desperate for flexibility in where, when, and how they work. “Leading employers understand that allowing people to telecommute, at least some of the time, makes them happier and healthier. That translates into greater productivity, higher engagement and lower turnover. It’s a triple win for people, planet and profit.” IWG’s research validates the business benefits as 80% of the 18,000 professionals surveyed agreed that flexible working helps retain top talent. Furthermore, 64% offered this incentive as a recruitment tool and 58% said it improved job satisfaction. This tallies with FlexJobs’ results which showed the most important factors when evaluating a potential job prospect were work-life balance (73%), salary (73%), flexible work options (69%) and work schedule (67%).
Allowing people to telecommute, at least some of the time, makes them happier and healthier
BENEFITS OF FLEXIBLE WORKING There are many advantages for both employers and employees when it comes to working flexibly. UPSIDES FOR EMPLOYERS • One of the biggest gains for employers is the lowering of costs associated with office space, rent and overheads. • Numerous research studies have shown improved productivity from remote workers. • The number of sick days and time off is reduced. • Flexible working can be used as a perk for prospective employees as well as increase existing employee retention. • Remote working can aid a business in decreasing its carbon footprint, particularly greenhouse gases, thanks to fewer staff commuting. EMPLOYEE VALUE • Mobile working can decrease staff expenditure, especially as regards clothing, commuting, food and child care. • Flexible working can enhance mental and physical well-being by improving staff members’ work-life balance. This is especially true for employees with young families, those caring for parents or people with a long commute. • Various studies have suggested that employees engaged in flexible working tend to be healthier, notably in terms of eating better and exercising more.
February 2020
TECHNOLOGY IMPORTANCE There is mounting evidence that remote working is effective in achieving a desired professional and personal life which is ultimately beneficial to both employer and employee. The proliferation of technology that enables mobile working from practically anywhere with an internet connection has certainly helped enhance staff motivation, smarter working and multitasking. However, poor IT equipment and accompanying outdated infrastructure can negatively affect efficiency. According to Productivity, Technology & Working Anywhere, a report by Lancaster University’s Work Foundation in the UK, respondents called out technology (53%) and changing working practices such as flexible working (45%) as the top two influences on productivity levels. Like in the US, many office-based employees in the UK (71%) claimed they are not provided with the opportunity to work remotely and only a mere 8% said they believe their organisation actively encourages such working practices. The institute’s 2016 study Working Anywhere suggested that around half the British workforce would prefer some kind of negotiability pertaining to location or hours. This mindset is only intensifying despite resistance from many businesses to implement flexible working strategies – predominantly due to a lack of trust in their staff. Nevertheless, it is a growing global trend and one which companies will have to start taking seriously.
There are also downsides to remote working. A number of studies have warned of harmful effects to well-being as boundaries between work and home become blurred. The pervasiveness of the ‘always-on’ economy means some employees work well beyond their normal hours when not in the office; they are also likely to reduce or eliminate any breaks that they would usually take if they were in the workplace. Social isolation and unhealthier behaviour are further risks that have been associated with mobile working. These issues can be reduced through a proper organisational remote working structure, ensuring personnel have the most updated technology and ergonomic furniture, as well as finding an optimal schedule that suits everyone involved. Overall, research shows flexible working is advantageous in encouraging a more harmonious work-life balance and therefore a healthier, happier and more productive workforce. Still, implementing such strategies need careful consideration to ensure the positives outweigh the negatives.
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HOW TO...
To be PREPARED is HALF THE VICTORY
In this How to… guide, Chris Paton highlights the six core principles of good – and well-managed – disaster recovery, regardless of the type of business emergency encountered
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have recently read the business contingency article on S.P. Richards (SPR) and the company’s recovery from a devastating fire in the last issue of OPI (see Special Feature, OPI December/January 2020, page 24). I found it very interesting for a variety of reasons. The honesty of those being interviewed stood out in particular – being willing to openly discuss what had gone well, alongside what had gone on their ‘ugly’ list was refreshing. The article really helped to highlight some key learnings which I would suggest match the six principles that I consider to be essential in any type of disaster recovery. As the headline – and indeed many centuries ago Spanish novelist Miguel de Cervantes – says: “To be prepared is half the victory.”
