OPI APP July/August 2020 A by OPI

BIG INTERVIEW

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Brian Bowerfind, ECI July/August 2020

THE CHANGING FACE OF

UK WHOLESALING

INSIDE THIS ISSUE l

GSAâ&#x20AC;&#x2122;s e-marketplace award l ISSA to the fore l Staples slashes jobs l The new normal for OP

l Office furniture opportunities l Office 2025 l Tech solutions during and beyond COVID-19

Special Issue

TECHNOLOGY

SOLUTIONS

Special Issue

CONTENTS 20 Hot Topic An exclusive interview with SPR's new owners Mike Maggio and Yancey Jones 36 Feature The 'new normal' according to industry pundits 40 Category Update Disruption brings opportunity to the furniture space 46 Opinion The safe return to the office 48 Advertorial VOW Wholesale: dealers' warehouse and wheels 52 Research The office of 2025

Big Interview: Brian Bowerfind, ECI

With a remit to increase revenue opportunities and drive down costs of their customers, technology solutions companies are at the heart of the independent dealer community. ECI is one of the best-known and longeststanding software providers in our sector. In these times of severe disruption, it has helped dealers to pivot, shift and adapt to a whole range of new, unprecented scenarios. Special Issue OPI caught up with ECI Distribution division President TECHNOLOGY Brian Bowerfind to discuss all things COVID-19, SOLUTIONS technology, category expansion and diversification.

Special Issue

TECHNOLOGY

SOLUTIONS 14 Big Interview ECI – one of the core providers of technology solutions to independents

Special Issue

TECHNOLOGY

24 Feature Tech experts give their views on dealers' performance in tough times

SOLUTIONS

32 Feature Software choices on offer

HOT TOPIC: SPR'S 2020 VISION

Special Issue

VENDOR SPECIAL

34 How to... ...get all your ducks in a technology row

REGULARS

Special Issue

5 Comment 6 News

Special Issue

VENDOR SPECIAL

56 5 minutes with... Walter Johnsen 58 Final Word Jonathan Smith

July/August 2020

I want to [...] dispel the notion that this isn’t a healthy company. We bought a profitable and cash flow-rich company with a solid foundation. SPR also did a great job reacting to COVID-19 and did not have a single month of negative results. [...] Our vision is simply to be a wholesale distributor of business products. But our model going forward will be a bit different from the current one. The merchandising strategy will change, for example, to be more market driven versus catalogue cycle driven. We want to make sure we have all the products that our customers and suppliers are telling us we need to have.

54 Research A 'new channels' prospects guide – Where To Now?

COMMENT The OPI team EDITORIAL Editor Heike Dieckmann +44 (0)1462 422 143 heike.dieckmann@opi.net Deputy Editor Michelle Sturman 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 aurora.enghis@opi.net

EVENTS Events Manager Lisa Haywood events@opi.net Event Programmer Sophie Carus sophie.carus@opi.net

PRODUCTION & FINANCE Studio Joel Mitchell joel.mitchell@opi.net Finance & Operations Kelly Hilleard kelly.hilleard@opi.net

PUBLISHERS CEO Steve Hilleard +44 (0)7799 891000 steve.hilleard@opi.net Director Janet Bell +44 (0)7771 658130 janet.bell@opi.net Executive Assistant Debbie Garrand +44 (0)7718 660249 debbie.garrand@opi.net

The long road to recovery

his column – and part of the magazine – was supposed to be all about OPI's 300th edition. Only we decided that it seems slightly strange under the circumstances (but see page 58 for a short trip down memory lane), so we've postponed all celebrations until our 30th anniversary next year when life will hopefully have returned to some kind of normal. What even is that normal though – now or in the future? This issue of OPI will give you a few answers, not just in our dedicated 'new normal' feature (page 36), but scattered throughout these pages. It depends on what you're looking at, of course. There's plenty to say about the now widely-accepted homeworking reality or the new workplace. Both bring opportunities for vendors and resellers, but also challenges (pages 40, 46 & 52), especially from a distribution perspective. Nobody knows that better than our industry's wholesalers (page 48).

No doubt [...] this will be a marathon, not a sprint Talking of wholesalers, it's not often that an entire OP community exclaims a united: "Wow, I didn't expect that!" But Mike Maggio and Yancey Jones pulled it off when they bought S.P. Richards recently. The initial gut reaction by many is positive. It's early days and the proof of the pudding is certainly in the eating. For now, read our News Analysis (page 6) and our exclusive interview with Mike and Yancey (page 20). What this deal and the constant COVID-19 talk – there's just no escaping it – have in common is a desperate need for urgency. Time is not on our side in the current climate and only those operators that are agile will have a chance to survive and thrive. Be it flexibility in terms of logistics, product diversification or a scrupulous look at costs, behind it all is technology. Which is what this issue of OPI is partially about – you'll see this by the sticker that runs like a red (purple even) thread through the magazine. As FusionPLUS Data's Steve Bilton (page 30) says: "It's as if the penny has finally dropped." I've enjoyed putting this issue of OPI together – it's been tough in these times of furlough and incredible uncertainty. But it's also shown me that there's so much scope for doing new and exciting things – watch out for our new OPI Talk podcasts, for example. No doubt though, this will be a marathon, not a sprint, so register your interest to get some guidance for 'The Road to Recovery' at the next OPI European Forum (page 47). HEIKE DIECKMANN, EDITOR Stay safe and well!

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Office Products International Ltd (OPI) Meadow Barn, Fairclough Hall, Halls Green, Weston, Hertfordshire SG4 7DP Tel: +44 (0)20 7841 2950

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

July/August 2020

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NEWS

Analysis: Positive reaction to SPR acquisition

There is an enthusiastic response from the US independent dealer channel after two of their own buy S.P. Richards

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Ever since S.P. Richards’ (SPR) proposed merger with Essendant fell through in 2018, there has been an air of uncertainty surrounding the future of the Atlanta, Georgia-based wholesaler. Speculation was ratcheted up a few notches in February this year when Genuine Parts Company (GPC) CEO Paul Donahue confirmed the group was ‘evaluating’ its future plans for this business, a euphemism for looking to divest it. GPC’s options had appeared to be somewhat limited to a buyer such as Office Depot or a takeover by a private investment firm. Furthermore, with the US still gripped by the coronavirus pandemic, the smart money would have been on any deal for SPR being put back until at least the end of this year. That wasn’t counting on the entrepreneurial spirit of Mike Maggio and Yancey Jones, the two industry veterans who brokered the deal to take over the wholesaler and who are now SPR’s majority shareholders. (For an exclusive interview with both and more details on how the transaction unfolded, see Hot Topic, page 20). They haven’t acquired the whole of SPR. The Supply Source Enterprises (SSE) division comprising Impact Products and The Safety Zone has been bought by investment firm HIG. SSE is now being headed by Steve Schultz, SPR’s former EVP who had already been in charge of these units. The Maggio/Jones combo – along with several other investors – have acquired what is being called the ‘core’ SPR business, which still brings in around $1.5 billion in annual sales. The purchase price was not disclosed; nevertheless, in April 2018, when the proposed SPR/Essendant merger was unveiled, SPR was valued at around $650 million. Since then, of course, the Canadian operations and Garland C Norris have been sold, and the acquisition did not include SSE. Still, it is an impressive feat to have pulled this deal off.

GREAT NEWS For the past 18 months, Maggio, as CEO of Independent Suppliers Group (ISG), has been reporting to industry icon Dave Guernsey, the group’s Chairman. Guernsey was one of just a very limited number of people who had been aware of what was going on. He called the acquisition “great news”, adding that he was “amazed” the news had not leaked out prior to the 30 June announcement.

In independent dealer channel (IDC) circles, there is a lot of positivity about this outcome for SPR. “It’s good as independents that we feel we have people who are on our side and understand us a bit more,” Matthew Hebert, President of dealer group Office Partners, told OPI. The sentiment was echoed by AOPD Executive Director Mark Leazer, who said: “The key takeaway for me is that we don’t have to wake up and wonder if SPR is going to be sold to a big box or to private equity. Many in the IDC were concerned about it going to Office Depot. That would have been the nightmare scenario, both wholesalers being owned by big boxes that are our competitors.” New ISG CEO Mike Gentile added: “I am very happy the two names that have acquired SPR are Jones and Maggio, and not Douglas and Smith [referring to Sandy Douglas and Gerry Smith, the respective CEOs of Staples Inc and The ODP Corporation]. While independent channel players understand that SPR has not been bought as an IDC move per se, they are encouraged by the new owners. “In a market in which companies that claim to be our wholesale partners are vertically integrating and aligning themselves with our largest competitors, we cannot express how exciting and important it is that SPR chose to remain independent,” stated Myers Jordan of Herald Office Solutions and someone who represents the next generation of IDC leaders. “This step forward ensures not only the continuation of powerful channel-wide wholesale partners, but also ultimately protects the relevancy of both the domestic US manufacturers and that of independent business products dealers throughout the country,” he added.

I am very happy the two names that have acquired SPR are Jones and Maggio, and not Douglas and Smith Quite how this ‘new’ SPR will shake up the market remains to be seen, but the vision of ending the first call/second call wholesaler/dealer relationship has gone down well. “It’s something we haven’t seen in years, and I was a big fan of the way it was before,” said Guernsey, who admitted his dealership was pretty much “forced” to make a choice when the first/ second call model sprung up. “I like the whole concept of looking at customers as customers, rather than first or second call,” agreed Leazer. “From my own experience, second-call dealers get treated as second-class citizens. I understand that, but if a dealer wants to buy a certain category from a wholesaler that is not their first call, should they be treated as second class for it? Probably not.” More details of SPR’s strategy will no doubt emerge once Maggio and Jones have got their feet firmly under the table, but you will be hard pressed at the moment to find a negative reaction to their bold move.

Worldwide cleaning association ISSA is playing a key role in ensuring people feel safe returning to work and recreational locations, as many countries around the world ease their coronavirus lockdown restrictions. Last year, the association acquired the Global Biorisk Advisory Council (GBAC), an organisation that specialises in infectious diseases and how to cope in disaster situations such as pandemics. As it turned out, the timing of that deal could not have worked out better for ISSA. It has been able to fast-track an accreditation programme called GBAC STAR, a performance-based scheme which enables facilities of all sizes to create and maintain an effective cleaning, disinfection and disease-prevention programme. “Now is the time for businesses of every size to be transparent about the measures they’re taking to protect customers and employees, including proper cleaning and disinfection,” said ISSA Executive Director John Barrett. “GBAC STAR programme participants demonstrate their commitment to going the extra mile by implementing prevention and response best practices that support health and safety.” GBAC STAR has been adopted by organisations in more than 30 countries, and the first accreditations were confirmed at the end of June, both in the US state of Georgia: the Georgia World Congress Center in Atlanta and a takeaway restaurant called Dinner in a Dash located in the town of Monroe.

Dianna Steinbach

their employee communications around jan/san, hygiene and the safety of the working environment – especially as employees seem reluctant to return to the office for fear of being infected. She also referred to the notion of ‘overkill disinfection’ and the need to offer clients the right sanitation proposition – don’t oversell and risk endangering that customer relationship down the line; instead, instil confidence and strengthen relationships for the longer term. To illustrate this, she showed GBAC’s five levels of cleaning. These range from a ‘normal’ situation where only routine cleaning is required to a high-risk decontamination response if a COVID-19-type outbreak has occurred in a building. Carrying out a full risk assessment of the premises beforehand will enable service providers to tailor their proposals to customer’s requirements. Leaping from transactionally selling cleaning, hygiene and PPE products to being the one your clients turn to when they need advice on how to maintain clean and safe premises is by no means an easy undertaking. However, it will surely help resellers stand out from the crowd as the demand for solutions increases.

ISSA SHOW SWITCHED

The dates and venue of the ISSA Show North America 2020 have been changed following feedback from the cleaning industry. The event had originally been scheduled to take place in Chicago from 26-29 October. However, permissions from the state of Illinois for privately-held business events were not as forthcoming as ISSA had hoped. The association therefore sounded out stakeholders about moving the trade fair to Las Vegas, Nevada, in mid-November. More than 70% of attendees voted for the switch, and the show will now run from 16-19 November at Las Vegas’ Mandalay Bay Convention Center.

July/August 2020

RESPONSIBLE CLEANING The programme forms part of ISSA’s call for ‘responsible cleaning’. The association believes COVID-19 could be a tipping point for the industry and that there is a real opportunity now for service providers. However, the emphasis must be on being recognised as a trusted source of advice for customers on all things hygiene-related and on developing a responsible level of engagement in line with each individual set of circumstances. During a webinar for members, Dianna Steinbach, ISSA VP of International Services, pointed to the sudden emergence of ‘pop-up experts’ in the jan/san world, each with a different message that could lead to confusion in the marketplace. “You need to cut through that,” she told the audience, underlining ISSA’s credentials as a single source for relevant, trustworthy and consistent information. Steinbach highlighted the difference between what she called “theatre cleaning” (ie for show) and “confidence cleaning”, where employees trust that the areas in which they are working have been cleaned to the appropriate standards. Another tip is to work with clients to help them develop

NEWS

ISSA at centre of post-COVID-19 response

NEWS

Analysis: Unanswered questions for GSA

raised a number of concerns in government purchasing circles which the GSA has still not publicly addressed. These issues were highlighted in a recent webinar – run by international think tank Public Procurement International – that featured Roger Waldron of the Coalition for Government Procurement. He has been sceptical of the CPI since it was initiated in 2018. One of his biggest worries is that buyers will have access to dual purchasing vehicles which follow a completely different set of rules. This is because the CPI does not have to comply with legislation such as the Trade Agreements Act that sellers on the GSA’s multiple award schedules (MAS) must adhere to. “Where is the government going with this?” he questioned on the webinar, warning of a potential disconnect in the procurement process. “The GSA will need to address this one way or the other,” he stated, meaning either the CPI will have to tighten its rules or MAS requirements will have to be eased to allow for consistency and a level playing field.

As the US federal government’s e-marketplace pilot gets underway, clarification is still needed in key areas of the programme

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After a delay of several months due to COVID-19, the US General Services Administration (GSA) has awarded contracts to three e-marketplace providers for the pilot phase of its Commercial Platforms Initiative (CPI) for federal government purchasing. Amazon Business, Overstock.com and Fisher Scientific have been retained for a proof of concept that could last up to three years. Their platforms are expected to be available for use by the end of July 2020 and will allow federal employees who have a government purchase card (p-card) to place orders of up to $10,000 – an amount known as the micro-purchase threshold (MPT) – on commercial off-the-shelf items. The first two awardees will no doubt be familiar names, although Overstock.com is less well known for its marketplace offering. Fisher Scientific appears to be something of a left field choice – it is a specialised reseller of medical equipment and does currently offer the broad range of products which was one of the CPI’s stipulations. The GSA is launching the proof of concept with five federal agencies – including itself – as it looks to “start small” and refine the programme via repeated testing. The overarching goal is to provide a modern, more efficient buying solution for federal customers for non-critical items as well as increase visibility on off-contract agency expenditure that is already taking place. To give that some context, the American Red Cross recently confirmed that 20% of its tail spend was made with a staggering 30,000+ suppliers.

$6 BILLION ADDRESSABLE MARKET The stakes are high. The GSA believes there is a $6 billion addressable market while other studies have suggested the real amount spent below the MPT is nearer $20 billion. However, the introduction of these e-marketplaces has

Transparency will be the key to success

Roger Waldron

There are also question marks regarding many other areas: the fee structure, fair pricing, vetting of third-party (3P) suppliers, a conflict of interest between first-party and 3P sales, counterfeit products, use of sales data, supply chain security and the amount of training that p-cardholders (most of whom are not procurement professionals) will need to undergo. In a recent press release, the GSA said the programme would take on board recommendations made by the US Department of Homeland Security earlier this year in a report called Combating Trafficking in Counterfeit and Pirated Goods. “Our approach [combines] better security practices, better data, and better pricing,” said GSA Administrator Emily Murphy. However, the agency has not yet explicitly laid out how it will tackle these – and the other – issues. As Waldron noted: “Transparency will be the key to success.”

AMAZON FORMS ANTI-COUNTERFEIT UNIT

With the US government looking to crack down on counterfeit products on e-commerce marketplaces, Amazon announced at the end of June that it is throwing more resources at this issue by forming a Counterfeit Crimes Unit (CCU). The CCU is a global team comprising former federal prosecutors, investigators and data analysts. The e-commerce giant said the unit would enable it to more effectively pursue civil litigation against suspected criminals, work with brands in joint or independent investigations, and aid law enforcement officials worldwide in criminal actions against counterfeiters. Amazon also noted its “substantial efforts” to prevent counterfeit products from ever being listed in its web store. It revealed it had blocked more than 2.5 million suspected ‘bad actor’ accounts before they were able to make a single product available for sale, and blocked over six billion suspected bad listings in 2019.

