Opi april 268 version b by OPI

BIG INTERVIEW

Connecting the

business products world

Harry Dochelli and Bob Aiken Essendant April 2017

INSIDE THIS ISSUE l l

Staples sold in Australia/New Zealand, Platinum now eyes up OfficeMax l SPOT back in the acquisitions game l Paper update Dealer groups: where next? l Internet of Things l EOPA winners announced l Education potential l Social selling in action

CONTENTS 13 Obituary The OP industry pays tribute to Bud Mundt 16 Big Interview The long road to transformation for US wholesaler Essendant 22 Hot Topic Getting to grips with the Internet of Things 26 Research Essendant presents enduser research into OP purchasing habits in the US 29 Research Office Power takes a look at the value of the UK’s dealer groups 33 Category Update Paper demand is declining, but some operators still see light at the end of the tunnel 36 Category Update Education is a category full of opportunities – if you can keep up with the pace

Big Interview: Harry Dochelli and Bob Aiken, Essendant

It’s been a tough couple of years for Essendant since its big rebrand in 2015. As the second CORE Live, recently held in Las Vegas, firmly demonstrated, transformation is the name of the game and that goes for the wholesaler as well as independents – the whole industry in fact

HOT TOPIC: THE INTERNET OF THINGS

45 How to... ...successfully implement a social selling programme 48 Review: European Office Products Awards All the winners of EOPA 2017 revealed – and why they won 55 Review: Partnership Europe’s core vendors and resellers meet in Amsterdam for strategic talks

REGULARS 5 Comment 56 5 minutes with... Niek von Reth 58 Final Word Sian Haskell

April 2017

Professional services firm PwC estimates that by 2020, out of a total of 50-100 billion devices that will be connected to the internet – including tablets, smartphones, etc – there will be 30 billion connected ‘things’. Many of these devices and ‘things’ will be ubiquitous in the workplace and, in short, will alter the way we all work – from time, resources and innovative opportunities, to the use of data and analytics.

41 Vendor Profile International Paper talks about its long-standing partnership with HP

The OPI team

COMMENT

EDITORIAL

Editor Heike Dieckmann +44 (0)20 7841 2950 heike.dieckmann@opi.net Deputy Editor Michelle Sturman +44 (0)20 7841 2942 michelle.sturman@opi.net Reporter Joshua Allsopp +44 (0)20 7841 2952 joshua.allsopp@opi.net Freelance Contributors Andy Braithwaite andy.braithwaite@opi.net David Holes david.holes@opi.net

SALES & MARKETING VP – Continental Europe, Middle East and Africa Ewan Dickson +44 (0)20 7841 2954 ewan.dickson@opi.net VP – North America and UK Chris Turness +44 (0)20 7841 2953 chris.turness@opi.net Director of Growth Services Jeremy Hughes +44 (0)7807 810617 jeremy.hughes@opi.net Digital Marketing Manager Aurora Enghis +44 (0)20 7841 2959 aurora.enghis@opi.net

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’m stealing the headline from this month’s Big Interview, conducted during Essendant’s CORE Live event in Las Vegas (see page 16), because I found it pretty appropriate for many topics that are going on in our industry right now. The obstacles that all parts of the channel are facing can seem daunting at times. From a manufacturer point of view, the paper industry is a good example of a sector that is in irreversible – albeit slow – decline, with an image problem to boot (see Category Update, page 33). And talking of image problems, UK dealer groups are facing particular scrutiny at the moment following research by dealer platform Office Power (part of EO Group) that suggests their future is somewhat uncertain for a whole variety of reasons (see page 29). Always striving to be an unbiased bystander, we would be interested in hearing if our readers agree with the research data and indeed if this data can potentially be extrapolated to other parts of the world, so please write to michelle.sturman@opi.net with your views.

There’s no doubt the dealer community at large needs to up its game to succeed in this scale-driven and ever-broadening industry There’s no doubt the dealer community at large needs to up its game – or “transform” in the words of Essendant’s Harry Dochelli – to succeed in this scale-driven and ever-broadening industry. From embracing the Internet of Things (and I’m sure many of our readers, like I, will still only have a rudimentary idea of what that actually means and can do, so find out more on page 22) to re-evaluating their selling techniques (see page 45) – there are plenty of ways in which all channel partners can do that. Close collaboration is always a step in the right direction even if it occasionally makes for unlikely bedfellows! Plenty of talking is exactly what happened in early March when many of Europe’s leading manufacturers and resellers came together in Amsterdam for strategic, senior-level discussions at OPI Partnership (see page 55). One of the highly-valued networking opportunities during Partnership was the European Office Products Awards dinner where outstanding companies and individuals were acknowledged for their achievements – take a look at the winners on page 48 and you will see that they are the ones which have achieved that transformation – or are certainly well on the way. With the tulips nearly out in Amsterdam, spring is very much upon us here in Europe. For those in the southern hemisphere, winter is coming (pun intended – the OPI team loves GoT!). We’ll be taking a close look at this part of the world next month, with our South African Big Interview and an analysis of Platinum’s interest in Staples and OfficeMax. HEIKE DIECKMANN, EDITOR Have a great month.

April 2017

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.

The long and winding road

NEWS

Analysis: Staples strategy taking shape But transformative actions will be needed to achieve the 20/20 strategic plan goals

Staples’ full-year results published at the beginning of March underlined its evolution into a North American-focused B2B delivery-oriented reseller. The company’s 20/20 strategic plan which was revealed after it abandoned the attempt to acquire Office Depot last year, aims to transform Staples into a workplace products and services provider with 95% of sales coming from North America and a channel mix of 80% delivery and 20% retail. Following the sale of Staples’ European operations in two separate transactions and the announcement that an agreement had been reached for the sale of the Australasian businesses, the first goal has already been achieved. Staples will now just be left with a small international presence in China and South America when the Australia/New Zealand deal closes.

A more aggressive approach to external growth will be required to make any significant impact to the top line

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Achieving 80% of sales from the North American Delivery (NAD) division looks like it will be a more challenging goal to accomplish. Of the $17.3 billion in sales from North America in 2016, around 60% came from NAD and 40% from the retail division (NAR). To achieve the 80/20 ratio target by the end of the 2020 financial year, there has to be a pretty drastic change

in the current sales trends – low single-digit growth at NAD and mid-single-digit declines at NAR – at one or both of the divisions. The strategy – a defensive one – at NAR is to “preserve profitability and rationalise excess capacity”. Staples has said it will close 70 stores this year, but there are 250 leases up for renewal in each of the next three years. That means store closures could feasibly accelerate without the company having to cough up for onerous lease-obligation costs. At NAD, underlying sales were up about 1% in 2016, largely due to growth in the mid-market sector and in categories beyond office supplies. Last year’s bolt-on acquisition of Capital Office Supply will add just under 1% to the top line in 2017, but a more aggressive approach to external growth will be required to make any significant impact to the top line. Staples CEO Shira Goodman said there were plans “to dramatically improve the growth trajectory” of the mid-market business, but she did not refer specifically to acquisitions, instead focusing on a number of internal growth projects such as membership, expanding the range of products and services, and several digital initiatives. These initiatives will all take time to ramp up and it is highly unlikely that they alone will be enough to achieve the 80/20 ratio goals. This suggests, therefore, that something transformative will have to happen over the next three years, either a cull of the retail network or a major – ie multibillion dollar – acquisition in the B2B space.

MID-MARKET MOMENTUM Some of the ways in which Staples is gaining ground in the mid-market segment: • Staples ended 2016 with about 30,000 mid-market membership customers. The largest mid-market membership programme is called Business Advantage Premium and costs $299 per year. Benefits include bulk discounts and a range of added-value services for office managers; for example, Staples recently partnered with Drizly for wine and alcohol delivery to business customers. • Mid-market sales in beyond office supplies categories grew 16% in Q4, including a 4% boost from the acquisition of Capital Office Supply. • In 2016, Staples partnered with and made an investment in Managed by Q, a start-up that offers more than 100 business services, mainly aimed at mid-market customers. Staples sales reps are actively selling these services.

IN BRIEF ECi integrates FusionPlus ECi Software Solutions is integrating FusionPlus Data into its Horizon and Progress platforms. This integration will allow dealers to compete with online companies in their product data capabilities.

Insight: SPOT looking to take share with dealer acquisitions

Schneider inks GM Pens deal GM Pens International, owner of Rorito, has partnered with German writing instruments brand Schneider to launch a set of pens. The partnership will also allow Schneider to break into the $84 billion Indian stationery market. 3M to acquire Scott Safety 3M is to acquire personal protection equipment manufacturer Scott Safety in a $2 billion deal. Its products include self-contained breathing apparatus systems, gas and flame detection instruments, safety equipment and communication devices. SP Richards presents top distribution award SP Richards has announced the winner of its Distribution Center of the Year award. The wholesaler has revealed that its Los Angeles distribution centre has won the accolade which is presented to the DC that achieves the highest combined results in a number of key performance measurements, including sales and employee productivity.

in the UK, Office Depot and Staples targeting smaller business customers, and continued uncertainties over Brexit (which has already had an impact on margins after the slump in the value of the British pound versus the US dollar). That said, Whiteway noted that there perhaps hasn’t been as much evidence of dealers going out of business as one would have expected given the circumstances. But there are certainly opportunities for more consolidation and this is why SPOT made the announcement in March. Of course, the hope is that this M&A activity will benefit SPOT, mainly through Spicers protecting or – preferably – taking market share. The best-case scenario is for a Spicers dealer to acquire a VOW dealer and this is where the “financial support” referred to in the press release is likely to come into play. That support could come in various guises – such as improved terms – but there would appear to be a degree of flexibility and each deal will be examined on a case-by-case basis. Talks are likely to be high level – due to confidentiality issues – involving Whiteway himself and SPOT CFO Andrew Mobbs. Whiteway isn’t exactly expecting the floodgates to open, but he confirmed to OPI that he had already received a call from a dealer regarding a potential transaction. COMMENT: Market shares related to dealer consolidation probably even themselves out over time, but the most acquisitive dealer in the UK at the moment – Complete Business Solutions – is a VOW-aligned reseller, so its activity has no doubt hit Spicers’ business to some extent. SPOT received some good publicity with its press release, but it was really just a reminder that the group is keen to play a part in market consolidation when it comes to protecting and winning share. Spicers dealers now know that there are added incentives if they target VOW dealers!

April 2017

ESG wins Office Depot award US-based business management firm Execution Specialists Group (ESG) has been presented with the Integration Partner of the Year Award by Office Depot. After starting its business engagement with Office Depot in 2010, ESG expanded its role to support the company merger with OfficeMax in 2013. ESG continues to aid Office Depot post-merger with the strategic development of its supply chain and sales deployment.