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1. Have an early warning system It seems obvious, but the best means of business contingency is to avoid the crisis in the first place. To do that requires good foresight, based on sound data, yet it is surprising how few organisations have a specific team scanning for vulnerabilities. These teams should be looking at specific current threats, but also at trends. This allows leaders to consider potential issues well in advance and implement preventative measures that mitigate the risk ahead of time. Even if threats aren’t increasing, risk teams should conduct tabletop discussions on where the organisation is currently more vulnerable than advisable – such as an over-reliance on a particular distribution centre or IT structure.
2. Keep agile A business can be hit from many different angles – cyberattack, fire, flood or even a severe outbreak of illness, as well as wider incidents such as public demonstrations/riots, terrorist attacks, or regional conflicts/wars. The answer to this is usually ‘focus on the most likely’ and generate detailed response plans for them. Sadly, it is invariably the one thing you haven’t prepared for which is the one that will happen for real. As such, a far better approach in my view is to have a well-rehearsed process that kicks in regardless of the situation, yet has flexibility of decision-making and adaptation built in. This is exactly how SPR appears to have managed a difficult situation – the basic processes were in place and they were adapted on the fly. The wholesaler wasn’t rigid in its approach or tied to a process that wasn’t working. 3. Don’t rely on key individuals If your recovery plan is purely based on some key individuals with specific skill sets, you are heading for a problem. You can bet that they will be away from the office at the crucial moment or out of communications. It’s more useful to have a plan that is known across the organisation and which can be implemented by anyone and is accessible from anywhere. There are lots of good tools available to help with this approach; my personal favourite is Method Grid, a cloud-based solution which
allows you to set out a step-by-step process but also build in checklists, videos, top tips, emergency contact details etc, so that anyone can manage the plan, from anywhere. 4. Challenge the status quo I often see businesses conduct continuity exercises. Carefully scripted, these run through a series of dilemmas to test the readiness of the teams to react in accordance with the recovery plan. But what if the recovery plan doesn’t reflect the current threats? When do we challenge if the plan or its processes make sense?
It’s more useful to have a plan that is known across the organisation and which can be implemented by anyone and is accessible from anywhere
5. Have a light footprint As was identified by the SPR team in the post-mortem analysis, over-reliance on key infrastructure can be extremely debilitating. If all your IT systems and files sit within a single physical server, then you are very vulnerable. It isn’t always practical or affordable to have backup servers or alternative HQ locations, so what else can we do? Cloud-based systems are definitely an option to consider here, even though some question their security. A discussion should be had around the risks of cyber vulnerabilities versus the agility that cloud-based storage provides. The SPR team identified transfer of data from existing tapes after the fire as being something which slowed things down considerably. Imagine if all that data was available immediately. Having a light footprint doesn’t just apply to the digital sphere. There will be cultures and working methods which have ‘always’ been in place. Some of these are there for a reason – because they work – and should be protected, but not all. Be sure to review how you do business on a frequent basis with a questioning eye to root out those processes which no longer make sense. 6. People are key As is so often the case, our people are the best asset in any business contingency. This was a significant factor in how quickly SPR got itself back on its feet – with teams willing to come in and work around the clock due to their affection and loyalty to the company. The lesson here is: care for your teams on a day-to-day basis, nurturing their personal and professional growth. This is morally the right thing to do, but it also protects the business. Look after your people and the people will look after the business. This also applies to management following an incident. Do not underestimate the impact that a crisis can have on your teams, particularly if it involves loss of personal items due to a fire or flood. Make sure there are frameworks in place to catch employees who need support and you have a culture of talking to one another openly. IN SUMMARY… Many of the above principles overlap. You keep agile by having a light footprint and not relying on key individuals. You challenge the status quo and gain early warning radars by consulting a ‘vertical slice’ of your people – not just the most senior leaders. What I mean by this is: don’t see these principles as a checklist, more as an integrated framework. The case study on the next page, Expect the unexpected – and plan for it, is a good example. Connect all the dots and you will be in a much stronger position.
February 2020
I recommend a test, reflect, learn approach instead. Run through a scenario for a short while, then take an immediate pause to talk through what happened. Who took the decisions? When? How? Via what communication channel? On the basis of what information? What would we want to change? Having taken this time to identify things you might want to alter, I suggest adapting to implement the new learnings – yes, mid-exercise, that’s fine – run a second scenario, and then see how using those updated processes and decision-making criteria make a difference. Or not.
This path generates a much more robust continuity plan that has been developed by all, not just a single subject matter expert. It therefore is ‘owned’ more widely and better understood.
