OPI APP September/October 2020 B by OPI

BIG INTERVIEW

Harry Dochelli, Essendant September/October 2020

HEALTH

HYGIENE l Specia

Issue

Cleaning is at the heart of the health and hygiene debate right now and there’s no better time to get involved as, quite simply, everybody is listening

The voice and value

OF CLEAN INSIDE THIS ISSUE l Consolidation takes shape in Europe l ACCO Brands’ consumer focus l COVID-19 silver linings l

Creating safe workplaces l Mailroom woes l Unconventional BTS season l Wholesale changes

CONTENTS 16 Big Interview Harry Dochelli on the winwins of being part of the larger Staples family 26 Top 100 The industry's main protagonists have remained surprisingly stable – so far 44 Category Update E-commerce is booming, but the traditional mailroom segment is under threat 50 Category Update The stamping sector continues to explore new avenues in difficult times 54 Research BTS 2020 – a strange season

Big Interview: Harry Dochelli, Essendant

When Essendant and Staples came together in January 2019, the expected mass exodus by dealers from the wholesaler didn’t happen. Instead, most adopted a waitand-see attitude, realising that neither of these two industry giants had been in a particularly strong position standalone. About 20 months on, are dealers now benefitting from the deal as promised? According to Essendant President Harry Dochelli, the answer is a resounding ‘yes’, for a number of reasons, not least leverage, particularly during the challenging COVID-19 pandemic. FOCUS: THE VOICE AND VALUE OF CLEAN

HYGIENE Special Issue

23 Hot Topic As the importance of health and hygiene at work has exploded, so have the opportunities for those involved in the category 34 Focus The new-found status of the cleaning sector 38 How to... ...make the workplace COVID-19 secure 40 Interview SPR's Nick Lomax on shortterm strife versus long-term potential in the jan/san space 48 Advertorial Rapesco's germ protection

REGULARS 5 Comment 6 News 56 5 minutes with... Travis Kaste 58 Final Word Robert Baldrey

September/October 2020

Organisations are looking for a way to provide answers to their stakeholders about how they’re going to protect them against this pandemic. Whether they paid attention to cleaning before or not, they now have to. Facilities managers are being asked to create protocols for protection and possible decontamination as well as reopening strategies if the company had previously shut down during lockdown. But most of these very qualified professionals have no experience in this. They are scratching their heads and trying to create something under a lot of pressure because businesses really need to open up again.

HEALTH

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

sually, at this time of year, we have an issue of OPI specifically dedicated to the jan/san category. This doesn't seem nearly broad enough at a time when cleaning and safety have risen to the top of the agenda for business leaders everywhere, so here you are – our very first Health & Hygiene Special Issue. Whether it's vendors, wholesalers or resellers, pretty much everybody has a story to tell in this segment – positive and optimistic, challenging and frustrating, or indeed a mixture of both – so look out for the Health + Hygiene sticker in these pages to find plenty of information. As it's such a prolific subject, more content can be found in the magazine section on opi.net. Or check out our brand new OPI Talk podcasts – I spoke to Dianna Steinbach from global cleaning association ISSA in August about the issues that you, our readers, most care about. You can find a summary of that interview on page 34, but please tune in and listen to the whole podcast (on opi.net/podcast).

Whether it's vendors, wholesalers or resellers, pretty much everyone has a [health and hygiene] story to tell On that note, please get in touch and give us your feedback on the first few podcasts we've produced – we want to get better and provide you with the most relevant content and analysis possible. Another big feature in this issue is the annual culmination of our continuous search for the TOP 100 most impressive and relevant personalities and operators in our industry (page 26). The full list can be viewed on page 32, but we've also highlighted a select number of entries that have particularly stood out over the past 12 months. The prize for deal of the year certainly goes to Mike Maggio (and Yancey Jones Sr). When the OPI editorial team – after long debates – put the final list together, we were somewhat surprised to see how few new entries there actually are in 2020, compared to previous years. Sadly, however, we believe that the 2021 edition might look quite different, with both companies and individuals disappearing in greater numbers. Why? COVID-19, of course, which is yet to shake out and reveal its full impact on the economy and people's livelihoods around the world. I'm immensely looking forward to a time when the words COVID, coronavirus and pandemic are not a recurring component of OPI – and everybody's life – anymore, but until then, stay safe and healthy. HEIKE DIECKMANN, EDITOR

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

September/October 2020

Executive Assistant Debbie Garrand +44 (0)7718 660249 debbie.garrand@opi.net

Health and hygiene – tell your story

NEWS

Analysis: Viking spirit

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The Office Depot trading name in Europe is to be dropped and a programme is underway to move the contract business to the Viking brand

13 years after Office Depot Europe’s (ODE) then American owners revealed plans to go to market under a single global brand – Office Depot (see OPI July 2007) – it is finally the Office Depot name that is set to disappear from the European business products scene in favour of Viking. To be fair, despite a co-branding of catalogues, Viking (or Viking Direct, as it was called) was never actually dropped in Europe – unlike in the US – and a new lease of life was breathed into it in 2011 with an extensive rebranding. Since then, ODE has operated under two trading names – and two systems – Office Depot for the contract side and the Viking online/direct unit. That is now set to change after ODE’s private equity owner Aurelius announced a strategic shift that will see it go to market solely under the

Robert Baldrey: leading the Viking+ project

Viking brand. Known internally as Viking+, the goal is to simplify the company’s organisational and IT infrastructures by refocusing the business around its Viking e-commerce brand. It will involve migrating existing Office Depot corporate customers onto an enhanced version of the Viking platform. Once the programme has been completed, the Office Depot name will cease to be used as a trading brand in Europe. The transformation is expected to take 12-18 months and will be led by Office Depot Europe Contract Chief Sales Officer Robert Baldrey. “From our perspective, this is a move we have been considering for some time and we had actually begun the journey before COVID struck,” Baldrey told OPI, revealing that smaller Office Depot customers in Germany and the Netherlands had already started migrating to Viking “with a good level of success” in terms of sales and customer satisfaction. He continued: “We had questioned how sensible it was to run with the two brands. When we looked at which one was the stronger, Viking has many millions of customers and a better e-commerce platform. Then along came coronavirus and employees started working from home. The opportunity to order from a modern website, select from a broader range of products, and have these delivered where customers choose feels very much of its time.”

AMAZON ALTERNATIVE Looking at the wider market, Baldrey believes a unified ODE has the potential to be a credible, albeit smaller, alternative to Amazon as the trend towards purchasing online accelerates. “We have the Viking online capability, which is up and running and with the volumes. At the same time, we have the sales teams – that’s something that Amazon is looking to recruit but hasn’t done so far. Therefore, it feels like a natural thing to bring the two businesses together.” Baldrey hopes the bulk of the work will be completed by the end of 2021, and that all customers will have moved to Viking by then. He pointed to the fact that it is a process of simplification as opposed to a project involving a completely new system. Also, the programme does not involve any supply chain consolidation. The main European facility in Grossostheim, Germany, runs both contract and Viking, as do the Leicester and Ashton sites in the UK.

From our perspective, this is a move we have been considering for some time and we had actually begun the journey before COVID struck

The news that Office Depot Europe has decided to focus on the Viking brand brought back memories from when Viking was first acquired by Office Depot in 1998. Viking was undoubtedly the most successful industry player in Europe at the time, and the acquisition followed a failed bid by Staples, which ultimately went on to purchase Quill. The idea behind the deal was to boost the global presence of Office Depot and use the Doug combined purchasing power Ramsdale to grow Viking’s already strong margins and operating results. And Depot paid a very significant premium to make it happen. The deal went wrong almost from the start. The foundation of Viking’s success – fanatical customer service – was called a sham by senior executives at Depot, who saw some kind of implied criticism of its own service ethic in Viking’s claim. The same was true of Viking’s strong gross margins, close to 45% compared to the average of 25% earned by Depot. Some of these senior executives claimed Viking was “ripping off” customers and would soon lose out to the competition. Viking had invested heavily in market-specific assortments and country-by-country marketing across Europe, whereas Depot tried to transplant as much of its one-size-fits-all US model. Viking’s model was criticised as being too complicated and too expensive by these same execs. The financial success of Viking, which had been generously shared with even low-level employees, was a source of the ‘green-eyed monster’, and not enough effort was made to help the two teams integrate. A lot of great talent was lost, and much of what remained did so under a very different business culture. When finally recognising that Europe is different from the US, and Depot tried to introduce smaller, city centre stores, it was hamstrung by its pricing at the out-of-town locations where costs were supposedly lower. It used the same low pricing in the city stores, knowing full well that it was impossible to generate a profit. Advertising in the press and flyers touted the Depot name and Depot pricing for both large and small stores, and commercial customers. The simple answer would have been to use the Viking name – already well-introduced, and a recognised premium brand for the personal and small business shopper. And, of course, the model was proven to be profitable. But no, such a move was just not acceptable. Pride, vanity, bloody mindedness? I was never quite sure. The performance of Office Depot plummeted shortly afterwards, with a steep decline in the all-important share price, and the knives came out. The result was that Business Week named the Depot-Viking deal as one of the ten worst ever up to that time. The synergies were lost. People moved on. An era was over. And we saw Viking become at first a shadow, then invisible. I’m still sad, but the prospect of a Viking resurgence certainly heartens me. Doug Ramsdale is a 40+ year business products industry veteran, whose distinguished career included leading the integration of Viking Office Products and Office Depot in Europe.

September/October 2020

The Viking+ project involves what ODE calls its ‘EU7’ markets: the UK and Ireland, Germany, Austria, Switzerland and the Benelux countries. That leaves out its operations in Italy and France. For the former, it is currently unclear whether the Viking+ strategy will be rolled out in that country. France, meanwhile, is a different animal. Here, ODE is a true multichannel player, having both contract and online businesses, plus a network of around 60 stores. With 2019 sales of about €380 million ($450 million), it also represents an important part of Aurelius’ investment and actually runs as a fairly autonomous unit within the ODE group. It has been undergoing a transformation under the leadership of charismatic CEO Guillaume de Feydeau since early 2019. OPI expects this process to run its course. The irony of the Viking name now taking precedence in Europe will not be lost on many industry executives who were around when Office Depot acquired the brand at the end of the 1990s (see Doug Ramsdale’s comment, right). Many will probably be thinking “better late than never”.

REMEMBERING THE OFFICE DEPOT-VIKING ACQUISITION

NEWS

For larger contract customers, Baldrey’s team is now working on the functionality requirements that will need adding, such as product and pricing customisation, reporting tools and authorisation features. Yet, at the end of the day, he expects little to change for these clients. “Larger contracts will still have a field account manager, but have a better online experience and a broader selection of products. What’s not to like?”

NEWS

Analysis: Banner makes Staples UK move EVO strengthens its position as the dominant multichannel business supplies operator in the UK The sell-off of the former ‘big boxes’ in Europe has taken another step forward with the news that Staples Solutions has sold its UK book of business to Banner, the contract stationer that is part of the EVO Group of Companies. While there had been speculation recently that, given its relative financial strength, Staples might look to expand in the UK, it has now decided to exit the reselling market altogether following an approach from EVO. “With COVID, we didn’t expect any M&A activity, but we were contacted by EVO to see if it would be possible to pursue a transaction,” Staples Solutions CEO Dolph Westerbos told OPI. “When a strategic partner approached us, we viewed it as a positive outcome for many of our employees and customers. Banner is a strong player with its own supply chain infrastructure, and the transaction creates a long-term stable platform.”

EVO not only dominates the broadline office products wholesaling sector in the UK through VOW Wholesale, but with Banner it has arguably the number one reseller in its portfolio too

PRAGMATIC SOLUTION Burdened with high fixed costs due to its state-of-the-art distribution centre in Rockingham, Staples UK has been a perennial loss-maker despite winning new customers last year and registering top-line growth in the first seven months of 2020. It appeared the only way to drive greater volumes through the distribution centre and return to profitability would be through acquisitions – or to sell the business, which Staples has now pragmatically achieved. The company said it will continue to support its third-party logistics operations in the UK, but is looking for a smaller warehouse to serve customers from. The 530,000 sq ft (53,000 sq m) Rockingham facility – which is subject to a long-term lease – is now being marketed.

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OfficeMax New Zealand to shutter stores

The EVO transaction includes the rights to the Staples trading name and branded products for three years, although Banner will have to source items itself after 12 months. “There is a transition agreement and we will work together to support Banner during this process,” added Westerbos. By the time OPI went to press, EVO had been unable to comment on the acquisition, stating that it was prioritising communications with staff, suppliers and other key stakeholders. “We look forward to the platform that the wider EVO Group represents, contributing further to the obvious progress that has been made by Staples in its UK business,” noted CEO Steve Haworth in the press release which announced the acquisition.

New Zealand’s largest business supplies reseller, OfficeMax, has said it will close all of its retail outlets in the country. In an email sent to customers at the end of August, the company revealed it would shut its 14 stores in the country before the end of October as it moves to an online-only business. This will result in the loss of 55 jobs. Sycamore Partners-owned OfficeMax said it had conducted a retail review, concluding: “The trend to increasing online purchasing, as well as changing office and work practices, compounded by COVID-19, means we need to evolve to remain relevant to today’s market.”

According to the most recent accounts available – for the 2018 financial year – Banner had sales of around £190 million ($248 million), and Staples UK just under £80 million. While those are pre-COVID figures, the combined entity is now neck and neck with Lyreco as the number one business supplies reseller in the UK. Office Depot UK had 2018 sales of around £170 million, by way of comparison. EVO DOMINATION All this means that EVO not only dominates the broadline office products wholesaling sector in the UK through VOW Wholesale, but with Banner it has arguably the number one reseller in its portfolio too. As Haworth said during two VOW webinars earlier this year – prior to the Staples transaction – EVO is aware of its position in the market and will act responsibly. There’s evidently some concern about the fact that both the country’s biggest OP wholesaler and reseller are part of the same stable, as it were. OPI is hoping to catch up with Haworth in due course to ask some of the questions that particularly dealers want to know the answers to.

NEWS

Office Depot exits Spain Office Depot Europe (ODE) has divested its operations in Spain in two separate transactions involving France-based rivals Lyreco and Bruneau. On 24 July, ODE announced its Spanish contract arm had been bought by Lyreco. The new owner will now integrate this into its existing Spanish business, it was confirmed. The two parties have also agreed on an exclusive service provider agreement for the management in Spain of ODE’s international customer contracts. A few days later, ODE confirmed the sale of its Viking online unit in Spain to

Sad passing of Ed Barnshaw

One of the UK’s most successful independent dealer principals of recent times, Ed Barnshaw, tragically passed away in a terrible accident on 1 August. Ed was just 44, but had spent more than 20 years leading Wolverhampton-based dealer Quality Office Supplies. In that time, he grew the reseller into a £25 million ($33 million) business following several acquisitions in different parts of the country. At the end of 2019, Quality was sold to the UK’s largest independent dealer Complete Business Solutions, and Ed left the firm to focus on other business interests. Ed will be remembered, not only for his bubbly personality, but also for his kindness to those less fortunate than himself. In this spirit, a donation page has been set up, with funds going to SIFA Fireside, a charity that helps homeless people. More details can be found at www.justgiving.com/fundraising/ edward-barnshaw

Bruneau, the French direct B2B reseller that has had a presence in the country for almost 20 years. The deal is expected to close at the end of October and will double Bruneau’s €15 million ($18 million) pre-COVID annual revenues in Spain. Bruneau’s Managing Director Nicolas Potier told OPI the Viking name would remain for some time and that there would be a transition period to ensure a smooth switchover to the Bruneau platform for Viking’s 24,000 customers. Bruneau will also take over Viking’s Spanish customer service centre in the north-west of the country.

Office Depot entered Spain in 2002 via its Viking catalogue brand, following with the contract channel a year later when it acquired the contract division of pan-European reseller Guilbert. No financial details of either transaction were provided.

ACCO Brands to cut costs and pivot to B2C ACCO Brands has said it will streamline operations in Mexico and North America to focus the business on faster-growing categories and channels. The manufacturer didn’t specify how many positions would be eliminated, but said these actions will result in annualised savings of $11 million. The move comes despite initiatives that reduced expenses by $33 million in the second quarter. However, the company is now expecting global economic conditions to remain challenging for some time and is therefore moving cost-reduction actions from temporary to structural. Despite managing the bottom line well in its second quarter, ACCO is facing a sluggish 2020 back-to-school season in North America and is predicting a year-on-year sales decline of up to 20% Boris Elisman for the three months ending 30 September. As many offices around the world remain empty or only partially staffed, ACCO has been experiencing strong growth in the mass merchant and online channels, partially offsetting steep declines with its traditional office products superstore and wholesaling customers. Its strategy, in the words of CEO Boris Elisman, is to “reorient the company away from the B2B trade brands towards more consumer-facing brands with end user-driven innovation”. This will include: a focus on the TruSens brand – including product expansion; developing Kensington to tap into opportunities to help productivity in a home office environment; refreshing core products with new colours and pack sizes that appeal to those working and studying from home; and considering acquisitions in adjacent categories as opposed to traditional office products.