OPI has spoken to Jeff Whiteway, CEO of UK office products group SPOT about the announcement that the group is re-entering the acquisitions market, either by assisting in dealer/dealer acquisitions or via its OfficeTeam reselling arm. OfficeTeam has a long history of acquisitions – 39 in total – but hasn’t acquired a business since the 2014 deal involving Buro. That, as it eventually transpired, had more to do with coming to the rescue of a distressed business that owed money to SPOT’s wholesaling unit Spicers than a strategic move. While OfficeTeam is on the lookout for external growth opportunities, Whiteway told OPI this would more than likely involve larger dealers in the £10 million+ ($12.2 million) range. He expects most of the future M&A activity in the independent dealer channel to take place at the smaller end of the market, and this is where SPOT would step in as “an honest broker” to bring dealers together. There are a number of market forces in play that are causing nervousness among smaller dealers, said Whiteway. These include the secular declines in traditional OP, Amazon and the expected launch of Amazon Business

NEWS

WHO’S WHO IN OP

Top 100 new entry: Stephan Iseli, Managing Director, Offix Group

No quick fix for Essendant Essendant CEO Bob Aiken has reiterated that it will take time for the wholesaler to return to a sustainable and profitable growth trajectory as the company’s share price slumped on the back of weak Q4 and full-year results. Essendant’s share price was down more than 28% in early trading on Wall Street on 28 February when the company issued its disappointing fourth quarter performance and weak outlook for 2017. The company’s Q4 sales fell 3.3% year on year to $1.25 billion, with only the cut-sheet paper category reporting growth. Essendant said the overall sales decline was mainly due to big-box and jan/san distributor customers, the latter still being affected by the move to a common operating platform for office and facilities products in 2016. The loss of the first-call Office Depot jan/san business, Staples’ acquisition of one of Essendant’s largest dealers Capital Office Products and the impact of the failed Staples/Office Depot merger will all hit year-on-year sales numbers for most of 2017. Even sales into the e-tail channel were soft in the fourth quarter, falling by almost 3% due to an assortment and sourcing review by one of Essendant’s major online resellers. Excluding this customer, e-tail customer sales did climb by just over 2%, but that is still not a particularly strong performance, as Aiken admitted himself on the earnings conference call. One bright spot continues to be Essendant’s Vertical Markets unit which helps independent resellers win business in the enterprise and public sector accounts segments. Sales here were up 13% year on year in the fourth quarter. Aiken said the results for 2016 as a whole were “well below expectations” and was at pains to emphasise that turnaround efforts outlined in the transformation plan announced in October would take time to come to fruition. Essendant’s overall 2016 results were a little less dramatic year on year than the Q4 results, but the bottom line was still not pretty. Net sales of $5.37 billion were down just 0.3% year on year on a workday-adjusted basis. See page 16 for the Big Interview with Essendant’s CEO Bob Aiken and President of Office and Facilities Harry Dochelli.

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Lyreco reveals succession plans

Lyreco Chairman Georges Gaspard revealed his successor at the recent European Office Products Awards in Amsterdam. The Industry Achievement winner and Lyreco icon revealed that his daughter Nathalie is to ultimately succeed him at the helm of the global reseller in a step-by-step, gradual handover. Nathalie is currently Group Communication Director at Lyreco.

Offix Group is the new powerhouse of the Swiss independent OP channel, having been formed in 2015 through the merger of the independent dealer cooperative operations of PEG (which were rebranded to Papedis) and IT and imaging supplies distributor Ecomedia. Former BPGI Chairman and Offix Managing Director Claude Ackermann left the company at the end of 2015 to lead a PEG sister firm, with ex-Ecomedia Managing Director Stephan Iseli stepping in to take the top job at Offix. A key initial focus of Iseli and his team has been an overhaul of logistics, and improving the customer experience and service levels at the Papedis unit, via a new initiative called PapLINK. CHF4 million ($4 milion) was spent on upgrades to the distribution facility in Aaburg in order to increase automation and efficiency and reduce errors. Papedis dealers have also been given access to new delivery options and improved e-commerce capabilities. As well as the Papedis and Ecomedia divisions, Offix Group has two other reporting units: Oridis specialises in serving the retail channel with EOS products and related services; and there is now a new division called Office Leader which was set up to handle the needs of customers that have more sophisticated requirements in terms of services and data exchange.

IPO for Officeworks?

Wesfarmers is reported to be favouring the IPO route for divesting its office products business Officeworks, according to various reports in the Australian media. As we reported last month, Wesfarmers is looking to cash in on Officeworks’ success via a sale or IPO. Having originally hired Macquarie Capital and Gresham to investigate trade sale options for business, Wesfarmers has apparently now appointed leading Australian law firm Gilbert + Tobin as lawyers for a potential IPO, according to the Australian Financial Review.

BIRD FEED

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Tagell to leave ASA Australian dealer group ASA is on the hunt for a new General Manager following the news that its long-term leader Siobhan Tagell will leave in July. Tagell has spent 18 years at ASA and has also been a key director of the Australian Office Products Charitable Fund for the past several years.

@purpleesm The #internetofthings is exploding at a phenomenal rate. 50.1 billion devices expected by the year 2020 #ai #bigdata #Data #innovation

Fastenal to acquire Mansco MRO and industrial supplier Fastenal has agreed to acquire “certain assets” of US fastener supply distributor Manufacturer’s Supply Company (Mansco). Mansco focuses on fastener products, with a particularly strong market position with commercial furniture OEMs. It is complementary to Fastenal which is a very small player in that sector.

@ShaneWallCTO Can’t wait to see the amazing innovations that come from new HP 3D Open Materials & Applications Lab #3dprinting

Wulff appoints new CEO Scandinavian reseller Wulff has named its new CEO as Kimmo Laaksonen. Elina Rahkonen, who acted as interim CEO, will continue in her position of CFO.

Pukka Pads closes Concord filing operation

Bunzl acquisitions continue UK-based facilities supplies distributor Bunzl is to beef up its outsourcing operations substantially following the announcement that it’s agreed to acquire US-based Diversified Distribution Systems. Freedesk to list in Stockholm Sweden-based office furniture maker Freedesk is to raise SEK12.5 million ($1.4 million) by listing on Stockholm’s AktieTorget stock exchange. Freedesk CEO Stefan Westergård said now was the time to take the group and its range of portable standing desks to the next level.

UK-based vendor Pukka Pads has closed its filing products factory Concord in Liverpool and put the business into administration. The Pukka Group bought Concord out of administration at the end of 2013 and apparently invested heavily in staff, production and service improvements over the last few years. A company statement says: “Every endeavour has been made to make the operation in Liverpool a viable profitable business. Unfortunately, this investment has failed to turn the business around. “Ongoing high overheads and legacy challenges have been exacerbated by increased raw material costs driven by the weak exchange rate since Brexit, and rises in the living wage. These factors, combined with a reluctance from the marketplace to accept the full level of price increases required mean that the Liverpool factory has been operating at a significant loss.”

Apogee acquires Danwood UK-based managed print services company Apogee has announced the purchase of fellow print and document management services provider Danwood for an undisclosed sum. According to Apogee, the deal will increase its annual sales to over £250 million ($307 million) and add more than 10,000 retained customers and around 8,000 transactional customers to its existing client base. The company believes this acquisition will make it Europe’s largest independent provider of managed services for print, document and process technology. Apogee Joint CEOs Jason Collins and Robin Stanton-Gleaves will continue to manage the group following the buyout.

April 2017

Keurig extends coffee offering Coffee firm Keurig has announced an expanded partnership with Dunkin’ K-Cup pods for the workplace. The initial brand roll-out will feature five varieties of Dunkin’ Donuts flavours.

@_TheBugo Dogzilla taking charge in sales this morning, excellent at drumming up #mondaymotivation, terrible at taking orders! #officedog #greatdane

NEWS

IN BRIEF

NEWS

Strong international presence at Paperworld Middle East 2017

OfficeMate pushes e-commerce channel OfficeMate, Thailand’s leading office supplies reseller, is continuing to invest in digital platforms as it keeps an eye on the growing threat from e-commerce giants Amazon and Alibaba. In its FY2016 annual results, OfficeMate’s parent group COL noted an increased focus on the e-commerce market in Thailand as global e-commerce companies begin to penetrate the sector directly or forge partnerships with local players. These include Amazon, which announced plans to enter the Southeast Asia e-commerce market through Singapore, and Alibaba, which in December signed an agreement with the Thai government to cooperate on a number of e-commerce initiatives. OfficeMate – which includes the former Office Depot business in Thailand – held continuous marketing campaigns throughout the year to drive sales through e-procurement and e-ordering platforms and move away from more costly call centres. That worked to the extent that e-commerce growth was the main driver of a 7.4% year-on-year increase in OfficeMate’s direct sales in 2016, but online still only represents 26% of direct sales, versus 74% still coming from call centres.

Cartridge World to launch new growth platform

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Ink and toner franchise chain Cartridge World has launched its new 2017 B2B Growth Platform. The platform aims to elevate brand awareness and help franchisees in the US grow recurring MPS sales in the B2B space. Highlights of the platform include: • Lead generation – advanced digital marketing campaigns for demand creation with SMB customers • Sales training – live and on-demand B2B sales training • Sales tools – customer-facing enablers to communicate Cartridge World’s B2B value proposition • Gamification – enhancements to corporate and franchise websites will feature a new lead generation game • Ongoing communications – monthly best practice sharing will be showcased in a monthly ‘Cartridge World News’ video sent to all franchisees The company said plans to translate and expand the programme globally are already underway.

Paperworld Middle East had an impressive turnout and a distinct international vibe at its seventh annual trade show in Dubai in March. The three-day event brought together nearly 6,000 trade buyers from 93 countries to peruse the stands of more than 300 exhibitors from 42 countries. Paperworld’s international flavour was underlined by the presence of six country pavilions from Germany, Italy, China, Taiwan, Egypt and Pakistan. As well as attracting the big industry names, the event this year was notable for the volume of start-up companies making their debut into the vast Middle East and Africa market.

HP opens 3D materials lab

HP Inc’s Corvallis lab in Oregon, US – home to some of the most advanced 3D printing technologies and birthplace of the thermal inkjet printer – has opened its doors to 3D materials partners. The new 3,500 sq ft (350 sq m) 3D Open Materials and Applications Lab is a space for partners to test materials and get feedback from HP engineers. It is hoped the focus on cross-industry collaboration will spur innovation and speed up time to market for new 3D printing materials, enabling partners to break into the $12 trillion manufacturing industry. Last year, HP announced its Multi Jet Fusion technology and released its first commercial 3D printers. The company ultimately hopes to launch a platform where customers can choose from a variety of certified materials, similar to an app store.

$1.29trillion Anglo’s logistics partnership makes London cleaner Anglo Office Group’s zero-emissions logistics partnership with Gnewt Cargo has won over organisations looking to tackle London’s ever-growing pollution problem. The New West End Company (NWEC) – a Transport for London-backed organisation created to improve air quality in the city – has appointed UK-based dealer Anglo as sole provider of office supplies and business services. The deal will see Anglo roll out its single source, zero-emissions solution to 500 businesses signed up to the scheme with more expected to be added in the future. The NWEC announcement followed the extension of an exclusive agreement between Anglo and Gnewt for a further four years. It will also see Anglo adding a carbon-neutral parcel distribution service to the partnership. Similar schemes have also appointed Anglo as their sole provider for projects across London, spanning over 2,000 businesses in total. London was served a “final warning” by the European Commission last year after air pollution in the city reached a six-year high. A report by Mayor of London Sadiq Khan revealed that tens of thousands of Londoners are being exposed to dangerous levels of air pollution.