HOW TO... Business Contingency
Chris Paton is Managing Director of Quirk Solutions, a management consultancy specialising in business resilience and execution success which works with large brands such as Unilever, Lloyd’s Corporation, Shell, Heineken, John Lewis Partnership and Linklaters, as well as SMEs and public sector entities including the NHS and the Home Office. In his former career, Paton was a Lieutenant Colonel in the Royal Marines and advisor to the UK government’s Cabinet and National Security Council on the Afghan strategy.
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Business Contingency HOW TO...
Expect the unexpected &PLAN FOR IT
It’s incredibly rare for canals to overflow in this way and to this scale. That explains why very specific business contingency plans addressing this particular type of emergency may not have been rock solid. It was the failure of river defences and the water management system in the canal at one critical point that caused this unique set of circumstances. That said, we did have a disaster recovery plan in place. The first priority was to contact personnel. Normally, this would happen to get them to go to an alternative group site or work from home as the facility was closed. On this occasion, once we had access to the site, we needed to get staff in to assess the damage and work to make it functional. The plan was divided into stages: • Assessment of viability of the site post event • Detailed communication plan to staff, suppliers and customers • Clean up and work planning to establish when site can be operational • Engagement of contractors • Immediate actions to mitigate further damage One theme that ran through all of the above was an ongoing risk assessment to ensure everyone at the facility was safe.
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usiness contingency is a broad topic and, as Chris Paton outlined, disaster can strike from many different angles. When the emergency is a natural disaster and especially when the chance of it happening seems slim from the outset, it’s unlikely that a recovery plan caters for the finer details. Agility and a positive commitment from staff are vital, as Tim Holmes, Commercial Manager for Office Products at UK wholesaler Exertis Supplies explains.
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Boxing Day – or 26 December – 2015 brought together a series of events that resulted in our premises in Elland, near Halifax, flooding. Storm Eva had dropped significant rain on Lancashire and Yorkshire on Christmas Eve, saturating ground already recovering from one of the wettest November and December periods on record. On Boxing Day, more torrential rain raised the level of the River Calder to 3.6 metres, the previous record peak being 2.4 metres. This caused the riverbank to collapse about a mile away from us and water to overflow into the canal running alongside our facility. This, in turn, resulted in the serious flooding of a number of premises – including ours – as well as the destruction of canal boats and bridges further downstream.
Tim Holmes
RECOVERY PLANNING After the initial assessments, we established two recovery plans. Due to the nature of the site, the warehouse and external areas suffered a relatively small amount of flooding so it came down to primarily cleaning and clearance. We removed ten tonnes of mud from the car park and warehouse and cleaned the premises. All electrical equipment and cabling was tested and any damaged goods were disposed of. The devastation to the ground floor offices was more substantial and they needed more extensive work, with all furniture, carpets and electrical items needing to be replaced. One option was to reconfigure the first floor offices to accommodate all employees for a short period. And that’s what we did. We made the ground floor offices safe, with a plan to have them ready for use again within three weeks. Staff worked on the first floor for that period as well as from home and other sites – it meant some desk sharing, but overall we were fully operational again in a few days. Due to the timing of the flood and because our offices were closed for the Christmas period, we chose not to communicate the event to customers and suppliers. In fact, I’m convinced that many people reading this now never even knew we had a flood. Control of communication was at the forefront of our minds to ensure that, if necessary, we had a clear and factual message to give to staff, customers and suppliers. As a result of the hard work and dedication of the employees who attended the site over their Christmas break, Exertis Supplies was fully operational on the first day of the New Year. All orders were taken and shipped as normal; it’s something the whole team is immensely proud of.
In reality, our business contingency plan had been robust and worked well POST-MORTEM ANALYSIS After the repairs were done, we undertook an evaluation of the whole process and looked in a critical way at the plans we had to see if there were any changes we needed to make. In reality, our business contingency plan had been robust and worked well. We have added more details since to make our company more resilient, but the principles remain the same: safety first, clean up, then recovery. If I had to point out a couple of aspects that are very important and perhaps are easy to overlook, it would be these:
Site flexibility If the building had become non-operational, there would have been a need for a new site for warehousing purposes. We are lucky with the scale and financial strength of the Exertis Group as we have a number of facilities we can use. Indeed, we have now taken space in one of those warehouses. We operate deliveries daily from there, giving us a robust, proven and alternative option. On the Elland site itself, we have upgraded our flood protection to keep water out of all the buildings, even if previous record levels are passed in the future. Contractor partners One area that is easily overlooked is the selection of a main contractor. We have an excellent local company that was able to respond very quickly to the event and was fundamental to the recovery process and to limiting losses. Considering the timing of the event at Christmas, it was invaluable to have this pre-selected firm built into the plan so that work was not delayed.