Staples Inc made at least 500 staff redundant in the US in June following another round of restructuring. Although the exact number of layoffs was unconfirmed, OPI understands it was between 500-1,000 and that many of the redundancies involved staff at the Staples Business Advantage division. Judging by the posts on various social media sites and platforms, many long-serving and senior sales execs were among those that were let go in these latest cutbacks. OPI sources suggested the catalyst for this restructuring were the changes to market dynamics brought about by the COVID-19 situation – for example, the work-from-home trend and fewer people in an office environment, and more digital (as opposed to face-to-face) customer interaction. Therefore, as customer relationships and needs change, Staples is likely to be investing in areas such as flexible deliveries, new product lines and inside sales staff. The flip side is that it sees less of a need for ‘feet on the street’, hence the

City of Hope to hold virtual events

latest redundancies. It’s an issue that all resellers in the contract space have been facing. As with many things, COVID-19 seems to be an accelerator of existing trends in the marketplace. Staples declined to comment for this news story when contacted by OPI.

The National Business Products Industry (NBPI) Council has taken the difficult decision to cancel all further in-person events for this year’s City of Hope (COH) fundraising efforts, but is calling for support for several virtual initiatives it is organising. “Given the current governmental and health agency guidelines, and ongoing corporate travel restrictions, we regret to inform you that we will be unable to conduct in-person events as we know and enjoy them this year, including our annual culmination celebration, the Spirit of Life Gala,” NBPI Council Chair Scott Light and 2020 Spirit of Life Honouree Stephanie Dismore wrote in a letter to stakeholders and supporters. It is only the second time in its 37-year history that the Spirit of Life dinner has been postponed – the other being shortly after the 9/11 attacks in 2001. More than half of the NBPI’s annual COH fundraising comes from non-event related activities, such as direct mail matching programmes, employee giving, product sales promotions, personal and foundation giving, and crowdfunding. These efforts are continuing and are on track to raise approximately $10 million this year. The remaining monies stem from industry-sponsored business summits, golf outings and the Spirit of Life Gala. To try and achieve the net fundraising typically realised from these kinds of events, the NBPI Council has set an ambitious goal to raise $3 million over the coming months via direct donation appeals and a number of virtual activities. These include a Walk for Hope, Bike for Hope, an OPWIL ‘Thurby’ Happy Hour, and a Virtual Spirit of Life Gala on 17 September. Spirit of Life Honouree Stephanie Dismore

NEWS

Staples cuts hundreds of jobs

New head of Lyreco UK Mike Milward

July/August 2020

Lyreco’s UK subsidiary has seen two senior level developments recently, one being a change of Managing Director. Former Managing Director Peter Hradisky left the company after more than 15 years, having spent the last eight of them running the reseller’s second-largest business unit (known internally as WISE). His successor is no stranger to the company. Mike Milward was in charge of Lyreco Australia for more than four years until the division was sold to independent dealer COS in 2018. He had come into that role with a remit to stem losses, and has a strong career background in business development and turnarounds. There is also an Australian connection in Lyreco UK’s other senior appointment. Vince Scammell has been named as Sales Director for the SMB customer channel. He has returned to the UK after almost three years at COS as National Sales Director for the SMB and mid-market segments. Scammell succeeds Greg Fry, who has left the company after more than 22 years.

NEWS

of workplace design – was somewhat sceptical that this would be the case. “We have all seen articles suggesting the office is dead and that we will all work from home. Those types of articles were being written 20 years ago; they were wrong then and they are wrong now,” he argued. “They show up every time there is a new technology, like laptops and then high-speed internet and wifi, and now low-cost videoconferencing platforms.”

Analysis: Fad or fact?

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Is Fujitsu’s massive remote working shift a sign of things to come?

As the business products industry tries to predict how post-COVID-19 work trends will affect go-to-market strategies, Japanese IT giant Fujitsu is offering some pointers as it fundamentally changes working practices for a staggering 80,000 employees. Japan is known for its rigid working culture, long office hours and crowded commuter trains. Fujitsu is making a bold move to disrupt the status quo with the introduction of a programme called Work Life Shift that aims to redefine working styles for its employees in Japan in the wake of the COVID-19 pandemic. “This latest initiative will mark the end of the conventional notion of commuting to and from fixed offices, while simultaneously granting [employees] a higher degree of autonomy based on the principle of mutual trust,” the company stated. “It is not only a concept of ‘work’, but represents a comprehensive initiative to realise employee well-being by shifting pre-existing notions of ‘life and work’ through digital innovation.” Work Life Shift has three essential principles: smart working, the borderless office and cultural change. Fujitsu will invest heavily in these areas over the next three years as its Japan-based employees begin working on a primarily remote basis, should they wish to do so. The company said the project will involve moving away from the conventional practice of working from a fixed office towards a system that allows employees to freely choose the place they want to work from, including from home, hub or satellite offices, depending on the type of work they do. This is certainly an atypical move, especially for a Japanese company, and comes after well-documented reports of giants such as Facebook and Twitter giving staff the option of working remotely on a permanent basis. Fujitsu is betting big that remote working will become the new norm. However, during a recent earnings conference call, Jim Keane, CEO of Steelcase – a company at the forefront

POWER OF THE PEOPLE Keane continued: “The predictions are always wrong because it’s not about the technology, it’s about the people. It’s not about whether you can have everyone work from home in the short run, it’s whether in the long run you can win that way versus your competitors which are always innovating, transforming and disrupting. “Over the past 20 years, we have occasionally seen customers announce large-scale work-from-home programmes; then, two or three years later, those programmes are quietly dismantled and employees are asked to return to the office. It takes a while for the problems to show up, but they always [do].” Nevertheless, Keane agreed it has “always been a good idea to give employees the flexibility to work from home from time to time,” adding: “We believe, as we emerge from this crisis, that working from home will be embraced by more companies as part of a holistic approach to more effective work. We will continue to expand our products and our programmes to support working from home, but the office is far from dead.”

The predictions [about working from home] are always wrong because it’s not about the technology, it’s about the people In all likelihood, most companies will not go to the extremes just demonstrated by Fujitsu. Yet, there is still the question of what products (partially) remote workers will require and how they will buy them. Will they expect products to be delivered to their homes, or pick them up when they go to the office? Will orders be placed by individuals and then expensed, or be purchased through existing companywide contracts with a regular supplier? During a VOW Wholesale webinar at the beginning of July, findings of an end-user survey for micro and small businesses in the UK were presented. They revealed that 90% of these types of company expect to have more than 70% of their workforces back in their usual office locations by January 2021. That is hardly a sign of a massive shift to work from home. The problem is that no one really knows what the working landscape will look like in the longer term. That makes strategic planning something of a shot in the dark. However, it will probably be necessary to have an approach that is more tailored to the individual needs of clients which have different sets of working practices.

US dealer organisation Independent Suppliers Group (ISG) has named Mike Gentile as its new CEO following Mike Maggio’s move to S.P. Richards (SPR) (see pages 6 and 20). Gentile is a well-known and respected figure in US office products circles. After almost 20 years at Boise Cascade, he became President of ISG in 2004 and CEO a year later. He then took on the role of President after the merger with TriMega Purchasing Association at the beginning of 2019. Commenting on the leadership change, ISG Chairman Dave Guernsey said: “Going forward, ISG is blessed with another consummate professional. Mike is well known to our dealer community and has many years of experience leading dealer groups. We are confident that he will build further on what ISG has accomplished thus far.” Maggio added: “I have known Mike Gentile for a number of years and have

worked closely with him when we were each running separate dealer groups and since the merger. Mike has been a true partner and I am proud to have worked with him. “I am leaving ISG in his very capable hands and the membership is lucky that a manager of his calibre is now at the helm. I look forward to working closely with him and the ISG board of directors to create collaborative programmes to the benefit of the members.” Mike Gentile

Fellowes makes organisational changes

Fellowes Brands has announced a “comprehensive” channel division structure for its North American business. Driven by its expansion into multiple channel industries over the past two years, the company said the new set-up is designed to enable clarity within its organisation. The divisions are as follows: Fellowes Workspace Solutions serves the business supplies industry through legacy partnerships, including office superstores, office product dealers, e-tailers, mass market resellers and wholesalers. Beth Wright, VP of Commercialisation, North America, will continue to lead all customer-facing elements of this division. l Fellowes Contract Interiors will manage the contract furniture industry. This organisation has been developed through merging the ESI and Trendway businesses into one functional team under the leadership of Mark Rhoades (President, Contract Interiors) and Rob Day (EVP Commercialisation, Contract Interiors). This division will continue offering its solutions through its trade partners. l Fellowes Curative includes service-orientated business units which provide ergonomic consultative services for corporations. This division consists of Posturite (UK) and Neo Forma (France), which both operate in the European marketplace. The US organisation services global contracts which have been established within European customers’ head offices. l

COMMERCE CONNECTOR BOUGHT Germany-based e-commerce software company Commerce Connector has been acquired by fast-growing US firm PriceSpider. Commerce Connector has been led for the past several years by Managing Director Markus Röse and Managing Director of Technology Stefan Stein. They will stay with the company – which has around 40 employees – under its new ownership. PLATINUM EQUITY ACQUIRES L&R Investment firm Platinum Equity has bought L&R, a US-based wholesale distributor of consumer products, including stationery and office supplies. Founded in 1956, L&R offers more than 30,000 products and operates three distribution centres in the states of Arkansas, California and New Jersey. Its CEO Marc Bodner and his management team will continue to lead the business. HAMELIN BUYS LIGHTING FIRM Via its Unilux division, Hamelin Brands has purchased Davyia, a France-based specialist in light therapy products. Dayvia was founded in 2009 in the northern French city of Lille. Hamelin said the company will now benefit from its greater international reach and a stronger presence in the business products channel. It also referred to operational synergies in areas such as R&D, production and the supply chain. BOLT-ON ACQUISITION FOR AVERY CCL Industries has announced that Avery has acquired InTouch Label and Packaging, a specialised short-run digital label converter based near Boston, Massachusetts. The enterprise value of the transaction, net of cash and debt, is approximately C$10.9 million (US$8 million). InTouch’s revenues for the current calendar year are expected to be in the region of C$9.5 million, with an estimated adjusted EBITDA of C$2.7 million. GRAINGER TO EXIT CHINA Leading MRO and workplace supplies reseller Grainger is to sell its distribution business in China. Grainger China will be acquired by an entity owned by its current management team and Sinovation Ventures, a China-based venture capital firm headed by former Google China President Kai-Fu Lee. Financial details were not disclosed and the transaction is expected to close later on this year.

July/August 2020

“Over the past three years, Fellowes Brands has grown in revenue by 38%, expanding its channel reach along the way. This result is driven by our strategy of reinvention, bringing greater relevance to our business in a rapidly changing world,” commented CEO John Fellowes. “As Fellowes has continued to broaden its offering and distribution reach, it has been important for us to evolve our organisation and go-to-market strategy. This new structure preserves our ability to intimately serve our existing customers while tapping into the capabilities, solutions and scale across our entire Fellowes Brands global organisation.”

M&A

NEWS

Gentile to lead ISG

NEWS

IN BRIEF BOSS launches COVID-19 product portal UK industry association BOSS, in tandem with sister organisation, the British Printing Industries Federation, has opened a COVID-secure product portal. The initiative connects those looking for COVID-19 products with BOSS members that can supply them.

Say hello to The ODP Corporation Office Depot Inc is now officially a subsidiary of The ODP Corporation (ODP) after the North American reseller implemented a holding company reorganisation on 30 June. The firm will continue to trade on the Nasdaq stock exchange under the ODP ticker symbol.

CEO for BIFMA BIFMA, the Business and Institutional Furniture Manufacturers Association, has appointed Deirdre Jimenez as its first-ever CEO. She succeeds Thomas Reardon, who is retiring after a 22-year tenure as Executive Director. Jimenez is both an architect and interior designer with over 25 years of leadership experience, and most of her career has focused on the workplace environment.

c.$8 million

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es paid out by Q1 2020 rebat p Independent US dealer grou p to its Suppliers Grou membership

$750 million Planned spend

ing by Tech Data on digital transformation initiatives over the next five years

23,000

Estimated number of Amazon’s own brand products Source: Coresight & DataWeave

I believe every company is a platform, and we must always use it to make a positive impact on people, the planet, and communities around the world

VOW supporting BOSS charity The UK’s VOW Wholesale is aiming to raise £10,000 ($12,500) for the BOSS Business Supplies Charity. Its efforts will help the charity offset the loss of fundraising from the cancellation of face-to-face events. Almost £3,500 were raised at the start of July during VOW’s ‘At The Races’ webinar.

Enrique Lores, CEO, HP Inc, July 2020

PIC OF THE MONTH: A sneak peek into BIC’s new shared services office in the Bulgarian capital Sofia. The 2,200 sq m (22,000 sq ft) facility consolidates all administrative activities for BIC’s European finance, accounting and customer service operations.

Creation of Inapa Deutschland The merger of German paper merchants Papier Union and Papyrus has been completed and a new entity, Inapa Deutschland, became operational on 1 July. It employs about 1,000 people and is headquartered near Hamburg in the north of the country.

opi.net poll

Compared to the beginning of COVID-19 lockdowns, how do you feel about your business prospects for the remainder of 2020?

28% 42% 29%

n More confident n About the same n Less confident

BIG INTERVIEW

Providing THE backbone With a remit to increase revenue opportunities and drive down costs of their customers, technology solutions companies are at the heart of the independent dealer community. ECI is one of these operators that have helped dealers to pivot, shift and adapt at this time of severe disruption

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ndependent dealers around the world rely heavily on their support network to survive and thrive. Wholesalers and buying groups play a considerable part in that network. So do technology solutions providers – they offer a much-needed, solid backbone to dealers’ operations which substantially help those savvy enough through the current upheaval and many other future, as yet unknown, crises. ECI is one of the best-known and longest-standing software companies in our space (and several other verticals, for that matter), having celebrated its 20th anniversary last year. As an evolving, private equity-owned company, it has seen considerable M&A activity, enjoyed geographic expansion, and launched a steady stream of new solutions and services to its dealer customer base. OPI’s Steve Hilleard caught up with ECI Distribution division President Brian Bowerfind in June, a time when many countries at various speeds started to emerge from the coronavirus lockdown that created such phenomenal obstacles for numerous operators in our sector. COVID-19 was naturally high on the agenda of topics to discuss during the firmly home office-based transatlantic chat. But there was also the wider picture of technology being fit for purpose, its perceived and actual value for dealers, and the crucial importance of category expansion and diversification and the role technology plays in that.

OPI: For those people who haven’t come across you yet Brian – not too many in the US, I guess, but maybe further afield – can you give a bit of background about yourself and how you came to be in your current role? Brian Bowerfind: Sure. I’m relatively new to the industry, having joined ECI just three years ago. I

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TECHNOLOGY

SOLUTIONS

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VENDOR SPECIAL

graduated from Long Beach State University in California in 1992 with a degree in political science. I actually went back to school ten years later with a decade of work experience under my belt and received my MBA from the University of Redlands. Most of my career, certainly since 1995, has been firmly based in B2B technology. Over the years, I’ve held many roles within the technology companies I worked for. I’ve been a support technician, a software implantation specialist, a sales engineer, a quota carrying salesperson, you name it. I worked my way into leadership in the late 1990s and have been there ever since. The goal in all these positions has always been to make businesses more efficient and productive. I joined ECI in July 2017 as President of its Distribution division. That part of the company focuses on solutions serving the office products and contract furniture space. In November of that year, I added ECI’s NET1 business to my area of responsibility. NET1, by way of explanation, provides payment solutions to all the company’s divisions in the US. Then, in June 2019, my role expanded again to include the ECI European Distribution business which serves OP dealers throughout Europe.

BIG INTERVIEW Brian Bowerfind

The biggest difference I’ve seen in our industry versus many others is mobile commerce. We’re slow in adoption here OPI: You’ve been a pretty frequent traveller across to Europe over the past year. I guess those visits have lessened somewhat given the current situation. BB: Yes, we’re all in the same camp in that regard. I’ve had one trip to Europe this year in late January which focused on customer and team 2020 kick-off meetings. Travel has certainly diminished and isn’t a priority right now.

OPI: How does our industry’s adoption of technology and the issues you’ve just referred to compare to the sector you came from – hospitality I believe? BB: I would say the use of key core technology solutions like ERP systems which drive day-to-day operations is very similar. Companies want to do more with those systems, they want to extend them and integrate them with third parties where it makes sense. The biggest difference I’ve seen in our industry versus many others is mobile commerce. We’re slow in adoption here – it’s picked up over the past few years, but it’s not out of the single digits yet. The demand to use tablets or smartphones as media for e-commerce just isn’t there in bulk. We talk about it a lot at conferences and with our customers, ie dealers, but it’s still in its infancy.

July/August 2020

OPI: Absolutely. Before we launch into this in more detail, let’s take a look at what we now refer to as ‘pre-coronavirus’. BB: Well, the topics from a technology perspective were numerous: mobile, big data, content, omnichannel buying experiences, e-commerce, data security, to name just a few.

Technology companies such as ECI continue to do all they can to address these issues with products, solutions and services. Our aim is to help our dealers drive additional revenue or reduce costs – or both. Certainly in the past few months, we’ve become more laser-focused than ever to achieve this.