Office Outlet to sublet space in 35 stores

NEWS

Estimated worth of global Internet of Things spending in 2020

A spokesperson from UK-based Office Outlet has confirmed to OPI that certain parts of its 35 stores are due to be sublet. The stationer formerly known as Staples was rebranded earlier this year after it was bought out by restructuring specialist Hilco Capital in 2016. Plans to shed 28,500 sq m (285,000 sq ft) from its portfolio are thought to be a key element of Hilco’s turnaround strategy. Staples UK was plagued by falling sales and persistent losses in recent years – last year’s financial report saw sales fall by almost 10%. Staples retained its online business after the sale to Hilco, meaning Office Outlet currently has no internet presence which is taking its toll.

Platinum Equity snaps up Staples ANZ; eyes up OfficeMax

April 2017

Staples has finalised a deal with global private equity firm Platinum Equity for the sale of its Australia and New Zealand (ANZ) business for an as-yet undisclosed sum. Part of its long-term growth plan, the divestment will allow the group to focus on its North American business, according to Staples CEO Shira Goodman. Late last year, Staples employed Morgan Stanley to “examine strategic options” for its ANZ unit. The company’s Australian business is the top player in the region’s B2B office products segment, while in New Zealand it ranks second. Both units bring in earnings of around $35 million a year for Staples. The reseller’s ANZ arm will continue to trade under the Staples banner while a new brand is finalised. Platinum Equity also has its sights set on OfficeMax, Office Depot’s Australia and New Zealand (ANZ) business, according to the Australian Financial Review. The newspaper pointed out the significant synergies that would arise from combining the two business entities. While Staples’ tops the sector in Australia, OfficeMax struggles in the region, seeing most of its growth in New Zealand. In November 2016, Office Depot announced that it intended to sell off its international operations – like Staples – to focus on North America. The company received first-round bids for its Australian operations earlier this year. It is also understood that another private equity buyer, possibly New Zealand’s Maui Capital, is lining up a bid. The next move for Platinum could be to add the Wesfarmers-owned Officeworks to its portfolio which, although more retail-based, would tie in nicely with the other two businesses. Platinum can certainly afford it – it recently announced a $6.5 billion global buyout fund focused on acquiring businesses that can benefit from its operational and financial resources.

A hugely popular and influential figure, former AOPD chief Bud Mundt passed away peacefully at home after a long illness on Sunday 26 February with his family at his side. OPI asked current and former AOPD members, customers and former colleagues for their tributes, memories and anecdotes JESS BEIM, FORMER SVP, AVERY DENNISON Bud was a long-time business associate who became a close friend. He had a unique style – warm, friendly, loyal, caring, and knowledgeable with a strong work ethic – a quality guy in every sense of the word. He was a ‘class act’ and I am proud to call him my good friend for so many years. BOB ENK, PRESIDENT, PROFESSIONAL SALES ASSOCIATES Bud was a great individual. He had great love for his family, his faith, his work and his friends. I was so lucky to have Bud as a friend and supporter. We shared many great times together that I will always cherish. CHUCK HARSTAD, FORMER VP OFFICE PRODUCTS DIVISION, 3M I first met Bud when he was interviewed for an opportunity with the office products division of 3M. By the end of the interview I knew I had met a man with an infectious personality, a warm and compassionate heart and one who could also be tough as nails when the situation required. Bud was not only a valued employee, but he and Janet became lifelong friends whose friendship we cherish. He was a contributor in all that he did and was often bigger than life. It is hard to think of Bud and not smile. To know him was to love him. IRWIN HELFORD, FORMER CEO, VIKING I first met Bud when he represented 3M. We worked together on many product introductions in the US and Europe. For over 30 years he was a close friend – honest, dedicated and a genuine gentleman. He set a high standard for integrity, respect and always kept his word, professionally and personally. He will always be in my memory. JIM O’BRIEN, EVP OF OPERATIONS, SP RICHARDS Quite simply, Bud was humble, gracious and epitomised the word professional.

MARK LEAZER, EXECUTIVE DIRECTOR, AOPD Bud and I go back to his days at 3M and his involvement with AOPD meetings 20 or so years ago. When we brought Bud on board to take over as AOPD Executive Director, we knew he was the perfect choice with his blend of manufacturer, large independent and big-box experience. He knew the industry and the people inside out. Bud knew everybody. It is those relationships for which he is probably best known and why so many people in the industry really admired and cared for Bud and his family. He and I had a very close relationship, both business and personal. I know Joe Templet, Jim Williams and a few others called him ‘Uncle Bud’. I’m not sure if he would be more like my uncle or more of a big brother figure. During the AOPD tenure we have always been there for each other when it came to business decisions and advice, always running some idea or thought by each other. Like many at AOPD and the industry at large, we are sure going to miss him.

OBITUARY Bud Mundt

Industry pays tribute to Bud Mundt

SHARON STEPIEN, GENERAL MANAGER, AOPD I worked for Bud for 12 years but knew him for more than 30. Bud empowered people – he didn’t push them, he led them. He trusted in the AOPD staff and thereby let us develop our creative abilities. He let us shine and always acknowledged our importance to the success of AOPD. He was a wonderful man and a great friend. We will miss him with all our hearts. PAUL VENTIMIGLIA, DIRECTOR BUSINESS DEVELOPMENT, PM COMPANY I admired him for obvious reasons… integrity, business acumen, honesty, trustworthiness, compassion, humour and, most importantly, the love for his family. Bud’s compassion for the City of Hope will forever be his legacy. Many times Bud would ask me to play piano for the City of Hope – it is one of the fondest memories I have of him. Pure enthusiasm. He touched everyone’s life in a positive way and his friendship was a blessing to me, as was his loyalty. Bud was a good human being, a mentor and dear friend. Everyone should live their life like he did. Learn from his example. I loved him. RIP.

April 2017

MIKE WILBUR, PRESIDENT, WILBUR AND ASSOCIATES CONSULTING Bud was a very special individual. I had the good fortune to know him for over 30 years. I am particularly fond of the past 12 years as we became close friends. As a businessman, he was level-handed. His approach always saw him create the proverbial ‘win-win’ that leads to great results and good feelings for all. Some call this fair, I call it integrity. As a friend, Bud was the best. It took a great deal to truly earn his respect, but once you did he was a friend for life. His loyalty was legendary. He always found a way to put his arm around your shoulder and say “love you friend”. The industry will miss him, his organisation will miss him, his friends will miss him, but most of all Janet and the Mundt family will miss him. There is/was only one Bud Mundt. Our mentor, leader and friend.

BIG INTERVIEW

TRANSFORMATION:

The long and winding road

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isruption, distraction and opportunity were three words discussed in great detail at Essendant’s biennial CORE Live event that was recently held in Las Vegas (see also Research, page 26). And while these words apply to the industry as a whole and the independent channel in particular, they also have great relevance to the wholesaler very specifically. OPI CEO Steve Hilleard caught up with Essendant CEO Bob Aiken and President of Office and Facilities Harry Dochelli at CORE Live to chart the wholesaler’s most recent history and the challenges it has faced, internally as well as externally.

OPI: Bob, you became permanent CEO of Essendant back in July 2015. It’s been a pretty bumpy ride over the past couple of years in terms of financial results [Editor’s note: the interview was conducted before Essendant’s most recent Q4 and full-year results – see page 8 for details]. Can you comment? Bob Aiken: Well, it will be two years in May that I’ve been serving in the CEO role. We worked hard during that time to really understand where the market is going and how to continue to define our value proposition in a way that helps our resellers win. The ‘Powering Possibilities’ branding (that we’ve just launched here at CORE Live) reflects what we think it’s going to take to win in the future. By that we mean Powering Possibilities for our resellers’ businesses with smarter operations, category expansion and digital and marketing support. Those are the new table stakes in our industry. The landscape is shifting in office products and in facilities today, and we’ve seen the impact of those shifts in our own business as well as in the businesses of many of our customers.

Every business today has to evolve in the face of the growing presence of e-commerce and when I joined Essendant I knew that we are no exception. The traditional wholesaler model of being all things to all people isn’t sustainable any longer and we’ve spent the past 18 months defining principles by which we’re going to operate the company going forward. OPI: Gross margin declines seem to be a particular issue for Essendant. How can you rectify that? BA: When we look at the trends in the business, what we see is that larger customers are growing and smaller customers are declining. The mix of products we’re selling is also shifting. How do you address both? One of the things we’ve looked at very carefully is our assortment and whether we’ve optimised that. Are we partnering with our suppliers in ways that drive value for them? Are we carrying the right items to meet the needs of end users? Do we have the right levels of inventory in the right places? As we work to improve the gross margin of our business, we’ll be primarily engaging with the

BIG INTERVIEW Bob Aiken & Harry Dochelli

suppliers that we believe offer the best opportunities in the marketplace. We’re also partnering with our customers – if we’re selling more of the right type of product to the right customer, margins will improve.

Essendant is still a highly profitable company and we generated a lot of cash flow. We’ve never invested more in our distribution network and IT systems than we have this past year and we’re investing for the future. OPI: At the last CORE Live event in 2015, the two big announcements were the rebranding from United Stationers to Essendant and the transition onto a common operating platform of both parts of the business (Facilities Essentials, formerly Lagasse, and Business Essentials, formerly

April 2017

OPI: How supportive are your shareholders of the initiatives you’re undertaking? BA: Well, like any public company shareholders, they’re interested in both how the business is performing financially as well as the long-term strategies that will make it successful over time. We’re fortunate at Essendant to have a number of large, very long-term shareholders that understand our business well. We’re having the same conversations with our shareholders that we’re having with our customers and suppliers about our strategies. I believe generally they are happy with the focus we’re bringing within our core categories to strengthen our position. Over time, those strategies will deliver good financial results for us. Despite the undoubtedly “below expectations” financial results we’ve had, it’s important to remember

Despite the undoubtedly “below expectations” financial results we’ve had, it’s important to remember that Essendant is still a highly profitable company

Bob Aiken & Harry Dochelli BIG INTERVIEW

USSCO). The first seems to have gone very well, the second not quite so from what I can gather. Can you tell me a bit more? Are you winning back some of the business that you lost during that difficult period? BA: As we put these two businesses onto a common operating platform there’s a lot that we got right and that went very well. But there were some aspects of an office products-centric operating model that weren’t as well suited to our jan/san distributors, so we’ve had to go back and make enhancements to our system to make sure we’re meeting the needs of both OP dealers and jan/san distributors. The good news is that we’ve made solid progress on this front. We measure our customer experience through a net promoter score concept and we have seen really rapid improvement across all of our customer segments. The original vision was one order, one shipment and one invoice across a range of categories to allow cross-selling and we’re going to realise that vision. We stumbled a bit, but our customers have been patient with us and now we’re ready to deliver on the promise that we made when we started.