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Office Depot acquires leading US dealer

Ed Barnshaw

Office Depot in the US has acquired one of the country’s largest regional independent office products dealers, Office Essentials (OE). St Louis, Missouri-based OE was founded in 2001 and, under the leadership of its President Jim Porter, had grown to annual sales in excess of $50 million – notably after the acquisition of Universal Business Supply in 2015 and then Midwest Office at the end of 2018. It was an Essendant first-call dealer and a member of the Pinnacle and AOPD organisations. OE operates out of around 20 locations in the states of Missouri and Illinois. Its purchase is certainly a feather in the cap for Office Depot’s Federation team run by former S.P. Richards SVP Bryan Wight. It’s the fourth dealer acquisition in 2020 by Office Depot, following three smaller deals in the first quarter of the year for an aggregate outlay of $20 million.

NEWS

Hummel’s makes double acquisition

New York state-based independent dealer Hummel’s Office Plus has made two acquisitions in the past few weeks. At the beginning of August, it bought Workplace Central-Albany, a division of regional reseller Workplace Central which is headquartered in Pennsylvania. The newly acquired business will remain at its Latham office – near Albany – but rebrand to Hummel’s, with all of Workplace Central’s staff being retained. The acquisition brings Hummel’s Central New York employee base to nearly 100. In a separate transaction, Hummel’s also acquired Smart Shoppers Club of Central New York. This is a locally-owned and operated coupon book that offers discounts and deals to hundreds of businesses in the Mohawk Valley area where Hummel’s is headquartered.

ISG confirms Industry Week

US dealer organisation Independent Suppliers Group (ISG) has announced that ‘Industry Week ’21, powered by ISG’ will take place in Las Vegas, Nevada from 22-26 March 2021. The event will be held at the world-famous Caesars Palace hotel and casino. ISG says the largest business product industry event of the year will bring together its members, suppliers and industry partners for a week-long agenda. The event will feature, among other things, a general session, educational seminars, peer networking, one-on-one dealer/suppliers meetings, and an exhibitor trade show. ISG Chairman Dave Guernsey said: “We believe it’s so important to get together face to face, collaborate and share ideas. So mark your calendars for late March in Vegas – a world-class location for a world-class event.” With the cancellation of this year’s Industry Week, ISG has been developing a series of virtual events to connect with its dealers, including member and supplier townhall meetings, one-on-one sessions, peer exchanges and a supplier presentation series.

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Domtar to slash paper production

North American paper manufacturer Domtar is to permanently reduce its uncoated freesheet (UFS) paper production as part of a $200 million cost-savings programme. Actions to be taken include the permanent closures of UFS manufacturing at mills in the US that are based in Kingsport, Tennessee and Port Huron, Michigan. In addition, the remaining paper machine at the Ashdown mill in Arkansas and the converting centre in Ridgefields, Tennessee, will be shut. The moves will reduce Domtar’s UFS capacity by about 720,000 tons (650,000 tonnes); that is in addition to the 204,000 tons taken out when it closed two machines at the end of last year. The latest programme will result in approximately 780 redundancies.

APPOINTMENTS LYRECO MAKES SENIOR APPOINTMENT Lyreco has named the current Managing Director of its ‘CASH’ (Czech Republic, Austria, Slovakia, Hungary) region, Juraj Nemjo, as its new Group Marketing Director. Nemjo – who has been with Lyreco for 15 years – succeeds Franck Suhit, who left the company in July. He will officially take on his new group role on 1 October. WARD LEAVING OFFICE BRANDS Office Brands CEO Gavin Ward has announced his departure from the Australian dealer group after eight years in charge. Ward said he was “saddened” to be leaving the group but had decided to move with his family to the state of Queensland to “look for another opportunity to start our next chapter”. He has agreed to assist with the handover to his successor, and the Office Brands board has begun a national search for a new CEO. SOENNECKEN NAMES BOARD MEMBER Georg Mersmann, the former Head of IT at Soennecken, has been named as new executive board member at the German dealer group, succeeding the recently departed Rainer Barth. He will take over responsibility for Soennecken’s IT and the LogServe wholesaling business as well as joining the group’s management board alongside Chairman Dr Benedikt Erdmann. OPI’S KELLY HILLEARD NAMED BOSS CHARITY TRUSTEE The BOSS Business Supplies Charity has announced the appointment of Kelly Hilleard as a new trustee. Hilleard is well known to many in the business products industry in her role as Finance and Production Manager at OPI. As Graeme Chapman MBE, Chairman of the charity, noted: “I have known Kelly for a number of years and have known her to be kind, compassionate and well organised; she will be a great asset to our group of trustees.” HERMAN MILLER DUO SUCCEED BYLSMA After 20 years with Herman Miller, Greg Bylsma – President of North America Contract and Global Operations – retired on 4 September. He is staying on for a further 12 months in a strategic advisory role. Succeeding him are Richard Scott and John Michael, who will take on the respective roles of Chief Manufacturing and Operations Officer, and President of North America Contract. NASH TAKES TOP JOB AT SPIRAL BINDING US document finishing supplier Spiral Binding has confirmed that Rob Roth has stepped down as CEO. He will now serve as the company’s Chairman. Taking over the CEO role is Doug Nash, who has been President at Spiral since September 2018.

EPIC Business Essentials (EPIC), the national accounts organisation owned by US dealer group Independent Suppliers Group, has announced record total sales for the first half of 2020. While it didn’t provide a figure, EPIC said H1 sales were 30% higher than the same period last year, despite the general downturn in the market brought about by COVID-19. EPIC moved quickly after the outbreak of the pandemic to help dealers grow in the high-demand PPE category and also lowered its fee structure with the launch of a model called EPIC 2.0. “Our ability to source and sell hard-to-find PPE items, add new furniture lines to our offering, and secure a significant number of new customers via our Omnia Partners public sector contract has kept us on a positive sales trajectory despite challenging economic times,” stated EPIC Managing Director Scott Zintz. EPIC has added over 30 new dealer members in 2020 and is optimistic for the rest of the year. It is currently also onboarding more than 50 independent dealers in its capacity as the website and operational platform for the new Essendant Premier healthcare group purchasing contract.

OKI to halt hardware sales in the Americas

NEWS

Record sales for EPIC

Print and document management OEM OKI Data Americas (ODA) has said it will no longer distribute printer hardware under the OKI brand in the North, Central and South American markets. The move – which comes into effect on 31 March 2021 – includes all LED-based single and multifunction, and dot-matrix printer hardware. The company said it had taken the decision following “considerable shifts in printer market demand due to the COVID-19 pandemic”. ODA reassured the market that it would continue to provide the necessary consumables, parts and service to keep its printers operational “for years to come”. OKI – which sells only into the B2B space – is the first print OEM to take such drastic action. It comes as office print volumes declined between 35-50% in the second quarter of the year and no immediate prospect of a return to pre-COVID levels.

September/October 2020 13

NEWS

IN BRIEF Antalis takeover finalised European paper, packaging and visual communications distributor Antalis is now owned by Kokusai Pulp & Paper. At the end of July, the Japanese group completed the purchase of almost 85% of Antalis’ shares.

Lyreco launches wellness hub Lyreco is supporting companies to help workers perform better and boost productivity with the launch of an online wellness hub and consultancy service called Refresh & Revive. The initiative will focus on workplace tips and advice, covering topics such as ergonomics, HR support and well-being.

WH Smith to axe jobs Retailer WH Smith is to cut around 1,500 jobs as it restructures its High Street and Travel retail operations in the UK. The company blamed the slow recovery of traffic to its stores and the need to reduce costs.

12% US workers who want to work from home full-time (Source: Gensler)

9.3%

Projected average unemployment rate for the US in 2020 (Source: US Federal Reserve)

97% www.opi.net

commerce Year-on-year eart US growth at Walm May-July 2020

An accelerated migration to digital plus higher technology adoption in business and learning are reducing the purchase frequency in categories such as paper notebooks, filing and binders

G&G awarded Blue Angel Ninestar-owned aftermarket brand G&G has become the first Chinese compatible printing supplies maker to receive German environmental certificate Blue Angel. The certification was awarded for G&G’s HP Inc and Canon compatible toner cartridges.

Leen Nsouli, Office Supplies Industry Analyst, The NPD Group

PIC OF THE MONTH: Congratulations to US independent dealer Eakes Office Solutions on reaching 75 years in business. Founded in 1945 by Howard Eakes, the company has grown from two employees in Grand Island, Nebraska, to over 250 staff spanning 13 locations across the state. Middle: President/CEO Mark Miller Left and right: Ron and Dan Eakes (Howard’s sons)

GPC ends lawsuit Genuine Parts Company (GPC) has dropped its lawsuit in relation to the failed S.P. Richards/ Essendant merger in 2018. GPC had been seeking damages after accusing Essendant of deceptive conduct and breaches of contractual obligations in its dealings with Staples Inc owner Sycamore Partners. Messe Frankfurt acquires The South African subsidiary of Messe Frankfurt has announced the acquisition of Hobby-X, an exhibition for the hobby, arts and crafts supplies sectors. The first Hobby-X under Messe Frankfurt ownership is set to take place from 4-7 March 2021 in Johannesburg.

876,000 Employees at Amazon at the end of June 2020

question

BIG INTERVIEW

OF TRUST

To call the past couple of years “interesting” for US wholesaler Essendant would be an understatement. Scepticism and fear abounded, a fear that most recently has taken a different turn, of course. But there has also been – and continues to be – plenty of opportunity, as Harry Dochelli points out

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hen talks of a takeover of Essendant by Staples Inc owner Sycamore Partners heightened in 2018, the US dealer community was predictably hostile towards such a scenario. Following the deal’s closure in January 2019, the expected mass exodus from the wholesaler didn’t happen, however. Most dealers – and the industry as a whole for that matter – adopted a wait-and-see attitude, realising full well that neither of these two industry giants were in a particularly strong position standalone and coming into the deal. Another 20 months and a certain amount of hyperbole on, is the grass really greener on the other side for Essendant, and are dealers benefitting from the ‘quick wins’ promised to them? According to the wholesaler’s President Harry Dochelli, the answer is a resounding ‘yes’, for a number of reasons, not least considerably better financial security during the challenging COVID-19 pandemic. As has become the norm these days, Zoom was the platform of choice when OPI’s Heike Dieckmann caught up with Dochelli to find out about the lie of the land of all things Essendant and the relationship with its dealers as well as Staples. The former, incidentally, still constitute its largest customer base.

OPI: You’ve been in this industry for many years and are very well known, especially in the US – although I believe you also had a bit of a stint in the UK. But for those with a short-term memory or our readers who don’t know you, can you give a short Harry Dochelli overview? Harry Dochelli: Sure. I began my OP career at Boise Cascade Office Products in 1987, starting as a sales manager and then working my way up through the ranks. As part of Boise and its international interests,

you’re right, I moved to the UK from 1998 to 2000 to manage a number of companies Boise acquired in Europe in the mid-1990s. I learnt a lot about the way business ‘is done’ in Europe in those years. Boise ended up selling its European assets to Guilbert which ultimately became part of Staples. I moved back to the US and eventually became EVP of North America Contract Sales for Boise. During that time – in 2003 – we acquired OfficeMax. I was there for about five years during that integration and then took a break from this sector to work for industrial distribution company Lawson Products, ultimately as COO. Next, United Stationers – now Essendant – came knocking on my door and when the time was right, in 2012, I joined the wholesaler. To start with, my responsibility was the independent dealer channel (IDC) – VP IDC Sales was the job role – and from there I worked in various positions, ending up, as you know, where I am now. OPI: Let’s get straight to it – Essendant sleeping with the enemy as it were when it joined Staples under the Sycamore Partners umbrella. Although Staples was already a big customer

BIG INTERVIEW Harry Dochelli

Most of our customers gave us the benefit of the doubt in the early days rather than jumping ship immediately

OPI: We’ll get to these benefits a bit later. What about you though – what lessons have you learnt so far?

September/October 2020

of the wholesaler, so it was just the nature of the relationship that’s changed – the relationship per se was already well established. I believe it was your presence and past performance that instilled a lot of confidence in dealers during a period of huge uncertainty when the deal closed and you replaced Ric Phillips as President. It must have been an anxious time. HD: It was, but for me, it was really about communication and remaining focused on the customer. This has always been a crucial aspect at Boise – we were tough to beat back in the day from a customer service perspective, and I like to think I still bring that sense of focus to our organisation today and drive it down to all our staff. So, in the first six months or so, it was all about communication and answering questions,

especially as there were a fair amount of conspiracy theories going on at the time as you well know. Trust comes into it in a big way. I believe we proved to our customers they can trust us implicitly, for example with the firewall situation. The importance of this firewall is huge for us, it’s ongoing and most definitely not casual. We recently put out a Q&A around our monitor activities, how the consent decree works, and the requirements we have to meet to protect the data of our resellers. We absolutely need to maintain the trust of our customers and the way to do it is to protect their data in a manner that would never compromise any kind of issues for them going forward. Thankfully, most of our customers gave us the benefit of the doubt in the early days rather than jumping ship immediately. And well over 18 months in now, they’ve realised the world has not come to an end. I would argue that they’ve even seen some benefits as a result of the deal with Staples.

Harry Dochelli BIG INTERVIEW

HD: Well, I’m not sure if it’s a lesson learnt or just common sense, but I’m acutely aware that bringing together the complexities of a $4 billion organisation with an equally complex $17 billion corporation is not easy. Everything takes a lot longer than you want it to, that’s just a fact, especially as we completely started from scratch when the deal was done, ie without any pre-planning or strategic talks. One thing is certain though and that’s Essendant’s financial stability – it’s so much better now. Quite frankly, I’d go as far as to say that given the difficult period we’re all in now, I’m in much better shape being part of the family under Sycamore, which has been very supportive, than I would have been as a standalone business. OPI: That trust you’ve referred to – is that even more important now, given recent announcements of your main competitor S.P. Richards (SPR) and the fact there appears to be added certainty again with that operator? New President/CEO Mike Maggio is obviously also hugely experienced in the wholesale distribution business through previous roles. HD: I’m not convinced it’s more important as a result of recent events. Trust is just of bottom line importance in any relationship. The closeness we have with our customers, especially with independent dealers, is second to none in my opinion, both on a personal and business level. We’re as close to a franchise model as you could possibly be without actually operating one. OPI: Interesting you call it a near franchise model. There’s often talk about the wholesalers – and not just Essendant – having minority stakes in dealers. Can you shed some light? HD: I won’t share with you who we have investments in, that’s not for me to say as a minority partner in some of these companies. If the dealers would like to share it, that’s their prerogative, but I think you’ll find most of them are not really interested in talking about it.

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OPI: You’re definitely correct there! HD: But let me say this: we look at it as the ultimate relationship. When I make an equity investment in one of our key dealers, we are then really attached at the hip in a way that’s different from the past because their success improves my investment over time. So yes, we’ve made investments in dealers in the past and we continue to do that, Staples or no Staples.

OPI: When SPR came out with its ownership news, Mike Maggio and Yancey Jones said: “We’re not just here for the dealers, we’re here for every reseller of business supplies.” No secret was made of the fact that 50% of its revenues comes from the likes of Office Depot and Amazon. Both gentlemen also issued a call to action that the notion of a first and second wholesaler should be scrapped. HD: I feel the same – all customers are customers. Obviously, you have clients of different sizes and

needs, and we service them appropriately for the business relationship we have. That definition of first and second call is quite irrelevant today. Our job is to service our customers in a way that they want to do more business with us, it’s quite simple. OPI: What is your customer sweet spot? HD: First, we don’t sell to Amazon direct, but we do support our resellers that are on Amazon. Everybody knows that WB Mason is a big client of ours. We are a significant player in the e-tail channel and we have a channel called Specialised Resellers that we participate in. Our jan/san segment is a very significant piece of our business – you may remember that we bought jan/san wholesaler Lagasse many years ago when we were still United Stationers. Lagasse has long been merged into the rest of Essendant and it’s been a crucial part of it, particularly lately. I’m sure we’ll get to the jan/san and PPE part of the business later. All that said, our largest combined customer base to this day is still the IDC. OPI: Before we get to all COVID-19 related topics, let’s stick to that biggest client base and the benefits for the IDC so far from the deal. HD: Sure. The benefits are actually quite interlinked with the pandemic. One of them, of course, is e-commerce. The shift to digital is hugely important and there’s been a significant sea change in that regard. We’ve been making some considerable investments here, with the help of Staples’ technology capabilities. Areas where we’ve improved so far cover content, user experience, personalisation campaigns and customisation.