Brian Bowerfind BIG INTERVIEW

OPI: Are you referring to a lack of demand from dealers and an unwillingness to offer options or from their customers, ie the end user? BB: Definitely from the end user. People who buy the products our industry sells typically sit at a desk and order what they need from a desktop, it’s as simple as that. Where I have seen mobile solutions used more often is at the backend – dealerships approving or not approving transactions, for example. OPI: You’ve had mobile functionality for some time. How do you deal with that reluctance? BB: You’re right, we launched a mobile solution over six years ago. We’ve worked hard to make that channel attractive and we work with dealers all the time to help them promote the flexibility, extensibility and technology mobile brings.

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OPI: You next mention big data. BB: Data in general – metadata, big data – is very important from a competitive standpoint today. Understanding consumer buying habits, price elasticity, what products are selling in what areas of the country – all of that is really important and we’ve been working on this for some time now. We have a solution called Acsellerate which deals with business intelligence and CRM functionality. We felt that data, and the understanding of it, is so crucial that we’ve included one base licence of Acsellerate in 100% of our ERPs both in Europe and in the US. We also released a new platform called Cognytics in Q3 last year. This concentrates on analytics and insights from disparate solutions. We’ve been very successful in terms of focusing data analytics on what happened and why did it happen. We’re now shifting into predictive analytics looking at what will happen and how can we make it happen again. This new platform combines it all and then provides that ‘new’ data to our users via reporting and/or dashboards. Data is not just an OP industry problem, it’s a problem for anyone. In this day and age, you’ve got all these databases everywhere and they all have really important information in them. How do you get the data out of these various systems, put it in a consumable format someone could digest and make actionable business decisions off it, display it in almost real or, better even, real-time fashion? That’s what Cognytics does.

OPI: I know what you mean. Having all the data is one thing; presenting it in a meaningful way that results in action is quite another challenge. Let’s talk about some of the other issues in the context of the current situation. Like many people, we’ve both been sat in our home offices now for about three months. How has this global pandemic affected the previously important issues you raised? BB: Working from home has obviously placed greater emphasis on the value that cloud computing brings to those who use computers to get their jobs done. For ECI as a company specifically, it was fairly straightforward and we

were able to transition 100% of our employees around the world to remote work within a few days. Over 80% of our customers have their ECI ERPs in the cloud, so that made the transition much easier for them too. Those needing to get to the office in order to access an on-premise solution were more challenged and had to figure out a lot of different processes quickly. Again, it really highlighted the importance of cloud computing.

The topics that were important six months ago are still crucial today and do have a heightened sense of urgency OPI: I’m not so much talking about the really short-term challenges, but the things you mentioned earlier – mobile, big data, content, security... Have any of them come to the fore or accelerated given the disruption that we’re currently experiencing? Are any redundant? BB: I certainly don’t think any of them have disappeared. The topics that were important six months ago are still crucial today and do have a heightened sense of urgency. Understanding where you have opportunities to sell big data during this pandemic is very important. Once you’ve identified the ‘where’, you will want to make sure your user’s buying experience is the best it can be and that takes great content. Finally, having all of this take place in a secure environment goes without saying. OPI: Talking of security, French retailer Bureau Vallée recently got hit with a cyberattack and had a whole bunch of data stolen. BB: It does happen which is why data security should be a large part of the technology

OPI: OPI has been banging the technology, in particular the e-commerce, drum for many years. What we’re seeing now is really a kind of vindication of its importance. I’ve been hearing anecdotally that those businesses which have invested in technology solutions are weathering the current crisis far better than those that haven’t. BB: I would agree with that, although I wouldn’t call it “vindication”. It just promotes and continues to drive home the value proposition that technology can bring to a business. When used properly, it can really help move the needle. It can enhance processes and procedures, and give you great visibility of your business. OPI: We spoke about this before and you said the investment independent dealers are required to make from a tech point of view is small in relation to their overall SG&A expenses. Do you still maintain that? BB: It’s an ongoing conversation. All technology companies have a development plan which aligns with the industry they serve and we are no exception. I wouldn’t say the investment independent dealers make in technology is small, but I would say it’s upon us as a vendor to continue to add value, so that the value derived always outweighs the investment made. OPI: So how well placed and agile are dealers to compete from a technology point of view? New product additions, such as personal protective equipment (PPE) which has become hugely important, is something that springs to mind immediately. Good technology must help immensely with this type of thing. BB: Overall, I think they’re very well placed. I’ve had many customer conversations recently related to the headwinds they’re facing from the pandemic. I’ve been very impressed with their entrepreneurial spirit and ability to quickly pivot from categories which were lagging to those like PPE and jan/san that are doing well. It’s important that the technology they use can easily support these transitions. As an example, should a dealer want to start selling jan/san, it will want an ERP system which supports deviated costs functionality. Without that functionality, selling in this environment could be difficult. As

such, you need to have a technology partner that has built up years of deep robust functionality which supports a wide range of categories. But I believe – and I’ve said this many times before – where dealers really differentiate themselves is service. The big boxes and Amazon just don’t have those relationships with end users which dealers have; they can’t deliver that white glove service the independent dealer community (IDC) can. It’s still a huge differentiator. Customers buy on relationships and not just on price. OPI: The consensus here in Europe is that local, family-owned businesses will see some benefit from a change in consumer sentiment as we get through this pandemic. Would you say the same is true for North America? BB: I do absolutely, not just in our industry but in all industries. I think we’re all in agreement about how important small, entrepreneurial businesses, whether they be office products dealers, restaurants, retail or other operators, are for the economy globally.

BIG INTERVIEW Brian Bowerfind

conversation. We make significant investments each year into our data centre technology with much of the spend focused on security.

OPI: You’ve just mentioned Amazon. How engaged – or not – are our industry’s resellers with that operator? BB: It’s a perennial discussion and there are two answers from my viewpoint. We have dealers that have found a way to work with Amazon. A few of them have told me they do 30-35% of their total business through Amazon. Others don’t want anything to do with this player, end of story. It’s their prerogative and I understand that. If there’s such a thing as a trend, I would say more of our dealers than not are working with Amazon and figuring out how they can still be profitable with this operator in the mix. OPI: What about the other big US and global operators – Staples, Office Depot, Lyreco, etc? How does the IDC – and solutions providers like ECI – stack up against them? BB: The technology tools are there to compete. Big box retail, as well as online e-commerce firms like Amazon, will always have a larger technology development budget than we have. Today, we spend roughly 24% of our dealer-derived revenues on R&D – it’s significant, but not comparable. The clue again lies in differentiation through service.

July/August 2020

OPI: On that service note, what kind of changes do you foresee you’ll have to make to your technology as a result of dealers embracing more of a solutions model, as supposed to just transactional sales? BB: What’s really important in that context is to complete a 360° view of a customer, ie you don’t just look at the transactional side. The IDC has continued to expand its product reach year on year, adding jan/san, breakroom and most recently, as we’ve just talked about, PPE. This channel is getting very creative in terms of shifting categories and understanding who they can serve. But to maximise the opportunities, much better integration with customers’ systems and

Brian Bowerfind BIG INTERVIEW

integrating those into their own ERPs is vital. We’ve been working on that for years and are expanding the Application Programming Interface (API) community. OPI: How would you summarise the relationships with your other industry stakeholders – the wholesalers, the vendor side, the buying and dealer groups? BB: We have very good relationships with the wholesalers and the buying groups. We have mutual customers and it’s important that those customers see us working together, constantly evaluating how we can solve their problems and help grow their business.

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OPI: As a relative newcomer to the industry, but having been in it long enough to have an opinion, do you think our sector is structurally and technologically fit to cope with the ongoing changes in consumer buying behaviour? BB: There will always be room for improvement. But from my vantage point, I think the industry has done a good job of working together and delivering what’s needed. When consumers started to purchase more products online, wanted to see stronger e-commerce platforms, more content, product reviews and so on, from a base technology footprint that’s all out there today. We have gone through a complete metamorphosis and are now very capable of reacting to dealers’ needs, whatever they may be. Coronavirus is a good example. We’ve seen certain categories go down while others have come up and many dealers have been able to successfully transition from one product category to

another. There are a lot of operational and technical complexities to achieving this and they’ve needed a partner that can assist them with this quickly. All in all, the industry is well positioned for the challenges of today and those we’ll see in the future. There will be dealer and supplier consolidation, no question, but I think the underlying technology to support the change is there. OPI: Consolidation aside, what else do you see? BB: Multi-category availability is so important – it’s like diversifying your investment portfolio. We’ve already talked about the rise of PPE. There’ll be other headwinds in the future, perhaps of a completely different nature, but diversification will be key, I’m convinced. Anyone focused just on a single category today is vulnerable to disruption. OPI: What about companies like ECI and, of course, your competitors? You provide a fundamental component to any company’s business continuity plan. Does that make you feel fairly confident about your role going forward, given that technology is absolutely at the heart of what we all do? BB: You’re right. If you look at the spend of dealers, they invest significantly with their wholesaler as well as their technology partner. Those are typically the two biggest partners they have, so it’s important for them to know that those businesses will be there for the long haul. One of the things ECI is good at is diversification – what I said earlier doesn’t just apply to the IDC. As you know, we’re not just in distribution, office products and contract furniture; we’ve got a manufacturing vertical, a building and

OPI: Over the past 20 years, your potential IDC customer base has diminished as a result of consolidation. That, as you predict yourself, will only continue. Should dealers be concerned about their importance within ECI? Will you start pulling back on some of that R&D spend you mentioned to focus on more lucrative industries and verticals? BB: Good question. But we don’t look at it that way. The Distribution division within ECI is still a significant contributor to the overall success of the company. The needs of our customers continue to grow and with that we will carry on investing in our solutions. We have not pulled back in R&D in any way and have no plans to do so. OPI: What are the geographic opportunities beyond your main UK and US markets? BB: As you say, the core is the UK and the US, but we are very focused right now on Canada as well. We’ve had a few large dealerships join us over the past year from Canada. We’re working with some key distributors and buying groups north of the border currently, so we have a nice pipeline up there. OPI: The Australian market has always appeared ripe to me for a solution like yours. Have you ever taken a close look down under? BB: We’ve looked at it, yes, and we do have some interests down there. I would expect any growth in that region to be inorganic in the short term, but we haven’t found the right opportunity just yet. But I do agree there’s potential. OPI: What about continental Europe? From what I remember, you have a five-year plan. How is that coming along? BB: Yes, we did kick that off last year after I had joined ECI in Europe in June. It’s actually a nine-point plan we have now and despite the pandemic we haven’t wavered too far from it.

OPI: You’ve had a business in Europe for many years. Why has it taken so long to kick-start that again? BB: That’s a tough one and I don’t have a great answer for you because I wasn’t here. All I can say is that it was something which was quickly identified when I joined and we’re doing it now. OPI: I’m not going to ask you to elaborate on your specific solutions here – you’ve mentioned a couple of them during our chat and I believe there are many more (see also ‘Software Pick’n’Mix’, page 32). But is there anything that you found has been particularly relevant during these COVID-19 times? BB: We’ve very recently released a product called Margin Accelerator which is proving to be particularly topical in the current circumstances. Our customers want the ability to maintain a particular gross margin on many of the SKUs they sell. But the costs of those products change frequently and there are challenges in maintaining profitability. Margin Accelerator is a solution that helps dealers with this challenge. As you say, we have a huge range of solutions. We are here to help solve customers’ problems and I think we do that well with all the solutions we have, from ERPs, Private Supply Networks, e-commerce and mobile commerce, to Punch Outs, CRM, inventory management and all manner of analytics. Some dealers take advantage of all those products, others use just a few. That’s all fine, of course, but what we have to make sure is that they are aware of all of them so they can make the choice. I get frustrated from time to time when I talk to dealers about the various solutions we offer which can really help their business and they just aren’t aware of them, don’t understand how integrated they are, how easy they are to implement, and how there’s an immediate ROI. A large part of our job is to be a trusted advisor. One that really listens to our dealers’ challenges and helps them solve those obstacles with the use of our solutions. This is the job I value the most. For more exclusive content from the interview, please visit the Magazine section on opi.net.

July/August 2020

OPI: What’s the overarching rationale behind the plan and what are you hoping to accomplish at the end of it? BB: It’s all about bringing the business to the next level. We took a close look at making sure we had the right team members in the right roles, for example. We’re also currently streamlining a lot of our implementation processes. And obviously, we always want to shorten those processes wherever possible. We’re looking at maximising functionality. This goes both ways, meaning we have some great

functionality in some of our solutions in the US that Europe could take advantage of and vice versa. Essentially, we’ve spent the past six months taking the best from our ERP systems and implementing them in others so we can expand that functionality to our entire user group. I mentioned third party integrations earlier. We’re extensively working on our APIs in the European market and with third party categories. Again, this is about category expansion: where are we not playing today; where would our solutions need to get better as relates to supporting the constituents and the customers that we have in the European marketplace today? All these things describe the essence of what we’re doing in Europe.

BIG INTERVIEW Brian Bowerfind

construction vertical, a residential home construction vertical and a field service vertical. They all have their ups and downs, but put together it makes for a very stable company. One of the very first things we did when the pandemic hit was to send communication out to all our customers that business continuity has been established and everyone is going to be able to do their job at ECI. I believe that was a crumb of comfort in the early days of this crisis.

HOT TOPIC

SPR’s 2020 vision

With the ink finally dry on the paper, Mike Maggio and Yancey Jones talk about their plans for US wholesaler S.P. Richards

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fter months of speculation, on 30 June 2020, the news broke that Genuine Parts Company (GPC) had sold US business products wholesaler S.P. Richards (SPR). That in itself wasn’t a big surprise. The buyer? None other than Yancey Jones and Mike Maggio. Certainly a surprise, even for the most fervent of industry followers. All previous ideas we had for this issue’s Hot Topic quickly had to take a backseat for this hottest topic of the year, COVID-19 notwithstanding. The OPI team quickly – press day was looming large – went to work, trying to find out more about the deal and were granted an exclusive interview with the two main protagonists.

OPI: Our first question: what were you thinking, buying a $1.5 billion company in the middle of a global pandemic? Mike Maggio: (Laughs). Well, we didn’t come up with the idea in the past few months. It’s been going on since the Essendant/SPR deal blew up in 2018. We started discussions with Treg Brown, EVP of Corporate Development at GPC, even before it was finalised that Staples was buying Essendant. The premise was simple and we both felt exactly the same way about it: the industry needs an independent wholesale distributor of business products. It was clear GPC was going to sell SPR at some point, and we both thought that, if SPR was for sale, why wouldn’t we buy it?

It had nothing to do with Independent Suppliers Group (ISG), nor with Yancey’s The Supply Room, one of his former companies, now owned and run by his sons and daughters-in-law. We’ve worked together and talked about buying something together for years. As I said, the industry needs an independent business products distributor. But I would quickly like to add that all resellers need this. 50% of SPR’s revenue does not come from independent dealers. Our customers, in equal measure and of equal importance, are also e-tailers, big boxes and so on. Every company that qualifies as a reseller is a potential and valued customer.

Mike Maggio

OPI: Can you tell us a bit about the funding of the deal? That topic probably also ties in with the make-up of the management team. MM: Let’s start with the management team. Rick is retiring, but is going to stick around fortunately and be a consultant to us for at least the next few months. He will also be on our board of directors which we’re very happy about. Yancey will be Executive Chairman of the company while I’m going to be President and CEO. Chad Lee has left the company, but the rest of the management team is intact and very experienced. As regards funding, there are several sources: SunTrust Banks – now known as Truist – provided the majority of the funding in combination with four other lenders. So there were five banks in total. GPC put some money into the deal as well, and then it was Yancey and I along with a small number of minority investors. Between the two of us, we own just over 75% of the company. The rest of our shareholders are a variety of people that own independent businesses, some from within the industry, some from outside. We’re privately-held now, so our intention is not to disclose the other investors. They have no say in the business and it’s up to them whether they tell people they’ve invested in SPR. OPI: Are you able to divulge how much the transaction was worth? MM: (Laughs). Nice try, but no.

COVID-19 and did not have a single month of negative results. Again, our vision is simply to be a wholesale distributor of business products. But our model going forward will be a bit different from the current one. The merchandising strategy will change, for example, to be more market driven versus catalogue cycle driven. We want to make sure we have all the products that our customers and suppliers are telling us we need to have.

We bought a profitable and cash flow-rich company with a solid foundation When it comes to customers, there’s no such thing anymore as being a first or second call wholesaler. We will distribute to everybody that qualifies as a reseller of business products and we will do a good job for all of them. Finally, we will work much more closely with the manufacturers. It means we want to sell all of their products, whether they are in our warehouse or not. But we want to have access to them and make sure our resellers have access to them. In other words, we want to be vendors’ distributor as well as logistics provider. OPI: What does that mean for your relationship with ISG, for example? You obviously left the group and Mike Gentile is in charge now? MM: Both Yancey and I are firm believers in buying groups and what they do for the community, and we want to work very closely with ISG as we go forward. But we’ve already said to folks like Avery and Fellowes that we want to be their distributor, so when a dealer places a direct order with them, we can do the last mile. It’s more efficient and ultimately takes cost out the channel, which means we will all benefit and be healthier. There’s a lot of work to be done, but the banks, GPC and the SPR management team all love the vision and the strategy and tactics around it.