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OPI: Bob, you made a statement [on stage] saying it’s not been an easy ride and that you didn’t understand your jan/san customers maybe quite as well as you should have done. That’s quite an admission when you’re talking about a $1 billion company that wasn’t at all a new business for you… BA: Maybe, but that comment had largely to do with the common operating platform we implemented. Yes, there’s a blurring of the channels taking place, but you have to be respectful of the fact that across the spectrum of jan/san distributors there are varying ways in which they do business. We have to have the flexibility in our operating platform to meet and address those varied customer requirements. It’s a learning curve and it was steeper than we anticipated. Harry Dochelli: CORE Live is a great example of the blurring channels that Bob has just mentioned. We have everything from jan/san distributors and office products dealers to e-tailers here. Combining all those on one platform is difficult. We literally lifted up a $1 billion company and put it on a new platform. We’re in a channel that frankly was – and maybe still is – reluctant to change its ways. But a lot of our customers are now asking us to go beyond great distribution capabilities; they’re talking about vertical markets, about our digital marketing experience, about online expertise, etc. So as bumpy as the ride was, we’re now in a strong position from which to move the business forward. For our office products folks, we can now give that billion dollar jan/san category expertise to them and we can do it well – that’s a good place to be in.

OPI: With the benefit of hindsight, how much of a distraction was the Staples/Office Depot acquisition saga and of course your involvement with the agreement that was announced with acquiring the Staples contract assets? BA: I believed all along that a merger of Staples and Office Depot would have been good for the

industry because consolidation in an industry that isn’t growing is a way to keep it healthy and vibrant, and take costs out of the system. When the merger ultimately didn’t go through, you saw a lot of changes in the industry unfold quickly. It turns out that the Amazon threat was real. Seeing all that has certainly caused us to re-evaluate how we can be successful across our different customer channels. The game has clearly changed.

In an industry where end-user demand isn’t growing it’s imperative to expand the categories we’re bringing to market The independent channel is built very much around the broadening of categories, with the belief that dealers will want to carry a broader range of products around digital and online capabilities and around the ability to deliver anything from a full truckload to a single item in a cost-effective way. 60% of what we’re selling now we’re putting in a box for either last mile distribution by our customer or we’re drop-shipping directly on their behalf. We’re evolving our model just like many other businesses are – I think the merger, even though it didn’t happen, has focused the mind in terms of what our industry will look like in years to come. OPI: Consensus at the time was that the market – and you just alluded to that as well – needed some consolidation. To what extent can both companies survive in the medium to long term without some form of transformation, acquisition or other major strategic shift? BA: In an industry where end-user demand isn’t growing it’s imperative to expand the categories we’re bringing to market – that’s going to be the key for all of us. For Essendant specifically it means expanding in breakroom, expanding in foodservice and driving our jan/san offering.

OPI: That’ll be another couple of years lost then. Sticking with Staples and Depot, were you surprised that both of them decided to focus their attentions on North America as well as specifically on the SME sector? BA: I wasn’t surprised at all to see them focus on the North American market. This is a business where scale really matters. Both companies have scale in this space and 25% of the world’s economy is still concentrated in North America. With regards to their focus on the SMB space, Staples and Office Depot have a large presence in the enterprise accounts sector today and for them to continue to grow they’re going to have to look at the SMB space. HD: I think it’s a smart move to focus on North America and to concentre on how they can be better here. As far as the SMB market is concerned, specifically for Depot it was already core to their business together with the government business. When they bought OfficeMax they added the large enterprise accounts business. Staples also was already strong in the SMB sector. It’s not so much a new phenomenon, but more a renewed focus. OPI: Harry, you spoke at CORE Live about the disruption that we’re going to see as a result of OfficeMax now being properly integrated into Depot, and of course both Depot and Staples having relatively new CEOs. Will that disruption benefit the independent dealer community? HD: Well, we just talked about our own platform and the integration issues we had. It’s a challenge for any business of that size to move over to a new platform, no matter how well you execute it. OfficeMax and Depot are not going to be any different – they’ll have their challenges and these will create opportunities in the marketplace and for other operators. We’re focused on the winners in the marketplace and we believe independent dealers are those winners. They execute well, they are capitalising from any disruption and they are taking market share. I believe the top 50 US independent office products dealers are pretty healthy – they are growing in a declining market and that means they’re grabbing market share. BA: The number one focus of these top 50 dealers is on enterprise accounts and I think you’ll see a real share shift in the next 12 to 18 months.

OPI: Talking about large dealers, I haven’t seen WB Mason here at the event and there have been rumours that all is not well in your relationship. HD: I wouldn’t read anything into that. WB Mason is our single-largest customer and we have a strong relationship with them. We’re very well integrated from a supply chain network standpoint, as we are with all our big customers, and that’s the way it should be. OPI: It’s difficult to have a conversation in this industry without Amazon cropping up sooner or later. One leading independent you know very well recently told us he thought Amazon Business was the biggest threat to the survival of the independent dealer channel in the past 40 years. Would you agree with that sentiment? BA: When you look at office products and jan/san today, it’s a $65 billion market. I believe Amazon Business will win its share, but I also think that independent dealers can do quite well. It will take three things: customer service, high-touch delivery and the right cost of goods. Essendant can help with all of these. OPI: But Harry, you said just yesterday here at CORE Live that “Amazon is more than a competitor. Amazon is a habit”...

April 2017

OPI: That brings me to your Vertical Markets unit which helps independents win business in the enterprise and public sector accounts segments. You’ve been very successful with that I believe. Can you tell me a bit about that?

HD: Yes. We’ve built this business unit to well over $200 million in the past five years. It again speaks to when there’s disruption in the market there’s also opportunity. We started in the federal state and local government business and have expanded into healthcare. We are also focusing on enterprise accounts. Our progressive dealers are capitalising on our new capabilities. These are markets they haven’t traditionally played in and they’re now participating in those bids with our help. It’s a different mindset and outlook, but our larger dealers see this as a window of opportunity. It’s one of our key strategies to help growth and we’ve been up in the double digits with this group consistently for the past few years. Importantly, we don’t see it slowing down either. Quite the opposite, there’s potential to accelerate it.

BIG INTERVIEW Bob Aiken & Harry Dochelli

OPI: But what about Depot and Staples specifically – can they survive without some sort of major event happening? BA: Staples has a very solid strategy and a focused leadership team. They’re executing on their strategy and I think they’re well-positioned to be successful. Depot has just had a new CEO coming in and he’s going to take some time to figure out what his priorities will be, so it’s too early to say how that company will fare moving forward.

Bob Aiken & Harry Dochelli BIG INTERVIEW www.opi.net 20

HD: They are and they do some great things and have some fantastic technologies, but they’ve got weaknesses as well. Millennials, for example, like local companies, they like people that give back, they like the high touch. Everybody has their weak points and I think as a good competitor you capitalise on your own strengths and exploit others’ weak spots. Independents still provide a point of differentiation in the marketplace today. And if they can at least be competitive on their digital experience, there are a lot of services they can provide that Amazon would still struggle with – just think furniture installation, jan/ san-related chemical mixtures, floor cleaning... Every industry goes through cycles where there’s a new inflection point. Just think back to the 1990s when the omnichannel players became huge. Everybody predicted the death of the independent dealer channel. They weathered the storm then and I believe the best dealers in the market today will weather this storm as well – by modifying their business models to meet customer needs in order to stay relevant in the marketplace.

BA: I’ve spent a lot of time thinking about how we can keep the independent dealer channel healthy and vibrant over time and I believe we have a core set of strategies at Essendant that will allow us to do that. All I can say is that consolidation will play a role in this industry over time, but it’s difficult to predict exactly how that would shake out.

OPI: Let’s talk about the dealer groups. There’s always been some friction between these groups and wholesalers because both are occupying this middle territory that revolves around services, marketing programme, etc. Do you think there is a healthy divide or is there too much blurring of the lines? BA: I actually think the relationship is healthier than it’s been, certainly less contentious than when I joined Essendant as a board member six years ago. Both Independent Stationers and TriMega and the two Mikes who lead those groups know redundancies in the supply chain don’t make sense, and they’re very open to getting alignment around what we do really well and what they do really well. These are times when you’re fighting for survival and you’ve got to think outside the box. Both groups I believe are willing to do that and it’s created some good dialogue between us.

OPI: What keeps you two awake at night? BA: This is an industry in transition and in which models have to change – and quickly. The impact that Amazon will have on our industry is real. But we can all be successful in the face of that if we’re willing to make the changes to our business model necessary and if we can move with the speed that is required. HD: And when we talk about change, it’s not just a couple of little things here and there, it’s transformative change. For the independent dealer channel it means really thinking outside the box and putting aside the traditions that we once had, about the historic role of the wholesaler or the role of the dealer or distributor, and so on. I believe many dealers are getting it and are ready for it, but I do lose sleep over some stragglers that don’t seem to be ready to jump yet. What our distributors and dealers can bring to the table is a differentiated value proposition that can win in the marketplace, but there has got to be transformative change. Like Bob said, it’s a $65 billion market and there’s plenty of share to be had by independent dealers.

OPI: Thinking outside the box, redundancy in the supply chain could also perhaps mean too many wholesale players? What’s your view on the desirability of, or potential for, consolidation among the wholesaler/distributor community?

OPI: I cannot come to the US and not talk about your new President. What will the Trump administration mean for the industry here in the US and in particular for organisations like Essendant and the community that you serve? BA: It’s early days still, but I hope that the Trump administration concentrates on a couple of real issues that are inhibiting growth in business in the US. If we can start to reduce some of the regulatory burdens and drive corporate tax reform, for example, it could have a real impact on the US economy. It’s a question of whether the Trump administration will bring the focus on the issues that would enable our country to create jobs. If we can create jobs, it will be good for our industry.

For more exclusive content from the interview, please visit the Magazine section on opi.net.

OPI: I look forward to coming back in a couple of years and finding out how well you’ve done!

HOT TOPIC

THE

Connected OFFICE

The business opportunity of the Internet of Things cannot be underestimated. It will change the way everyone works and we are only just beginning to feel its influence – by Michelle Sturman

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t’s no secret that the office products world is undergoing metamorphosis, but the unknown factor is what it will look like when it emerges on the other side. The Internet of Things (IoT) – see Definition on page 23 – is a primary reason for this as it is constantly moving the goalposts, not only in terms of new products, applications, services and solutions, but because it is responsible for the continual re-imagining of the office environment. In effect, it will disrupt every industry and business over the coming years and even decades. Consulting firm McKinsey Global Institute estimates a total potential economic impact – including consumer surplus – of $3.9- $11 trillion per year in 2025 for IoT applications. The business opportunity of IoT-based applications for the office could be worth between $70-$150 billion, with the primary activity based on security and energy management. In addition, McKinsey research suggests that IoT applications for the office such as augmented reality could provide a productivity improvement of 10%, while activity monitoring could improve productivity by 5%. Meanwhile, energy monitoring could result in savings of 20%, and IoT security applications could reduce labour costs by 20%-50%. While the IoT ‘concept’ has been around for some time, the past few years have seen it come into its own. It envelopes the recent technology trends of mobile communications, cloud computing and big data and offers a myriad of opportunities for manufacturing and vertical industries.