When the actual [sourcing] negotiations take place, if it’s a joint supplier [...] then those negotiations happen with the Staples team and they take the lead We’ve also just launched a series of sales training webinars around virtual selling to help our customers and their sales people learn to adapt to this new environment. OPI: What about sourcing, is that a joint effort? HD: It varies and it depends. We’re independently run and I’ve got a different board than Staples has. I also have my own set of objectives, but where there’s opportunity to leverage, we do exactly that. For PPE, the product category so in demand right now for example, we work with the Staples sourcing team to see if they’re uncovering anything that they can share with us and vice versa. In this new COVID world, where everything is moving so fast and there are daily changes, we’ve organised a taskforce within Essendant that is doing this full time right now. It’s all they do, sometimes with the Staples guys, sometimes without, depending on what’s beneficial and makes sense.

OPI: What are your current priorities? HD: Well, this goes back to pre-COVID, but is just as important now. One of the big projects we’ve worked on with Staples is a programme called Market ADOT (Automated Distribution Order Transfer). It’s the ability to have a primary warehouse for our customers and then a secondary and tertiary facility in order to get the

OPI: The final topic – and it’s a big one – is COVID-19. You’ve already said that, given the current circumstances, you’re in a better position now under the Sycamore umbrella than you would have been otherwise. Tell me a bit about Essendant in a coronavirus context. HD: First and foremost, I’m really proud of how my people have handled the challenges of this pandemic. These are unprecedented times and staff have really gone above and beyond and at all times remaining focused on the customer. We use the Net Promoter Score to measure customer satisfaction levels. We review that on a daily basis to see what our clients are telling us and what we’re seeing is good. In the early stages, there was a lot of ordering and hoarding of products; then we had a shift and had to find new items to sell in order to keep our and our dealers’ top line going. We added over 400 new SKUs and $80 million in inventory to support our customers with those new items. OPI: I’m guessing you’re talking about jan/san, PPE and health and safety products? HD: Yes, and I would say what made a big difference to us is that we’ve been a significant player in the jan/san channel for many years due to Lagasse as I mentioned earlier. As a result, we’re one of the largest distributors of Clorox, RB and GOJO Industries products and fortunately wield some power in that space. Some might say: “Yes, but you still can’t get it anymore than the other guys.” The data we have doesn’t support that argument. We had some serious high-level conversations with those big

September/October 2020

OPI: What about private label? That seems an obvious area to combine forces. HD: Absolutely. We have an extensive private label line already – Universal for traditional office products; Boardwalk and Gen for the jan/san category; Innovera for technology products and Alera for furniture. But we’re looking to add about 20% more items to our private label offering. We’re currently evaluating what we have versus what Staples has. Innovera is our private label technology line, like I said, but we’re short on items in that range, so we’re going to expand this as we start to look across our joint portfolio of brands and decide where we could start doing dual sourcing together. I’m excited about what this collaboration might bring. I think it’ll strengthen our brands and with dual sourcing, we’re going to get some better prices that we can pass on to our customers.

BIG INTERVIEW Harry Dochelli

As regards general sourcing, I have my own merchandising team looking out for our customers in terms of assortment, categories and their expansion, supplier relationships, etc. I know from my Boise days how different it is to be a wholesaler versus a direct seller from a sourcing perspective. But when the actual negotiations take place, if it’s a joint supplier – and that’s the case for about 70-80% of all our suppliers – then those negotiations happen with the Staples team and they take the lead.

highest fill rates possible. Our goal in most cases is to deliver on a next-day basis, but in certain geographies our warehouses are just not close enough to get to that service level. Historically, with ADOT, our warehouses have talked to each other to fulfil orders and Staples have talked to us as a customer – we have been supplying the reseller for many years as it was a main partner pre-Sycamore days and it’s worked very well that way. But now we want the Essendant and Staples warehouses to liaise with each other too, so that Staples can fulfil orders as well. Market ADOT will give us that capability and we’re going to pilot it in a few facilities this autumn to test it. Our warehouse and order management systems are very complex, as are those of Staples. Our IT teams are working hard at testing everything they can to ensure a good rollout. Let me say though that customers have the option to either opt in or out of this – if they don’t want orders going through a Staples warehouse, they don’t have to. But we’ve talked to many already and most seem pretty comfortable with it, because of the advantages they get. Immediately, they see an uptick of about 5,000 SKUs that we don’t have. Fill rates and service levels will also go up significantly because of better proximity. This is what we’re essentially looking at: how, on a combined basis, can we serve our customers better and realise improved efficiencies?

Harry Dochelli BIG INTERVIEW

manufacturers about our position in the market, which only gets stronger when you add Staples into the mix, as it’s a large seller of those products too. Acquiring these items during this time was made more complex as manufacturers weighed in on how we allocate product. Our team was quick to develop an allocation process that met the requirements of the key suppliers and assured the continual supply of product. OPI: Are most of your dealers capitalising from the jan/san and PPE opportunity? HD: Most of them. Some are what I would call fairly casual in what they sell while others are completely focused and have a team of people who drive that category – they’re serious players. So much so that jan/san distributors see them as competitors now. If you had asked a jan/san distributor four or five years ago which OP dealer they were competing against, they would have said: “I don’t know what you’re talking about – what OP dealers?” That has changed. OPI: Going back to the 400 products you introduced quickly. Was sourcing an issue? HD: It was a huge challenge, as I’m sure everybody in the same position would tell you. We had to find a lot of new suppliers in those areas; with that came the quality controls and all the rest of it. In many cases, payment as well as contract terms were different too.

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OPI: How would you describe the state of play in the IDC and your customer base now? Sadly, we’re not out of the COVID woods yet.

HD: No, unfortunately you’re right. It’s common knowledge that pre-COVID there was already the secular decline of the traditional categories – copy paper, ink and toner, and traditional office products. Technology is replacing a lot of these items, which is why many of our best customers have substantially diversified and actually don’t call themselves an office products company anymore. Those same clients have quickly sourced and built their top line with COVID-related items. I think the nimbleness of an independent dealer has really shone during this pandemic – the speed with which they can move, the decision-making, the personal relationships they have with their customers. I’ve seen some incredible things being done by our dealers in order to weather the storm. Obviously, the larger you are, the more capabilities you have. But that’s not to say only the big players have done well; I’ve heard some amazing stories about smaller guys finding product in unusual ways to help and take care of their end consumers. All that said, there have also been casualties and I’m sure there’ll be more to come. OPI: Having digital capabilities must have helped at a time of mass migration to homeworking. HD: Definitely. Many of our dealers operate websites and have partnered with us to enhance their e-commerce capabilities in areas like product content, search and navigation, digital analytics and marketing, and email marketing. We have continued to invest in these services to keep up with the pace of innovation, as well as adding new offerings. For example, we will be hiring SEO and SEM experts to support our dealers in expanding their available tools to acquire customers.

OPI: A business model that supports home delivery or hybrid work makes sense too I guess. HD: A lot of the larger dealers have made available programmes for their customers and employees now working at home. But it is challenging, no doubt. Making deliveries into residential neighbourhoods is not what dealers are meant to do, but they’re doing it, with really good drivers who are high touch and deliver a great experience. A model with 100% home delivery will be too expensive, however. As people start coming back to work, I expect the concept will be more to order products to the office. Staff needing those items can then take them home to allow them to operate from there efficiently. A good percentage of the US workforce – up to 57% I believe, according to some studies – will continue to work remotely in some shape or form going forward. It’s the dealers’ job and opportunity to sell to their customers the idea that, yes, staff can work from home one, two or three days a week, but these are the items they will need to do so effectively. OPI: Is that scenario more likely than having a small discretionary budget where those people just go to the likes of Amazon for their supplies? HD: There’s no doubt that the shift to operators like Amazon or Walmart is big – you only have to look at their numbers. We have to help our resellers offset the convenience of an Amazon with programmes that make the decision an easy one for the customer. You cannot replace the personal service that our dealers provide – none of the online players can. OPI: Costs for Essendant must have been up considerably as well, with all the direct drops to end users. HD: Absolutely. Think about deliveries for the parcel carriers – they used to do 40 boxes to a dock of a company – now we’re delivering all those products to homes residentially. It’s driving cost up across the industry and we’re feeling the impact. It’s another reason why Staples is such a good partner. Deals with our freight carriers get negotiated on a combined basis, so that gives us some leverage with operators like UPS and FedEx. That said, leverage at some stage becomes irrelevant because their costs are going up too and they’re naturally passing those on.

OPI: So much has happened that the deal, not to mention all that went on beforehand, seems a lifetime ago. HD: That’s very true. And mostly, when you’re doing these kinds of deals, there’s a lot of pre-work and pre-planning. We didn’t have any of that. In fact, a lot of the Staples people we met was on day one. I always said that day one really was day one in every sense. It then took us a good six months to work through the whole organisational design – how were we going to operate? Only then, ie about a year ago, did we start prioritising projects and deciding what made the most sense first. Then a few months into that COVID happened, so priorities changed again. What I would say is that the tree is starting to bear some fruit, but we had to plant the tree first and it had to grow a bit. Then we had a disease season that slowed us down a bit. But I’m excited about the future – we’ve got some great plans. We’re sharing these with our advisory councils – there’s one for OP dealers and one for jan/san distributors. We always give them insight into what we’re working on and get their feedback. This guidance is great and really helps us shape our strategy. OPI: Final question and I know you can’t really answer it: what are the chances of Sycamore taking Staples or indeed Essendant public again? There have been murmurings… HD: I’ve learnt to never say never. Just like any other company, you want to bring the greatest value back to your customers, investors or shareholders and whatever path this leads Essendant down to enable that, that’s the path we’ll take. As for Staples, you’d have to ask Sandy Douglas that question. Whatever we do, we’ve built the proper processes and put agreements in place to ensure that the benefits we are getting underneath the Sycamore umbrella could continue no matter what happens. OPI: An answer of sorts! Thank you Harry for your time and insights – much appreciated.

September/October 2020

OPI: What about Essendant itself in terms of COVID? What has been your experience? HD: I don’t think we were different from anybody else. The first thing to consider was obviously the well-being of our employees, so we put practices in place in our distribution centres to ensure the safety of the people there. We are a distribution company, so couldn’t send everyone home. Where we could, we started working remotely very quickly. We’re refining that on an ongoing basis to ensure everybody is as productive as possible. As a leadership team, one of the most important things was communication – both to our workforce and our customers – and I think we did that very

effectively. Most of the customer communication came from our sales leader Renee Starr as we were trying to keep them informed, not only on products we were coming out with, but also service levels, any issues that we were having, etc. Essendant had to close down a couple of warehouses temporarily, due to COVID infections, and were very open and transparent about that. Within the management team, meanwhile, we were meeting virtually every day because decisions had to be made. We all learnt how to be more nimble and agile through this and prioritise better. As within any big company, sometimes you get stuck in bureaucratic processes and take ages to make decisions. Well, in a pandemic, you don’t have that time and as such maybe take some risks here and there along the way. As long as you always remain focused on servicing your customers, it’ll be fine – and I am pleased to say we did that.

BIG INTERVIEW Harry Dochelli

For more exclusive content from the interview, particularly Essendant’s Vertical Markets Group and its recent contract wins, please visit the Magazine section on opi.net.

HOT TOPIC

HEALTH

HYGIENE

Silver LININGS Special Issue

As the concept of health and hygiene in the workplace has changed beyond recognition, the business supplies sector has been rallying to play its part. It’s been a colossal challenge, a phenomenal opportunity and a steep learning curve – by Heike Dieckmann

OVERWHELMING DEMAND GOJO – best known perhaps for its PURELL hand sanitiser range – ramped up production at all its manufacturing facilities when the scale of the pandemic became apparent. By March and despite record-breaking production levels, the

company said it had to prioritise the distribution of key products to ensure hospitals, first responders, and critical infrastructure providers could access the items they needed. It was simply overwhelmed. US-based Deflecto is another well-established brand in our sector – albeit in a different sub-category – and it has certainly risen to the challenge. Not all parts of its portfolio have done well in the past few months, but the company has launched an impressive 50 new products in a very short period of time.

There is one category that has moved to the top of the agenda and become relevant to every conceivable customer group: health and hygiene As Maggie Waples, Global VP of Product Management and Marketing, says: “Sneeze guards are popular and are used in a wide variety of contexts including retail, grocery, drug store chains, businesses, municipalities and schools. This product category was literally born out of COVID and did not exist six months ago. Demand for these products continues and the supply chain is new and without any major leaders, so the results are significant to the company. “Signage, meanwhile, is part of our core business, but we expanded it into social distancing signage

September/October 2020

hatever ‘business as usual’ was in early 2020, it came to a sudden halt in March for most of us. Sales of traditional OP – certainly through the established distribution channels and perhaps to the benefit of online operators – plummeted when large swathes of the global workforce were sent home and into various lockdowns. Several segments have fared well as a result of the homeworking trend. But there is one category that has moved to the top of the agenda and become relevant to every conceivable customer group: health and hygiene. It encompasses everything from all manner of jan/san products to PPE, signage and safety equipment. Demand for these items in the early days of COVID-19 was ferocious and the need immediate. So much so that manufacturers in this up-until-now mostly adjacent segment in our space were inundated with requests for products that have long been in their portfolio, but where historically demand has been steady and continuous. Most vendors, predictably and understandably, couldn’t keep up as supply chain disruptions occurred all around the world.

Health & Hygiene HOT TOPIC

such as floor markers, seat and water cooler signage to help companies and schools easily communicate available seating and distance. "We also manufacture anti-fog, disposable face shields (non-medical) and have used our sourcing expertise to contract with the NHS in the UK to supply masks.” Antimicrobial and antibacterial have become big terms again and are being used in an ever-growing range of applications, by Deflecto and many other operators. Specialist of technical cleaning equipment AF International has seen vastly heightened demand for antibacterial products, in terms of workplace and home office cleaning supplies, as well as PPE such as safety glasses and hearing defenders. Marketing Manager Julia Vorley comments: “Technology cleaning has become hugely important as tablets and smartphones have functioned as a lifeline to the outside world.”

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As vendors could not meet the pandemic demand, new suppliers have stepped in with alternative product to help bridge the gap

UNORTHODOX SUPPLY CHAIN The sheer scale of demand meant that the reseller and wholesaler communities in our sector typically couldn’t fulfil customer requests through the usual routes. Frank Hoard, Director of the Facility Supply Channel at US dealer group Independent Suppliers Group (ISG), says: “As vendors could not meet the pandemic demand, new suppliers have stepped in with alternative product to help bridge the gap. “As of August, the disposable gloves market, kitchen towels, disinfecting aerosols and disinfecting wipes were the products hardest to come by. It has meant that the independent dealer channel has moved towards far more self-sufficient and unorthodox supply chain options.” Gloves, by all accounts, has been a particularly difficult sub-category – a “nightmare” as several dealers reported. One of ISG’s vendor partners, meanwhile, according to Hoard, compared the disposable glove supply chain to a fish market, with different brands, fluctuating availability and pricing that had to be secured literally every morning. He adds: “From 27 July to 10 August, disposable glove pricing increased by more than 80%. Indications are that it will increase further until the end of the year. It’s incredibly difficult for dealers to explain that volatility to their customers.” At the other end of the spectrum, overcapacity is an issue too. Face masks are a good example of this, explains VOW Wholesale’s Buying Director Simon McLoughlin. “Understanding the trends within the trend has been a real challenge. The high demand for face coverings has seen three different product areas growing, spiking and declining at various times. These are disposable respirators and medical masks, disposable

civilian masks and reusable civilian masks. The same can be said of the sanitiser market with individual, desktop and bulk fill products trending in several ways. The net effect was an often overinflated view of anticipated and future demand that led to the current overstocking.” MEETING STANDARDS A move away from tried and tested sources of supply, which so many resellers had to explore, has also meant the risk of procuring fake and fraudulent products. Masks not meeting standards they were approved for by the relevant regulatory bodies, false claims on packaging or hand sanitisers that include dangerously high levels of methanol are all examples of at best unethical, at worst health-threatening opportunism. Ongoing education and meticulous verification processes are vital for everybody, but most definitely for those new to and uninitiated in the hygiene and PPE game. Data Direct is one such operator. Based in the UK, it’s known as a distributor of copier and printer supplies, consumables and associated value-added services. But when COVID hit and the need for PPE became apparent, the business adapted quickly to support its 600+ dealers that urgently required these items not only for their employees, but also for an increasing number of their customers. Securing reliable, quality-assured products from trusted sources was a priority for the purchasing team, says Procurement Director Peter Cowan. There were other challenges too, as he explains: “The whole process has a been a big learning curve. The problem initially appeared to be availability, but in actual fact, it was more a case of tactical logistics that was required. Our usual partners were able to help us overcome these barriers. Another huge obstacle was the availability of space on vessels and planes, and the resulting exorbitant pricing to secure that space.” Data Direct has further branched out into uncharted territory with the recent launch of a new COVID-specific item called the Hygienehook. Created by its in-house product designer, the Hygienehook is designed to help people open, hold and close doors safely, without ever touching them directly. The product has received considerable coverage in the mainstream media. New, pandemic-related R&D has become imperative, especially for vendors that were historically more at home in the severely declining traditional OP categories. Germany’s Durable has done just that. As Managing Director Rolf Schifferens points out, items like its name badges have taken a real hit, as they’re typically used for events which are non-existent right now. But the company remains upbeat and embraced the challenge, according to Schifferens. “Our experience has been positive. We have created a special task force to ensure speed and a special focus on potential products in order to be quick to market. "We launched a number of new items, spearheaded by face visors and hygiene dispensers. Based on our core competencies,

SIGN OF THE TIMES As mentioned earlier, Signage has become another main component of this COVID world, in terms of social distancing as well as the labelling of products. Avery has been developing its industrial product range for years, so is ideally placed to support its reseller partners with adhesive safety signage items. Where the vendor has seen particular spikes in recent months too, however, has been in the area of chemical labelling goods.