July/August 2020

OPI: Buying a business of this size in the current climate was a bold move, no doubt about it. But it’s also a fact that SPR wasn’t in the best state of health before the coronavirus hit, and faced a lot of secular challenges and headwinds. What do you think you can do differently that made it an attractive proposition for these five banks to stump up the cash to enable the deal to go ahead? MM: I want to first of all dispel the notion that this isn’t a healthy company. We bought a profitable and cash flow-rich company with a solid foundation. SPR also did a great job reacting to

Yancey Jones

HOT TOPIC S.P. Richards – Sold

OPI: We understand the need for an independent wholesale distributor. But you obviously proactively instigated the conversation rather than GPC making a move. Were you worried that SPR might end up in the hands of Office Depot? MM: Rick (Toppin, former President/CEO) probably said it best in terms of GPC’s outlook. He called it door number one, two or three. One was a deal with Essendant, which may have worked, but clearly didn’t happen. Door two could have been a sale to private equity. It’s debatable whether that would have worked – Sycamore Partners and Essendant are a good case study here; whether that deal turned out to be a good one is very much in the eye of the beholder. Door three could have been a combination with Office Depot. Yancey and I don’t believe any of these three options would have been ideal for the industry nor, quite frankly, for the people at SPR.

S.P. Richards – Sold HOT TOPIC Yancey Jones: We’ve had some excellent feedback from the manufacturers – they are very enthusiastic about this opportunity. They see their products being in the market less and less, and we’re giving them some hope that we’re going to be able to sell more of their SKUs. We stock 98,000 items right now, but there are probably another 200,000 to 300,000 SKUs out there that we do not have. We can still deliver those products to customers.

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OPI: Why do you think these initiatives weren’t taken by the previous SPR management team? MM: That’s not for me to answer really. But I want to reiterate that SPR is a great company. We’ve not by any means just bought a pig in a poke.

OPI: Also with vendors in mind, how have they responded to this new situation whereby SPR – outside the GPC umbrella organisation – is considerably smaller than Essendant as part of the Staples/Sycamore stable? How will it impact pricing, for instance? MM: We’ve been talking to six manufacturers from the very beginning to make sure the vision we had and where we wanted to take the company would fit with their long-term goals. And they couldn’t have been more supportive or enthusiastic throughout this whole process. As far as the others are concerned, it’s day one. I don’t have an answer for you there. YJ: I would add that we’re going to really focus on US manufacturers and see what we can jointly come up with to be able to grow their brand. We’re hoping we will be a core vehicle for getting their products out there through all reseller channels. There are some big brands in our sector – Swingline is a stapler that’s been around for 100+ years, for instance. We want to keep that name in front of the end consumer rather than exchanging it for a non-descript product sourced in China. I’m not sure our size, compared to that of Essendant/Staples, is at all to our detriment. Ours is an entirely different proposition. OPI: With regards to Amazon and Office Depot – your two biggest customers – I assume

it will just be business as usual in terms of your relationship with those two players? MM: Absolutely. They’re both very important to us and our go-forward strategy, and we’re going to work very closely with them as we look to grow our revenues over the years. OPI: Something else that we believe will be on our readers’ minds is this: we’re in the middle of a pandemic that heightened the need for personal protective equipment, safety and hygiene products. Why weren’t the businesses under the Supply Source Enterprises entity included in the deal, but divested separately? MM: We’re very much focused on that product mix, I can assure you, and are most certainly not abandoning it. In fact, we have an entire strategy around growing the jan/san business which just needs to be implemented. We’re growing the category as well by about 1,500 SKUs. But we’re not manufacturers and that’s what The Safety Zone and Impact Products essentially are to some extent. We told GPC during the very early negotiation stages that we’re not interested in Canada [editor’s note: hence, presumably, the sale of the Canadian business by SPR at the beginning of this year] and we’re not interested in the manufacturing side. We’re logistics providers. Steve Schultz, who runs these businesses, is going to do a great job. And we remain a very big customer of those two companies, of course. OPI: When you announced the deal, you referred to eliminating redundant costs. Other than what you've said already, what costs do you intend to get rid of? MM: It all goes back to being a distributor of choice, for our manufacturer and our reseller partners – it’s the much better alignment of these three stakeholders where cost savings will come from. We’ll put a lot more meat around this in due course – what you’ve got right now is just the bare-bones vision. OPI: When can we expect to see some of that meat? MM: OPI will be the first to know!

Toasting the deal on 30 June 2020

FEATURE

Special Issue

TECHNOLOGY

SOLUTIONS

The voice of

TECHNOLOGY

Technology is important, no doubt about it. But what particular issues have come to the fore most recently? A divisive question it appears...

o previous single event – industry-related or otherwise – has catapulted e-commerce to the top of the agenda in quite the same way COVID-19 has. Are independent dealers keeping up? And have the issues that have been so prevalent over the years fundamentally changed as a result of the coronavirus; have they escalated or become redundant? OPI’s Heike Dieckmann spoke to a selection of technology solutions providers – the e-commerce enablers – on both sides of the Atlantic.

JOHN EVANS, OWNER, SSI

Special Issue

VENDOR SPECIAL

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CHALLENGES The main issue for dealers right now is survival, everything else is secondary. The big challenges are coming from outside the technology space – lowered demand, product availability, receivables, rising delivery costs, and several other problems related to the pandemic. That said, dealers can leverage technology to help them address those obstacles. They can use software to drive more costs out of their business, and offset some of the lost sales and problems with receivables until the economy gets back to a more normal footing. This is the kind of technology dealers need to focus on now. As an additional benefit, in doing that, it puts them in a stronger position for the next crisis that comes along. One effect of the pandemic has been to move more business to the web. Small business and home office customers who were going to big box stores before have been ordering online. Some of that business will stay online. People are anxious for things to open back up, but I don’t see them running out to buy file folders when that happens.

WORK-FROM-HOME REALITIES This is a two-pronged issue. For dealers, it depends on the flexibility of their software. We designed SSI Edge so a dealer can work from almost anywhere – their house, the back patio, the lake – wherever they have an internet connection. Those independents that are using their

wholesalers to drop-ship orders could pretty much leave the office shut down indefinitely while they and their employees carry on from their homes. It’s different when you talk about customers working from home, however. With a lot of companies turning as many of their employees as possible into telecommuters, some dealers have started delivering to residential addresses, either to retain existing accounts or to compete with Amazon for new business. It means more small orders going out to more locations which are probably quite geographically scattered. Deliveries become increasingly complicated and expensive. Technology can offset some of those issues by automating as much of the fulfilment and delivery process as possible. The basic features — ship-to addresses, manifests, routing and so on — are available in most dealer systems. Whether independents have the flexibility they need to deal with extraordinary situations like this pandemic depends on how those features have been implemented. Can dealers set up individual employees’ residential addresses as ship-to for a customer, for example? How easy is it to create and optimise new delivery routes? PRODUCT OFFERING About 90% of SSI dealers have web stores, so they were well-positioned when the pandemic pushed more customers online. And most of them already sold across multiple verticals, giving them flexibility.

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COMPETITION Before the coronavirus, dealers’ main competition was Office Depot, Staples and Amazon; now it’s Amazon. But there are also new opportunities. Amazon’s priority at present is health care and home goods, not business products, so now is the time for dealers to start stealing that business from Amazon. Staples and Depot are having the same problems independents dealers are having and, again, the real challenges are outside of the technology space – sales are down, and they are having trouble getting products, but on a much larger scale. The difference is that they are also saddled with expensive leases for obsolete retail

stores that are sucking cash out. With businesses closed and people staying at home, their retail customers have been forced to order online. Some of them are going to keep doing that, even when things go back to normal.

The main issue for dealers right now is survival, everything else is secondary BEST PRACTICE Sayes Office Supply is one of our dealers that’s been doing well during the pandemic. It’s a multi-line operator out of Alexandria in Louisiana that sells all kinds of business products, including jan/san and breakroom supplies, so it was already used to handling some of the items that customers want right now. More importantly, in addition to working with a wholesaler, Sayes had supply channels in place well before COVID-19 and was therefore able to secure high-demand, current items like face masks when other dealers couldn’t. For imported products, for instance, and where wholesalers are buying big container lots that come by ship, Sayes bought masks in small quantities that could be packaged up and thrown on a plane, so it was able to get them into customers’ hands when they needed them most.

FEATURE Technology Providers

The issue with those high-demand products is not technology, however. Most software systems handle more than just pens and paper, but dealers can’t sell what they can’t get – many simply don’t have access to the things that customers want right now. It’s a supply chain issue and the onus is on the wholesalers and buying groups to step up and help with securing those products. The pandemic obviously disrupted overseas manufacturing where a lot of these products are sourced, so some products are in short supply. Also, the priorities of some supply channel partners may not always favour small, independent dealerships.

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ANDY BALLARD, DIRECTOR OF SALES, GOPD CHALLENGES Depending on the dealers and how they go to market, many of the issues and obstacles are the same as they have been for a number of years – big data, omnichannel, security, mobile, market share erosion being some of them. For the most part, technology solutions providers like GOPD and the main wholesalers have developed tools to support independents in these areas. As many dealers – GOPD ones included – now increasingly move from a physical presence to a digital one, their challenges revolve around attracting more customers to visit their shopping cart, and getting the pricing right. Dealers generally have to accept that it is time to embrace automation and digital sales. That has an impact on the service they provide. Customer support for e-commerce is often more of a sales and problem-solving role than just order taking. Digital marketing, meanwhile, requires learning new technology and thinking in multiple levels. Flexibility in all of these things is key. WORK-FROM-HOME REALITIES GOPD is a cloud-based system, so from a dealer point of view, it’s irrelevant, as long as they have internet access. Many of our dealers’ personnel work remotely already, irrespective of COVID-19. Customers working from home or indeed both the office and the home is more of an issue, because of the logistics of delivering the products. PRODUCT OFFERING GOPD’s system offers flexibility at every level. Dealers can go to market in several ways with design, pricing and order flow, down to individual customer level and including multiple guest users. Adding non-wholesaler supported products is simple. Sourcing SKUs can be easily managed down to item level, giving dealers tools to support

different vendors for each situation. We strongly support our wholesaler partners while also working very closely with the buying groups that our dealers join. COMPETITION In technology terms, dealers often offer more tools and better content than the big box competition. With the wholesalers’ support, product portfolio and shopping cart options are also rarely an issue, with plenty of alternatives available. Pricing is a different topic, but with GOPD’s Chain Store Match or Beat program, dealers are able to address this challenge as well. BEST PRACTICE My Georgia Office Products (MYGAOP) comprises four strategically-located independent dealers that work together to serve a four-year State of Georgia general office supplies contract. Along with GOPD’s team, MYGAOP created a customised shopping cart system to do this. These dealers have done a fantastic job and we love being their technology partner. TECHNOLOGY DEVELOPMENTS GOPD has added numerous features and tools to its offering and continues to do so. Over recent months, we have enhanced order flow further by developing additional ways to handle the purchasing of products, down to an item level. We have upgraded our shopping cart options to include our 100% total cart design. We have also developed a sales rep/quote tool and continue to add options to it, thereby giving outside sales and inside customer service reps a powerful way to build quotes and orders for customers. Finally, we have added tools for dealers to do more B2C marketing including domain hosting, SEO, etc.

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JOSHUA CHAN, BUSINESS DEVELOPMENT MANAGER, THALERUS

CHALLENGES The technology issues – big data, content, mobile, etc – that were important to dealers pre-coronavirus were directly related to their market acquisition and retention strategies. Now they have become critical to survival. Without technology to support multichannel ordering and data-driven applications to quickly respond to changes, a business cannot thrive. Coronavirus has created a window of opportunity for dealers to finally implement technology solutions that they have been procrastinating about. Missing out on this potential would surely generate a depressive outlook post-pandemic as many new norms will be developed. The biggest challenge independents are facing is an unwillingness and hesitance to initiate change – and they haven’t got the luxury of waiting for the ‘coronavirus problem’

to go away. The opportunity is here now; if they embrace it, the outcome will not be insecurity and uncertainty, but assurance of survival with flying colours. I believe that end consumers want to essentially maintain a good relationship with their supplier. We also have a kind and respectful business culture – every business is hurting right now, and there’s a genuine wish to protect and help each other. In other words, customers do not want to abandon the dealers that have serviced them for years. By the same token, dealers have to understand their customers’ needs and be willing to fulfil them. Technology is a key factor that’s needed to make in-demand product lines available to customers and ordering processes more user friendly and efficient. It will also ensure that a dealer has a first-to-market advantage and is noticed by customers.

Technology Providers FEATURE

WORK-FROM-HOME REALITIES Remote working has allowed dealers and their customers to enjoy flexible work arrangements, which should result in productivity improvements. On the other hand, however, it immediately tests a dealer system’s availability, security and connectivity to other office apps. From day one, Thalerus has designed its ERP system VIBENet to allow dealers access from anywhere without compromising security. As for customers, the demand for multi-product or at least expanded product lines, choices of shipment and delivery methods has become more critical than ever before. VIBENet’s web store and rule-based supply chain programs can be easily configured to allow customers the option of shipping their orders home, for instance. COMPETITION Starting with Amazon, I believe this depends on a dealer’s vantage point. If a dealer has already established a relationship with this operator, Amazon can be leveraged as a vendor source and/or as a sales channel. In other words, it is not an obstacle. However, if there is no prior relationship, then dealers will actually find Amazon to be a huge competitor. Unfortunately, remote working has created a pseudo-consumer buying culture, even for business buyers. As a result, Amazon has become – if it wasn’t already – one of the top

choices for any buyer. Looking further down the road, once Amazon has acquired more (business) customers, dealers will have to exert extra effort earning those customers back. As regards the other competition, ie the big boxes: realistically, an independent can adapt and initiate change more rapidly if it chooses and implements good technology. For example, leveraging a feature such as a multi-product line single shopping cart, a dealer can add on product lines and supply chain workflows much quicker than a Staples or Office Depot. The question is: does the dealer own good technology?

The opportunity is here now; if [dealers] embrace it, the outcome will not be insecurity and uncertainty, but assurance of survival with flying colours TECHNOLOGY DEVELOPMENTS One of the key products in development at Thalerus right now is sales tools. VIBENet supports dynamic product lines with punchout and single sign-on integration, so we are preparing a new generation of sales tools for our dealers to use for growing their own newly captured market share.

JENNIFER SCHULMAN, PRESIDENT, FORTUNE WEB MARKETING

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CHALLENGES The pandemic has caused pivots in technology, marketing, planning, sourcing, logistics and so many other areas. But with these also come ‘pivot problems’ and this is what we are seeing right now. For example, we have been preaching about the importance of having a mobile-friendly site for years. Dealers that did not think this was important have now made it their number one priority. It’s at least something, but you don’t build an effective website overnight and the opportunity missed here is great and, truth be told, detrimental. Other issues such as big data, better content and omnichannel still have a long way to go. That said, we’ve been impressed with the dedication, resourcefulness and creativity of our dealers, wholesalers and manufacturers. Dealers have adopted new ways of sourcing products and handling logistics. This was a good ‘pivot problem’ to have as the lessons learnt will benefit them for years to come. Wholesalers and manufacturers have also risen to the challenge. While the supply chain and logistic issues we’ve seen are unprecedented and everyone is handling them in the best way they can, the supporting marketing materials from both entities have been very impressive.

PRODUCT OFFERING A big part of being able to on-board new products, perhaps in completely different verticals, has to do with the flexibility, user friendliness and agility of your technology platform. How easily can you add new products and pages? Can you SEO them to make them appear in search results easily? Can you customise the on-site search, so these new products appear in on-site search results?

COMPETITION Amazon and Amazon Business can be both friend and foe, we all know that. Some dealers are scrambling to get on e-marketplaces now more than ever to generate additional revenue streams, while others have been hurt by these types of operators. Amazon is still the 800-pound gorilla in the room and will remain so – you can try to beat it, join it or find a nice balance of the two.

Compared with the big box OP competition, dealers are not there yet with the custom online experience. Again, the onus is on the tech providers to offer the right e-commerce solutions. The use of big data into systems should have begun years ago – our industry has always been and continues to be behind in that respect. A+ content needs to be made more readily available to independents, with better places to showcase it in the detail pages. TECHNOLOGY DEVELOPMENTS There are several areas we’re working on right now: l

Expediting website builds for those dealers that did not make their sites mobile-friendly over the past five years or so. l Adding COVID-related product and service sections to websites and effectively marketing them. Depending on the dealer, this could be five or 50 new pages. l Social media – it’s in a huge upswing now. This is another area dealers seemed to be reluctant to get involved in previously; now they all want a presence. l Pay per click (PPC) ads via Google AdWords: Google still captures over 80% of US market share. While we wait for the SEO for some of these new product and service pages to pick up, or for those without an SEO strategy, PPC is the way to go, despite being more expensive.