It is widely accepted that the Internet of Things can be split into two broad camps: consumer-oriented IoT and the Industrial Internet of Things (IIoT) – see Definition on page 24. McKinsey believes that B2B applications will generate almost 70% of the potential value enabled by IoT, although consumer applications such as driverless cars and health and fitness monitors will naturally grab all the headlines. THE APPLICATION OF IOT When discussing the available applications, most people think immediately of domestic appliances connected to a smartphone such as Google Nest and the British Gas Hive system, or internet-connected devices such as Amazon Dash buttons, and Xerox self-service print machines in Staples retail stores. Soon, just about any physical object that can be connected to the internet will be. There are of course also incredibly sophisticated applications found within the IIoT sector that marry connectivity machine-to-machine – commonly referred to as M2M. Professional services firm PwC estimates that by 2020, out of a total of about 50-100 billion devices that will be connected to the internet – including tablets, smartphones, etc – there will be 30 billion connected ‘things’. Many of these devices and ‘things’ will be ubiquitous in the workplace and, in short, will alter the way we all work – from time, resources and innovative opportunities, to the use of data and analytics.

IOT IN THE WORKPLACE You would have to had your head buried in the sand not to have noticed the dramatic changes already taking place within the workplace, and IoT is certainly playing its part. In what is now the third wave of the internet, IoT is modifying the way the office is being designed, utilised, and the way that workers interact within the enviornment. As businesses seek to implement office-based IoT, there will be an increasing need to deploy intelligent devices such as smartphones and TVs to lighting and window coverings, for example.

coverings to create ambient temperature and light settings, assign employee seating, monitor and adjust air conditioning and heating, and automatically call for janitorial services to clean the washroom. From a facilities management point of view, the office environment has now become a wealth of information as sensors constantly send streams of data that can help manage an entire building, right down to individual rooms. Kimberly-Clark Professional (KCP), for example, recently announced a smart washroom system that harnesses the M2M connectivity of the IoT. In addition to signalling whether dispensers need refilling, KCP’s Onvation Technology provides real-time data with analytics and insights through a web-based dashboard. KCP North America Marketing and Sales Leader Terry Sanchez says: “Buildings today are smarter than ever with sensors and software managing everything from lighting and security to HVAC systems and more.” On a more personal note, the increase in interest in wellness in the office will boost the use of health monitors while sensors built into office chairs will

HOT TOPIC Internet of Things

But there’s more to IoT than just things, especially for the business supplies industry. The IoT will influence every part of the industry and is already having an effect on manufacturers, wholesalers, resellers and customers. PwC expects IoT to be the biggest driver of productivity and growth over the next ten years, with most devices being sensor-based. Delivery vehicles, white goods, clothes, anything that can have a sensor attached or built-in, will do.

From a strategic perspective, the fast rise of the Internet of Things is a veritable ‘black swan’, an unexpected event of enormous reach and consequence It will become the norm for products we can’t even begin to imagine right now to monitor, assess, scrutinise and optimise the world around us. Louella Fernandes, Principal Analyst at business and IT advisory firm Quocirca, points out that connected smart devices represent a growing opportunity in the workplace as IoT capabilities are extended to office products that have long relied on scheduled or routine maintenance. There’s a huge opportunity for the OP industry to be leaders in IoT in terms of supplying the right products for the workplace, but it is going to require a change in mindset and a broadening of category horizons. For now, this is an opportune moment to introduce customers to existing products – think appliances such as smart refrigerators, for example, that can automatically order breakroom snacks and beverages when supplies are running low. The IoT frees the world from the restrictions of only being able to access data and information via PCs, tablets and phones, and extends it to just about anything. The smart workplace uses beacons, sensors and cameras operational in offices to allocate available meeting room space, adjust window

April 2017

Definition: The Internet of Things The interconnection via the internet of computing devices embedded in everyday objects, enabling them to send and receive data. In other words, connecting physical objects – ‘things’ – to the internet.

send information to automatically adjust the seat for a better posture. While all this may seem futuristic, it’s already being implemented and it will keep growing. Wearables, for example, will become increasingly important in the coming years as millennials take over the workforce and the use of such technology becomes standard. Office furniture vendors have been incorporating connectivity into products for some time. DAMS Furniture Managing Director Chris Scott told OPI that many of its desk ranges feature integrated power management with plans to incorporate Bluetooth speakers in its meeting pods. Meanwhile, global office furniture manufacturer Steelcase has announced it is to develop technology-enabled workplace solutions built on Microsoft Azure IoT technology. As part of the deal, the software giant is planning to bring in Steelcase dealers as authorised Surface Hub resellers. Manoeuvring into this space and carving out a reputation now is probably a wise move, as there are already vendors, wholesalers and large resellers active in the world of IoT. Amazon made a splash back in March 2015 when it launched the Dash button in the US – and other locations since – which enables one-click ordering at the push of button. In addition, the Amazon Dash Replenishment System allows automatic ordering to be built into products. A good illustration of this is the integration of DRS into select Samsung printers which order new cartridges automatically through Amazon when they sense that the toner is running low.

Internet of Things HOT TOPIC

BUSINESS BENEFITS IoT is not only rapidly changing and broadening the list of products available, but dealers can certainly take advantage of the benefit of utilising IoT within their own business. According to Gartner’s Harness IoT Innovation to Generate Business Value, these can range from operational improvements such as predictive maintenance, to digital transformation including selling product usage ‘as-a-service’. IoT-connected devices provide masses of data that can be analysed for detailed insights which can then be used to streamline business processes, make better strategic decisions, increase productivity and sales, and shape the future of the business in terms of customer relationships. They can help make businesses more competitive and agile and enable dealers to respond more quickly to customer demands and changing market conditions.

Resellers will need to leverage the wealth of data that is generated from sensor-based smart devices Gartner analyst Chet Geschickter points out that the adoption of IoT is becoming “widespread and profound with competitors, suppliers and partners all adopting IoT in various formats. So too are customers”. Interestingly, this is leading to what the research company terms “things as customers” – an order may come from a ‘thing’ that requests new supplies for a printer, for example, or could be something requested by Amazon DRS or Dash. Gartner adds this is a “transformation, not an incremental adjustment”. To deal with this evolution, OP industry players will also need to re-adjust internal systems to deal with smart devices – and not people – ordering products. Gartner points out: “Connected things will disrupt not only day-to-day customer engagement but also entire customer-facing business models.”

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STREAMLINING THE SUPPLY CHAIN The ‘revolution’ of the entire OP supply chain due to the IoT is no different to what every other industry is experiencing. Fact tank The Pew Center found that by 2025 there will be a huge improvement in manufacturing productivity at every stage as supply chain logistics become

15%

coordinated. Meanwhile, No IoT will enable business Yes supplies dealers to What’s IoT? add ‘as-a-service’ to their repertoire for the maintenance and Maybe upgrading of IoT things and applications. Within the next three years, according to the Centre for Economics and OPI.NET POLL Business Research, the adoption of big Do you have plans data analytics by UK businesses is expected to to incorporate the rise to 67%, while the adoption of IoT is expected Internet of Things to increase to 43%. (IoT) into the With the continued rise of IoT in businesses products you sell across all industries, the time now is ripe to start or manufacture? investigating and investing in the systems and products available, with the understanding that IoT is only at the beginning of what it’s expected to achieve within the next few years. Quocirca’s Fernandes says that to capitalise on the IoT opportuntiy in the office products space, resellers will need to leverage the wealth of data that is generated from sensor-based smart devices. “This may mean working with a customer or manufacturer to leverage a platform that handles the data analysis and reporting. The opportunities for incremental revenue are significant, particuarly as they help strengthen longer-term customer relationships,” she adds. There’s still much to be done, however, in terms of standardising hardware, software and creating a common IoT ‘language’. Equally important will be the creation of standards that enable the billions of devices to integrate and communicate with each other reliably and on a secure basis. They will also need to ensure data privacy and security both internally and externally. A quote in the opening welcome to IoT Executive Handbook by Telit Communications founder and CEO Oozi Cats sums up the extraordinary time we find ourselves in: “From a strategic perspective, the fast rise of the Internet of Things is a veritable ‘black swan’, an unexpected event of enormous reach and consequence. It comes with the redistribution of the pieces on the global chessboard and is igniting a transformation whose results we cannot even begin to predict. And to be quite honest – isn’t this wonderful?”

47%

19% 19%

Definition: The Industrial Internet of Things (IIoT) IIoT applies the Internet of Things technology to industry, particularly manufacturing, in the pursuit of increased productivity and efficiency. IIoT applications include the management of transportation, energy, supply chain, facilities, inventory, and warehouse and security. The IIoT is an inherent part of Industry 4.0, which essentially refers to ‘smart factories’.

RESEARCH

Disruption, distraction

& OPPORTUNITY Understanding market forces is fundamental to a successful business, and Essendantâ&#x20AC;&#x2122;s latest research seeks to make sense of our rapidly-changing industry and its impact on the workplace

S wholesaler Essendant revealed new end-user research during its CORE Live event held recently in Las Vegas. The survey of 1,500 B2B buyers, including over 500 millennials, builds a picture of traditional OP and professional facility buyers purchasing from a host of resellers including Staples, Office Depot, Amazon, WB Mason and many independent dealers. Delving deep into the psyche of B2B purchasers, the survey revealed that almost three quarters (73%) of millennials are involved in B2B decision-making with one third the final/sole decision maker for their department. To put this into further context, millennials now make up the largest segment of the US workforce at 53 million and by 2020 will account for 46% of the labour force. Equally important for future-proofing the industry, the research revealed the top six attributes that millennials look for in a website:

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1. 2. 3. 4. 5. 6.

MOBILE MANIA Smartphone ownership for millennials is considerably higher (86%) than for baby boomers (58%). In the workplace, 82% of millennials use a mobile device to collect information about office products. In fact, just under half (49%) of all buyers use a mobile device for product research while at work to compare prices and features, read product literature, and 42% use it to make purchases. So where do buyers go for business supplies information and to compare prices online? Research indicates that Staples.com is the top choice, followed

B2B e-commerce sales

12% Amazon

Save frequently ordered items See available inventory Live chat/customer support Ratings and reviews Online returns and processing Video buying guides etc

The research revealed little difference between OP and jan/san buyers in terms of what they consider to be important for online purchasing. The top criteria for both groups is accurate pricing along with clearly indicated delivery costs. For the OP buyer, however, the ability to order products online is vital (52%) whereas almost half (48%) of all jan/san buyers cited available safety data sheets and material safety data sheets for each item as crucial.