For more content and opinions canvassed from OPI’s interviews with industry participants on the subject of health and hygiene, please visit the magazine section of opi.net.

How can we safely reoccupy the workplace and protect our most important assets – our people?

CLEANING FOCUS: HERE TO STAY Everybody is talking about the future, the dreaded – or is it highly anticipated – ‘new normal’. The resounding consensus from everybody OPI talked to, not just for this feature, but several other health and hygiene-related articles in this issue, is that, even if and when COVID doesn’t pose a threat anymore, the sharpened focus on all things health, hygiene and safety will stay. That means sustainable sales from these categories which have forged their way into our sector so vigorously. It has also resulted in a considerably better educated consumer and supplier base across the board and, as such, better preparedness for whatever may come next. Those factors combined, plus a hopefully happier and healthier workforce, surely is a good thing.

September/October 2020

As Group Product Manager Colwin Chan says: “With the need to disinfect every area of our work and home life, transferring and diluting concentrated disinfectants into spray bottles has become more and more common. We’ve seen demand dramatically increase for chemical-resistant labels for 32-oz spray bottles used in manufacturing and medical facilities, warehouses and offices. “In the workplace, identifying chemicals in secondary containers like spray bottles is a critical safety component. They must have labels compliant with OSHA's Hazard Communication Standard as well as correct Safety Data Sheet information. We have noticed not only a rise in the number of labels sold, but also access of the Global Harmonised System Wizard and templates on our website as they are being used to customise and print individual labels.” Health and safety at work – and that workplace is often still at home right now – goes way beyond cleaning needs in an effort to stop the spread of COVID-19. Employee mental well-being aside – a completely different and huge issue not covered in this feature – the realities of so many homeworkers have also meant considerable opportunities in other areas. One of these is ergonomics. Fellowes Brands’ Johan Hereijgers, Global Market Senior Director of Work Solutions, explains: “As staff are now working from home with a longer term set-up in mind, we see that they want to get more organised and comfortable. It isn’t working for people to have monitors set up on boxes, for example. As a result, we are witnessing a shift towards better home office ergonomics.” There’s no doubt, however, that there’s a real need to fill offices with people again, from a psychological as well as economic viewpoint. But to do that, staff need to feel safe to return (see also ‘A deep dive’, page 38). Appropriate signage, perspex and acrylic screens, re-configured spaces, temperature checks, not to mention a severe uptick in all things

cleaning, will contribute to that feeling of being looked after properly. As Mike Booth, Global Market Director of Air Treatment at Fellowes says, a side effect of the new COVID and ultimately post-COVID office has also been a much bigger focus on air purification. He asserts: “HR professionals, facilities managers and business leaders across the globe are all facing the same challenge: how can we safely reoccupy the workplace and protect our most important assets – our people? We believe air hygiene is as critical as handwashing and surface sanitisation. This is backed by experts in the field who are advising organisations to consider the use of localised HEPA air filtration as part of a re-occupancy plan.”

HOT TOPIC Health & Hygiene

we have also created other solutions to help companies reopen and meet the requirements set by local authorities. Demand is coming both from our existing partners as well as new entities.”

Who’s Who in OP? TOP 100

his time last year, few would have predicted that a global pandemic would strangle supply chains and lead to lockdowns that have kept millions of people away from their places of work and learning. The impact on the business products industry – like many others – has been profound. Demand for traditional products has fallen off a cliff almost overnight, retail stores were forced to shut and offices around the world remain devoid of staff. There were suggestions that 2019 was a ‘pivotal’ year for the business supplies sector – especially in the US. Surely, the same and more can be said for 2020, although this time it’s more a case of external circumstances dictating developments, rather than internal initiatives driving our industry proactively from within.

Any description of the business products sector in 2020 would contain the words ‘challenging’ and ‘unprecedented’. However, ‘agile’ and ‘resilient’ also spring to mind as many players have adapted their businesses to cope with the havoc wreaked by COVID-19. The crème de la crème of our sector has not only been resolute in the face of adversity, but has grasped new opportunities and, in some cases, even thrived, as the OPI editorial team found out Does that mean all is well and we can rest on our laurels and celebrate the stability of the OP industry? Definitely not. The true impact of COVID-19 has yet to be felt; things will become clearer as government-backed furlough schemes and other financial measures come to an end. Already, many firms are announcing permanent layoffs – some of them involving thousands of employees – and the short-term economic outlook is bleak. Will all companies survive? Unlikely. The above factors will no doubt lead to further consolidation, quite possibly involving some of the names on the Top 100 list on page 32. From the full list, we have selected a number of people from different geographies who we felt were worthy of special mention this year (that’s

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The true impact of COVID-19 has yet to be felt. [...] Will all companies survive? Unlikely

CHANGING PRIORITIES No doubt, existing strong trends such as core product declines, e-commerce growth, digitisation and consolidation have accelerated. But also – and this is clearly evident in this Health & Hygiene Special Issue of OPI – slow-burning ones such as homeworking, the hybrid workplace and the need to supply PPE have exploded. Yet, despite all the turmoil, it’s largely a matter of ‘steady as she goes’ in this year’s OPI Top 100 list of global resellers. In 2019, there were a record 19 new entries; the year before 15. In 2020, there are just seven – with three of those coming from the Australasia region (including the as-yet-unnamed successor to Gavin Ward at dealer group Office Brands).

not to say the others aren’t, but we can’t highlight them all). A familiar face among these is Mike Maggio, who also featured in 2019 in his role of CEO at Independent Suppliers Group in the US. Kudos to him and Yancey Jones Sr for pulling off the transaction of the year so far in acquiring wholesaler S.P. Richards. Others, such as Steve Haworth, Danièle Kapel-Marcovici, Richard Scharmann and Joe Taylor, have all been involved in major acquisitions in their respective markets over the past 12 months and have set their businesses on course for a successful future post-COVID-19. The Top 100 is an evolving – and fiercely debated – beast, now more than ever. The 20th edition next year could look very different.

Who’s Who in OP? TOP 100

AMERICAS

Mike Maggio

President/CEO, S.P. Richards

What a difference a year makes, in so many ways. In October 2019, Mike Maggio appeared in these pages following the long-awaited merger of TriMega Purchasing Association, Independent Suppliers Group (ISG) and Pinnacle Affiliates. When he was appointed CEO of new, combined group ISG – with Mike Gentile named as President – little did we know that talks were already underway to embark on another remarkable

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AMERICAS

journey. That journey reached its destination at the end of June when news of the acquisition of Genuine Parts Company (GPC)-owned S.P. Richards (SPR) by Maggio and Yancey Jones Sr broke. The idea behind it? In all likelihood to save S.P. Richards from a less desirable fate – from an independent dealer point of view certainly – of also coming under private equity ownership or alternatively being bought by an operator like Office Depot. The deal ‘only’ included the purchase of SPR’s core wholesale business, meaning the Supply Source Enterprises (SSE) division – comprising Impact Products and The Safety Zone – were divested separately. Despite SPR’s growing focus on the ranges that these entities sell – PPE, safety and hygiene products – a purchase of SSE was never on the cards, according to President/ CEO Maggio, as it would have compromised SPR’s role as a logistics provider only (as opposed to a manufacturer as well). The acquisition has been roundly applauded as a good solution for all concerned, finally providing a new sense of stability as regards the future of the wholesaler as well as the dealer community. That said, Maggio has been clear about the fact that the deal was not made purely with independents in mind. SPR’s vision, he said, is to be a wholesale distributor of business products to all resellers. These, as is well known, include the likes of Depot and Amazon which combined make up about 50% of the wholesaler’s revenues. With a new and very experienced senior management team in place since July, it will be interesting to see what the next few months bring.

Denis Mathieu CEO, Novexco

Novexco began 2020 with the acquisition of the Canadian operations of S.P. Richards (SPR). CEO Denis Mathieu said he had been pursuing SPR Canada – which had sales in 2019 of approximately $50 million – for some time. The stars finally aligned when SPR owner GPC looked to offload certain assets that were not part of the planned takeover of the US business by Mike Maggio and Yancey Jones Sr (see above). The addition of SPR Canada bolstered Novexco’s existing wholesaling operations in Canada, giving it coast-to-coast market coverage. The transaction also included the rights to the SPR Canada name. Given its strong brand reputation in the market, this will become Novexco’s wholesaling brand in Canada, meaning an integration with its existing Chestwood business. Novexco and SPR in the US have also developed a strategic relationship for the provision of private label brands such as Business Source, Genuine Joe and Lorell. Mathieu moved swiftly to take decisive action at the outset of the COVID-19 pandemic. Setting up what he called a ‘SWAT team’, the group’s leadership took aggressive steps to reduce both fixed and variable costs. These included temporary layoffs and a reduction in the number of distribution facilities from ten to eight. The measures resulted in Novexco ending its financial year to 31 May on a strong footing and being able to increase its dividend payout to members. Initiatives also comprised financial support to more than 100 independent dealers that operate under the Hamster brand. They were given improved payment terms, a cut of

the revenues from the central Hamster.ca website – which, incidentally, was up 600% as consumers moved online – and an additional dividend. The current financial year has got off to a good start. Organic sales (excluding SPR Canada) were up between 3-4% in the June-August period as members tapped into the wider assortment of cleaning and PPE products.

Udo Böttcher

Managing Director, Böttcher

Doing well in good times is not so difficult. Meeting and exceeding expectations under very challenging circumstances is something else altogether. It’s exactly what online reseller Böttcher has been doing during what was already a stagnating German market, well before COVID-19 hit the world in early 2020. Since 2017, the company has been averaging €70-80 million revenue increases and this year should be no exception, with 2020 still earmarked for breaking the €500 million ($586 million) sales barrier, up from around €430 million in 2019. Managing Director Udo Böttcher and his team of about 500 certainly planned something different for this year, including celebrating the company’s 30th anniversary in some style. That will have to wait for the time being until COVID restrictions ease further. But Böttcher has been busy serving its six million customers in the current crisis. With online shopping in general having seen phenomenal growth in the past few months as retail sales ground to a complete halt in March, Böttcher had an exceptional period, with sales in April alone up 40% compared to the same month last year. According to a survey on online visibility of office products resellers in Germany, the company came second, behind only Amazon. Out of all e-commerce operators in the country, Böttcher has entered the top 20, with steady further ranking growth envisaged. All the demand has put a severe strain on the reseller’s operations, especially at a time when many members of staff had to resort to homeworking due to child care issues,

EUROPE

TOP 100 Who’s Who in OP?

EUROPE

for example. Logistically, Böttcher has been running on full capacity for the past few months, owing to unprecedented demand, particularly in product categories such as jan/san, PPE and safety. Shortages from some of the better known manufacturers have meant the quick onboarding of new vendor partners which, says Böttcher, bodes well for the future prospects of these players, as end users may remain loyal to these new entities. The company’s expansion work of both its distribution as well as office facilities, which began last year, is on track. The warehouse is expected to come on stream next year and then be fully operational by mid-2022.

Steve Haworth

CEO, EVO Group of Companies

September/October 2020

It’s been quite a year for UK operator EVO Group of Companies, but under the steady hand of CEO Steve Haworth, the company has risen to each challenge and seized every opportunity. Recent events have validated its top position, with business supplies reseller Banner starting the year on a roll with the first three months showing market-beating sales growth of 6.5%. This business also pivoted quickly during the COVID-19 pandemic, adding PPE to its already broad capabilities and then, in August, acquiring the UK contract and online operations of Staples Solutions. The combined sales of the two companies – estimated to be around £270 million ($354

million) – now have Banner poised to overtake Lyreco as the largest business supplies contract player in the UK. Banner’s e-commerce capabilities on behalf of manufacturers have been further established in the past few months with sales growing by 300%. Haworth believes the reseller will also benefit from the recently announced withdrawal of Office Depot from this market. With the demise of Spicers in May, VOW Wholesale became the UK’s main broadline supplies wholesaler. It subsequently invested in expanding its reseller development team and operations to ensure ongoing service provision for those dealers that were previously with Spicers. Before the pandemic sent everyone home to work, the first quarter of this year witnessed growth at VOW and VOW Ireland of 6%. At the beginning of 2020, the wholesaler also embarked on its ‘warehouse and wheels’ strategy. This includes a reseller loyalty scheme along with direct deliveries to end users, allowing its customers to deduplicate cost, improve efficiency and really compete given the new market dynamics. VOW is gradually re-establishing its valued-added overnight delivery services. Dealing with coronavirus, EVO Group responded rapidly to changing demand. VOW established a new Infection Control category and has introduced over 1,400 lines of additional jan/ san, PPE and social distancing and signage products. 2020 undoubtedly hasn’t been an easy ride for anybody so far. EVO Group has been swift and surefooted in adjusting to the COVID-19 situation, reassuring its suppliers and customers and preparing for the future.

Who’s Who in OP? TOP 100

EUROPE

Danièle Kapel-Marcovici CEO, RAJA

RAJA’s 2019 acquisition of Staples Solutions’ operations in France, Italy and Spain (collectively known internally as RAJA Office) certainly took the office products world by surprise. However, it was really a continuation of a product and geographical expansion that began in the mid-1990s. Nevertheless, with annual revenues of around €320 million ($380 million) and the addition of about 1,000 staff, RAJA Office was by a considerable margin the packaging specialist’s largest acquisition to date.

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The rationale behind the move was the realisation that B2B purchasers are increasingly looking for one-stop experts for their indirect purchasing needs. The office products offering of JPG, Mondoffice and Kalamazoo, coupled with the jan/san-focused Bernard, tied in snugly with RAJA’s existing packaging, MRO, facilities and business equipment SKUs. With the exception of Bernard, the outbreak of the coronavirus pandemic couldn’t have happened at a worse time or place for RAJA Office. It came just four months after the closing of the transaction and France, Italy and Spain, of course, were among the European countries most deeply affected by lockdowns. Not that this gave RAJA CEO Danièle Kapel-Marcovici second thoughts about the acquisition. While she has been less than complimentary about the state that private equity owner Cerberus left the businesses in (see Big Interview, OPI May/ June 2020, page 16), it is full-steam ahead with bringing the companies into the RAJA fold and achieving autonomy in areas such as IT systems, purchasing and customer service. Apart from a change at JPG at the start of the year, Kapel-Marcovici has kept faith in the local RAJA Office management teams and there appears to be a good rapport between them and the existing RAJA country leaders. Staff in Italy and Spain, in particular, have been working closely to develop cross-selling opportunities between their clients. While some key projects have been on hold during the past few months, longer-term goals include the rollout of the RAJA Market model – which will make the group’s products available in all its markets – and the international expansion of JPG.