HOW TO... Business Contingency
The ground floor offices were ready in three weeks as planned. If you visited our premises now, you would never know anything happened at all. But it did and we had to address that. We have had discussions and meetings with the local authority and the Environment Agency to ensure the riverbank and canal are managed better to be certain the same thing can never occur again. Alongside this we have upgraded our own defences to protect us from the unexpected.
DAMAGE MITIGATION Overall, we did incur some losses – including the Managing Director’s car – but due to the hard work of all our staff, they were relatively small and the business was quickly operational again.
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EVENT
And the
NOMINEES are...
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EUROPEAN OFFICE PRODUCTS AWARDS t’s difficult to come up with new and exciting products and services year after year when there are so many other challenges to deal with in our industry. Add in the fact that office products – or at least a sizeable part of the portfolio – have become commodity items, and it’s even more impressive that entries for the 2020 European Office Products Awards (EOPA) were plentiful, innovative and incredibly broad in their approach. And it’s great to see so many established as well as new operators entering the fray. There are dealers that excel in their particular region and those with a unique USP; entrepreneurs that dare to be different in their approach; or companies that well and truly think outside the box in terms of the products and services they offer and how they market and sell them to their channel partners and end consumers. All entries were judged, as always, by a panel of industry experts. This time, the judging took place in the beautiful city of Amsterdam in early December, incidentally also the place where the EOPA Gala Dinner will be held on 9 March 2020 at the Hotel Okura. This will be a night when the leading lights of the European business supplies industry will come together to celebrate the people – three awards are up for grabs here, among them the prestigious Industry Achievement accolade – companies, initiatives and products of our sector. So take a look at the shortlist on the right and the brief synopsis on pages 50 and 51 to see who is in the running for an EOPA 2020 – and why.
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EOPA 2020
SHORTLIST
PRODUCT OF THE YEAR • ACCO Brands – GBC Foton 30 Automatic Office Laminator • Avery Europe – Labels with ultragrip technology • COLOP – e-mark • Duracell – Lithium coin cells with double child safety • Fellowes Brands – Levado Height Adjustable Desk RESELLER OF THE YEAR – REVENUES UNDER €100 MILLION • Commercial • GBR Rossetto • Lomax • Streit Service & Solution RESELLER OF THE YEAR – REVENUES OVER €100 MILLION • Amazon • Banner • Böttcher • Bureau Vallée • New Office Centre WHOLESALER OF THE YEAR • Comercial del Sur de Papelería • Exertis Supplies • JGBM • PBS Holding • Quantore VENDOR OF THE YEAR • Durable • Essity • Fellowes Brands • International Paper • tesa SUSTAINABILITY AWARD – NEW • ACCO Brands EMEA • Bi-silque • Commercial • Essity • Lyreco
VIDEO OF THE YEAR • BIC – Gel-ocity Quick Dry • COLOP – e-mark • Fellowes Brands – Meet Emma: Our Work Colleague of the Future MARKETING CAMPAIGN OF THE YEAR • Avery France – Back to School Campaign • Fellowes Brands – Meet Emma: Our Work Colleague of the Future • Office24 – Paper Paws • Office Friendly – Van-Tastic 2019 INITIATIVE OF THE YEAR • Integra Business Solutions – i-merge: A Platform to Bring Businesses Together • International Paper – Reikan • Essity – Tork Clean Care, Office Trend Report 2019 YOUNG EXECUTIVE OF THE YEAR • Julien Barabant, Marketing Manager, Pilot Pen France • Esmeralda González, European Category Development Specialist – Workspace Management/ Furniture, Fellowes Brands • Alexander Steffl, Senior Manager New Business Opportunities, Office Depot Europe • Huiru Zhang, Group Product Manager, Lyreco PROFESSIONAL OF THE YEAR & INDUSTRY ACHIEVEMENT No shortlist – winners announced on the night. To book a place at the EOPA Gala Dinner – which is open to anyone – please visit www.opi.net/eopa2020 or contact awards@opi.net.