2020 $1,132 billion

2019 $1,066 billion

2018 $999 billion

2017 $928 billion

2016 $855 billion

2016

Essendant

Composition of the marketplace is changing! Others Club Stores Walmart/Target Grainger Amazon Nationals IDC End-user share of wallet

THE AMAZON EFFECT It is likely that the desire for good customer service has been highly influenced by buyers using consumer websites with the result that similar e-commerce experiences are expected to be the norm when purchasing business supplies. Amazon has set the bar high here of course, and as Essendant President of Office and Facilities Harry Dochelli pointed out during CORE Live, the e-tailer is now “more than a competitor. It is a habit”. B2B customers are clearly using Amazon to make work-related purchases – Amazon Business alone raked in $1 billion in sales in 2016 – but what are they actually buying from the website? According to Essendant, it’s items in the following categories: office products (47%), tech/computer items (45%), printer ink/toner (30%), copy/printer paper (17%), office furniture (16%); breakroom, coffee and jan/san (14%). Buyers check Amazon 70% of the time when looking to make a purchase, with 65% having used it to buy business supplies. Reasons for doing so include: competitive prices, easy-to-locate items, one-stop shop, on-time deliveries and easy reordering. In terms of Amazon’s advantage over other websites, the most common answers were: good product availability, customer ratings and reviews, rapid delivery service, deep product range and the best pricing.

stock products, convenience, and better overall service. Several added-value services would keep B2B buyers from switching, and they would also be willing to pay for them. These include premium/faster delivery service, ongoing maintenance, purchasing analysis reports and product recycling. The IDC certainly has the advantage in convenience and excellent overall service, and the good news is that it also has the most loyal customers – over half (54%) would continue to stay loyal to their dealer even if better pricing was found elsewhere. However, it’s worth noting that one in three businesses are not even aware of a local independent dealer. Of those that are acquainted with a local reseller, 41% have not purchased anything from them. Clearly, there are still misconceptions about the IDC out there that need to be addressed, including perceptions surrounding high prices, difficult purchasing processes, poor website experiences, and being unable to compete with the national chains on service and product selection. On a related note, OPI and Martin Wilde Associates will this summer publish ‘Piranha Business’, a new market research report that examines the experiences of B2B buyers with Amazon Business. For details, visit www.opi.net/Piranha-Business.

RECOMMENDATIONS FOR THE INDEPENDENT DEALER • • • • • • •

Differentiate: communicate value proposition, be local, give back New customers: be open to new customer segments Digital and marketing: leverage tools to be on par with the competition Transform sales: re-evaluate sales organisation, scoop up talent Expand categories: enter new ones, expand share of wallet Sell services: move beyond products, provide solutions Customer intimacy: must cascade throughout the entire organisation

April 2017

CUSTOMER LOYALTY But it’s not all doom and gloom. The independent dealer channel (IDC) offers some significant advantages over a company like Amazon. B2B buyers said it is difficult to speak to anyone at the e-commerce giant, they are not product experts and simply do not possess office supplies knowledge. Customers are still switching allegiance, however. The question is why, and what can be done about it? The main reasons cited for changing a workplace supplier were finding better deals elsewhere, out-of-

2011

RESEARCH

ion

by Amazon.com, Officedepot.com and then Google. The majority of time online (70%) is spent looking for product information and two thirds of buyers also check prices while browsing. Encouragingly, 67% of B2B buyers overall do place orders for workplace products online, with a slightly higher proportion of millennials (75%) reporting the same. So with two thirds of office products now being ordered online, the race is on to up the ante on website functionality as buyers are increasingly looking for value-adds such as ratings and reviews (68%), purchase history (68%), live chat (65%) and buying guides/educational tools (63%). A notable survey response is the dramatic drop in the use of catalogues within the decision-making process. According to the research, 71% of B2B buyers used a catalogue in 2011, but in 2016 this had fallen to just 11%. Survey respondents stated that having competitive pricing is still the number one criterion for an office products supplier. But a lot has changed in the past two years: having an e-commerce site has jumped from sixth place to second, while good customer service is in third position when this option simply didn’t exist in 2014.

RESEARCH

Dealer groups:

WHERE NEXT? What is the value of UK dealer groups in these times of declining margins and increasing pressure to reduce cost? Office Power sought to find out in its recent research report...

ealer and buying groups remain a popular model in our industry. But as margins, funding and marketing support available in our industry’s supply chain continue to contract, dealer groups’ value has come under increasing scrutiny. Do they need to adapt their approach to better match the changing market? As part of a series of reports that explores the dynamics of a changing industry and the impact on traditional dealers, UK-based independent dealer platform Office Power, part of reseller EO Group, at the end of last year surveyed over 100 dealers from across the UK that are currently in or are using dealer group services to gauge their views. The key objectives of the research were: • To understand what services provided by groups dealers currently use and value the most. • To evaluate dealer perceptions of how good their groups are at providing those services and why.

FIG 1 HOW IMPORTANT ARE DEALER GROUP COGS?

• To identify key motivations behind dealer tenancy and loyalty towards their groups. • To uncover the key motivations for dealers to switch dealer groups. • To understand dealer expectations and their future needs. • To identify how dealer groups need to change to meet their member expectations in the future. The survey consisted of three sections. The first section focused on understanding the current relationships dealers have with their dealer groups while the second explored dealers’ current experiences with their groups in order to understand what the industry landscape looks like at present. The third part includes a bit of future-gazing and a look at where the industry might be moving in the years ahead. The results show some interesting dynamics that may impact the future of dealer group organisations. The data demonstrates, for example, that there

FIG 2 HOW COMPETITIVE ARE DEALER GROUP COGS?

April 2017 29

RESEARCH Dealer Groups

is an overwhelming focus by dealers on the cost of goods (COGS) benefits of being in a group. It also highlighted the complexity of measuring how competitive these costs are. Dealers consider the COGS, or a supplier cost price, to be the most important benefit/service provided by dealer groups. A sizeable 61% of dealers think that the COGS from dealer groups are extremely important and a significant 84% believe they are either extremely or very important (Fig 1). It is interesting, however, that even with the importance they attribute to their cost price file they don’t necessarily believe that the prices they get are competitive. Only 24% think that they receive extremely competitive prices while 51% believe they get extremely or very competitive prices (Fig 2). It is concerning that 32% think their dealer group prices are OK to extremely uncompetitive. This should definitely worry dealers given how critically important they think cost pricing is.

FIG 3 HOW IMPORTANT ARE MARKETING SERVICES?

61% of dealers think that the COGS from dealer groups are extremely important and a significant 84% believe they are either extremely or very important

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It is perhaps not surprising that there is a disconnect between the importance associated by dealers to cost prices and how competitive a deal they think they are getting. This will have been escalated by some of the significant increases in cost prices on goods not purchased in the British pound currency since Brexit due to significant foreign exchange fluctuations. It also ‘muddies the water’ as it has become increasingly difficult to validate what is true price inflation caused by a weakening pound and what is an opportunist move by the supply chain to build some margin.

EFFECTIVE MARKETING? Dealers consider the provision of marketing services to be another key service//benefit of their groups. As can be seen from Fig 3, 74% of dealers think that marketing services are between important and extremely important. Dealers further believe that their groups do a good job of providing these services, with 69% giving their group a high to extremely high importance rating. Office Power is not as assured as dealers about the proficiency of dealer groups to provide marketing services. It says that while it knows groups are very active in meeting the demands of dealers for marketing, it’s not convinced about the effectiveness

of the services provided. Neither are dealers, Office Power claims. It says: “There is no doubt that marketing activities have an effect and increase the brand awareness of the dealers’ brands. We are more concerned with the ROI of these activities.” The catalogue remains an important part of a dealer group’s offering to its members. In fact, dealers consider catalogues to be the most important marketing channel, with 57% rating them as important to extremely important (Fig 4). Office Power agrees that catalogues are important and that most dealer groups offer decent publications. However, it points out, while a printed catalogue is a useful tool as part of a full marketing mix, it is important to consider which customers want and need a catalogue and which customers would be better suited

FIG 4 HOW IMPORTANT IS THE CATALOGUE?

FIG

THE NEED FOR CHANGE At the end of the survey Office Power asked dealers how they believed their business would perform if they were not in a group. Only 13% of dealers thought they would perform poorly if they were not in a group. It is perhaps this statistic that might put the spotlight on the current dealer group model the most. Overall, it is abundantly clear that dealer groups in the UK need to change. As Office Power says: “As the margins through the full supply chain continue to contract there are less vendor and wholesaler rebates available to support and fund the head office

A staggering 22% of dealers believe that [e-commerce] is extremely unimportant costs or dealer group profits that have traditionally been enjoyed in this model. This will either mean a contraction in the range of services provided or a decline in the quality.” It’s clear from the data in the report that only dynamic and proactive groups which provide their dealers with services that add real measurable value will be the ones to succeed in the future. There is a clear indication that dealers want their groups to invest more in e-commerce and digital channels, so it seems that technology is the way forward. It’s still unclear how things will play out in the end, but it’s likely that the winner will be the one that focuses on what dealers need rather than what they want – and hopefully this will start with the customer. The whole report can be downloaded from Office Power at www.officepower.net/opi. As this is a highly topical issue, with Office Power being one of many players ultimately having an interest in the dealer channel, OPI will be offering a broader assessment of the future of dealer 6 WILL YOU BE IN A DEALER groups globally – not just the UK – in GROUP IN FIVE YEARS? the May issue of OPI.

April 2017

DIVIDED E-COMMERCE OPINIONS The issue of e-commerce continues to divide opinion and is the service that creates the most polarised viewpoints. The majority of dealers agree with end consumers’ buying trends and think that e-commerce is of key importance, with 60% rating it between important and extremely important. However, a staggering 22% of dealers believe that it is extremely unimportant which, given industry trends and research, is bemusing to say the least (Fig 5). On the whole, dealers think that their groups are proficient at providing e-commerce solutions, with 56% assessing these between good and extremely good. It’s worth noting, of course, that there is no longer such a thing as a single channel purchasing journey. Customers might have a preference, but they no longer interact exclusively through one channel and have often researched their purchasing options across many channels before choosing their supplier. The section in the report on the future of dealer groups raises more questions than

Dealer Groups

to ordering online. “We think that greater recognition should be given to how the buyer is changing and that a broader approach is required, particularly to digital channels,” the dealer platform says. Due to the annual nature of the print run of most catalogues and the significant fluctuations of pricing, Office Power also points out how problematic having a priced catalogue can be, but similarly how ‘toothless’ an unpriced catalogue is. This further highlights the importance of having a dynamic online catalogue, currently priced, to support any offline material that has long print runs/shelf lives.

answers, but it’s interesting that only 38% of dealers which are currently in a group are convinced that they will still be in their current group in five years’ time while 22% said they definitely wouldn’t (Fig 6). It is clear from this report that the dealer group model is one that is going to come under closer scrutiny in the future. It is perhaps surprising that dealers expressed fairly low levels of engagement and in some cases apathy towards their relationships with their groups. Only 30% of dealers think that dealer groups represent value for money, for example, and a meagre 8% believe that they could not get a comparable range of services elsewhere.