FEATURE Technology Providers

For dealers that have used their ingenuity to source items from new suppliers, especially early on during the pandemic, this was a problem. A handful of tech providers do this well while others need to improve. As for manufacturers pivoting, I believe we have seen some amazing examples – Deflecto, Safco Products and ACCO Brands are just some of them. Wholesalers have also done a good job with all of their marketing. That being said, I think they are falling behind in some categories as far as product offerings go and I’m not necessarily talking about COVID-19 items here. We have heard this as a major complaint from dealers for several years. There’s so much out there, whether it be new tech products, novel office items from smaller manufacturers or just trendy products that dealers want to carry but can’t. From a marketing perspective, independents need to claim and utilise every single piece of digital real estate they possibly can.

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COVID-19:

e-commerce catalyst

PI speaks to Paddy Donnelly and Steve Bilton from UK-based ES Tech Group about the rise and rise of e-commerce. And the impact of COVID-19 on the company’s two core products – B2B web store platform EvolutionX and product content database FusionPLUS Data.

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OPI: What have been the most pressing issues for you in these past few months? Paddy Donnelly: The team at EvolutionX, myself included, has spent a lot of time with Steve and his people at FusionPLUS Data on helping dealers secure product. As demand has been moving away – and continues to do so – from traditional OP, the combination of the product-rich FusionPLUS database and Evolution X’s web store platform has enabled dealers to secure and guarantee supply of much-needed personal protective equipment (PPE), for example. At EvolutionX specifically, we’ve also been coming up with a huge amount of marketing and promotional material around the items that are selling now. Our focus currently is very much on how we can support dealers in executing their sales and marketing, and on how we help them offer the products in demand now. Steve Bilton: On the Fusion side, we have a lot of partners across many product verticals. We’ve taken a very close look at how these are categorised, helped dealers add products to their mix and then organise them – in terms of homeworking or infection control, for instance – so that they could very quickly and efficiently highlight them in their various campaigns. It’s not just been a case of maintaining the content we have, but to really manipulate it in order to help the dealer community squeeze the pips out of those categories that are most likely to be purchased by their existing or new customers.

OPI: You have struck up several new partnerships with vendors in the medical, health and hygiene sector I believe. SB: We have. One of the most recent sign-ups was Reliance Medical. But many of our previous vendor partners – particularly those working in plastics – have also turned their attention to changing their ranges to include visors or a selection of social distancing equipment. As a result, we’ve been sent a huge amount of new data to incorporate in FusionPLUS in these past few months. We’ve never been busier. OPI: Have you had any issues getting content from manufacturers, particularly in the traditional categories, as many have

Paddy Donnelly

Steve Bilton

temporarily closed down parts of their operations? SB: No issues at all. Vendors’ sales volumes have certainly been down, but what they’ve also realised is that online is now more important than ever. It’s as if the penny has finally dropped. We’re getting more data from manufacturers all the time, and it’s not just on the new items, but also improved content on existing products. Most of what dealers have been selling over the past few months has been online. Both vendors and dealers are very aware that they need to stand out to attract the consumer, so there’s been an amazing concerted effort to improve product descriptions, imagery and – as Paddy said – marketing on the web stores too. OPI: How well prepared were your dealer customers back in March to move to a homeworking environment? PD: I feel they’ve been quite resourceful in making the transition. What all this has done is highlight the enormous importance of cloud services. When COVID-19 first hit, I feared it was going to be the end for our business. But quite the opposite turned out to be the case. From a decade-long, slow evolution, COVID-19 suddenly jump-started the significance of e-commerce, as Steve just mentioned. With physical businesses closing up everywhere, the only thing dealers could keep open was their website – it became their business continuity solution. OPI: What about Amazon – more or less of a threat after several months of lockdown? PD: Well, you’d be a fool to say Amazon wasn’t a threat, but its focus changed from all products to a selection of products as you well know. Dealers were able to maintain service levels and 48-hour delivery, Amazon was not on many items. In terms of dealers being worried about losing business to other players, Amazon is not at the top of the list is my perception. OPI: Who is? PD: The local competition. There’s less business to go round and independents are losing it to each other. And then obviously the big operators like Lyreco always show up in the mix too.

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OPI: But the ‘falling off a cliff’ scenario that you anticipated in terms of losing dealers, didn’t really materialise. SB: Correct. We feared the worst, but dealers didn’t stick their head into the sand – they got nimble and creative with our help, found new products outside their usual portfolio and put them centre stage on their web stores.

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OPI: But this is far from over, of course... PD: Exactly right. I believe the real sting in the tail will come later on this year when, for instance, the government’s support scheme will be discontinued. Also, the demand for face masks, sanitiser and social distancing equipment is somewhat artificial. It’s not sustainable. On the plus side, the importance of e-commerce has been well and truly shown and is here to stay.

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VENDOR wide range of technology solutions they can choose from. Here are just a few on offer… SPECIAL Independent dealers, particularly in the US, have a

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SSI has two software packages aimed at the North American office products industry – SSI Edge and SSI Web. The former is the company’s new dealer business system, the successor to its SSIop system and a complete solution for managing the back office efficiently. SSI Edge is a fully graphical product that provides OP dealers with an efficient business flow and runs on a modern, open-source platform. Released in 2018, the software has already received a number of upgrades and new features thanks to SSI’s aggressive development schedule. SSI Edge also interfaces with a number of different marketing and business analysis tools, including Remarkety, ZOHO reports, Zapier, Sugar CRM and BPM Online. SSI Web, meanwhile, is a B2B web store that integrates with SSI Edge. It’s SEO-optimised and has features that allow dealers to compete with the big e-commerce sites, together with the tools to help them sell the products that make them the most profit. It also has a responsive design so it’s compatible with mobile devices. Like the company’s dealer software, SSI Web is continuously updated to provide the features required to keep dealers competitive. Find out more: www.ssiop.com

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ECI

ECI Software Solutions provides complete, cloud-based business management solutions that enable independent dealers to adapt and grow in an ever-changing business environment. They can accelerate their growth and ECI ERP usage with additional solutions and services tools to improve e-commerce, increase margins, easily analyse information from multiple locations, and increase efficiencies. The new Margin Accelerator service provides integrated end-consumer pricing matrixes that increase gross margins while maintaining customer loyalty. Ecommerce Website Design Services, meanwhile, provide a modern storefront design, compelling banner ads and email templates to generate incremental customers and revenue. ECI works with dealers to develop and maintain their site, so they stay one step ahead of the competition. Weekly analytics reports help to continually increase traffic and online sales. Acsellerate is a CRM and business intelligence tool that helps dealers to consistently anticipate and respond to customer needs, make better business decisions, and increase customer satisfaction and loyalty. JumpTrack proof-of-delivery (POD) software replaces paper-based systems with electronic manifest lists and signature capture. Electronic PODs increase fleet efficiency, while helping dealers improve customer service by using real-time information accessible from any device. Find out more: www.ecisolutions.com

GOPD GOPD’s OP-24/7 Shopping Cart system was designed specifically for office products dealers. The company has been working closely with dealers and wholesalers since 2005 to develop a user-friendly cart, designed to provide shoppers with the tools they need to research, browse and buy products quickly and easily. The system also helps dealers automate their business with extensive back-office functions tailored to fit their specific needs. GOPD continuously adds new functionality to its system, and flexibility in the program means dealers can pick and choose what works best for their business. Features include increased cart customisation options, hosted work servers, domain hosting, SEO, and an enhanced mobile-friendly cart. GOPD offers an extensive interface to QuickBooks and the ability to interface with other accounting systems. Find out more: www.gopd.com

OPSOFTWARE OPSoftware is leading the crusade against institutional sellers and has been doing so for many years. From developing the very first chain store item number cross-reference system decades ago to dynamically pricing hundreds of independent web stores today – the tradition continues. The reason OPSoftware has managed to survive and thrive for so long is because it never sits still and always evolves and adapts. When Amazon entered the scene, OPSoftware was the first and only company to provide much-needed competitive intelligence to independent dealers. By partnering with up-and-coming system providers, it then developed accounting integrations and system conversion processes to assist dealers switching from legacy systems that are holding them back from evolving. OPSoftware has been a trusted source for dealer technology and competitive information for decades – it’s here to meet independents’ needs today and will continue to meet their changing requirements in the future. Find out more: www.opsoftware.com

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In this How to… guide, Rick Marlette urges independent dealers to get their website functionality and technology in order to go with the current and ongoing homeworking flow

or many, the sudden transition to working from home in these past few months has been difficult. For others, myself included, it’s been a much longer process. Over the past 20+ years of being home office-based, I’ve learned a few things. The importance of technology is one of them. While I still like to buy my groceries in person, pretty much everything else I need is bought online. And anyone who knows me at all will be well aware that Amazon is not my go-to portal. I truly believe in the benefits of buying from local independent businesses and will go to considerable lengths to avoid the institutional sellers. With home-based working likely becoming a permanent fixture, even in a post-COVID-19 world, understanding and taking advantage of this new situation is paramount to independent businesses.

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SIX-STEP GUIDE Here are six of the most important steps independents should take to make sure they are ready and capable of taking care of the new professional homeworking brigade.

1. Show pricing on your website Nothing is going to save you if you don’t have a priced website. You can’t make up this deficiency by any other means. None of the jargon about “bulk pricing”, “contract pricing”, “log in for

price” or “contact us for pricing” is going to work. You have to get your pricing right, you have to be competitive, and you don’t have to sacrifice contract pricing to large customers in the process. A combination is all doable today, it just takes effort and guidance. You don’t have to beat everyone’s price, no one does, and your margins are likely to increase with a solid pricing strategy. In this information age, attention spans are shorter than they have ever been. Your potential customers need to immediately be able to discern why they would buy from you instead of Amazon or another of your competitors. After all, they are just a click away and your customers can pull up your site and Amazon’s and compare – it’s so easy. Rick Marlette is the designer and creator of OPSoftware. He has worked independently for many years in various facets of the office products industry, developing specialised programs and databases for independent OP dealers.

2. Your website has to rock By rock, I mean blow me away. It’s near impossible to overdo it here. If you skimped and went with a cheap solution, it’s going to show immediately. People can see through this. Is your website telling me, “I don’t care much about my image or my company?” or is it saying, “I operate an on-the-ball organisation, and you can trust us to take care of you, your values and your business?” When you are travelling with your kids, are you going to stop at the cluttered, dimly-lit and seedy-looking shop? Or does the clean, organised and well-lit outlet seem like a safer place to be? When dealing with the home-based worker, your website is your shop – the only one you have.

card. Just like I can with Staples, Amazon, Walmart, Office Depot, Quill, Target and every other major retailer in the world, I should be able to easily place an order with you. Otherwise, why would I bother? 5. Add new and relevant products to your site You can always add another wholesaler to your website if your existing partner doesn’t have all the SKUs you want to offer. Check with your system provider to see which ones are available. Consider adding new product lines such as food, hygiene, personal care, medical or home

If it’s not simple and quick to buy from you, your chances are slim to non-existent – there is really no excuse not to have someone working on this for you. Of course, SEO firms are not all created equal and it’s important that you vet who you decide to work with. You wouldn’t want any questionable characters doing construction work on your physical shop, so you wouldn’t want the same for your website. 4. Make it easy to buy from you Frustration is the number one reason I will bail on a site and never come back. If it’s not simple and quick to buy from you, your chances are slim to non-existent. Finding local independents can be tough enough, but when you send me searching for links, pop-ups and redirects to someone else’s site, just to place an order with you, my frustration cap is exceeded. One site where I can search for products and place them in my cart – that’s what I want. Logging in should not be required to place an order. Oh, and I want to check out with my credit

HOW TO... Website Best Practice

3. I have to be able to find you Just like the most important factor in real estate is ‘location, location, location’, the most important factor in online selling is ‘SEO, SEO, SEO’. Your website has to be search engine optimised if you expect to be found by the new work-at-home economy. “I would buy from a local independent if I could find one” is the most common answer to the question “Why don’t you buy from local independent dealers?” If you don’t know how to implement SEO on your website, recruit someone to help you. The internet is rife with SEO companies for you to choose from

office furniture. These providers and products are all out there, waiting for you to find them. Work with your system provider to get these wholesalers and product lines added to your website. Sometimes this can be easier than you think – and very often it is. 6: Implement a stay-in-touch email campaign Stay in touch with your new customers via email specials, new products, training videos or anything to keep your business in those customers’ mind. I always look at the email specials from my favourite websites. But be responsible about it: don’t overwhelm but stay consistent – email marketing can produce huge results for little cost. Importantly also, make your email blasts stand out and make them personable. Everyone’s inbox is flooded with tons of these every day, so it’s vital that yours hit home and aren’t robotic. Your customers want to be related to. Three excellent independent websites that tick all my boxes are: hoppstetters.com, courtofficesupplies.com and advanceoffice. com. These three sites are easy to find, show competitive prices and have diverse product selections. None of them went the easy route with their design and aesthetics and they all use different system providers.

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IN SUMMARY With Amazon struggling to deliver on several fronts, home-based workers are looking for new sources. Implementing these best practices will ensure that your company is in the best position to take advantage of the new home office community. Social distancing isn’t going away anytime soon. And even if a cure, vaccine or effective treatment is developed for the coronavirus, a significant number of those employees sent home to work will undoubtedly remain home as businesses are seeing – many for the first time – the benefits of reduced cost, reduced stress and increased productivity associated with having their employees based at home. Now is the time to implement changes because ordering online as well as home delivery are the future. Why fight the current?

FEATURE

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POSTPANDEMIC World

There’s no doubt COVID-19 has upended the working world as we know it, but what does the ‘new normal’ look like for the OP industry? OPI finds out...

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ne of the biggest upheavals of the COVID-19 pandemic was the instruction by governments to work from home. This has severely affected the OP industry and continues to do so.

JOHN BARRETT, EXECUTIVE DIRECTOR, ISSA Business supplies dealers have been reinventing themselves for the past decade. As the use of traditional OP has declined, they have increased their offerings in other categories such as furniture, jan/san, breakroom, managed print services, and promotional products. As a result, dealers have been considered ‘essential businesses’ during this pandemic. Nearly all will survive, and many have thrived as a result of their nimble business model. Savvy dealers will take what they’ve learnt during this crisis and develop a plan to meet the needs of their customers, maximising short-term opportunities while transitioning to a longer-term new normal. Businesses will adapt inventory, marketing and training. As more people work from home, solutions will evolve to provide business supplies, ergonomic products, office furniture and residential delivery. Products and services will support enhanced cleaning solutions, social distancing and better personal hygiene for urban and public sector accounts. More emphasis will be placed on training and expertise in products used for cleaning and disinfecting, as well as personal protection. Being a trusted resource for clients will be critical. The training and resources available from ISSA and IOPFDA will be a big part of this, especially the new qualifications delivered by the Global Biorisk Advisory Council (GBAC), a division of ISSA (see also News, page 7).

Now, as companies and individuals are beginning to slowly emerge from lockdowns, they are getting to grips with a new way of life and working. The business supplies sector is no stranger to battling headwinds, but this

time it’s not on its own. The coronavirus has created a global ‘new normal’ in mere months, but what does this really mean for our market specifically? Michelle Sturman asked a number of key players in our space for their thoughts.

JAN VAN BELLEGHEM, MANAGING DIRECTOR, INTERACTION In the ‘new normal’, there will be more homeworking, with people being in the office less often. It will have a negative impact on the consumption of traditional office and catering supplies. We will see further consolidation of the market, both on the suppliers and manufacturers side in the traditional office products and paper section, as well on the distribution side. There are just too many players in a market that needs less. Interaction is accelerating the development of its personal protective equipment (PPE) range and has identified products to source jointly and those that for practical reasons better remain local. Over these past few months, we have gathered a lot of information and sources in this field. It would be a shame not to capitalise on it. MARK COOPER, PRESIDENT, AVERY It strikes me that the two most significant long-term implications for the new normal are the accelerated rise in e-commerce and the potential for more remote working. Many are now suggesting that the COVID-19 crisis will have a step-change impact on the rise of e-commerce. The pandemic has moved more people online who may not return fully to traditional retail. The OP sector has already seen a steady move to online purchasing, and we can only assume that this will be further accelerated post-pandemic. The second area of significance will be a propensity towards remote working. Where there is little impact on productivity, companies will consider this part of their new normal in the future. Employees who have become used to this will also be more demanding for greater future flexibility from their employers. The rise in the use of technologies such as Zoom and Slack are persuading people that more meetings and communication can be done remotely. It’s likely that in many of our offices we’ll see a rise in more frequent and permanent telecommuting. We’ll potentially see reduced travelling for what would have been face-to-face meetings in the past, as there is now a greater acceptance that some of these can be achieved via video conference calls. In terms of the products ordered and consumed, there will be more home deliveries, the demand for smaller pack sizes and purchase quantities, along with different assortments. We have seen an increased focus on PPE because of concerns for health and safety in the office. Some of this may stay around but, in my view, mask-wearing, for example, will be more of a short-term solution rather than something which will be part of any new normal. We’ve also had to adapt faster to changing consumer requirements and have been able to pivot to bring products to market much quicker than we had typically done in the past. This rethink about how we operate will have lasting implications for our businesses in the future and put us in a position where we can react better to evolving consumer needs.