Richard Scharmann CEO, PBS Holding

Pan-European multichannel operator PBS Holding had a record-breaking year in 2019, racking up sales of €342 million ($404 million) versus €270 million in the previous 12 months. While much of that growth was due to the acquisition of Office Depot’s Central Europe (CE) operations in late 2019, there was still low single-digit organic growth. In particular, businesses in Poland and Hungary grew nicely while the launch of the Desktoo wholesaling operation in Italy added around €7 million to the top line. EBIT and EBITDA were also at record levels, despite the start-up costs in Italy. The group’s performance in 2020 is proving to be more resilient than first expected when the seriousness of the coronavirus crisis became apparent in March. CEO Richard Scharmann had initially forecast a 20% dent in full-year sales, but has since revised this to 10%. Desktoo has been performing ahead of expectations and is set to triple revenues year on year, the back-to-school season in Germany is on a par with 2019, and sales of PPE products have helped offset declines in traditional categories. Like many business leaders, Scharmann has been focusing on managing cash flow and this is, in fact, up in 2020 versus last year. Tax payment holidays, government subsidies and a pull-back on investments have all contributed to PBS maintaining its sound financial position. The CEO believes that not all market players are on such a solid footing, and expects M&A opportunities to increase in the coming months.

In terms of PBS’ projects, the success of the wholesaling business in Italy has triggered the search for larger premises – with a likely move in mid-2021. Its strategy for the CE region, meanwhile, will need to be finalised when the rights to use the Office Depot name expire at the end of next year.

Brad O’Brien

CEO, Office Choice

Located in the Australian city of Melbourne, Brad O’Brien and his team at Office Choice have so far been hit by two COVID-19-related lockdowns in 2020. While it has been a challenging period, O’Brien has been focused on keeping his staff of 22 together. He has been able to do this by taking advantage of government schemes, foregoing incentives and removing non-essential expenditure. At the same time, the group has been very proactive in terms of supporting its members throughout the pandemic, and its board has approved some major initiatives to help Office Choice’s 146 dealers. In March, it introduced a 50% fee reduction for the April-June period and quickly set up a coronavirus resource hub to assist with COVID-related communications and the sourcing of in-demand items such as PPE. Shortly afterwards, Office Choice decided to bring forward its Making Local Work branding programme, its biggest marketing investment since the launch of the Joan The Office Manager campaign in 2014. The results were immediately positive. Coinciding with the end of the financial year in Australia – a traditional time for higher B2B spending – aggressive TV and social media advertising helped the group’s sales in June grow by 10%. June also saw the introduction of Office Choice’s new national e-commerce website in an effort to grow its collective customer base and deliver increased revenues directly to members. With many people working and studying from home, this was good timing, and O’Brien said the site has far exceeded

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initial expectations. It has also enabled dealers to attract the B2C customer segment, generating significant sales from a demographic they hadn’t really been able to reach before.

TOP 100 Who’s Who in OP?

AUSTRALASIA

Joe Taylor CEO, NXP

The company now offers clients a single-source supply, with 90% of sales generated online through its procurement portal. Today, NXP is one of the largest suppliers to government agencies and the corporate sector in the country.

September/October 2020

Joe Taylor, CEO of New Zealand-based reseller National Express Products (NXP), is no stranger to the industry, having spent more than a decade in the sector. He started in 2009 at Corporate Express Australia. Following the Staples buyout of Corporate Express, he then moved into various leadership roles at Staples ANZ. As a member of the Staples executive team (including positions such as VP of Supply Chain and Chief Sales Officer), he led the sale of Staples ANZ (now Winc in Australia) to private equity firm Platinum Equity. He was also responsible for facilitating its subsequent merger with OfficeMax Australia and New Zealand. However, after the Commerce Commission in New Zealand had blocked the deal, Platinum sold Winc NZ to the Tiri Group and Taylor moved to Auckland as CEO of the new venture in 2018. According to Taylor, the carve-out was completed in just six months, with new IT systems (ERP and e-commerce), HQ, executive team, brand and website. Despite facing numerous challenges, including trademark battles with the previous owner over the use of NXP’s original Net Xpress Procurement trading name, NXP has gone from strength to strength as a standalone company, with revenues doubling in 2020 from 2019. This is in part due to a massive diversification effort in terms of broadening its range, with the jan/san, breakroom and facilities categories now representing over 50% of sales. It is also a result of the acquisition of New Zealand Office Supplies in May which added 2,000 customers, 34 staff and the exclusive rights to Fuji Xerox’s office supplies and copy paper to NXP’s arsenal.

Who’s Who in OP? TOP 100

This year’s list of the Top 100 personalities in our industry, split into five geographic regions

AMERICAS Jaime Alverde Losada CEO, Office Depot de Mexico José Mário Britto & Thiago Britto Chairman & Managing Director, Inforshop Michael Buenzow Interim CEO, School Specialty Harry Dochelli President, Essendant Sandy Douglas CEO, Staples Inc Tony Ellison CEO, Shoplet Sean Fleming CEO, DM Supplies Network Alexandre Gagnon VP, Amazon Business Paulo Garcia Managing Director, Kalunga NEW Mike Gentile CEO, Independent Suppliers Group John Givens CEO, Office Source & Technology Dave Guernsey CEO, Guernsey Matthew Hebert CEO, Office Partners Bob Hodan President, Basics Office Products Kevin Johnson CEO, Warehouse Direct Lauren Jones CEO, The Supply Room Mark Leazer Executive Director, AOPD Sid Lerman President, The Weeks Lerman Group DG MacPherson CEO, Grainger NEW Mike Maggio President/CEO, S.P. Richards Denis Mathieu CEO, Novexco Leo Meehan CEO, WB Mason NEW Mike Motz CEO, Staples US Retail Mark Prybell Director OP and Business Electronics, Amazon Gerry Smith CEO, Office Depot Jennifer Smith CEO, Innovative Office Solutions Jason Tillis President, Imperial Dade

ASIA Xavier Etienne Managing Director, Lyreco Asia Shailesh Karwa & Sharad Dalmia Co-CEOs, Work Store Worawoot Ounjai CEO, COL Akira Yoshioka CEO, Askul

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AUSTRALASIA

Sarah Hunter Managing Director, Officeworks NEW Peter Kelly CEO, Winc Australia & OfficeMax New Zealand Dominique Lyone CEO, Complete Office Supplies Brad O’Brien CEO, Office Choice Pejman Okhovat COO, The Warehouse Group Grant Sheridan CEO, Office Products Depot NEW Joe Taylor CEO, NXP Paul Yardley CEO, GNS Wholesale Stationers NEW To be confirmed CEO, Office Brands

EUROPE Adriano Alessio General Manager, Gruppo In Ufficio Andrew Beaumont Managing Director, Exertis Supplies Tim Beaumont Managing Director, Nemo Group Philip Becker Chairman/CEO, EOSA/Hedera Carlos & Rafael Benavides Managing Directors, Comercial del Sur Sergey Bobrikov General Director, Komus Udo Böttcher Managing Director, Böttcher Robert Brech Group Managing Director, Kaut-Bullinger Richard Coulson CEO, Complete Business Solutions Simon Drakeford CEO, EO Group Dr Benedikt Erdmann Chairman, Soennecken László Fehér Managing Director, Corwell George Gerardos CEO, Plaisio Gert Gerber Managing Director, Office Supplies Denmark Xavier Guichard CEO, Manutan Philippe Guillotin Managing Director, ADVEO France Julie Hawley Managing Director, Office Friendly Steve Haworth CEO, EVO Group of Companies Barrie Hayes CEO, BPGI Joe Hemani Chairman, Westcoast José Hernández Sanchez General Manager, Carlin Arthur & Simone Hindmarch Joint Managing Directors, Commercial Group Danièle Kapel-Marcovici CEO, RAJA Martin Kelterborn CEO, Offix Group Alper Kisa Vice General Manager, Akoffice Kypros Kyprianou Group CEO, Theo Phaphitis Retail Group Greg Liénard CEO, Lyreco Aidan McDonough CEO, Integra Business Solutions Patrick Murphy CEO, Codex Office Solutions Paul Musgrove Managing Director, Nectere Niklas Norström CEO, AllOffice Serban Oarzǎ CEO, RTC Proffice Vaida Pacauskienė Managing Director, Officeday Bruno Peyroles CEO, Bureau Vallée Elina Pienimäki CEO, Wulff Group Johann Pintarich & Patrick Lobsiger CEOs, OWIBA Nicolas Potier Managing Director, Bruneau Laurent Proy Managing Director, Groupe Alkor Raffael Reinhold CEO, Office Depot Europe Ferdinando Rese President, Errebian NEW Jörg Schaefers & Axel Hennemann Joint Managing Directors, Büroring Richard Scharmann CEO, PBS Holding Hans Schmid President, Printus Dieter Schmidt Managing Director, Plate Jean-Yves Sebaoun Managing Director, Fiducial Office Solutions Stefan Sonesson CEO, RKV Miroslaw Szydlowski Managing Director, PBS Polska Arnold Theuws Managing Director, Quantore Igor Trifonov CEO, Samson Jan Van Belleghem Managing Director, Interaction Frank van Zanten CEO, Bunzl Thomas Veit Managing Director, soft-carrier Francesco Villa General Manager, Gruppo Buffetti Dmitry Vinogradov CEO, Merlion Michael Voll CEO, Despec Nordics Dolph Westerbos CEO, Staples Solutions Felix Zimmermann CEO, TAKKT

MIDDLE EAST/AFRICA Trevor Girnun Managing Director, Waltons Abdulrahman Ibrahim CEO, HPG Craig Noyle & Garry McCluskey Directors, Inovocom

FOCUS

HEALTH

HYGIENE Special Issue

The voice and value

OF CLEAN

Cleaning is right at the heart of the health and hygiene debate right now and there’s no better time to get involved as, quite simply, everybody is listening

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t’s fair to say that cleaning has never been more important. And while there is so much heartache and anxiety in these coronavirus times, it’s also fair to say that there’s plenty of opportunity when it comes to health and hygiene in the workplace. Not just potential with regards to selling products, but also the opportunity to inform and educate and making sure that cleaning remains top of mind, even when COVID-19 ceases to be the core topic of every conversation. Heike Dieckmann spoke to Dianna Steinbach, VP of International Services at global cleaning association ISSA, putting to her a wide range of questions canvassed from OPI’s readership across the globe.

OPI: Let’s start with a brief overview of the importance of cleaning in the context of COVID-19? Dianna Steinbach: Sure. We need to get to the basics and the basics are in fact very effective. The purpose of cleaning right now is to remove or deactivate the human coronavirus that is causing the current pandemic. It may not seem like it, but we’re actually quite lucky because this is an enveloped virus, which means that it can be easily deactivated if we do our jobs correctly. An enveloped virus has an outer wrapping, and when the virus leaves the infected cell, it covers itself with a membrane. When this is destroyed, the virus is deactivated and it cannot infect the next host.

As such, basic surface cleaning and disinfecting can have quite a high success rate in terms of removing that envelope around the virus and deactivating it. We have some studies which show that simple surface cleaning and disinfecting, as well as good hand hygiene, can reduce the viral load on a surface by more than 60%, while the probability of infection can be reduced by as much as 80%. What this means is that with increased and better cleaning, you can greatly reduce the risk of cross-contamination and infection. On the other hand, however, we also need to make sure that we do not have overkill disinfecting. Don’t clean and spray a lot of disinfectant around just for show or to prove a point. OPI: What should companies and their facilities managers be looking for to avoid this kind of ‘theatre cleaning’? DS: Essentially, organisations are looking for a way to provide answers to their stakeholders about how they’re going to protect them against this pandemic. Whether they paid attention to cleaning before or not, they now have to. Facilities managers are being asked to create protocols for protection and possible decontamination as well as reopening strategies if the company had previously shut down during lockdown. But most of these very qualified professionals have no experience in this. They are scratching

USEFUL INFORMATION

• GBAC STAR facility accreditation (use code OPIGBAC01) – gbac.issa.com • GBAC Fundamentals Online Course: Cleaning & Disinfection Principles (use code OPIGBAC01) – www.issa.com/gbac-fundamentals • ISSA position paper Ensuring your Facility Makes a Clean Start – https://go.issa.com/issa-position-paper/ • Tip sheets – www.issa.com/coronavirus

Cleaning

OPI: So it’s not just the cost of extra products, but also the cost of time added. DS: Definitely. For most organisations, their employees and customers are their greatest assets and they want to protect them. And the cost doesn’t have to be extraordinary. There’s no need to go out and buy completely new technology and all these whizz-bang gadgets out there. The basics can work. There needs to be a heightened level of what we call ‘confidence cleaning’, but you need to get your priorities right. Carry out a risk assessment and identify what is necessary and most important. What and where are those high touchpoints that might have a chance of transferring things from one person to the next? How often do we feel comfortable with cleaning and disinfecting those surfaces? ISSA has created a toolkit for our members called the Value of Clean. It’s really good for sales people and walks them through how to make a business case and assure customers that they will get a return on their investment. For instance, if

you increase your investment in cleaning by X, you have the chance of decreasing absenteeism and sickness in the workplace, which obviously has an impact on productivity. For the first time ever, you have a situation where resellers and cleaning companies are able to take the message about cleaning and its impact to every level of their customer. Everybody’s listening now, not just the facilities or purchasing manager, but top management and the owner, the head of marketing, the head of operations, etc. It’s because the company’s future rests on how well they can convince people – employees and customers – that it’s safe to come back into their buildings and resume business. And that is the case wherever you go – an airport, a public facility, a business building, a doctor’s surgery, and so on.

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their heads and trying to create something under a lot of pressure because businesses really need to open up again. But how do we clean and disinfect? How do we distance people? What kind of signage do we put up so that we remind occupants of what they should be doing? What extra training is needed for cleaning staff as well as for the regular employees in buildings? And what training do the people need who are creating those protocols so that they can feel confident they’re making the right choices? One of the important points that facilities managers and purchasers of cleaning products have to understand, for example, is that disinfecting takes longer than cleaning because of the dwell time. As such, if you have people addressing surfaces for longer, it means it will take more time for cleaning services to complete their tasks in a building.

For the first time ever [...] resellers and cleaning companies are able to take the message about cleaning and its impact to every level of their customer

Dianna Steinbach, VP of International Services at ISSA

OPI: How can the business supplies industry get involved to maximise the opportunity? DS: Well, end users are currently being exposed to a tremendous amount of information around COVID-19 and not all of it is accurate and helpful. As a result, the most important thing is educating

September/October 2020

OPI: How can businesses validate their efforts and prove they’re doing what they’re supposed to be doing? DS: About a year ago, a group of experts joined ISSA to create a new division called the Global Biorisk Advisory Council (GBAC). These are people who have spent their entire careers helping create protocols to protect others during pandemics and in other types of emergency or speciality cleaning situations. They’ve been working with us to develop an online education programme for cleaning technicians to complete. It takes about two and a half hours and helps professionals understand what they need to consider in their protocols. The same group also created a facility accreditation programme which encompasses 20 key elements of a proper protocol plan for infection prevention and cleaning and disinfection. People can first see – for free – if they have these 20 elements. They can then start the process whereby our experts will review their protocols in those 20 areas and give them advice as to where they maybe have some gaps. Once they meet all the criteria, they would have that GBAC STAR accreditation to show both to their internal stakeholders and to their customers. We have also just launched a GBAC STAR Services accreditation for cleaning companies. [For more information about these programmes, see ‘Useful information’, page 34].