RESEARCH

FIG 5 HOW IMPORTANT IS AN E-COMMERCE PLATFORM?

CATEGORY UPDATE

Declining paper demand and cheap imports pose an existential threat to US and European paper manufacturers, but some players in this sector are still managing to profit – by David Holes

he outlook for the paper industry appears bleak and analysis by industry experts RISI of the key figures confirms an industry in continuing decline. In the US, demand for uncoated free sheet paper fell by 3.6% in 2016, continuing a longer-term trend that began at the turn of the century. There is some optimism that this fall may be mitigated over the next two years as the effects of low prices and economic growth play their part. Nonetheless, demand is projected to decline a further 3.1% this year and 2.2% in 2018. Naturally, the impact of these figures is highly significant for paper manufacturers and those involved in that particular supply chain. As one industry commentator who prefers to remain anonymous says: “Unless you’ve got a strong balance sheet and can leverage the economies of scale, it will be difficult to survive the future.”

It’s also about managing the product mix – our overall broad product portfolio means that dealers often prefer us over paper merchants EUROPE SUFFERS The industry’s woes are not confined to North America, with sales also down in single-digit percentages across Western European countries and set to continue in the years to come, mirroring the projections from across the Atlantic. The decline in paper demand is now relentless and increasingly driven as part of a company’s overall environmental strategy, with many

April 2017

INEFFECTIVE TARIFFS In February 2016, the US Department of Commerce (DOC) levied anti-dumping and countervailing duties on importing producers of cut sheet paper. The duties range from a low of 7% up to a staggering 325% and, for the most part, cut the flow of copy paper from Australia, China and Indonesia. However, over the past year US producers have not seen the benefits they were expecting as the flood gates have opened for non-tariff producers that have already increased their market share, with additional capacity from Thailand, Taiwan, Argentina and Columbia coming on stream.

In fact, despite the imposition of tariffs, cut-size imports into the US were up around 33% in 2016. As Jim Kluth, Paper Category Manager at wholesaler Essendant, reports: “Imports from non-tariff producers such as Germany, Finland and Thailand will likely increase sharply in the future. No major capacity shutdowns have been announced by North American paper producers and Asian capacity expansion is continuing with new machines coming on line in 2017 and 2018. This will negatively impact global demand and supply balances, driving costs down even further.”

Paper CATEGORY UPDATE

celebrating how much less paper they’ve used year on year within their annual reports. As Darren Clargo, Market Analyst at European paper industry consultants EMGE, admits: “2016 was a very bad year for the paper category. There were major challenges caused by general oversupply and chronically-low prices. In addition, the industry continues to suffer from a poor environmental image in the eyes of consumers in general. Despite huge efforts to educate wider society about the incredibly clean credentials of the sector, there’s still a perverse – and simply incorrect – link made between office paper production and rainforest depletion.” However, some companies are still making a success from the paper business. European wholesaler ADVEO, for instance, has seen double-digit growth in the cut-sheet paper category over recent years by taking overall market share. As its Purchasing and Category Director Dennis Albers reports: “This is down to a combination of a strong brand offering coupled with attractive pricing and a large amount of marketing effort. It’s also about managing the product mix – our overall broad product portfolio means that dealers often prefer us over paper merchants. SME OP dealers have proved quite resilient in selling paper, helped by successfully adding value-added products to their range.” In Austria, multichannel operator PBS Holding is also seeing a decline in paper sales, although mainly across Central Europe. As its CEO Richard Scharmann explains: “Consolidation is having an effect, with some manufacturers managing to post record earnings while others are in a desperate situation. We still expect some growth in this sector from Eastern European countries and that’s where our strategic focus lies. By aiming to retain our existing customers and play an active role in distribution, it will help us manage our exposure in a market that’s declining overall, while we concentrate on pushing alternative non-paper portfolios.” As the sector contracts, resellers and distributors are looking to flex their product lines in order to try and find new angles and niche markets that could prove profitable. Essendant in the US, for example, has seen success by introducing paper ranges with a lower

weight. Traditionally, the copy paper market has been dominated by 20 lb (75 gsm) ranges, but new 18 and 16 lb versions that require less wood to produce are finding favour. As Kluth discloses: “Although they cost a similar amount to regular paper, it’s a way in which customers can demonstrate their commitment to sustainability. The other benefit is that a 5,000-sheet carton weighs about 20% less, making for lower shipping costs and a smaller carbon footprint.”

2016 was a very bad year for the paper category. There were major challenges caused by general oversupply and chronically-low prices UK office supplies group SPOT has noticed the rise of of value-added products that offer fewer sheets per pack or fewer reams per box to support online customer growth and the SOHO market. It’s also seeing a higher sales decline in branded paper, with a major shift to own brand and entry-level, white-box paper at lower price points. The decline in the value of the British pound has actually seen significant UK price increases as paper mills seek to maintain profit levels. Prices of wood-free paper have increased more than those of recycled paper, which has meant that the demand and volume for recycled brands has grown. “Price stability driven by reduction in capacity, instability in currency and fewer paper producers is the major challenge,” says SPOT Group’s Purchasing Manager Gail Moody. “The competitive nature of C grade, lower-specification paper means that customer loyalty is weak. The loss of PaperlinX in the UK has left fewer numbers of large paper merchants that, with both direct and indirect channels of distribution, are able to leverage customer price increases to fuel their own profit expectations.”

WHAT DO EUROPE’S CUSTOMERS EXPECT FROM PAPER?

Advertising/ promotions 3.22

Brand reputation 3.57

Physical properties 3.95

Optical appearance 3.96

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Product performance 4.39

Regularity of quality 4.56

Multifunctionality 3.81

Average Expectation Level 3.92

Source: EMGE

UNCERTAIN FUTURE The category has spent a lot of time responding to external factors and consolidating requirements, rather that developing new innovative ideas, according to Simon McLoughlin, Category Head Traditional at UK wholesaler VOW. However, he adds: “Paper as a category is still performing strongly for us with sales in 2016 up by double digits. In the premium copier paper sub-category core brands such as Xerox and HP are outperforming the market, with Premier Paper’s Evolution brand also driving significant sales growth in the recycled arena. Additionally, one of the newest entrants to the market, the Double A brand, is building a loyal following with consumers who are enjoying the mix of quality and value it offers.” McLoughlin also refers to pricing as being a huge issue: “Since last June, we’ve all faced significant uncertainty and market volatility as a result of the EU referendum. These concerns are impossible to ignore given the impact this commodity product group has on the channel and its future remains unclear.”

CATEGORY UPDATE Paper

ENVIRONMENTAL FOCUS PAYS OFF FOR OFFICE CLUB K dealer group Office Club has recently found commercial success with an environmentally-friendly brand of paper, known as ‘Cool Earth’. OPI spoke to CEO and keen environmental campaigner Toby Robins about the philosophy behind the way this paper is produced and marketed. OPI: Tell me about Cool Earth paper? What sets it apart from other ‘green’ paper products? Toby Robins: The messaging on the wrapper – ‘This paper saves trees’ – says it all, and unashamedly sets out to grab the attention of the consumer. But it’s not ‘greenwashing’. Cool Earth paper has been created to withstand the intense scrutiny of sustainability professionals and consideration has been given to the social, economic and environmental requirements of stakeholders along the entire value chain. Often a so-called green product will focus on a single environmental feature – such as being made from recycled material or FSC/PEFC pulp. But it then fails to take account of the mill being coal-powered, for example, the raw materials being shipped halfway round the world, or the health and safety record at the manufacturing plant. When Cool Earth was developed it adopted a totally comprehensive and holistic approach to systematically take factors such as these into account. OPI: How does Cool Earth make a difference? TR: We entered into a partnership with the Cool Earth charity and have developed an ethos that goes way beyond simply planting trees. It’s not just protecting the rainforest but also the biodiversity within it and the ecosystem services it provides. We are supporting indigenous communities to prevent deforestation and environmental degradation in the long term. In this way they benefit from improved healthcare, education and economic development, but not at the cost of the forest. Cool Earth paper is not just an end in itself, but a tool to raise awareness and support the transition to a sustainable economy. OPI: How has Cool Earth performed for you from a commercial perspective? TR: It has been a delightful surprise. The previous Office Club paper brand was showing an 8%

decline, but Cool Earth has turned it into a 30% growth. It’s particularly pleasing because it’s an added-value product and therefore reiterates that there are alternatives to the price-focused ‘race to the bottom’ business models that have become so prevalent in our industry. In conjunction with Antalis we will continue to maintain the profile of the product and awareness of its benefits among our reseller community, supported by point-of sale-merchandising for our retailers and other marketing materials for our commercial and online members. These materials will be kept fresh and updated with new information – such as the Cool Earth’s shortlisting for the Marketing Initiative of the Year in the European Office Products Awards.

Toby Robins CEO, Office Club

OPI: What are your views on the environmental record of the paper industry to date? TR: On the whole, the environmental record of the paper industry has not justified the poor reputation it has gathered. Of course there are elements within the global industry that have not demonstrated responsible environmental management and which continue to do so by failing to control and manage the corruption within their supply chains. However, regulators have sought to address this through, for example, the Lacey Act in the US and the EU Timber Regulation in Europe. Manufacturers and merchants have sought to distance themselves from bad practice through supporting voluntary chain of custody standards. At the point of production, professional environmental management systems have not only seen massive reductions in carbon intensity, but also ever-tighter management of water and waste. By sourcing locally in Europe or the US, you will almost certainly be supporting manufacturers with levels of environmental awareness and management like few other industries while also reducing the carbon footprint of transportation. I believe the industry is several steps ahead of its reputation.

2050 ROADMAP UPDATE increase on current levels – to transform the paper industry in Europe and lead the low-carbon bioeconomy by 2050. The Confederation of European Paper Industries (CEPI) pioneered the first low-carbon industry roadmap six years ago and its Director General, Sylvain Lhôte, told OPI: “Since our first roadmap

in 2011 the paper industry has invested €15 billion in Europe [but] more must be done to accelerate industry transformation in Europe over the next decade. It is now essential to lift off the low-carbon bioeconomy and pace of transformation.” Download the full roadmap at www.cepi. org/node/21250

April 2017

The European paper industry has launched a reviewed version of its 2050 Roadmap detailing the route and investment needed to cut its carbon emissions by 80% while creating 50% more added value. The Roadmap forecasts the need for an additional €44 billion ($47 billion) investment – a 40%

CATEGORY UPDATE

Despite budgetary constraints, the education sector offers a rich bed of opportunities to suppliers that can keep up with the pace of change – by David Holes

www.opi.net

he education sector globally is undergoing something of a revolution. Technological advances, curriculum changes and new learning methods are being swiftly adopted and even the layout of the traditional classroom is changing to encompass new ways of teaching. For those suppliers nimble enough to meet the ever-changing needs of schools and colleges, this expansive category represents a fertile area in which to do business. “The biggest challenge we face is keeping up in this market,” admits Beth Wright, Chief Commercial Officer at visual communications vendor Bi-silque. “Its rapid evolution and the development of new products to meet specific needs is a demanding challenge. Nevertheless, the recent recruitment of specialist education sales teams by many of our reseller partners is allowing us to bring products to market in a focused manner. Education is a very attractive market for increasing our sales volume.”