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EOPA EVENT
PRODUCT OF THE YEAR ACCO Brands – GBC Foton 30 Automatic Office Laminator This is a big-ticket product that shows innovation and solves a real need, saving users up to 98% of their time as a result of the automatic nature of the lamination process. Avery Europe – Labels with ultragrip technology Avery Europe’s address and filing labels have been successfully reinvigorated with their new ultragrip technology that promises straight feed, jam-free printing and precise label printouts. COLOP – e-mark The e-mark is a battery-operated electronic marking device for mobile printing. Based on inkjet technology, it works in combination with an app whereby imprints can be individually designed and sent to the device via wifi.
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Duracell – Lithium coin cells with double child safety With electronic devices getting smaller, so are the batteries powering them. Duracell fills a gap in the market with its lithium coin cells with extra security – through packaging and a sticker that tastes very bitter – to reduce the risk of ingestion by children.
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Fellowes Brands – Levado Height Adjustable Desk A newcomer to the furniture category, Fellowes Brands has developed the Levado desk to encourage users to add movement to their working day, in line with current health and well-being recommendations.
RESELLER OF THE YEAR – REVENUES UNDER ¤100 MILLION
– REVENUES OVER ¤100 MILLION
Commercial This is a UK-based dealer that has sustainability at its very heart, but is also hugely commercially – no pun intended – successful.
Amazon It’s no surprise that Amazon is on this shortlist again. One of the criteria for this award is sustained growth and the online operator delivers that in abundance.
GBR Rossetto This Italian company is a family business that very successfully operates in the contract space against some mighty competition. Lomax Denmark-based Lomax has evolved from a supplier of core office supplies to a tech-savvy operator with a very broad product portfolio. Streit Service & Solution A regional player in the German market, Streit Service & Solution is regarded as one of the most progressive dealers in the country.
Banner Banner posts consistently excellent results through a combination of extended product offerings, expert sales support, new service solutions and great vendor support. Böttcher Böttcher’s phenomenal success story continues, with outstanding financial results, ever-expanding product categories and key investments in its infrastructure. Bureau Vallée Investment and development is what Bureau Vallée continues to stand for, at a time when many operators are retreating, particularly in the retail sector. New Office Centre This Dutch company represents great entrepreneurship, having made some daring acquisitions in retail, among them Staples retail operations in the Netherlands and Germany.
WHOLESALER OF THE YEAR
VENDOR OF THE YEAR
Comercial del Sur de Papelería A long-standing solid player in the Iberian market, Comercial del Sur is now also making strong inroads in France, having invested there for years and recently buying the assets of OP superstore chain Hyperburo.
Durable A long-established vendor with an extremely high-quality and ever-evolving product portfolio that continues to create value in a changing industry.
Exertis Supplies An ever-evolving – and highly disruptive – wholesaler, UK-based Exertis Supplies continues to enhance its logistics capabilities, in the process growing sales at impressive rates.
Essity This Swedish company has become an integral part of what constitutes today’s business supplies industry. It’s always innovative and often best-in-class with products that end consumers want to buy.
JGBM JGBM is consistently hailed as an excellent company to work with, a UK partner with great capabilities and always ambitious to up its game. 2018/2019 sales have been the best in its history.
Fellowes Brands Fellowes Brands is a perennial award contender that excels in new – often adjacent – product development as well as in its outstanding partner relationships.
PBS Holding Austrian multichannel operator PBS Holding has carved itself an impresssive wholesaling niche in Central and Eastern Europe, with big plans to further drive the business forward.
International Paper An highly regarded manufacturer in a difficult and declining category that expertly supports its reseller partners and always comes up with new solutions and initiatives.
Quantore Quantore in the Netherlands is another operator that is constantly looking for growth, investing in its capabilities, extending its reach and future-proofing the business.
tesa This is a manufacturer that is not a core OP operator, but one that its partners are really growing with due to its highly-relevant adjacent product range.
VIDEO OF THE YEAR
PRESENTATION DINNER
ACCO Brands EMEA With a comprehensive sustainability strategy in place since 2010, ACCO Brands EMEA regularly measures its ten core targets under three broad goals: impact, stewardship and relationships.
BIC – Gel-ocity Quick Dry BIC’s video perfectly meets this category’s criteria by capturing the viewer’s attention, using celebrity endorsement and influencing, while bringing the product to life and conveying exactly what it does.