Cleaning FOCUS www.opi.net 36

customer decision-makers. That starts by being educated yourself. And if we’re all taking a bit of truth serum, if cleaning is a vertical segment and not the core of your business, there’s a good chance that resellers are maybe not as strongly educated as they might be about some of their more core product lines. The first step resellers need to take is to make sure that the team, or at least a couple of people on it, are educated in terms of what cleaning customers need. The GBAC online course I mentioned before is a good place to start for those key sales people. Next, you want to ask your customers about their goals and desired outcomes – what do they want to accomplish? They may not even have an answer to those questions, so you need to be able to advise them knowledgeably, both on what they might require and how they can get it. ISSA is aware how important this education role is for distributors, wholesalers and dealers right now, and has created a referral programme whereby they can actually resell some of ISSA’s programmes and let their customers know about the online training. They can then receive a revenue share back from those sales through a referral code. OPI: One of the things that keeps coming up is the issue around the sale of inappropriate or inadequate products. Do we need stricter legislation in terms of the claims that are made by vendors? DS: It’s less about legislation and more about regulation, and there are registering bodies in many countries or entities like the EU. There are different levels, but if your country does not have that kind of regulation for cleaning and disinfecting products and equipment, I often refer to the EU, the UK or the US as examples because of their already extensive lists. If a cleaning product has been registered under a certain regulation, it’s an easy way of telling that it’s been tested, validated and does what it claims it does. If there’s a product which does not have any kind of regulation, you want to ask a lot of questions about its usage. What independent – not internal – study was done that proves what you have here can actually deactivate a human coronavirus? Often, when a pandemic happens, you can’t quickly study and test products with the specific virus because it’s too new. Several countries have done some rapid registration processes whereby they say to manufacturers, if you can prove that your product has been effective with a human coronavirus that can be considered a substitute to what the SARS-CoV-2 virus is, then you can make a claim. We are starting to see a few products now – in Australia, for example – that have actually received SARS-CoV-2 registrations because they did go through the testing with the current virus. Our advice would always be to ask questions and demand proof. When it comes to PPE, meanwhile, there’s obviously the big issue of face masks. In terms of

features, some have exhale valves, others don’t, for instance. You need to know the facts to be able to sell them appropriately – what type of mask is good for what kind of purpose; is it to protect the wearer of the mask or the people around you? OPI: In the early days of the pandemic, there were severe shortages and disruptions in the supply chain regarding many products. Has that gone back to normal? And are manufacturers ready for a second wave of COVID-19? DS: There certainly was a shortage in a variety of ways, raw materials being one of them. Ethanol is used in a lot of products in a lot of industries, so massively ramping up the use of hand sanitisers overnight had an effect. There was also a shortage of packaging in some countries, meaning you might have the contents, but you didn’t have the bottles to put it in.

If there’s a product which does not have any kind of regulation, you want to ask a lot of questions about its usage Manufacturers have needed to evaluate their supply chain to make sure that they have diverse enough options to meet demand. I think it’s more or less under control right now, but you don’t really have a fully reopened society yet, so there’s a good chance that demand will spike again. I think we’re going to see some fluctuation in availability for the next six months or so.

To listen to the whole interview with Dianna Steinbach, visit opi.net/podcast

OPI: The cleaning industry, practically overnight, has had a phenomenal rise in importance. How can this new status quo be maintained? DS: We’ve been handed an amazing opportunity. This industry has the knowledge and the solutions that can help society protect itself and hopefully

FOCUS Cleaning September/October 2020

regain some kind of business normalcy. But with that opportunity also comes the social responsibility of doing it properly. We have to have consistent leadership and education in what we’re doing when we’re talking to customers. True character always comes to light in a crisis. People will remember those who took advantage of the situation and those who were honest about what they did or did not know, but were willing to go get the right answers and figure out how to make this manageable. There’s also a big responsibility for the cleaning workers because these people are on the frontline trying to remove a potential virus. They have a higher risk and we need to make sure we are protecting them too. Being properly trained is a component of that protection. I cannot tell you how many times I’ve seen people spray a disinfectant on a surface and then straightaway wipe it right up again. That’s not effective because dwell time is needed for a disinfectant to work properly. Or they spray the disinfectant all over the place without a mask on. One of the reasons these products work is because they are a bit harsher. Not so harsh that we need to be overly concerned about a bit, but for cleaning staff who do this for eight hours a day, five days a week, it’s not advisable without the manufacturer’s recommended user protection. This is a moment where responsibility is taking the front seat – doing the right things at the right time. That way, you’re protecting companies’ greatest assets – their workers, families and customers. That’s powerful and it’s something that we hope we can leverage to maintain some level of understanding of the impact that cleaning and disinfecting can have on society and on improving occupant health and safety. If we get it right, we have the chance to really stake our flag in the sand and have it stay there longer than ever before.

A deep DIVE

HOW TO...

HEALTH

HYGIENE Special Issue

In this How to… guide, US-based sales and marketing agency Highlands looks at what it takes to make workplaces COVID-19 secure in its Safe X Secure white paper

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he coronavirus pandemic keeps ploughing on like a runaway juggernaut on a global scale, but there are regions now where companies are slowly but surely enabling staff to return to their place of employment. As offices begin to reopen, the safety of employees should be the number one priority. To achieve this, many governments are issuing guidance on COVID-19 secure workplaces. Deciphering these new health and hygiene essentials is vital for any business seeking to bring back staff to the office or any other type of work environment.

BROAD CANVAS While targeted at the US market, the information in Highlands’ Safe X Secure white paper provides a broad canvas that anyone can use as a basis for ensuring a safe working situation. Of course, all policies should be reviewed in line with local, state and federal regulations in the US, while non-US readers should follow the current guidelines issued in their own country. The white paper examines six industries: Office and Workspaces; Manufacturing/ Production Facilities; Education; Healthcare; Restaurants/Foodservice; and Hotels/Lodging. It is the first three that are covered in this article. For any workplace, four universal guides apply in terms of keeping employees safe: social distancing, disinfection and sanitisation, personal hygiene and wellness.

Social distancing We all know the rules by now. Keep your distance from others (preferably two metres/six feet) and avoid mass gatherings and crowded places. Additional safety measures can be put in place such as desk screens and room dividers as well as floor markings. Disinfection and sanitisation High traffic areas, for instance washrooms and breakrooms, should be cleaned and disinfected at least daily. Particular attention should be paid to frequently touched surfaces including tables, doorknobs, light switches, countertops, keyboards, toilets, taps and phones. Ultraviolet C (UVC) can be utilised to kill 99.9% of germs in the air and on surfaces. Alternatively, sanitising with visible – rather than UV – light can reduce pathogens over time. Lamps are available in floor or desk-mounting formats and also as under-counter and ceiling fixtures. Given the current situation, it is likely that many cleaning and hygiene standards will be updated and made more stringent to include new techniques and frequencies. Make sure you stay well-informed about any changes. Personal hygiene Regular and thorough handwashing continues to be a cornerstone in the fight against coronavirus. Workplaces need to ensure that if soap and water aren’t available, a hand sanitiser containing a minimum of 60% alcohol should be readily and easily accessible. Wellness Key principles to promote employee wellness related to safety, health and hygiene comprise compulsory temperature checks upon arrival,

VERTICAL DEEP DIVE In terms of the aforementioned industries covered in the white paper, the advice is as follows: Office & workspaces It’s already evident that the office will look and feel different as staff return back to their workplace. Not only will the physical surroundings have changed, but there will likely be new rules as regards group meetings, breaktimes and even the use of lifts. There are seven main protocols to maintaining social distancing in the office, according to the Society for Human Resource Management: 1. Avoid in-person meetings even if employees are in the same building. Use online conferencing, email or the phone where possible. 2. When face-to-face meetings must be conducted, they should be brief and take place in a large area where people follow social distancing guidelines. 3. Eliminate unnecessary travel and cancel or postpone non-essential meetings, gatherings, workshops and training sessions. 4. Do not congregate in spots where socialisation typically occurs. 5. Encourage ‘bring your own lunch’, with staff to eat at their desk or away from others. 6. Reduce the use of public transport by walking, driving or cycling. Alternatively, avoid rush hour where possible. 7. Limit recreational activities where close contact with others may occur.

To instil a sense of security and peace of mind in your staff, communication is vital

Manufacturing/production facilities For employee health and safety in a manufacturing environment, temperature scanning and workstation sanitisation is imperative. The latter could be achieved through the use of UV desk lights while facial ID equipment can be used to also check face mask compliance. Similar to the office, space issues need to be taken into consideration. The disinfection of all high touch areas should also be maintained, with handwashing stations and hand sanitiser made readily available. The appropriate PPE has to be worn by employees in compliance with government regulations. PPE must be selected based on the hazard to the worker and properly fitted. It must be regularly inspected and replaced as necessary, as well as adequately removed, cleaned and disposed of. Education Guidelines for the health and safety of educators and pupils in schools are ongoing in most parts of the world, but the aforementioned four essentials still count. In the US, the Centers for Disease Control and Prevention has issued an extensive guide detailing reopening information for the cleaning and disinfection of schools and other public places. It includes how to establish what needs to be cleaned and disinfected, what resources and equipment are required and how to maintain safe behavioural practices. Here again, temperature scanning and facial ID equipment will provide a safer environment. Social distancing should be promoted and frequently touched surfaces wiped down often. COMMUNICATION IS KEY To instil a sense of security and peace of mind in your staff, communication is vital. Be open about how your business is keeping its employees and customers safe, and talk about your recommendations, guidelines and regulations.

Highlands provides sales, marketing and e-commerce services in multiple sales channels, working alongside clients to secure product placement with some of the world’s largest B2B resellers. Categories include office products, workplace and home furniture, business machines, cleaning supplies, breakroom, facilities management, hospitality, MRO, and more. For more information on the Safe X Secure white paper and Highlands, visit www.thinkhighlands.com.

September/October 2020

In terms of the workspace, desk spacing needs to be arranged to enable social distancing. Sub-dividing rooms via partitions and dividers can be made easier with mobile products. Here, the choice of materials will play an integral part in improving the physical environment with acrylic and glass favoured. Movable visual communication

items like easels and whiteboards will be sought after for collaborative and learning purposes. All employers should heed basic infection prevention advice, including frequent handwashing, ensuring staff stay at home if they are sick and encouraging respiratory etiquette when coughing or sneezing. Cleaning and disinfecting needs to be frequent, especially on hard, non-porous surfaces where there is repeated contact. This includes reception areas, conference rooms, lifts, handrails, etc. As a side note, recognised and trusted brands for cleaning and sanitising are recommended to provide a sense of reassurance.

HOW TO... Safe and Secure

mandatory PPE, single-use supplies such as paper towels and foodservice and breakroom items, no sharing of work tools and good air filtration systems. One important note in the context of single-use and disposable goods (including PPE) is the issue of sustainability. Already, there are reports of millions of extra PPE products finding their way into the environment; the increased consumption of single-use materials will only exacerbate the plastic problem. There are many planet-friendly options available.

INTERVIEW Short-term challenges versus long-term opportunities – the jan/san category in a nutshell

HEALTH

HYGIENE Special Issue

ivot! Whether you like or loathe that particular word, it’s been used extensively during the coronavirus pandemic. And for want of a better description, pivoting is exactly what S.P. Richards (SPR) and its reseller and supplier partners have been doing for several months, as the wholesaler’s SVP of Jan/San Sales Nick Lomax tells OPI’s Heike Dieckmann.

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OPI: Please tell me about your experience at SPR in the past few months from a jan/san category perspective. Nick Lomax: Well, the world turned upside down early this year. In the US, it was March before the impact of what was happening really hit us. During that month, we – like many other businesses – saw an incredible spike in the sale of all types of cleaning and hygiene products. The good news is that we were in a really strong position at that time up to about mid-March. Our jan/san business literally doubled from March 2019 to the same time in 2020 because of this enormous run on our inventory. Then that inventory completely evaporated and we entered a whole new world of allocation by the suppliers of these SKUs. Anything cleaning and disinfecting-related, especially from players with real brand equity in the marketplace, like RB’s Lysol or any Clorox products, was just flying off the shelves.

OPI: That allocation aspect must, at times, have been tricky given the various relationships you have, particularly with the Safety Zone and Impact Products – still part of the SPR stable several months ago (before GPC divested them to an affiliate of HIG Capital). Those two

companies obviously have their customer groups as well, outside of SPR. NL: You could say that. Safety Zone and Impact provided us – and still do – with a huge amount of guidance as they are the experts in all things safety and PPE. As for allocation from our other supplier partners, they understood that we had to look for alternative sources of supply. The challenge with new sources is always registration and compliance. At the rapid pace this was happening, it’s easy to make a mistake and we’ve seen examples of that in the industry. We take this extremely seriously and have an obligation to make sure that we’re only distributing safe products. I believe we’ve done that. OPI: In terms of products, did your range actually include all these items that were all of a sudden so in demand, such as face masks, visors and desk screens? NL: ‘Kind of’ would be the most appropriate answer here I think. We historically bought some face masks domestically, but we didn’t sell a lot of them, so were not globally sourcing these items. We, as a wholesale distributor and indeed the country as a whole, were certainly unprepared for what was to come. That changed quickly. We have a very robust global sourcing team which made things happen. Most people in distribution were scrambling at that time, shifting focus away from what they typically sold. It’s a credit to our sourcing team who pivoted quickly and found products that were going to help our customers get through this crisis. The team has also been absolutely amazing in terms of the compliance issues I referred to earlier.

Nick Lomax INTERVIEW

OPI: From what I can gather, it wasn’t just sourcing the product, but also getting it to you that was a challenge. NL: No doubt. The first wave of face masks came in via air freight, for instance, which drove the price up. Since those early days, pricing has moderated as these items are now more obtainable and are being put back on ships. The essence of it – and to actually answer your question – is that six months ago, we were not a destination for face masks, they were peripheral products for us. Now we are. Importantly as well, we believe that consumption of masks is sustainable, and that’s the case for a lot of products in the overall health and hygiene range. Education on proper handwashing techniques and workplace well-being, hygiene and safety will drive consumption over the next several years. Yes, there will be some moderation but, as an example, I’m convinced disinfecting wipes will likely be requested in every single workplace going forward, as will certain other items and cleaning and safety procedures. Even if COVID is completely eradicated at some stage, I’m sure that from now on you’ll see people wearing masks during the normal cold and flu season every winter – that’s never happened before in the US or indeed in many other countries. Same with their use in airports and planes – many of these formerly niche items are here to stay. OPI: How much has the demand for ‘COVID’ products counteracted the decline in other categories? Secular decline, but also as a result of temporary company shutdowns, furloughs, homeworking, etc? NL: Significantly. However, it’s worth pointing out that we’ve been a strong jan/san wholesale distributor for many years; we’ve just not necessarily been viewed this way. That’s different now – we are absolutely a jan/san and safety wholesaler, it’s become the largest part of our business in a mere few months. We supply businesses – through our various types of customers – with what they need to operate, typically in an office environment. At the moment, not many of these products are required due to all the things you mention, so the spike in the jan/san category has been a great offset – that’s how we perceive it and it’s what our dealers are telling us.

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OPI: On that dealer note, have they maximised the opportunity? NL: Independent dealers that were in this space already before the pandemic – the deeper the better – yes, absolutely. They’ve really embraced this category.

OPI: So if I asked them what their experience with SPR has been over the past few months, what would they be telling me? NL: Well, it depends on who you talk to. But seriously, overall the feedback we’ve received has been great. Have we been perfect? Probably not,

but has anyone in these odd times? I’m sure there have been some disgruntled customers along the way. But I think for the most part dealers would say that we’ve shown great agility and speed and really helped them when they were struggling. In the early days, government-funded help wasn’t available to dealers – that came a bit later. In the interim, they were thinking: “My business is under siege and I’ve got to have product to sell.” I believe the wholesalers – and vendors – did their utmost to help those businesses move forward during a period of great uncertainty.

Six months ago, we were not a destination for face masks, they were peripheral products for us. Now we are This is also where the whole first call, second call wholesaler notion comes in. In this challenging and unprecedented environment, we have an obligation to society to help keep people healthy. So if a dealer buys something from a competitor, I cannot be overly upset about that. This is a time of all hands on deck – we’re in this together to service the needs of all our customers, not just a fraction of them.

Nick Lomax, SVP of Jan/ San Sales, S.P. Richards

OPI: You referred earlier to the education part too. I presume in the past, a lot of dealers were selling the jan/san basics, like toilet paper, paper towels, fundamental cleaning products, etc. What consumers suddenly asked for was something quite different. NL: Definitely. It’s not just about getting product to customers. We have a dedicated jan/san team that is connected at every level and across the country. These business development managers (BDMs) are jan/san product technicians who know about disinfecting versus cleaning versus sanitising. They can talk about dwell time and are aware of when you should wear gloves when using a specific product. Part of the reason we created this BDM strategy ten years ago was to become a trusted source and counsel to our customers as they were starting to enter this category. Of course, during the first few months of the pandemic, the BDMs weren’t able to physically go and see customers. But I dare say, they worked harder than ever before – on the phone or via videoconferencing – to provide guidance, answer questions, and so on. OPI: Let’s get the crystal ball out – what lies ahead in your opinion? NL: Plenty of innovation. The topic of hygiene and safety will continue to be scrutinised like never before. Several of the big brands are looking at some novel concepts and solutions I believe. The next ISSA Show will be a very interesting and inspiring place to be, that’s for sure.