SIMON DRAKEFORD, CEO, EO GROUP I believe we may see further challenges to some businesses in our supply chain as the cost protection initiatives unwind and revenues don’t fully return to pre-COVID-19 levels. Credit will become a new battleground as cash is squeezed and service levels will be compromised as new working practices are adopted. Some positivity will result from those companies that have been able to pivot to support the demand for PPE. However, the supply chain will normalise and requirements will settle. This opportunity needs to be great enough to mitigate the risk resulting from a lack of demand due to new working practices and the dramatic rise in unemployment that the UK economy is likely to suffer. I expect further supply to come out of the channel which may help those that remain. The EO Group was not immune to the dramatic impact the pandemic has had on our sector and at its peak, we experienced an approximately 50% reduction in turnover. During lockdown, we saw a significant shift in our online businesses away from B2B to B2C orders as customers bought for themselves at home. Revenues are steadily climbing as companies open up again, and we are optimistic that the small business customer segment will return to some levels of new normal quicker than the corporates. Office Power, our dealer software/services platform, has seen considerably increased interest as progressive dealers realise that adapting both the structure of their businesses and the way they go to market is critical if they are to ensure survival. We have also seen much larger dealers engaging with the model. It is a trend we expect to continue.

FEATURE The New Normal

ALEX DUNN, MANAGING DIRECTOR, SUPERSTAT With the new normal likely meaning a prolonged recession and more people working from home, many dealers don’t expect to see a return to pre-COVID-19 levels of traditional business quickly, or even at all. Several also have concerns about long-term profitability. One area where dealers do expect to see continued growth is in the technology sector – and long after sales have ceased to be propped up by coronavirus-related hygiene and safety supplies. Having seen a big upheaval in the UK wholesale channel (see also Advertorial, page 48), dealers feel that a more efficient, lower-cost model is essential to their future profitability. Where dealer principals have been more hands-on recently, they are looking at streamlining their logistics and purchasing processes. At the same time, their customers have been much more flexible in their service expectations during the crisis, which is adding to that thought process. At Superstat, the whole industry shake-up has probably given us a more relevant offering for the future, with better margin opportunities for dealers and a vast range of technology products and expertise. JULIE HAWLEY, MANAGING DIRECTOR, OFFICE FRIENDLY Mobilise, mobilise, mobilise. That’s been the call from Office Friendly from the beginning of the pandemic. Don’t hide and hibernate before analysing your business – this will be the consistent message going forward. The industry has been hit in both the service and product sectors. Every company has had to assess to what degree it tries to operate during the next few months. Business models will be tested to see if the traditional versions are still valid or need to be repurposed. The term ‘new normal’ suggests a period of consistency, but I don’t think we will have that for possibly at least 18 months as we come out of the first wave of debt, unemployment and deferred payments. Survival of the fittest, collaboration, working key relationships, and a sense of community will all play a part if we are going to help one another through this. I can’t predict what the new norm will look like at this stage, except to say that areas such as online and homeworking will be part of it more than ever. The supply chain will continue to be challenged as suppliers look for new routes to market.

July/August 2020

HARRY DOCHELLI, CEO, ESSENDANT As businesses prioritise employee safety ahead of returning to the office, growth will be slow for the OP industry. We will see companies return in waves, starting with SMBs located in suburban areas and in low-rise buildings, and less dependent on public transport. Trends that were already underway have accelerated and will endure. These include increased consolidation in the channel, remote working and a shift to e-commerce. The latter two will require dealers to adopt new digital ways to reach and attract customers, while sales teams will need to learn new approaches to sell virtually. With less travel, virtual selling should have the added benefit of increasing sales team productivity. Supply for high-demand items was – and still is – a huge factor. As supplies began to dry up, many customers looked to alternative sources. Supply chains will eventually catch up again and, as they do, many customers will go back to their traditional resellers as their first choice. But supply chain leaders will re-evaluate their global sourcing and safety stock positions and make choices to better manage risk and prepare for non-anticipated disruption. A key product trend that will expand is infection prevention and protection. ‘Clean’ is the new marker for business quality and eventually, accreditations like the ISSA GBAC Star Facility Accreditation will emerge as industry standards. The pursuit of ‘clean’ will further bolster the jan/san category. A top priority for Essendant will continue to be employee safety. When the pandemic began, we implemented many new policies and procedures to support employee safety within our distribution centres and offices. This focus continues within our distribution centres and drives our thinking as we decide how to return to the office. Throughout the past few months, many lessons have been learnt as we navigated our way through this very disruptive environment. Many of our responses to these lessons will have lasting effects on who we are and how we operate. One specific outcome is that we have become much nimbler and more efficient in both our decision-making as well as the development and implementation of solutions in response to customer needs. Our channel mix has evolved. The traditional OP vertical experienced declines while our jan/san and e-commerce channels had significant growth. We are organising and resourcing ourselves to support the unique challenges and opportunities within each of these areas. We are also responding to new demand with emerging categories and taking aggressive positions to broaden the product assortment and establish our dealers as leaders within them.

The New Normal FEATURE www.opi.net 38

DANIEL KELLY, MANAGING DIRECTOR, STUART & DUNN OFFICE CHOICE The new normal is just like the ‘old normal’ but with streaming, Zoom meetings and a whole lot of sanitiser. Welcome to the time before technology… with technology. Spending close to three quality months with family in isolation while working has provided a couple of honesty moments. Number one: family is everything. Number two: if you aren’t willing to adapt, diversify and change your business, prepare for the beginning of the end. Only the resilient will remain. There has been a shift in attitude from the Australian consumer, with a genuine hunger to support local businesses. The proof that ‘local matters’ has put a real spring in the step of those SMBs that have remained optimistic. The reality is though that the world is a business, and it will soon be all about the bottom line again, so capitalising while you can, has been paramount. In an ideal world, the new normal will see people remember to stick by their new-found or reignited values during this time and look after what matters. Themselves, their family and the businesses that helped get everyone through the virus.

MARTIN KELTERBORN, CEO, OFFIX HOLDING With gratitude, I would say that Offix has come through the crisis very well, thanks to its multichannel sales strategy. Management has dealt with the situation critically and always with a view to the future. It is vital to recognise and use new opportunities – any business that still has to revise its fundamental structures has not done its homework. For Offix Holding (Ecomedia, Oridis, Papedis, Office Leader and Docuserv), the new normal has consequences, especially in terms of corporate culture. For Offix executives, it means to become more courageous. More ‘why not’ and less ‘yes, but’ thinking; more trial and error than analysis and planning; more trust, less monitoring; and also hard, consistent and honest administration. The new normal should not be wasted on a few operational measures, but should encourage us to invest in the supreme discipline of corporate management.

PETER KELLY, CEO, WINC AUSTRALIA & OFFICEMAX NEW ZEALAND There’s no denying that the new normal is creating fundamental changes for our industry and society in general. Some organisations are embracing newly distributed workforces, while others remain on-site and are busier than ever. Then there are businesses that are still trying to work out how best to navigate both their short and long-term future. To support our clients at this time, we see it as our job to flex as the market requires it and to innovate to ensure needs are met. We’re looking at several different initiatives to support the work-from-home market while also exploring the opportunities that come with changing customer behaviour. It’s certainly an interesting and challenging time for the industry.

RICHARD SCHARMANN, CEO, PBS HOLDING The business supplies sector seems to be under the same pressure as other industries after the lockdowns. However, the extent to which the crisis hit PBS Holding companies across the eight countries in which we operate has not varied that much. I don’t think there is a new normal. Instead, it’s a special situation which has highlighted the well-known weaknesses of our industry. It will therefore not redefine us, but accelerate consolidation and the shift to real online sales and distribution concepts.

ELINA PIENIMÄKI, CEO, WULFF GROUP In a post-coronavirus future, we need to find a balance between what worked before and what needs to change to succeed in the new normal. Whether we like it or not, that future is not what we thought it would be just a few months back. Although coronavirus froze various companies for several months, it has also created opportunities in the short and long term. There will be some permanent changes accelerated by COVID-19 such as buying online, remote working, a more sustainable way of living, and a virtual way of working. For Wulff, the focus will continue to be on sales activities, although this may be in new forms such as on-screen meetings, more digital marketing, online sales, etc. As the world accelerates to digital, customers will get used to a faster-evolving assortment and user experience. Online purchasing will speed up and contain product and user groups that were not as impacted by e-commerce before the coronavirus pandemic. As customers will carry on working remotely at least to some extent, there is a need to develop product and service assortments as well as the supply chain in order to meet their needs wherever they are. The first steps in the new normal will be to ensure workplaces are safe, resulting in higher demand for hygiene, disinfection and safeguarding products. Sustainability will also play a crucial role as business leaders see it increasingly as a competitive advantage. Environmentally friendly products and deliveries will continue to play an important and relevant role in Wulff’s strategy.

DOLPH WESTERBOS, CEO, STAPLES SOLUTIONS The coronavirus pandemic has accelerated Staples Solutions’ digital revolution. Our customer communication has transformed as our sales agents work more digitally, and we conduct customer webinars. Many of our contract B2B customers have started to behave more like B2C ones as their employees work from home. We made the required functionalities available to support our clients and their employees in record time, which resulted in online hypergrowth in various countries. It is amazing to see how quickly everyone adjusted, and we believe many of these changes are here to stay. In these extraordinary circumstances, our customers need not just products, but a trusted guide to help them transition out of lockdown and reopen workplaces safely. Most companies have a plan B to deal with unforeseen situations, but even those do not apply in such unprecedented times. That is why we launched Plan C, our offer to support employers navigate the new normal. Through a framework of safe distancing, keeping clean and staying connected, Plan C is a comprehensive solution of products and services that help customers transform their workspaces.

CATEGORY UPDATE

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space

While hampered by COVID-19, there are still plenty of opportunities for the office furniture sector – by Michelle Sturman

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very facet of our working lives has been disrupted to some extent by the ongoing coronavirus pandemic, with no apparent end in sight. One of the tremendous upheavals has been the migration of employees from the office to a working-from-home scenario. Globally, countries are in various stages of lockdown, with some currently facing second wave worries. Whatever phase they are in, one commonality remains – still-empty offices with only a trickle of employees heading back to the workplace. Several reasons exist for this. Firstly, COVID-19 is still circulating, with no vaccine in sight. Secondly, most governments are advocating a ‘work-from-home if possible’ scenario. Thirdly, there is the dawning realisation that employees can be just as productive working remotely as they can in the workplace. On top of this, even for companies that are returning to some sense of pre-coronavirus normality, understandably, many people remain hesitant to head back to their place of work. This is especially true if it means commuting on public transport and being in an environment in which they feel unsafe or unprotected against COVID-19.

AN ABOUT-TURN Addressing this while adhering to government or individual state guidelines, offices and buildings need to be revamped to ensure social distancing and to minimise the risk of contracting coronavirus. As such, for the office furniture industry, the crisis will continue to be both a blessing and a curse. Pre-virus, the sector was gearing up for a stellar year off the back of a strong 2019. The closing of manufacturing facilities around the globe from early this year, followed by the homeworking situation meant, however, that sales and orders for office

furniture leaders such as Herman Miller have fallen off a cliff. The company’s most recent results released at the end of June revealed a steep drop in year-on-year organic sales of around 35%, while orders fell by 25%. A bright spot was the home office category, where sales rose by an impressive 125%. Steelcase, meanwhile, reported a sales drop of 60% in April, as orders fell 47%. It was better news by mid-May as most of its manufacturing workforce had returned to work. While the category’s giants may have borne the brunt of the pandemic, it has left virtually no business untouched. UK-based Ergochair expected 2020 to be the company’s best year, with sales up around 17% on 2019. Says Sales Director Nick Arnold: “Unfortunately, the coronavirus situation has put quite a dent in that, but we are resilient. One of our key strengths is our ability to adapt and innovate, so I am confident we will turn it around again quickly.” The latter is a sentiment echoed by other players in the sector such as Sit-Stand.com, where a surge in demand for office wellness solutions has resulted in sales increases of 50% year on year. For some, a stable supply chain has been the saving grace over the past few months. BakkerElkhuizen Country Manager UK & Ireland Steven Howe explains: “Our supply and distribution chains have been relatively unaffected due to the close relationships we enjoy with our manufacturing, warehousing and carrier partners. Plus, the majority of our products are made in the Netherlands, which has provided us with shorter lead times for stock replenishment and urgent project-type orders.”

Pre-coronavirus, the office was already transforming into a more relaxed and collaborative setting, with moveable and comfortable furniture, funky breakrooms, and places to enjoy a nap, read a book and be creative. While the office footprint per person has reduced over time, it has been offset by hot-desking and a more innovative use of space. Post-coronavirus, the office layout will look and feel substantially different due to social distancing and enhanced safety measures. But what will this new office look like? It depends on government regulations and the accepted social distance measurements in each country/state, but basic guidelines could include: • One-way systems including directional floor/screen signage throughout the car park, building and individual offices. • Vastly reduced or single person lift use. • Different shifts or staggered arrival and departure times. • The elimination of hot-desking and the use of constantly sanitised desks set 6 ft (1.8 m) apart. • Hand sanitiser stations or handwashing sinks at entry/exit points. • Personal lockers/storage facilities. • Desktop protection screens (sneeze guards) or free-standing partitions between desks. To maintain communication and collaboration while adhering to safety regulations, dividers should be glass, acrylic or plexiglass that can easily be wiped clean. Other options include hanging screens.

• Moveable modular furniture to accommodate appropriate social distancing and arranged to minimise any face-to-face risk. • Breakrooms with appropriately distanced tables and chairs or screens. Staggered lunch and other breaks to limit the number of people making use of facilities. Restricted use or the elimination of vending machines and the introduction of pre-packaged food. Individual sachets of coffee and tea, for example, with the use of a personal cup. Removal of communal items such as kettles and microwaves unless strict cleaning rules can be enforced. • Use of antimicrobial surfaces, fabrics and vinyl for office furniture, but ones that can withstand regular and heavy-duty cleaning. Alternatively, covering of fabric or upholstered furniture with plastic for easy wiping. • Washroom facilities with automatic doors, sensor taps, flushes and soap dispensers; self-closing toilet seat lids or touch-free sinks. The debate between hand dryers and paper towels rages on – either way, dryers and waste disposal bins should be ‘no-touch’. • Access to cleaning supplies for employees, including sanitiser, disinfectant and wipes. • Touch-free technology that negates having to touch door handles, lift buttons, light switches, etc. These can be deployed using voice recognition, hand activation or via an app. • Better and more creative utilisation of outdoor space for working and socialising. Linked to this is better indoor ventilation and air filtration. • Increased use of desk and meeting room booking apps. Hygiene and safety in the post-pandemic office will be covered in depth in the September/October 2020 issue of OPI.

July/August 2020

SAFE DELIVERY Furniture manufacturers and dealers using e-commerce along with safe and efficient home deliveries have been able to capitalise on the homeworking trend. As Eric Gellman, VP of Sales for Raynor Group/ Eurotech Seating, points out, the e-commerce section of the business is currently booming. The abrupt swing to online purchasing has highlighted the importance of e-commerce, and manufacturers are now accelerating their digital roadmaps. HNI, for example, says the expanding home office market has provided a welcome spike in e-commerce sales during the pandemic. Herman Miller CEO Andi Owen, meanwhile, believes its digital transformation roadmap has become even more of an imperative. The expectation is that its investment will leverage opportunities to serve the changing needs of customers in the near term. Online furniture and décor specialist Wayfair is a prime example of the power of e-commerce in this new hybrid workplace/home office world. The company saw a 20% jump in Q1 sales as orders from work-from-home employees started flooding in and demand for all manner of home office products soared. Wayfair CEO Niraj Shah believes that, as customers have been forced to move to online buying during the pandemic, it will provide “clearly definable long-term advantages” for the company.

THE SOCIALLY DISTANCED OFFICE

CATEGORY UPDATE Furniture

MIXED RESULTS COVID-19 has indeed turned out to be a double-edged sword for the office furniture sector. Traditional sales plummeted, but they have been partially offset by customers’ scramble to get employees set up quickly for working at home. Additionally, global lockdowns forced children and students into home learning. “We’ve been doing everything possible to support Australian businesses and families by providing them with essential products and services they need. As a result of these new ways of working, we experienced an increase in demand for many products like sit-stand workspaces, student desks, office chairs including ergonomic versions, mats and bookshelves,” says Officeworks General Manager Merchandise, Toby Watson. The rush on home office furniture started in March as the country entered lockdown and has continued ever since. It has resulted in strong year-on-year growth for the retailer as people are still evolving their workspaces at home. BakkerElkhuizen too experienced an uplift in home office equipment like compact keyboards, laptop and tablet stands and vertical mice. Additionally, the company has witnessed growth with large organisations such as those in the financial sector in and around the City of London that have a considerable percentage of staff presently working remotely. “These firms represent great opportunities due to the desire for continued working from home in the UK. We have equally seen an upturn in sales via the IT sector,” says Howe.