The winners of the 19th EOPA will be announced on 9 March 2020 at the Hotel Okura in Amsterdam, Netherlands
Bi-silque For a manufacturer to achieve all-round sustainability excellence is no mean feat. Bi-silque has had a deep-rooted environmental commitment from its inception and is Cradle-to-Cradle certified. Commercial Commercial is known for its sustainability focus; it’s ingrained in everything it does, both from an environmental as well as wider corporate social responsibility perspective. Essity Essity is all about sustainably developing, producing, marketing and selling products and services. Its Tork PaperCircle service is one of its latest environmental initiatives. Lyreco Lyreco’s comprehensive environmental approach spans all areas of the business, from product, packaging, delivery and waste, to total carbon footprint.
MARKETING CAMPAIGN OF THE YEAR
Avery France – Back to School Campaign This back-to-school campaign which set out to promote Avery labels to school children generated impressive results in a challenging category. Fellowes Brands – Meet Emma: Our Work Colleague of the Future A campaign with extraordinary exposure that created considerable awareness of the office well-being category.
Office Friendly – Van-Tastic 2019 This well-executed, competition-based initiative generated huge engagement by members and vendors, driving sales and promoting growth.
Fellowes Brands – Meet Emma: Our Work Colleague of the Future This video is part of Fellowes Brands’ Meet Emma – Our Work Colleague of the Future campaign. It is highly visual and completely on trend as regards current concerns around working practices.
INITIATIVE OF THE YEAR Integra Business Solutions – i-merge: A Platform to Bring Businesses Together Tapping into the perennial issue of succession planning, Integra’s i-merge initiative solves a current need in the market, helping its dealer members sell their business (or buy new ones). The platform has benefited numerous dealers since its inception a year ago. International Paper – Reikan A local, France-based initiative, Reikan aims to encourage end users to reduce their environmental footprint while at the same time dispelling the myth that all paper is bad and shouldn’t be used anymore. Essity – Tork Clean Care, Office Trend Report 2019 In its Office Trend Report, Essity highlights hygiene issues in the office environment and offers solutions to many of the challenges that are often not top-of-mind for facilities managers.
YOUNG EXECUTIVE OF THE YEAR
Julien Barabant, Marketing Manager, Pilot Pen France Creative, engaged and always thinking outside the box, Julian Barabant is leading Pilot Pen’s digital transformation in France and was instrumental in developing its B2B web store concept. Esmeralda González, European Category Development Specialist – Workspace Management/Furniture, Fellowes Brands Esmeralda González began her Fellowes career as a junior marketing manager. A fast learner and supervising a small team herself now, she has become a specialist in the well-being category. Alexander Steffl, Senior Manager New Business Opportunities, Office Depot Europe An energetic go-getter who knocks down barriers, always challenges himself and everybody around him, Alexander Steffl is surging through the ranks at Office Depot Europe and is expected to go far. Huiru Zhang, Group Product Manager, Lyreco Inspiring trust, encouraging partnerships and exuding confidence and reliability – that’s how Lyreco’s vendor partners view Huiru Zhang. Fairness and total professionalism are other accolades bestowed on her.
PROFESSIONAL OF THE YEAR & INDUSTRY ACHIEVEMENT No shortlist – winners announced on the night.
February 2020
Office24 – Paper Paws With an aim to engage existing customers and attract new ones, Office24 showed real ingenuity with its catalogue campaign that, in the process, helped abandoned dogs.
COLOP – e-mark COLOP’s electronic marking device e-mark is a brand new product that’s not necessarily easy to understand at first glance. This video seeks to show in just two minutes what the e-mark is and how it works.
EVENT EOPA
SUSTAINABILITY AWARD NEW
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EVENT
SPEED dating OPI PARTNERSHIP PREVIEW
at its BEST
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o quote Benjamin Franklin (and many thereafter): “Time is money.” And it certainly is for senior executives from all channels in our industry who, in these challenging times, are constantly bombarded by many demands. From day-to-day and short-term operational issues to long-term strategic plans, there’s simply no time for operators to jet around the world and have meaningful and fruitful discussions with their partners and customers. So why not just come together in one beautiful and geographically convenient place in Europe – the Hotel Okura in Amsterdam – and conduct the business that would usually take weeks in a fraction of the time? Welcome to OPI Partnership!
MARK THE DATE
OPI Partnership will be held from 8-10 March 2020 at the Hotel Okura in Amsterdam, the Netherlands.