CATEGORY UPDATE

As e-commerce continues to disrupt the mailroom segment, manufacturers are on an evolutionary path to integrate the traditional with technology – by Michelle Sturman

Avery shipping labels

The full PACKAGE

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he writing was already on the wall as a result of the sustained and rapid expansion of global e-commerce, but COVID-19 has given it a huge helping hand. The pandemic has had a twofold effect on the mailroom and packaging sector. The first represents the fall in demand for traditional mailroom services which were already experiencing secular declines. This downward trend has been exacerbated as many workplaces continue to keep their doors closed or businesses gradually migrate employees back to an office with reduced capacity. The second is the enormous rise in packages and parcels flying around the globe as online purchasing underwent a tremendous growth spurt due to people having to endure months of lockdown in their homes.

LETTER DROP With the rise of electronic communications, it’s no secret that traditional mail has been on the wane for years. This has naturally impacted related categories such as envelopes. Research undertaken by the European Federation of Envelope Manufacturers states a total decline of 7% in volume both in 2018 and 2019. As COVID-19 began its springtime run around the world, the UK’s Royal Mail revealed that in April and May, 553 million fewer letters were delivered (a 33% fall in volume), advertising mail volumes plummeted 63% while business post was more resilient, down a ‘mere’ 19%. Simultaneously, parcel quantities grew 37%, with 78 million extra packages delivered in those two months. UK domestic account volumes (excluding

Amazon for some reason) rose 65% as people shopped from home and retail closed down. The Royal Mail also stated that, on average, it delivers one letter per household a day in the UK, with total letter amounts currently running around half of what they were in 2012. These downward trends will persist, but it’s not all doom and gloom. Q2 data released by the Joint Industry Committee for Mail in the UK (JICMAIL) shows that during lockdown, direct mail and door drop volumes declined. However, more time spent at home resulted in double-digit increases in how people ‘connected’ with their post. JICMAIL information suggests that the average piece of direct mail was interacted with 4.58 times, while door drops saw record levels of consumer engagement. Business mail recorded the highest levels of interaction. These figures are encouraging for the renewed adoption of mail as a marketing and business tool as more employees continue to work from home.

DRIVING EFFICIENCY There’s other good news from firms such as European mailroom solutions provider Quadient (formerly Neopost). Although the company’s traditional mailing hardware has not been exempt from the structural decline in letters, it has seen an increase in market share for its largest equipment lines of franking machines and folder inserters. “Organisations of all sizes are seeking new ways of working and applications of innovative technologies to achieve cost savings and efficiency gains. This drive is reflected in additional growth in digital communications and workflow

CREATIVE END USERS The mammoth escalation in parcels is also of consequence to the traditional OP industry as manufacturers and resellers get to grips with declines in the mailroom sector. As Peter Katz, Category Business Manager for Avery’s Printed Media Group points out, while there has been growth in the shipping market for its products over the years, it has not been enough to completely offset the headwinds in the letter sending segment. However, he adds that consumers are creative and use Avery’s address labels in new and innovative ways in terms of product packaging and identification. “We have witnessed a nice uptick in the requirement for shipping labels, which is one of our largest categories, because of the rise in transportation demands,” he says.

Carriers are trialling new and exciting strategies to deliver the best customer experience Digitisation has also made it vital for vendors like Avery to align with all the major software and shipping company systems to ensure seamless integration with its products. “We have had long-standing template integrations throughout the software world, including our own Avery Design & Print Online,” explains Katz. Avery isn’t the only manufacturer shifting focus to areas related to e-commerce. European envelope manufacturer Bong is repositioning to what it terms ‘Envelope 2.0’ – the approach of using traditional postal packaging items such as envelopes, pockets, expanders and padded bags for e-commerce deliveries. “Our light packaging range offers various solutions to not only help reduce the amount of material used, but ensure the availability of sizes that fit through a letterbox,” says Bong’s Tyvek Marketing Manager Europe Andrea Wilhelm. “In 2019, we launched the e-Green range of paper mailers. They are designed to fit the requirements of online shops and consumers, while being environmentally-friendly at the same time. Our strong kraft paper mailers are easy to open and reclose in case of return shipments. For an additional ‘unboxing’ experience, we can offer inside print, which is also available for the outside,” she adds. Speaking to OPI, Tom Rodda, Managing Director of RAJA UK, agrees: “Operators selling via e-commerce need specific packaging requirements. They want to deliver a protected and intact product, ensure their brand

Acme United cutters are in high demand

September/October 2020

SEISMIC SHIFTS Developments like these are vital for the industry to keep pace with the seismic shift to e-commerce, customer demands and the surge in parcel distribution. The Global Parcel Delivery Market Insight Report 2020 by Apex Insight provides some astounding figures. In 2019, the worldwide parcels business was worth almost $430 billion, a rise of around $50 billion compared to 2018. Research indicates Asia-Pacific is the largest regional packages market by value, accounting for about 42% of global trade. North America and Europe represent just over 50%. Unsurprisingly, online retail is the primary driver of growth in parcel deliveries. Same-day delivery options are becoming ever more popular and are led by Amazon. To this end, the report reveals that significant investments are being made in last mile services, notably by Amazon and Alibaba, reflecting the strategic importance of deliveries to these operators’ business models. Pitney Bowes’ annual Parcel Shipping Index, meanwhile, predicts that global shipping volumes will reach 200 billion parcels by 2025 and will surpass 100 billion this year in aggregate across the 13 countries reviewed. However, the report was released in October 2019 before COVID-19 and the subsequent surge in e-commerce. It is therefore hardly a stretch to imagine that actual volumes will likely eclipse all forecasts. Commenting at the time, Pitney Bowes EVP and President of Sending Technology Solutions Jason Dies said: “Worldwide parcel revenues continue to benefit from the explosive impact of e-commerce, but it isn’t just online shoppers boosting the industry. We know from our clients’ own behaviours that office sending is increasing, particularly in industries such as IT, healthcare and manufacturing. “Carriers are trialling new and exciting strategies to deliver the best customer experience, keep costs down, boost productivity and generate

profitability. This includes forming partnerships, designing next-generation sending technologies and developing last mile innovation.”

CATEGORY UPDATE Mailroom & Packaging

management,” says Antony Paul, Head of Global Product Marketing – Business Processing Automation at Quadient. The rise in remote working caused by the pandemic has further gained traction with Quadient’s outsourced multichannel delivery service. Paul says this enables continuity where organisations are experiencing increased working from home or resource reductions through furlough schemes. In fact, 2020 has been a significant year so far at Quadient. In June, the company launched its new Impress management platform (see ‘Mailroom Innovations’, page 45) which enables customers to automate their document and communication processes securely and efficiently. “Impress offers a host of choice and benefits to customers including operational savings, data compliance, preference-based multichannel delivery and supporting self-serve requirements, all through personalised secure digital portals,” explains Paul.

Mailroom & Packaging CATEGORY UPDATE

experience is communicated via packaging customisation, as well as convey their sustainability credentials through the use of environmentallyfriendly materials.” The impact of coronavirus provided an unexpected boom for RAJA UK during the main lockdown months of April-June. Says Rodda: “We budgeted for declines during this period, yet as all retail outlets closed, our packaging sales grew between 20-30%, with orders rising 30-40%. “Pre-COVID, our forecast was £30 million ($39 million) for 2020, but it is clearly significantly more than that now and most of our product categories are in growth. Postal packaging was the big winner before the pandemic, and is even more so now.”

e-Green packaging by Bong is a sustainable choice for e-commerce

BASKET-BUILDING Burgeoning online purchasing is good news for many manufacturers supplying items that are necessary for fast and efficient parcel delivery and sorting in mailrooms, offices – and now the home. For businesses or individuals involved in e-commerce, the purchasing of a box is a basket-builder as it typically requires packing materials, tape and other implements.

According to T3L Group Marketing Director Benjamin Baruteaud, online purchasing is precipitating a rise in sales of products that may not typically be associated with the mailroom and packaging sector. “The shift from the traditional mailroom to warehousing and logistics facilities is providing an increase in categories such as display systems and extending arms, as well as drawers, desktop and filing products.” For Acme United Europe, the mailroom has continued to drive increased sales of cutters and knives this year. Managing Director Georg Bettin acknowledges that growth has not been massive, due to momentum swinging to online purchases and shipped parcels. However, he believes cutters, in particular, will remain a growing category with both business and consumer demand. The transformation of the mailroom and packaging category is undoubtedly advancing as purchasing habits change and the use of technology increases. Nevertheless, there are plenty of possibilities to explore yet, as manufacturers adjust to the shifting trends with products and solutions that take advantage of the opportunities as they arise.

MAILROOM INNOVATIONS E-commerce may be stealing the limelight, but there’s still innovation happening in the mailroom category. QUADIENT IMPRESSES Mailroom solutions provider Quadient launched a new cloud-based multichannel document automation platform for SMBs in June. The comprehensive platform provides flexibility to prepare and send single or batch transactional documents to customers through any combination of channels – print, digital or outsourced. Impress’s suite of applications includes:

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• Impress Automate – Automates repetitive manual tasks related to the creation, distribution and output of customer communications such as invoices, statements, notices, and letters. When used with mailing equipment, it manages pre-set business rules to add personalised messaging and ensures the correct document goes into the right envelope. • Impress Portal – Allows users to send communication through branded and secure document portals. • Impress Dispatch – Enables business users to prepare outgoing ad hoc communications at their desktops and send them to a centralised mail production centre or a dedicated customer portal. A built-in approval process ensures communications are consistent and compliant.

• Outsourced Hybrid Mail – Removes the time-consuming process of managing outbound mail, enabling employees to prepare and send mail with just a few clicks from their desktop, which then gets physically mailed from an external location. PITNEY BOWES EXPANDS SENDPRO PORTFOLIO Global mailroom and technology vendor Pitney Bowes recently introduced the latest evolution of its award-winning SendPro portfolio, the SendPro Mailstation. Since the launch, the company has sold over 10,000 units, a considerable milestone in its 100th anniversary year. The SendPro Mailstation provides SaaS-based postage-in-the-cloud capabilities and sophisticated functionality specifically designed to solve clients’ challenges around the complexity and cost of sending. Pitney Bowes says postage-in-the-cloud gives businesses access to accurate mailing costs in real time. Any postal rate changes are automatically downloaded to the device. Users can print postage directly from the device following prompts on a full-colour touchscreen. An integrated scale adds precision and ensures accurate costs. SendPro Mailstation comes with SendPro Online for Priority Mail postage printing, tracking, reports and more.

ADVERTORIAL

HEALTH

HYGIENE Special Issue

Germ

PROTECTION FOR LIFE

apesco has been working hard in 2020 to bring to market a product upgrade that helps offices and workspaces address the growing need to maintain a hygienic, healthy environment. The UK office products manufacturer has been embracing this new workplace head-on by introducing antimicrobial protection as a running change to many of its bestselling products. Simply called Germ-Savvy, the ISO-certified range kills up to 99.9% of germs. As Managing Director David James comments: “We’re delighted to bring this wide and expanding germ-repellent range to market at a time when hygiene is more important than ever before. We pride ourselves on our ability to react quickly to consumer demand and we’re excited to see the enormous interest in this product upgrade which comes at no extra cost to our customers.”

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We’re delighted to bring this wide and expanding germ-repellent range to market at a time when hygiene is more important than ever before

THE WORKPLACE – REBORN Long before the outbreak of the coronavirus, studies showed that offices can easily become breeding grounds for E. coli, staphylococcus and other bacteria as a result of not following basic hygiene procedures. The humble desk is often the worst affected of all areas around the office when tested for bacteria. But workplaces have evolved to become far more aware of the need to reduce the risk of any type of infection wherever possible. The introduction of handwashing stations, enforced social distancing and the implementation of strict hygiene guidelines are just some of the measures taken. Understanding the growing need for compliance, the new Germ-Savvy range is fully compliant with ISO22196:2011 standards, as

tested by SGS. By adding silver and zinc ions to the plastics at the manufacturing stage, the germs’ cell walls are actively broken down, cell growth is prevented and the germ dies, all before it can spread. As the antimicrobial additive is part of the structure of the plastic itself, it cannot wear out or rub off and will last the lifetime of the product itself, in keeping with the well-known Rapesco guarantee of 15+ years. Germ-Savvy is being introduced into many current Rapesco products, including the company’s popular ECO range which is made substantially from recycled acrylonitrile butadiene styrene (ABS). As such, it remains ecologically friendly while also now combatting germs. GREAT FOR RESELLERS So far, Germ-Savvy’s antimicrobial protection has been seamlessly integrated into an initial range of 20+ products, to be followed by a further 20 in the months to come for a continuous rollout. All products maintain the same specifications and codes, meaning that upgrading reseller catalogues with the Germ-Savvy range is a simple description change – Rapesco takes care of the rest. Another bonus is Rapesco’s decision to absorb the additional cost to manufacture, allowing resellers and consumers to reap the full benefit of the upgrade without a price premium. Rapesco’s growth has been well documented in recent years and this has continued throughout 2020 despite COVID-19. The company has secured distribution partners in all key European markets and the brand now enjoys a heightened exposure among the online reseller community with a fast commitment to significant product listings. The registration of the Germ-Savvy sub-brand is another – and very timely – example of Rapesco’s continued investment in exciting new product development initiatives. Contact the Rapesco team of account managers with any enquiries at sales@rapesco.com.

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Dianna Steinbach, VP of International Services, ISSA The importance of cleaning in COVID-19 times

Robert Baldrey,

Contract Chief Sales Officer, Office Depot Europe Changes and challenges in the office products wholesaling channel

CATEGORY UPDATE

STAMPING

ground

Innovation is alive and well in the pursuit of new opportunities in the stamping and marking industry, as Michelle Sturman finds out…

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OVID-19 has affected all business supplies categories in some way. So much so that industry peers now talk in terms of pre-coronavirus and coronavirus. The stamping and marking sector is by no means exempt from this. The major players in the arena agree there is limited scope for growth as traditional stamping is a mature OP segment. That’s not to say there’s no headway at all in the market. On the contrary. Pre-coronavirus, companies including Reiner, Trodat and COLOP were making excellent progress in areas such as electronic stamps and mobile marking. There has also been penetration into new business segments like arts & crafts and industrial applications.

ATTAINING GROWTH As COLOP’s Head of International Sales & Marketing Franz Ratzenberger points out: “It’s apparent that especially in Europe, demand for traditional office stamps is declining – it’s not a growing business field. But there are regions such as Asia where demand for our high-quality goods is still rising. In these locations, we have the opportunity to substitute lower-end products with ours.” For Reiner’s Director of Sales and Marketing Gerolf Heldmaier, the traditional hand stamp market is more or less flat. But for innovations like electronic and mobile devices, there is stable double-digit growth. The introduction of the jetStamp 1025, for example, has been a boost for the company, despite a recent short-term slump when industrial facilities closed because of COVID-19. He says: “To our surprise, even in these challenging times there are new customers. It’s been interesting to see how many companies are involved in the disinfectants market where batch and filling dates and ‘best before’ dates are a must. This has become an ideal field of application for our jetStamp.” In the US, the segment overall has plateaued in recent years. However, as Trodat’s VP of Sales and Marketing Christopher Boyle notes, those companies that have embraced e-commerce and

remained aggressive with their selling, advertising and promotions, have managed to increase their business substantially. “Trodat USA offers support for both online and offline channels. It can range from providing customers with a fully functional e-commerce site and custom flyers to catalogue design and web shop images,” he says. FOLLOWING THE TRENDS Explaining further, Boyle asserts that a key development in the industry has been the proliferation of easy-to-use, web-based customisation tools for end users. This has led to the opening up of new channels and customers. “End users can now easily create custom designs. This shifts some of the burden away from stamp makers and office dealers, which now receive fully designed stamps ready for production without having to manually reproduce them in-house.” Importantly, Boyle believes OP dealers are in an “enviable position” to capitalise on this trend. Trodat, for example, has integrated its online ordering platform, uTypia, with leading office product software providers including ECI and BMI. This means that resellers and their customers have access to some of the most advanced online stamp ordering tools. “It provides dealers with a very simple advantage to exploit, with just a little communication and marketing to their client base. It can help combat the big box stores and Amazons of the world.” DIGITALLY INCLINED Personalisation is key to the ongoing success of the category and goes hand-in-hand with digitisation and e-commerce. All of this fulfils a critical role in COLOP’s business model, with several online solutions