Furniture CATEGORY UPDATE www.opi.net 42

NO GOING BACK The remote working trend is unlikely to abate anytime soon. The pre-existing shift to homeworking has accelerated, and only time will tell how it affects office occupancy. “I do think this movement is going to last, at least at the corporate level as it looks to protect itself and its employees. Things will loosen up, but not until numbers trend downward with the virus,” comments Gellman. A recent study commissioned by Officeworks investigated Australians’ behaviours and attitudes towards working and schooling from home during the coronavirus outbreak. The survey found nearly half (48%) of respondents would like to work from home all or most of the time post-COVID-19 restrictions. This is despite only 41% having a dedicated office or study. Many are improvising with their workspace furniture: 27% are not using a desk and 67% don’t have a desk chair, instead opting to use furniture from other parts of their home. “There’s a real opportunity to ensure people have the right set-up in their home office and are as comfortable as possible, now that restrictions and preferences are looking more long term,” explains Watson. THE RIGHT FIT Health and wellness in the workplace has been a burgeoning trend for some time and will be an even more critical element in the office furniture mix moving forward. As Ergochair’s Arnold observes: “Sadly, the industry trend for homeworker seating appears to be price-focused and often overly concerned with aesthetics, but with little actual regard for the intended users or their postural needs. “It often surprises people to learn that the mass-produced, low-cost ‘out of the box’ seating only proves a proper fit for four out of ten people. Accordingly, we are expecting to see a big increase in users suffering posture problems as a result,” he adds. With the prospect of a more permanent move to remote or flexible working, employers and employees will ultimately look towards an ergonomic home office set-up with accessories and furniture items such as sit-stand desks. “While we face uncertain times, it is also an opportunity to redress the balance and focus on the well-being of people and sustainability. We see a huge shift in this direction. Wellness solutions that are suitable for homeworkers and affordably priced are key recipes for our growth,” says Sit-stand.com Managing Director Gavin Bradley. Expectations for the ergonomics category are high, with BakkerElkhuizen also predicting growth in this space. “Our ergonomic solutions for mobile and flexible workers are receiving more attention as the coronavirus pandemic is fostering greater awareness. “We think ergonomic products will be the most popular in the next 12-18 months. We are dealing with this by increasing our marketing collateral for a whole new group of people who were previously unaware of the range of solutions we produce,” notes Howe.

AN ALTERED WORLD For those eventually heading back to the office, the workplace will be a fundamentally modified setting. It will be where employees meet to connect, collaborate and claim the type of space they want to foster creativity and teamwork rather than the traditional 9-5 working scenario.

There’s a real opportunity to ensure people have the right set-up in their home office

Officeworks’ Stockholm range of desks, bookcases and coordinates

Flexible working and hot-desking have already led to a change in the design and function of office space and the furniture used. They will now need to be reconfigured to accommodate social distancing and safety guidelines (see ‘The socially distanced office’, page 41). Office furniture manufacturers have risen to the challenge, creating new or modifying existing products. Ghent and Waddell – part of GMi Companies – have released several items including desktop dividers and free-standing partitions. All are designed to address the need to help decrease the spread of COVID-19 within the workplace. Talking to OPI, GMi Companies COO John D’Agostino said the team quickly evaluated and adapted its current product offering to create ten new additions to its line in just six weeks. “Materials like acrylic are in short supply, but we were able to respond to the quick spike in demand for products, which are now selling at record levels.” Explaining which solutions are currently in high demand, Director of Product Scott Bowers says customers are seeking furniture that is mobile, flexible and easily cleaned. New products include Stroll Mobile Glassboards and the Prest Mobile Whiteboard, as well as lines for the outdoors. “There are also new laminate and writeable surfaces that are truly antimicrobial and which we are exploring. Right now, function is trumping design. We have achieved a balance of both and have products people want to incorporate into their space to provide the extra margin of safety as employees return to the workplace,” he adds.

Furniture CATEGORY UPDATE

Virtual office L

ike just about every industry occasion on the 2020 calendar, the world’s leading commercial furniture trade show NeoCon announced that this year’s event would no longer take place due to COVID-19. Initially scheduled to take place in Chicago, Illinois, in June, it was revealed in mid-March that it would be postponed until 2021. Using its considerable clout as the go-to interiors conference and exhibition, the organisers swung into action and in less than a month launched a creative digital hub, entitled NeoConnect. According to NeoCon, “the purpose of NeoConnect is for us to continue to conduct our business, share ideas, learn from one another, support the greater community and celebrate where and when possible”. Unsurprisingly, the online resource is comprehensive, offering users an immersive design experience with access to exhibitor product launches, webinars, virtual events, blogs, video content, programming and a community portal.

The purpose of NeoConnect is […] to continue to conduct our business, share ideas, learn from one another [and] support the greater community

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INSTANT ACCESS Launched on 1 June on neocon.com, the frequently updated hub will be available for the next few months and includes entry to NeoCon’s famed CEU daily webinars that took place throughout June. With a diverse range of topics, this year’s programming schedule includes foodservice formats, resimercial design at work and home, the sustainable future workplace, resilient spaces, lighting trends, and the 21st century classroom. Also available is a series of special talks and panel discussions, while Metropolis magazine’s

Sustainability Lab contains video interviews, product information, technology innovations and comprehensive coverage of sustainability topics. Keeping up to date with the latest company developments is an essential element of NeoCon, and the digital hub aims to provide these details online in lieu of the physical event. A major pull of the live show is the ability to browse new product launches. This is now covered online in the “Explore Exhibitors’ section. NeoConnect users can search products, online programmes, virtual events and more from about 500 companies. Among them are BIFMA, ECI, Ergotron, ESI, Ghent, Haworth, Humanscale, Safco Products and Steelcase. A quick click on a company name reveals product details, including videos and photos if available, and other pertinent material. Also included in the exhibitor sections are virtual walkthroughs of NeoCon 2020 by floor. For those using Instagram, @designmilkworks features exclusive content of NeoCon exhibitors’ new products, projects and collections. NeoConnect’s community portal showcases several components such as a guest blog series with unique content from the design industry’s movers and shakers. NeoCon 2021 will take place from 14-16 June at The Mart, Chicago, Illinois. Registration will open in February 2021. For more information, visit: www.neocon.com.

OPINION

RETURN TO THE OFFICE?

Do your homework first

s the slow process of going back to any kind of normal – and previous – work accelerates in an attempt to kick-start the economy, there’s plenty of anxiety out there. According to the New York Post, 80% of employees would not feel safe returning to work upon re-opening. But organisations can implement a whole host of best practices to ensure that they do. Developing a COVID-19 preparedness plan is key to having proper measures in place while setting the stage for workplace health and wellness. From protective shields and temperature checks, to touch-free restrooms and social distancing signage, welcome to the next way of working! Categorising your office space into zones is one way of helping to prioritise areas of focus:

• High traffic, high touch zone: reception areas, restrooms, breakrooms • Medium traffic, high touch zone: workstations, conference rooms, elevators • High traffic, low touch zone: hallways, aisles • Low traffic, high touch zone: private office, print/ mail rooms, file areas My advice would be to start by focusing on the high and medium traffic, high touch areas. This is what you can do, for example: Temperature checks Are you incorporating temperature checks at entrances? Many organisations are, and it is important to ensure your employees and visitors are safe. Taking this measure will inspire confidence when entering the workplace.

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Cleaning protocols and guidelines What are your cleaning protocols; do you have guidelines? There is an array of cleaning solutions to consider. From UV disinfecting technology, to EPA registered cleaners and microfibre cloths, protocols such as ‘you touch it, you clean it’ are increasingly popular along with frequent hand sanitiser use. Locate sanitiser stations throughout the office, especially at the main entrance and near workstations to promote cleanliness.

Touch-free spaces How touch-free are the spaces in your workplace? People are now hyper-aware of what they come into contact with and are mindful not to touch their face. We are confident touch-free solutions will stick after this pandemic. Hands-free door openers,

touch-free soap dispensers and water faucets, and automated flush systems will be standard. Among the many studies conducted on air dryers, one found that they send out over 190 times more virus than paper towels (Washington Post). If it is the only thing you can do, replace air dryers with touch-free paper towel dispensers. Air purification Have you considered air purification? According to the EPA, the levels of indoor air pollutants are 2-5 times higher than outdoor levels. Air purification can eliminate more than 97.8% of pollutants and reduce the risk of infection.

Kelly Link is Insights Specialist at US independent dealer Innovative Office Solutions.

As you transition back [to the office], make sure you are equipped with the proper solutions needed in all areas of your business Signage How will social distancing and cleaning guidelines be communicated? Many buildings have already added signage indicating that they have been properly cleaned and sanitised. This is just one of many ways to instil trust and make occupants feel comfortable when entering your workplace. You should also include informational signage to direct the flow of traffic, educate on hygiene etiquette, and maintain social distance. There are many ways to do this, from custom decals to free-standing whiteboard signs and floor mats with 6 ft (1.8 m) distance symbols. Then there’s furniture and design. How will your furniture layout be impacted? Employees have

EUROPEAN FORUM 2020 THE ROAD TO RECOVERY An exclusive event for senior executives from the business supplies industry

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17th November 2020 Venue to be confirmed

More information: www.opi.net/ef2020 March 2019

REMOTE WORKING – HERE TO STAY Millions of employees have followed stay-at-home orders and have been working from home to prevent the spread of COVID-19. A recent study by IBM found that nearly 55% of staff want to work remotely most of the time after the pandemic (Business Insider). So remote working is very much here to stay. Some companies are providing their employees with ergonomic furniture and accessories along with products to stay productive at home. Sit-stand desks, adjustable monitor arms and task lighting are popular items! On the flip side, however, we also know that people have been significantly disrupted by this pandemic, and over 50% feel lonely working from home, according to USA Today. Some staff want to continue to work from home while others desperately want to get back into the office and are craving social connection. Employers certainly need to be aware of not just physical safety, but psychological well-being as well. When I asked my CEO Jennifer Smith what ‘return to work’ looks like for us, she explained: “As business leaders, we are going to have to be flexible and give our employees choices as they determine their comfort level of when, if and how they return to the workplace.” There is a lot to navigate as we prepare our return to the office. There is not a ‘cookie-cutter’ solution, so it’s important to strive to understand the goals of every organisation. As you transition back, make sure you are equipped with the proper solutions needed in all areas of your business. With safety, wellness and health being paramount, are you ready for employees to return to the workplace?

FEATURE Digital Transformation

been working remotely in the comfort of their homes for some time now. Returning to the office can be overwhelming, especially in open plan environments. Create a sense of safety by retrofitting, reconfiguring and even repurposing what you already have. Adding protective shields or repurposing a mobile whiteboard to double as a shield, repositioning workstations so they are not facing each other, and simply removing seats in your breakroom goes a long way to protect your team. Video conferencing will continue to play a big part in work (and social) life. Have you heard of ‘Zoom fatigue’? Some of you have probably experienced it and here is one reason why. Research shows that when you’re on video, you spend most of the time gazing at your own face. The stimuli from your own video and backgrounds of others can be exhausting to keep your eyes on. Try minimising your video and consider using the speaker view. Lastly, schedule breaks between video conferencing and give your eyes a rest during longer meetings by looking away or just listening in for part of it.

ADVERTORIAL

Warehouse

& WHEELS

Challenging times demand drastic – and fast – action and true partnerships. VOW Wholesale has stepped up to the plate

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t’s by no means been plain sailing at VOW Wholesale at a time of huge industry upheaval – suffice to say coronavirus and Spicers – but there’s a real sense of stability, transparency and progress coming from this UK-based operator. OPI spoke to Managing Director Adrian Butler about all things wholesaling, and how a laser focus on just this part of the company has allowed it to become a more nimble entity and a better partner for its dealer customers in hugely difficult times.

OPI: It’s been well over two years since we last spoke in detail. It was when you announced a new leadership team at VOW and became considerably more autonomous from the EVO Group of Companies in terms of the day-to-day running and decision-making of the wholesaler. How did that transformation work out? Adrian Butler: Being in charge of our own destiny and everything it entails helps, from suppliers we’re dealing with, stock we hold, inventory control, commercial management, etc. It did take a few months to bed in properly, but really started benefitting the business from around Q2 last year. Being able to focus solely on the wholesale business where we didn’t have to factor in the rest of the group has meant, for example, that we were experiencing the best monthly product fill rates and availability that we’d seen consistently in the past five or six years. We also started to engage much more with dealers about what the wholesale

business looked like today and what it should look like in the future. The review became an enabler for us to really focus on VOW, what it does and how it does it. OPI: From a VOW trading perspective, how were things looking as you came into 2020? AB: How we looked at the beginning of the year was completely shaped by what we did in the latter part of 2019. It meant working with dealers a little differently compared to what we had been doing. We launched a loyalty growth incentive scheme for dealers over and above the commercial terms they were on, for instance. We want to be the ‘warehouse and wheels’ for them in a comprehensive way. At the beginning of 2020, we saw a lot of dealers winning large end-user clients using our Wrapide direct delivery service. One of the challenges we had had beforehand was dealers being concerned about the potential cost of direct deliveries, so we aggressively reviewed our charging structure and third party costs, announcing different structures and initiatives for them to take advantage of in Q1. We saw a big shift in take-up of this service as a percentage of overall volumes, with some dealers completely changing their model. In mid-March, direct deliveries on behalf of dealers reached just under 40%, up 10% from ten weeks earlier. OPI: The direct delivery debate and the costs associated with that model have been around

OPI: Then lockdown happened. What was the immediate impact on VOW and on your customers’ businesses after the announcement on 23 March? AB: VOW saw a volume drop of 42% pretty much overnight. We did a number of things very quickly. One of the first was to remove a lot of the agency cost that flexes with our volumes, which brought expenditure in the warehouse down. We also thoroughly reviewed all overheads that we incur to run the business and we took advantage of the government furlough scheme. Within a short period of time, we enabled about 500 people to work from home. It was a fanastic effort by our IT guys to achieve that and by our staff to embrace it and make it work. OPI: Did you have any contingency plans for something like this happening? AB: We knew we had the technology to enable people to work from home, but we didn’t have a contingency for anything specific and certainly nothing on this scale. I don’t think anyone did. From an operations point of view, all the goods get picked in one location in Lutterworth at our

The review became an enabler for us to really focus on VOW, what it does and how it does it Arrow Distribution Centre (ADC), so we have a concentration of technology and people in one place which was helpful. And we have a good mix of full-time staff and agency workers, as I’ve just mentioned, which gives us the ability to flex up or down depending on different scenarios. Among the key things we did very soon after the initial reorganisation was to look at the products we brought in. Obviously, demand for traditional office supplies went downhill while that for cleaning and hygiene products soared. What really helped us again here is our new flexibility at VOW – everything we did was a wholesaler decision, so we were able to react quickly and get in stock.

OPI: I guess some of the work that you’ve done in recent years in terms of being able to on-board new products and ranges quickly would have stood you in good stead. AB: Absolutely. As you know, we launched the virtual product conveyor a number of years ago, giving us the ability to add products into range within days. We’ve done a massive amount of work in this area and now have an entire Infection Control category available for our dealers. It encompasses everything from sanitisers, wipes, dispensers, masks, visors and goggles, to air purifiers and all manner of social distancing equipment and signage. To put some scale to that, we have introduced just over 1,400 lines in eight weeks. OPI: How did the typical dealer respond to lockdown and an incredibly difficult situation? AB: There are several answers to this. First, I think many reacted very quickly and restructured their business. Second, they took advantage of the government’s financial support schemes. Once those two things were sorted and they felt more in control of their own destiny again, I believe many dealers went back to a more traditional selling method. They were hugely proactive, picked up the phone and sold product in a very personal way. All these items like PPE, cleaning and hygiene that were suddenly so in demand. It was encouraging and we saw big sales spikes in those areas. OPI: With so many businesses closed because of lockdown, where was this demand coming from, as dealers presumably were not involved in supplying the frontline health care sector? AB: We definitely saw a geographical split. Sales volumes were lower in the South, London obviously included, than they were in the Midlands and the North. And dealers didn’t just rely on their existing customers. A lot of prospecting took place, particularly to mid-market businesses. Yes, there were massive staff reductions in some businesses, as well as restricted office hours, but many still had a core set of people in the office. And they needed those products. Dealers worked incredibly hard to serve existing customers and attract new ones. OPI: Do the volumes for these products make up for the decline in the more traditional categories? AB: We’re getting there and saw a 30% increase year on year in June. It’s probably worth stating that, even pre-COVID-19, 50% of what VOW sold was in non-traditional categories. Traditional OP is still very important for us, but we haven’t been a ‘stationery’ wholesaler for some time. The current environment is only accelerating the mix change.

July/August 2020

OPI: Personal protective equipment (PPE) in particular was hard to source in the early days. How did you get hold of sufficient volumes? AB: Our existing suppliers in Asia had product offerings we could take advantage of. And where we didn’t have what we needed or enough of it,

our in-house sourcing team started exploring all avenues to get things like masks into the UK. We were very careful about the right certifications as probably eight out of ten are not what they appear. Our team’s knowledge and experience played a huge part in making the right decisions.

ADVERTORIAL VOW Wholesale

for years. Why, in your opinion, did that message suddenly seem to stick? AB: I think we genuinely got the package we offer right. Changing product mix, a tougher business climate, greater price transparency, operating margins – all those things play a part too. As you well know, this is quite a small and close-knit industry, dealers speak to dealers and there’s no better endorsement than one dealer saying to another, “this works”. We saw a bit of a snowball effect of this in early 2020.