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Feedback tells us that the level and depth of the strategic dialogue is phenomenal
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This event, launched in 2014 and this year held from 8-10 March, has a proven track record and provides excellent value for all participants (see ‘What the delegates say...’). Partnership is where about 25 of Europe’s leading vendors converge in one location, ready to meet over 30 of their most important reseller and distributor partners – all in the space of two days. The aim of Partnership is not to talk about the latest sales campaign, review product listings or day-to-day transactional activities; instead, the idea is to facilitate highly strategic discussions in a confidential, time-measured and well-organised setting. These discussions can either cement existing relationships or forge entirely new ones. Certainly with the need for resellers to expand into ever broader product areas, Partnership provides an opportunity to meet vendors – established as well as relatively new to our industry – that excel in those areas. The focus is very much on quality meetings that yield results, as OPI’s Commercial Officer Chris Exner points out: “OPI Partnership is a
unique event in the industry calendar. Where else do you have over 50 of Europe’s leading national and global operators, their CEOs and most senior executives from the manufacturing, reseller and wholesaler communities all under one roof? And they’re ready to do business – non-essential, peripheral chat is for the many informal networking breaks outside the top-to-top, meticulously scheduled meetings. “Feedback tells us that the level and depth of the strategic dialogue is phenomenal while the return on time and money invested in the event is second to none. I am particularly excited about this year’s Partnership, as a considerable proportion of all participants will be new, thereby offering even better opportunities for attendees.” As Exner says, not all the time is spent on focused, strategic talks in strictly timed slots. There are plenty of casual networking opportunities where delegates can catch up with their peers, not least during the annual European Office Products Awards Gala Dinner (for the shortlist and more information, see page 48), which will be held on 9 March at the end of the first full day of OPI Partnership. This year’s OPI Partnership is sold out. To get involved in this invitation-only event for 2021, contact Chris Exner at chris.exner@opi.net.
WHAT THE DELEGATES SAY… “The most efficient way of networking and discussing strategic matters of our industry. If you are serious about office products, you cannot afford to miss this event! A great investment of time” – Peter Damman, soft-carrier “The event has a lot of value as it allows us to see some of the leading players in the industry in a very condensed period of time. We get to showcase new products and explore opportunities directly with the senior executives of our key customers” – James Webb, Fellowes Brands “OPI Partnership is a great way of spending a couple of days getting off the ‘business as usual’ treadmill to hold strategic meetings with senior execs from the supplier base” – Isabel Spence, Banner Group “This event has been helpful to meet, in a speed dating way, a lot of suppliers. It enabled us to address many different strategic issues in a positive way. Really fruitful!” – Eric Boudet, Bruneau
5 MINUTES WITH... CAREER Q&A
Helen Wade
Describe your current job. I am the Marketing Director for VOW Wholesale. I cover all aspects – from catalogue production to product marketing – while driving the VOW brand.
What would you be the patron saint of? Lunchtime walks – a necessity in today’s busy office culture. What’s your life philosophy? Live for the moment. You never know when it might be your last. Describe yourself in one sentence. The girl from Yorkshire with the unique shoes. What scares you? Wasps. What do you do in your spare time? Run marathons, participate in triathlons, go to the gym, walk my dog… There’s a theme! What is the hardest thing that you’ve ever had to do? Say goodbye to my dad who sadly passed away in 2013.
Helen Wade, VOW Wholesale
If you could change one thing about yourself, what would it be? To be able to relax without feeling guilty. Do you have any famous relatives? I am a distant relative of Christine Keeler – remember the Profumo affair?
Your favourite gadget? My smartwatch and Fitbit.
What would be a good theme song for you? Always Look on the Bright Side of Life. What kind of music do you like? Everything from classical to modern pop. And I do have a soft spot for Michael Bublé… If you could have the answer to any question, what would you ask? Is there really an afterlife?
www.opi.net
If the world had a President, who would you vote for? Walt Disney. His vision created joy for millions of people and will continue to do so for many decades to come.
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Your pet hate? Being late. What’s your guilty pleasure? Gin and Prosecco – sometimes mixed together!
If you weren’t doing your present job, what would you like to be doing? Working as a marine biologist. I like being close to nature – it would have to be in a warm climate though. Best moment in your career so far? Winning Professional of the Year at the BOSS Awards in November last year. Worst moment? Being told, when I was 18, that a back injury would end my career in sport. This led to a withdrawal from university and a total career rethink.
Best compliment you’ve ever received? When I worked at Boots, I was constantly mistaken for one of their models. She was wearing a face mask but even so, it was quite flattering. If you could trade places with someone for a day, who would it be? Eliud Kipchoge – to be able to run that fast would be amazing.