Trodat USA’s core product line

Stamping CATEGORY UPDATE www.opi.net 52

that enable customers to create, personalise and buy products. “Purchasing behaviour has changed faster than expected due to COVID-19, and accelerated the move towards online channels. Also, retail has been hit very hard during recent months, and there will be consolidation. Despite the current restlessness in all the various sales channels, there is also a huge amount of dynamism,” comments Ratzenberger. Manufacturers in this sector are securing their future by expanding into new industry verticals and geographic locations. Progress has been swift. COLOP, for example, established a Digital subsidiary in Austria just two years ago which has resulted in the much-lauded e-mark digital stamp and mobile printer. Says Ratzenberger: “With the e-mark, we have more than met the demands of the prevailing digitisation trend. Now we have added to the line-up with the ‘e-mark create’. This edition is explicitly aimed at end customers for handicraft, lettering, scrapbooking and decoration purposes. It contains special templates in its app, geared towards the creative sector.” The e-mark create ties in firmly with COLOP’s moves over the past couple of years into this trendy and growing category. It was jump-started in 2018 following the acquisition of the creative segment of Belgian-Dutch firm Royal Posthumus, leading to the establishment of the company’s Arts & Crafts division. PRODUCT FOCUS The coronavirus pandemic has naturally adversely affected the sector in terms of further declines in traditional stamp sales as offices closed. Despite this, manufacturers have been quick on their feet to seek other opportunities and focus on unique products and ideas. Taiwan-based Shiny, for example, is looking to expand the S-84x series Printers to 14 colours and it also working on improving the cast embossing seal with an enforced second layer structure. Speaking to OPI, Shiny’s Deputy Executive Manager Jimmy Chen revealed that the Shiny EGX Embossing Seal will retain the look of a traditional cast embossing stamp while providing the functionality of a heavy-duty embosser. Trodat, in the meantime, continues to add new models and sizes to its popular Professional 4.0 series. The most recent version features a round impression. “This type of impression is primarily geared towards legal, medical, notary and financial customers, and we are very excited about the possibilities for this product with office dealers,” conveys Boyle. He also notes the prospects presented by the current shift to working from home. This, he says, may benefit the sector moving forward as the requirement for company and personal address stamps could increase through correspondence that cannot be done via email. “The

Reiner’s jetStamp offers an integrated thermometer

COLOP’s Protect Kids Stamp promotes handwashing in children

education sector has represented a very promising category in recent years, and this should continue to be the case as more schools open in the coming months. In the past year, we have also expanded our mobile offering with the new Pocket Printy. Pocket stamps are currently very much in demand with medical professionals because of the coronavirus pandemic,” he adds. INNOVATIVE SOLUTIONS In the same vein, Reiner has gained traction in numerous areas with its electric jetStamps due to COVID-19. Heldmaier explains: “Coronavirus has led to various new service and product ideas. Some of our distributors have been able to win small projects with the printing of customised face masks. The demand went beyond the typical stamp request ‘date’, to the printing of the place of issue with date and time on the masks.” As businesses gradually begin to return to some semblance of normality, workplaces need to be COVID secure, which in many cases will entail taking an employee’s temperature. Says Heldmaier: “The topic of body temperature measurement promoted the conclusion of two novel products and application solutions for Reiner. Our jetStamp sensor devices have an integrated thermometer and free imprint design for the immediate documentation of temperatures. “Such an application can also be handled with the jetStamp1025 marking devices, although users will require a handheld thermometer with USB or Bluetooth and our senseAPP PC software. In both cases, the measured values can be directly printed into appropriate running cards, entry documents or a health passport.” COLOP has launched a Protect Kids Stamp. An imprint on the hand in the morning – with dermatologically certified stamp ink – is designed to remind youngsters to clean their hands regularly during the day. After approximately five washes, the ink should have disappeared. According to Ratzenberger, the idea has been favourably received and the stamp will remain in its product range even after the crisis has subsided. Like Trodat, COLOP is identifying ways to capture potential markets for small portable stamps. In countries where hospitality patrons are required to leave contact details, for example, COLOP’s Pocket Stamp, Stamp Mouse and Pen Stamp Alu Magnet Touch, are all being used as time-saving devices and to avoid illegible writing.

RESEARCH

Throw out the RULEBOOK

The back-to-school season is traditionally a dependable source of revenue, with a standard list of supplies to sell. Not this year – by Michelle Sturman

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uffice to say, the 2020 back-to-school (BTS) season is turning out to be unique in many different ways. At the time of writing – late August – the uncertainty surrounding pupils and students going back to school and college/university was still rife as the coronavirus pandemic continues. In countries that were still experiencing high levels of COVID-19 infections such as the US, the opening of educational facilities still had parents worried. A poll conducted by the Financial Times revealed that almost two-thirds of Americans thought it unsafe to send children back to school. Indeed, many states have implemented digital learning schedules for the beginning of the new school year, with a phased approach to physical attendance. According to the National Retail Federation (NRF), in early August, 63% of consumers expected that at least some school and college classes will take place online this year, up from 55% just a month prior. Since mid-March when most schools worldwide shut their doors, online education taking place in the home became the de facto method of learning. This has subsequently skewed the BTS supplies market. Outside of the usual back-to-class season, there was an immediate surge in the purchase of traditional school supplies and technology products such as laptops, for instance, as parents settled into a routine of homeschooling and students attended online lectures.

A SLUGGISH START As a result, The NPD Group research projects that 37% of parents in the US were not planning to spend more on educational items during the usual BTS timeframe. Between 21 June and 25 July, office supplies retail dollar sales were -6%, according to data from NPD’s Weekly Retail Tracking Service. “The BTS season got off to a very slow and late start. With schools beginning to lean towards a digital start, we can expect that the BTS spending period will be pushed out later. It will be accompanied by a long tail, with some bumps in sales as schools in different geographies start at varying times and parents grasp the needs of the new environment,” says The NPD Group Office Supplies Industry Analyst Leen Nsouli.

Many of the types of products parents and students will be purchasing this year will be just as unconventional as this BTS season has been itself US BTS purchasing predictions vary depending on which research you read. Data analytics firm GlobalData, for example, predicts BTS sales in the country will be 6.4% lower this year at $26.4 billion compared to 2019, while back-to-college (BTC) spending will fall 37.8%. Professional services network Deloitte forecasts BTS expenditure to be flat in 2020 at $28.1 billion, while a survey commissioned by PayPal reveals that 40% of K-12 parents and 35% of college students expect to spend more this year on school supplies than last.

60%

11%

opi.net poll

Do you think the back-to-school season will be... n Better than last year n Same as last year n Worse than last year n Really don’t know due to the pandemic

CHANGING CHANNELS NRF data suggests that more than half (55%) of US K-12 shoppers will buy online, with all other destinations experiencing declines, including office supplies stores, falling from 31% in 2019 to 23% in 2020. As Deloitte reports, 23% plan to visit OP outlets, but only 3% envisage spending the most with these retailers. Deloitte’s results also show that the percentage of the budgeted amount expected to be allocated to e-commerce is 37%, an increase of 8% over last year. This comes at the expense of in-store purchases, with the percentage of spend decreasing significantly from 56% to 43% this year. In Canada, Field Agent research indicates 78% of parents expect to purchase at least some supplies online, up from 62% last year, with most buying from Amazon (82%), followed by Walmart (36%). It’s a different scenario in the US, where both companies are virtually neck-and-neck. Amazon’s impact on BTS sales certainly cannot be underestimated. NPD’s Nsouli explains that without Amazon Prime Day in July and the macro impact that has on overall retail sales, categories that typically benefit, such as writing instruments, declined this year. Ongoing health and safety concerns have also heightened the popularity of ‘buy online pick up in-store’ (BOPIS) as contactless shopping becomes a preferred option. 47% of shoppers like retailers with BOPIS availability and 26% of BTS buyers plan to utilise the service more frequently (Deloitte). Says Nsouli: “I expect many of the types of products parents and students will be purchasing this year will be just as unconventional as this BTS season has been itself. These may include additional learning resources and books as well as pouches and boxes to store supplies and be able to move them between the classroom and home. It could also entail paying for professional homeschooling online services.”

September/October 2020

STAYING SAFE Unsurprisingly, items specifically related to health and hygiene have appeared on the BTS list this year for the first time. Average spend on the home/health category is expected to be $61 in the US (Deloitte), with 75% of parents in Canada anticipating buying hand sanitiser and 47% face masks and gloves, claims Field Agent. PayPal’s study predicts that 81% of those surveyed will spend more on these types of PPE and hygiene items than they did last year. Almost three-quarters suggested they would purchase more disinfecting wipes – hardly a shock given the current situation and the fact that these products didn’t feature much last year. Over and above these changes brought about by COVID-19, several extenuating circumstances could put a dent on spending in certain channels, particularly physical stores. Deloitte reveals that 75% of parents in the US are anxious about the

24%

health and safety of their families, in addition to financial worries. Coronavirus will substantially affect BTS shopping in 2020 in some form (88%, NRF), and this will be especially noticeable in the shift from bricks-and-mortar stores to e-commerce.

RESEARCH Back-to-school

100 PRIORITY SPENDING According to the NRF, BTS purchases could reach a record-breaking $33.9 billion. It attributes this partly to increased expenditure on electronic products such as laptops, speakers and tablets. 80 These items are more expensive than general school and college supplies and are being bought in preparation for the continued suspension of in-person classes. 60 NRF CEO Matthew Shay comments: “Consumers still face a great deal of uncertainty even as school begins to start. The majority of families expect to spend as much as they thought earlier this summer 40 to if not more, and it’s largely because of the need spend more on electronics.” Deloitte’s annual BTS survey states that 40% of parents expect to buy fewer traditional school supplies this year (down 17% year on year 20 with 33% bought online) as technology takes over (spending up 28%, and 48% purchased online). Accordingly, the average outgoings on school supplies will be $102 (-13%) and $395 for 0 computers and hardware (+38%). NPD concurs, citing revenue growth in the US of 64% during the first week of August for productivity-focused tech products like notebooks. Distance learning also drove sales of a slightly altered set of BTS products: PC headsets (+127%), monitors (+97%) and routers (+87%). According to PayPal, 63% of parents and students are planning to outlay more on at-home study furniture and home goods, with 59% indicating a plan for increased spend on remote learning technology. A survey undertaken by market research firm Field Agent in Canada reveals a buying pattern whereby purchases for certain traditional BTS products like clothing, footwear, backpacks and electronics are down compared to 2019. This is likely due to having already bought technology items for the purpose of online education earlier in the year. It is also coupled with the expectation that physical lessons may not take place for some time which is discouraging parents from considering the usual annual BTS purchases.

5 MINUTES WITH...

Travis Kaste

CAREER Q&A Describe your current job. As National Sales Manager, I’m responsible for the independent channel for 3M’s Consumer Business Group. In short, I currently work with all the business products customers except Staples and Office Depot.

Early bird or night owl? I’ve been a night owl for most of my life. But, as I age, I’m finding myself becoming more of an early bird. If you could trade places with someone for a day, who would it be and why? Michael Jordan – on the day he won his first NBA Championship. It would be great to experience that feeling of accomplishment and seeing all of the work in your craft come to fruition. What would be a good theme song for you? Till I Collapse by Eminem. What kind of music do you like? All kinds, but my favourite genre is 1980s rap. Where would you most like to travel? I would absolutely love to spend some time in the Alaskan wilderness. What’s your worst character trait? Impatience – I definitely torture my family with my impatient nature and I’m sure I may do the same in some aspects of my work life.

Travis Kaste, 3M

What would you cook for a dinner party? I’m not much of a cook, but I love using my smoker. I make a great smoked chicken. The beef brisket turns out pretty well too. Favourite time of the year? The hunting season is my favourite. I was raised in a hunting family, so now getting to share those autumn days in northern Minnesota with my wife, kids, brothers and dad is the best time of the year. What’s your guilty pleasure? Buying and collecting anything with Indian heads on it – t-shirts, metal signs, breweriana, advertisements, etc. My family says it’s more of a ‘problem’ than a ‘guilty pleasure’ though. If you could change one thing about yourself, what would it be? I wish I was more dedicated to fitness and health. I know what needs to be done – just have to stop letting life get in the way of it.

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Your childhood ambition? I wanted to be a fighter pilot or a Navy SEAL.

Your worst ever job? Leech trapper. Leeches are very popular fishing bait and my dad and grandfather would trap them. On many occasions, I worked with them to bait and check their traps. Imagine being 13 or 14 years old and getting to go out at five o’clock in the morning to trap and handle 176 lbs of leeches. It was definitely much worse than selling Post-it Notes for a living! If you weren’t doing your present job, what would you like to be doing? I would love to be a coach – either Division 1 College Football or Division 1 College Softball. Your best piece of advice to someone who has just joined the OP industry? Get involved. Actively participate whenever possible. There are so many great people among the manufacturer, dealer, wholesaler and buying group communities. Get to know them. Network at every event. All of this will escalate the learning curve and develop a great knowledge base as you navigate this industry. If you could change one thing about the industry, what would it be? It would be great if we could find a common, consistent way to measure results and success among manufacturers and across the many customers in the business products world. What personal item do you have on your desk? A picture of our first grandchild Kennedy Rae, born at the beginning of this year.

In the next issue of OPI

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featuring:

• • • •

Interviews and opinions Sustainability best practices CSR initiatives Environmentally-friendly products

contact:

For all editorial enquiries contact: michelle.sturman@opi.net For all advertising enquiries contact: chris.turness@opi.net

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FINAL WORD

Wholesale CHANGES

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hat a fascinating few months we’ve had from a wholesaling perspective (and many other angles as well, of course). Most recently, the positive news coming from the US was the acquisition of S.P. Richards (SPR) by Mike Maggio and Yancey Jones Sr. If you look at the past two and a half years that SPR has had – the potential merger with Essendant, that deal falling through, the fire last year… I think Rick Toppin and the team dealt with all of this brilliantly and came out the other side. After what had happened with Staples and Essendant, the logical next step was for Office Depot to buy SPR. Credit to Mike and Yancey for their bold move and avoiding that type of scenario – it’s great to see this new home for the wholesaler. If these two guys get it right, I believe it could be extremely successful and very beneficial for the industry.

FACING THE INEVITABLE On the not so positive note, there was the sad demise of Spicers earlier this summer. I worked in that organisation for over 20 years in various guises, so it was quite emotional. Not necessarily unexpected though. As with so many things – and not just in our sector – COVID-19 has merely accelerated what was perhaps inevitable. It was a well-known fact that SPOT Group was in trouble already. Add a global pandemic and all that entailed in terms of lost business and various other issues, and the challenges became insurmountable. As regards the disappearance of Spicers, I was a little surprised that none of the ‘old’ Spicers guard – myself included I suppose – came out of the woodwork to take it on. The thing to watch now is the nascent OT Group wholesale segment, particularly from a vendor viewpoint. I would be very surprised if the manufacturing community rushed to open new credit lines when a number of them have presumably lost considerable amounts of money as a result of Spicers disappearing. I also didn’t expect a company like Paragon Group to acquire OfficeTeam. But then again, operators from adjacent categories coming into our somewhat traditional space appears to be quite popular now – just think of RAJA moving in for Staples in France, Italy and Spain last year. It makes a lot of sense when you think about it. Paragon has been very acquisitive over the years and you can see how this deal gives the company access to a whole bunch

of captive customers that may also be interested in the bigger print opportunity. Conversely, OfficeTeam could be well placed to sell to Paragon’s client base. My money would have been on one of the larger dealers in the UK picking up Office Team. Rich Coulson at Complete Office Solutions or even EVO’s Banner spring to mind. Hindsight is always a wonderful thing. One of my regrets several years ago when I ran EVO (and beforehand Vasanta) was that I didn’t spend more time trying to persuade the two private equity firms Better Capital and Endless to combine the two wholesalers and, separately, the contract businesses Banner and OfficeTeam. That would have made a lot of sense in my opinion.

Robert Baldrey, Contract Chief Sales Officer, Office Depot Europe

As regards the disappearance of Spicers, I was a little surprised that none of the ‘old’ Spicers guard – myself included I suppose – came out of the woodwork to take it on VOW DOMINANCE VOW is now by far the largest wholesaler servicing the dealer channel – it’s got Complete and EO Group among its clients, for example – that’s about £200 million ($259 million) in end user sales alone. It will be interesting to see how big Exertis will get. I have no doubt some dealers will say, “I was with Spicers and I don’t want to be with VOW”. I know from my wholesaling days that some of these emotions run very deep indeed, so there’s a massive opportunity here for Exertis. It also depends on what kind of wholesale support you need these days. If you want a full-service wholesaler, then VOW is extremely capable, in terms of product, marketing and, with Truline, all aspects of logistics. If it’s just product you want, without all the bells and whistles, you’ve got Exertis. I’m not convinced there would even be a space today for a resurgent Spicers, sad though that makes me. It’s the end of an era. This Final Word is loosely based on an interview with Robert Baldrey for OPI’s first-ever OPI Talk podcast. To listen to it, visit opi.net/podcast

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