VOW Wholesale ADVERTORIAL

OPI: As we’re easing out of lockdown, what’s VOW’s role now in terms of helping dealers get their customers back to some form of normality? AB: It’s range. Dealers need to help end users feel confident about going back to the office and/or provide them with effective homeworking solutions and products. And we as a wholesaler offer them that breadth of product they need. It goes back to the Infection Control category I referred to – it gives our dealers and their customers confidence. OPI: But will this category have legs long-term? Or is it a short-term, crisis-related offering? AB: There will be some product sets that drop off eventually I’m sure. But I think there’s been a real change in user behaviour in terms of health and hygiene and that will continue post-pandemic. OPI: The work-from-home scenario is likely to stay with us in some shape or form. A more disparate workforce will put greater pressure on the supply chain in terms of both cost and logistics. How are you planning to address this? AB: Range again is one of the answers. Do dealers, via their wholesaler, offer everything that both an office-based as well as a home-based customer needs? They need to! From an operational point of view, and this started pre-pandemic as a result of the increase in direct deliveries, something we’ve done in the ADC is to increase the number of physical packing stations. It facilitates many more, but smaller, orders going out. Also before the crisis, we had been relentlessly reviewing our Truline delivery service in order to gear up for more direct deliveries. It’s not easy and you have to react quickly and look at the numbers each day to spot trends and be prepared to scale up and down with resources and so on.

Adrian Butler in VOW’s COVID-19-adjusted warehouse

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OPI: That said, I also get a sense that people actually want to consume differently when this is over. Buy and support local initiatives seems to a positive side effect of COVID-19. AB: I completely agree. We’ve pushed that message as an industry for years. There does appear to be a renewed groundswell of support for local businesses because these are the guys that have felt the impact of the pandemic the most.

We already have UPS as a third party carrier that we use if orders are not delivered by Truline. It’s a big and constant work in progress.

OPI: All in all, VOW has been weathering this storm pretty well and that’s more than can be said for your biggest competitor under the SPOT Group umbrella. What are your thoughts here? AB: I’m talking about Spicers here, not SPOT. I think it’s very sad and a big loss. My thoughts are with all the people who have lost their jobs. Spicers has an incredible history and there are so many relationships originating from that company, many linked with VOW as we’ve been rubbing horns in a healthy, competitive way for decades. We’ve had a number of conversations with dealers post Spicers’ demise, and we’ve rekindled and reinforced some relationships. We saw an increase in volumes straightaway, which is what you’d expect. There was an overriding nervousness from dealers in terms of what our approach would be now.

OPI: With the homeworking trend in mind again, what do you think will be the impact of this situation on dealers in terms of losing business potentially to Amazon? Some work-from-home employees might have a small discretionary budget to purchase low-value items for use in their home. How do dealers penetrate deeply enough to be an alternative to that? AB: It comes down to dealers’ number of contact points at every customer – there need to be several. And it’s again a behavioural change, both on the part of the customer as well as the dealer. A lot of dealers have been offering home deliveries; we’re clearly seeing that in terms of the number of home drops that we’re doing on their behalf. How

OPI: Why were they nervous? AB: There was this fear that the UK was only going to have one broadline wholesaler left. The OT Wholesale announcement obviously came out pretty quickly anyhow. But also, Spicers was not our only competitor – there are a lot of competitors in the market that we’re up against, be they regional players, operators in specific categories like EOS or those with a slightly different model. We do not have a monopoly in any shape or form. All that said, what’s become very clear to me is that VOW has a huge responsibility to the industry – many businesses depend on us doing the right thing. We’re very conscious of that and it’s exactly what we will always strive to do.

VOW has a huge responsibility to the industry – many businesses depend on us doing the right thing

much it will stick long-term remains to be seen I guess. But you’re absolutely right, the Amazon threat is there and it’s not going away.

RESEARCH

CHANGE is COMING

Come the year 2025 and there will be five different office environments, according to Lyreco’s Office 2025 report. The reseller’s UK & Ireland Marketing Director Claire Smith explains more

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he current crisis has cast a spotlight on the world of work. Transformations that were already in progress have been accelerated by the COVID-19 pandemic and impacted the way we work. Many people have had to adapt rapidly to new requirements, including millions who have been actively encouraged to work from home or asked to continue from places of work, but in a safer and often quite different manner. Conventional organisational structures have been challenged like never before. Businesses have had to be amenable and innovative to ensure staff can operate with due care and effectiveness in challenging circumstances. The way a lot of companies and their employees have adapted to a ‘new normal’ reinforces the general belief that the work environment may never be the same again. The recent disruption to how we approach and use venues as a result of COVID-19 has only helped to significantly accelerate a workplace revolution that was already underway. It is re-engineering the landscape for the future. Several sociological, behavioural, technological and economic trends are identified as primary disruptive drivers. They are forcing businesses to realign office structures to chime with the current generation of employees and consumers.

DISRUPTIVE TRENDS Evolving consumer and purchasing behaviour has been fuelled by a combination of technology, the internet, smartphone use and the rise of sustainability concerns. Significant online purchase increases have coincided with the collapse of a great deal of long-established traditional retailers. This, along with current patterns of consumption in the workplace, has led to an ever-broadening moving target for OP dealers to address. Advances in terms of understanding how we interact at work and support creativity are leading to some out-of-the-box thinking about how offices and other premises are designed. That, in turn, is having a knock-on effect on the need for business supplies. The rise of social responsibility, meanwhile, has witnessed organisations look again at their corporate influence. This has driven an upsurge in implementing the type of sustainable business practices staff and consumers want to see. Limiting pollution through waste and reduced plastic use are becoming critical objectives for companies and the suppliers that serve them. The pace of technological transformation in places of business is accelerating. Artificial intelligence (AI), the Internet of Things, voice applications and 5G are all disruptive technologies which are becoming increasingly commonplace. Companies are energetically exploring the potential for technology to improve business competitiveness in all areas. Workplace designers are seeking to harness the power of digital solutions alongside the value of human interaction, so both can play their part in

REALIGNED OFFICE SPACES The outcome of these powerful and influential trends represents the emergence of a broad range of flexible solutions that support both employer and employee requirements. As staff seek to transition between work modes and optional locations with minimal equipment and inconvenience, Lyreco predicts the development of five distinct office forms. It also forecasts that many people are likely to use more than one type. All this is a significant move away from reliance upon a single, traditional and permanent place of work. As a result, this forthcoming fluidity of choice will need to be acknowledged by the business supplies sector in terms of how they serve these future needs. So here are the five office environments of 2025: 1. The hospitality office This is where people, primarily home-based employees, will reach out for collaboration, creativity and specialist resources. It will involve the ‘experience’ and be a venue used for intense periods of activity, for instance, team brainstorms or meetings. There will be formal and informal meeting rooms, outdoor areas and sensors to interact with wearable devices. We will also see the return of the stationery cupboard as people access specific needs away from their usual place of work. 2. The home office As seen through the current pandemic, homeworking has become a present-day reality for many. But for some employees, this was already the norm. Flexible working, driven by millennials, will increasingly be expected. The home office entails personalised productivity as future remote workers are seamlessly integrated into the business. They will need to be supported by clear company guidance and strong technological connectivity.

Individuals will determine their choices around space utilisation at home and how it is furnished. Responsible businesses will provide home-based staff with the range of smart office furniture and other items required. They will look to the office products industry to support them in achieving this. 3. The shared office Co-working areas will underpin staff demands for more remote working arrangements leading to shared office spaces that have a cosy, social and collaborative environment. Businesses looking at flexible working patterns and employment offers will need to provide the requisite structures. Informal meeting locations, shared stationery resources, 24/7 catering, and equipment rental rooms where people can borrow items like laptops, characterise this setting.

RESEARCH Office 2025

the workspace of the future. People will always sit at the heart of organisations, and this remains reflected in technology implementation and office design.

4. The office on the move A mobile office enables employees to determine their bespoke hours and work patterns. By 2025, more public spaces such as cafés will be adapted to encourage access to facilities including parcel delivery and printing services. Powered by uncompromised internet connectivity, staff will fit personal lives around work commitments from no fixed location.

Office products dealers looking to support the evolving workplaces of the future need to be mindful of the rapid and current changes underway A mobile team will require items that range from luggage to house-essential tools and reliable digital technologies to allow seamless integration between colleagues. 5. The traditional office Through the growth of alternative workplace solutions, the role of the traditional office will change to a new version of its old self. Open areas, high connectivity and intelligent systems will create places designed with well-being in mind. AI will gauge individuals’ personal preferences for space, lighting and acoustics, accompanied by products designed around simplifying the working life.

July/August 2020

STAYING IN STEP Office products dealers looking to support the evolving workplaces of the future need to be mindful of the rapid and current changes underway, which will fundamentally reshape these environments. Employee expectation, purchasing behaviours, technology innovation and remote working patterns are just some of the diverse issues. Today’s businesses will be forced to take a fresh look at the kind of workspace choices they need to provide for staff going forward. The OP supply chain, in turn, must enhance its adaptability, versatility and service support to ensure it stays in step with a changing landscape.

RESEARCH

The ‘new channels’ PROSPECT GUIDE PREVIEW: WHERE TO NOW?

any office products vendors serving the UK market are caught between a rock and a hard place nowadays. Demand for their traditional offering is in decline while the OP channels that they have historically relied upon to get these products to market are under ever-increasing pressure. Those manufacturers that attempt to diversify into adjacent areas often experience a reluctance from the more traditional channels to accommodate their new ranges, especially if they are positioned in non-conventional categories.

DISTRIBUTION OPTIONS Based on online interviews with European vendors serving the UK market, supplemented by in-depth phone conversations and desk research, Where To Now? seeks to:

There has never been a

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greater need for vendors to consider all of the distribution options now available to them

Many vendors are now actively looking for ‘new’ channels to market all their ranges. To support these initiatives, OPI and MWA have jointly carried out a research study to identify and profile these channels and evaluate the extent to which they are being used or considered. The outcome of this research is Where To Now?, a ‘new channels’ prospect guide that aims to inspire vendors to target those channels that are most aligned with their current and future business strategies.

• Identify the channels used by the sample of UK vendors in 2018, 2019 and 2020. • Report the share of their sales derived from each channel in those years. • Highlight the trends in channel shifts between 2018-19 and 2019-20. • Report vendors’ current perceptions of the traditional OP channels. What this guide also does and where it adds particular value is profile each of the new channels being used. These profiles include general perceptions, but also identify and specifically focus on approximately 30 key players that are being considered by the participating vendors. With the turbulence being inflicted on the UK OP market by the COVID-19 crisis, there has never been a greater need for vendors to consider all of the distribution options now available to them. To be published in October 2020, Where To Now? will be an essential guide that helps them assess and review the opportunities and align them with their own business strategies.

Where To Now? is available for £950 if ordered before 31 August 2020 and for £1,200 thereafter. To order your copy, please visit www.opi.net/wheretonow

5 MINUTES WITH...

Walter Johnsen

CAREER Q&A Describe your current job. As CEO of Acme United, I focus on building our business, strengthening our team and taking calculated risks.

What special skill do you possess? I can compartmentalise and deal with multiple problems at a time.

Your worst ever job? I was a landscaper pulling weeds. Every week, the weeds would grow back. I did that for an entire summer. I now know that I don’t like gardening.

Describe yourself in one sentence? I am self-driven. What scares you? I am insecure and worry about everything. Favourite author? Robert K Massie. His biography of Peter the Great, the former emperor of Russia (1672-1725), put much of Russian history into perspective for me. What is the hardest thing you have ever had to do? Closing a plant. The employees are not at fault and they are left without a job. It’s a truly terrible process. What phrase do you use the most? “OK, let’s make it happen.” Best way to spend the weekend? I love to get in my boat, head to a new port and explore.

Walter Johnsen, Acme Unit ed

Early bird or night owl? I get up at about 5 am, even at the weekend. I like getting a jump on the day. If you were President, what would be the first law you pass? I wouldn’t. Instead, I would roll back the new laws passed in the past two years. If we lasted this long without them, why were they necessary? If you could trade places with someone for a day, who would it be and why? Queen Elizabeth II. Viewing Britain, the world and her family from that perspective would be a fascinating experience I think. Where would you most like to travel and why? I would love to take an extensive trip across Russia – through Siberia – and then into Mongolia.

Mongolia

If the world had a President, who would you vote for? Germany’s Angela Merkel. She is tough as well as ethical.

If you weren’t doing your present job, what would you like to be doing? I would be creating a new company, pacing around a lot and thinking about how to make it grow. Best moment in your career? I invested in Apple early on in my career. I was too young to know what I had done! Worst moment in your career? I had to go to major customers asking them to pay early as we had no money. It was humbling. Which industry figure do you most admire? Tom Stemberg, founder of Staples. He was a visionary, driven and fair. Your best piece of advice to someone who has just joined the OP industry? Change is opportunity. Seize it and go for it. What do you like best about it? The fact that I have industry friends all over the world.

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If you could change just one thing about our sector, what would it be? I would tell those who feel threatened by change to engage in it. I am very optimistic.

What personal item do you have on your desk? A Waterman pen that my employees gave me. Their recognition is special.

THE VOICE OF THE BUSIN

S PRODUCTS INDUSTRY ES

coming soon st y tune

FINAL WORD

RAISING the bar – ALWAYS

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or this 300th issue of OPI, Editor Heike Dieckmann has asked me to “sum up” the past 40 years in about 750 words. Quite a task! I’ll start by saying that I have had a wonderful working life in this industry. It’s fair to say that when my careers master at school asked me what I wanted to do after my education, selling sticky bits of paper was not top of my list. It was obvious to me that I was going to be a professional footballer for Manchester United and successfully take over the number 7 shirt from George Best. Sadly, my talents and ball skills weren’t spotted, so I did indeed end up doing just that – first selling yellow sticky bits of paper for 3M from 1981, then white ones for Avery. As fascinating as these products are, the real reason I have been doing it for several decades has been because of the industry as a whole – the dynamics, the constant change, the general buzz of business, and of course the people. I’ve worked with some amazingly talented and inspirational people at both 3M and Avery, and done business with a whole bunch of diverse and interesting customers in practically every country in Europe. The first 30 years were all about growth; the last ten admittedly have been a lot tougher. And because times have been hard, a lot of people seem to have fallen out of love with the office supplies industry. But was it ever really easy? Was there ever a year when you and your colleagues said: “You know what, competition and the market are a bit easier this year compared with last.”

DOOM AND GLOOM PREDICTIONS Yes, there were many doom-laden forecasts over the past 20-30 years. When Viking Direct came to Europe in the 1980s with crazy pricing, easy returns and next-day service, many commentators predicted the end of the world. I can picture Graham Cundick putting together the first catalogue in his West London kitchen and Irwin Helford coming on a charm offensive from the US to the UK several months later. Then Tom Stemberg and Staples arrived for the second Armageddon a few years later – more crazy pricing and stores the size of football pitches. You may remember Ron Sargent at an OPI event in a brilliantly funny and self-deprecating speech recalling all the screw-ups Staples made trying to break into the European market in those early years. We all know how that ended.

Soon after, in a UK meeting in about 1995 fondly remembered by those of us who attended, Jon Ledecky from US Office Products (USOP) informed the UK independent dealer community to drop their business cards in a box at the front of the room when they left. Their only options, he said, were to sell or die. As it turned out, ironically, it was USOP that died while – surprise, surprise – many of the good independent dealers survived. What next? Oh yes, Amazon arrived like the Grim Reaper, ready to lay waste to everyone in its path, including the old enemies Staples and Viking. And at a certain point, this operator will turn its power against the vendors too and nail us to the wall – or so the saying goes.

Jonathan Smith, VP Sales, Avery

If there’s one lesson to be learnt from all these false prophecies [...] it’s that every single new threat raises the bar for the rest of the industry LEARNING CURVE If there’s one lesson to be learnt from all these false prophecies about the mortal damage new and different players will cause, it’s that every single new threat raises the bar for the rest of the industry. Good wholesalers, dealers and even a few of us dumb vendors learnt fast about matrix pricing, good merchandising, better packaging, exceptional service and e-commerce. And we learnt faster and better than we would ever have done without these players. Now, of course, there’s a completely new game changer in the picture – COVID-19. As we’re starting to emerge from the pandemic, none of us can confidently predict its mid/long-term impact. There’ve been a few casualties already, all with underlying health conditions, like Spicers in the UK for example, and more will come. But if there’s something the past 40 years have taught me, it’s how resilient this industry is, and how adaptable to change. We’ll come out of this bruised and battered and with some fundamental, irreversible changes, no doubt about it, but still here! Editor’s note: Jonathan Smith, for his contribution to our sector, in March of this year won Industry Achievement at the European Office Products Awards dinner in Amsterdam, Netherlands (see Review, OPI April 2020, page 42).

NEXT ISSUE

HEALTH

HYGIENE Special Issue

Category Focus Research How to... hygiene-proof your business

l l l

Big Interview Harry Dochelli, President, Essendant Top 100 The year of COVID-19: what does that mean? Category Updates l Mailing and packaging l Stamping