Your worst job? I lasted six months when working at an accountancy practice when I was 19. Auditing just wasn’t for me.
What would you cook for a dinner party? I wouldn’t – I would order a takeaway. I’m not the best cook. What is humankind’s greatest invention? Insulin. It keeps my diabetic daughter alive.
Your best piece of advice to someone who has just joined the OP industry? Take the time to understand the complexity of the industry and don’t rush. What do you like best about the OP industry? Definitely the people. It’s such a friendly industry with a genuine desire to grow and develop in partnership. If you could change one thing about our sector, what would it be? Our supply chain is too complex, making it hard to respond quickly to changing consumer demands. What personal item do you have on your desk? A picture of myself, my mum and my daughter.
FINAL WORD
New Box 2.0
I
wrote this column nearly three years ago entitled ‘We need a new box’ (see OPI March 2017, page 58). Given all that’s happened in the US business supplies industry since then – and perhaps particularly last year from my own vantage point – I was asked by the OPI team to update that piece with my more recent thoughts. So here is ‘New Box 2.0’ – purely from a US perspective I hasten to add to all the global readers out there. Well, we surely have fewer players in the box in 2020. Some operators have decided to collaborate more together and even merge (how about that!). A few have pushed back further from the table, while some continue to seek relevancy and others attempt to build new operating models. This is all good because standing still in this very dynamic industry is not an option. Constant change will be a continued reality in the 2020s, and turning that change into opportunities to grow by fostering synergistic ‘out of the box’ partnerships is a critical imperative for the independent dealer community (IDC). Creating these partnerships will require some to put egos aside and stop playing by the old rules of the game in order for the IDC to compete more operationally efficiently and cost effectively. We need to learn faster, adapt to constant change and imagine entirely new possibilities. We also need to seriously collaborate unselfishly with key stakeholders who sincerely want to partner with one another within the IDC for its collective mutual good.
www.opi.net
CONFLICTING INTERESTS I am not naïve and understand that there have been – and always will be – conflicting competing business plans, personal biases, lack of trust among key industry entities, and a reluctance to change because of the uncertainty of the result or possible lack of control. I have expressed many of these feelings throughout my own career and I know I’m not alone. However, we have all learned what happens when we do the same old thing over and over again. Why would we possibly expect a different result? So what could a new box in 2020 and beyond possibly look like? Here’s my list:
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• Dealer attrition due to mergers by Staples and Office Depot • Equity positions taken by Essendant and S.P. Richards in independent dealers • One fewer wholesaler or a hybrid wholesaler • Manufacturer consolidation • Share shift among wholesalers, buying groups and dealers
• Desperate, relevancy-seeking strategies for retail by Staples and Depot • Unified IDC national accounts model • Further buying group consolidation • Resurgence of manufacturer brands • Streamlined IDC supply chain model for dealers among wholesalers and manufacturers • Greater control of the dealer’s digital destiny dilemma • Newly-formed ancillary industry buying group relationships
Mike Gentile, President, Independent Suppliers Group
CONSTRUCTIVE COLLABORATION I am more optimistic going into 2020 than I was in 2010 entering the last decade. A lot of dust has settled since 2010, although there is still some swirling around by design or by accident.
Today we can see a more clearlySpecial Issue defined competitive landscape But today we can see a more clearly-defined competitive landscape. The marketplace might be a bit convoluted or even unconventional. It has also been said that some industry players are still building the plane while they are already flying it. My experience with the IDC has shown me Special Issue that many dealers have&a tremendous ability to HEALTH WELL-BEING learn and adapt. No other selling entity knows its customers’ needs more and has proven to deliver an exceptional service better than the local independent. Technology will help acquire customer insight from data, but the ability of the local dealer sales rep to establish trust and deliver world-class service should never be underestimated. The US industry is riddled with failed retail and commercial B2B wannabe business plans. We will have to figure out the most effective combination of artificial and human intelligence. I am encouraged to see many initiatives that helped createSpecial market Issue opportunities for the IDC to VENDOR can be attributed to succeed. This inventiveness SPECIAL the wholesalers and some of our manufacturers, dealer groups. Many in our space see these initiatives as a sign for further growth and a catalyst for positive momentum as we enter a new decade. Let’s constructively collaborate as a unified IDC – we are many, but let’s act as ONE! To quote from Sun Tzu’s The Art of War: “Attack weakness and utilise strength.”
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