EXPLOITING OPPORTUNITIES Tim Beaumont, Managing Director at UK dealer group NEMO also sees 2017 as a very good time to capitalise on a number of educational supply opportunities: “There were some pressures on the sector in 2016 caused by government austerity budgeting, the influence of living-wage increases, and problems implementing the funding for the new 30-hours of early years childcare. These, coupled with slowdown influences on business from Brexit concerns, have caused some casualties and consolidation in the supply sector. For those that remain this has created opportunities that we’ll now seek to exploit with our membership.” European statistics provide some intriguing insight into future projections for this sector. The under-five age group are the pupils of the future and data shows

that, on average, this group is expected to show a decrease up until 2030. However, in many key north-western European markets such as the UK, Belgium, Switzerland and Scandinavia, this trend will move in the opposite direction meaning this pre-school cohort will grow. This will provide significant growth opportunities for educational sales in these countries. In addition, kitting out classrooms with the latest products is expected to accelerate. Currently, one-in-four classrooms across the world has an interactive display, but by 2019 this will increase to one-in-three. Teachers are certainly backing this

A huge challenge in this market is the considerable diversity in the type of products needed within different countries – they all require specific solutions and often very different certifications development. A recent survey by the Economist Intelligence Unit showed that 90% of educational leaders believe that technology has already made them more imaginative and creative at work. And the traditional classroom, with students’ desks aligned in rows in front of the teacher, also appears to have had its day. The physical teaching environment is changing, spaces are no longer static and need to be easily adaptable to fit a range of activities and pedagogical methods. The new classroom is expected to be more of a learning studio – a place where knowledge is created and not just consumed – with key activities centred on interactivity, flexibility and adjustment to group work.

The back-to-school (BTS) period has traditionally been seen as the most important sales time for the education sector, but increasingly that is being edged out by other seasonal drivers which are having an effect throughout the year. Pentel’s Marketing Manager Wendy Vickery says that the company sees the end of the financial year, around 1 April, as an important time: “This is when people have unspent budget to use – we call it ‘Tax Time’. Also, because of the nature and profile of our product range, ‘back-to-college/university’ is actually bigger than BTS and then, of course, there’s ‘Exam Time’ which also offers a major opportunity as students equip themselves for this important period. “It’s all about identifying the right product for the right age group and meeting each seasonal opportunity effectively with the right range – back-to-college/university, for example, requires a more sophisticated selection of products than BTS.”

Problem-solving, team-working and communication are the skills that are currently most in demand in the workplace and will be increasingly integrated into teaching practices and the educational environment. As Nicole Esser, Marketing Intelligence Manager at Germany’s Legamaster, explains: “Products that support the development of collaboration and communication skills of students are in demand. Despite the strong technological developments in the education segment, we still see opportunities for traditional equipment. A creative atmosphere can be built around technical devices used in combination with things like whiteboards, flipcharts, workshop boards and other tools that are really tactile to stimulate creativity among students and positively influence effective team-working.” Flexibility, mobility and adaptability – similar to the office environment – are becoming key. Amy Kiefer, Director of Marketing at Mayline and Safco, says: “Teachers are demanding options such as standing-height tables and mobile desks with casters. Students are also being provided with adjustable-height desks and perch seating is becoming a popular alternative. Active seating, such as our Zenergy Ball Chair, allows students to sit and bounce keeping them actively engaged to help facilitate better learning.”

A TIME AND A PLACE This concept of time and place – and appropriate type of product for it – is also picked up by Ken Newman, Director of Marketing at Zebra Pen in the US. “For writing products, the BTS months of July and August are still critical and will continue to be the most important selling season,” he says. “However, post winter break – in late December/early January – is when kids restock on a whole range of items, especially college students going back for the new semester. This is another seasonal opportunity to expand our reach.” And while Tim Beaumont, Managing Director at UK dealer group NEMO, agrees that Q1 and Q3 respectively are the peak quarters for its members to supply the education market, there are other seasonal opportunites, such as Easter, Halloween and Christmas which can tap into specific classroom project work. As such, he adds, “we supplement our catalogue with new products and promotions throughout the year”. There are other – sometimes surprising – seasonal sales swings that can be harder to predict. As Mélanie Martins, Digital Marketing Manager at CEP Office Solutions in France, explains: “This sector can depend on French politics. In 2016, the government decided to change the whole curriculum and all the school text books had to be re-edited and reissued. As such, schools spent their entire budget buying these new books and delayed all other purchasing decisions. The school supplies list was also sent out very late to parents, who then bought everything at the last minute, causing a big sales spike.”

April 2017

SCOPE FOR INNOVATION New teaching techniques are being introduced as well – this includes ‘Flipped learning’ whereby the typical lecture and homework elements of a course are reversed. Short video lectures are viewed by students at home before a class session, while in-class time is devoted to exercises, projects and discussions. Bi-silque’s Wright is aiming to tap into this opportunity: “We’ve launched a complete education package incorporating interactive solutions and software that fit perfectly with this new pedagogical approach. It’s known for improving students’ critical thinking skills, increasing participation, engagement and motivation to improve learning outcomes.

CATEGORY UPDATE Education

SEASONAL SALES

“2017 is going to be rich in innovation, with many new improved education products launched that incorporate more relevant features and unusual, but smart, solutions such as antimicrobial properties for more hygienic use.” Wright adds: “A huge challenge in this market is the considerable diversity in the type of products needed within different countries – they all require specific solutions and often very different certifications. We have to adapt and develop innovative solutions that are able to meet the requirements for every country.” And not all countries are proceeding at the same pace either, says Esser: “The level of adoption of these innovative products varies enormously by country. The UK and the Netherlands are far ahead of other European countries with, for example, older interactive whiteboards already being replaced by new touchscreen flat-panel displays. Germany is on a slower path – the market here is growing and offers large potential. Further steps forward can be expected as a newer generation of students, parents and teachers becomes more accepting of modern developments.” MONEY TALKS All that said, all these innovative educational products cost money and there’s no doubt that the limited budgets that teachers have to work with is adversely affecting sales, with many suppliers that OPI spoke to on both sides of the Atlantic mentioning this effect. It’s certainly having an impact on spending patterns as Ken Newman, Director of Marketing at Zebra Pen in the US, explains: “Budgetary constraints are a constant challenge. We’re actually seeing a growing personal spend from teachers to ensure that their classrooms are properly stocked for their students. Additionally, more and more of the supplies burden is being pushed to the home, with students and their parents asked to purchase their own materials.” In that context, the emergence of Amazon as a supplier to the school market is also causing a major shakeup. As US education consultant Jim Benkovic states: “This is a real game changer. Individual schools and districts have always used a series of local or national dealers for product support. But that is changing and they’re now going directly to Amazon and receiving exactly the same products as before. As this new trend continues to grow dealers will be under increasing pressure not only to remain profitable but to survive as a business.” Indeed and as reported in OPI (see Analysis, OPI March, page 6), Amazon Business is likely to eat a very substantial part of the pie as a result of US Communities awarding the e-tail giant a multi-year online marketplace contract that gives Amazon’s B2B arm access to public agencies such as schools, school districts and higher education institutions. Despite these headwinds the education sector remains an area with excellent opportunities. With the right approach and the ability to adapt to the category’s rapid pace of change significant sales are possible for all channel participants.

CATEGORY UPDATE Education

TECHNOLOGICAL IMPACT s with many OP product categories, technology is having a significant impact on the education sector. OPI speaks to Stuart Bleese, Technology Category Manager at EVO Group, about the effect this is having on sales and the types of product that are in demand from a UK wholesaler perspective. OPI: What are the main drivers behind the increasing take-up of technology products in the education sector? Stuart Bleese: This sector is embracing technology more than ever before. Children are familiar with technology from an early age and students quickly become comfortable with new developments. Educational establishments now have to keep up with this pace. Changes to the national curriculum are also driving change – the introduction of 3D printing, programming and app creation mean that the products to support these must be bought. The latest technologies now have a pivotal place in the education environment. OPI: What specific product types and brands are gaining traction? SB: Items such as Genee interactive boards, HUE animation cameras and Kensington docking stations are particularly in demand. But overall, any product that can offer the two target audiences – students and educators – time-saving benefits are very popular. With school staff in mind, machines such as Brother’s Direct Scan Solution, for example, enable users to store documents – student records, attendance registers, school-trip forms, etc – digitally rather than manually filing hard copies. This saves time and helps schools comply with national pupil safeguarding and data protection laws. Additionally, it reduces paper usage and increases space availability by reducing the need for filing cabinets.

OPI: What are the key future technology trends set to take hold in this sector? SB: Life is becoming ever more harmonised with technology through the use of physical devices or via virtual innovations such as cloud storage. Schools and academies are not immune to these changes and are increasingly taking control of their own budgets enabling them to prioritise the adoption of these developments. Resellers looking to target this sector should note that technology is not only being purchased by IT and science departments – it’s now used by teachers in all subject areas as well as by administrative staff.

Stuart Bleese, Technology Category Manager, EVO Group

Resellers looking to target this sector should note that technology is not only being purchased by IT and science departments – it’s now used by teachers in all subject areas as well as by administrative staff In the short term, I believe wearable technology and the use of virtual reality (VR) headsets will become far more common. Students will use VR to explore different aspects of the world without ever leaving the classroom. Smart watches will also make major inroads, with alarms, reminders and timetable changes all electronically communicated to pupils. Similarly, students will be able to digitally interact with their teachers, whether they are in the classroom or not.

April 2017

OPI: The sector spans a broad age bracket from nursery through to higher education. That must have an impact on the type of products needed? SB: Yes, technology requirements differ significantly depending on the age of users. In the early-learning years ergonomics and aesthetics play a key role. Interaction is important when it comes to capturing a young child’s attention and the use of products like interactive whiteboards and animation cameras are encouraged. Devices must also be robust which leads to a demand for tough, durable and often waterproof products. This opens up further sales opportunities for complementary protection products such as cases, screen guards and carry bags. Among older students technology usage is obviously higher than their younger counterparts, with increased ownership of portable devices such as tablets, laptops and smartphones. There’s also a thriving market in compatible accessories such as cables, cases and headphones. Teachers, meanwhile, are using products such as interactive boards in conjunction with tablets to engage and interact with these older students and

there are many educational software packages and apps available to assist pupils of all ages with their learning.

VENDOR PROFILE

TELLING the HP Papers story International Paper has been producing HP Papers for 20 years. Its partnership with HP has grown and evolved over time and has proved mutually beneficial for both companies

aunched in 1996 and initially manufactured by Champion International, HP Everyday Papers is a premium line of uncoated cut-size papers scientifically engineered and tested to work across all makes and models of printer and copier equipment. The papers are optimised to provide superior print performance when used with HP hardware and supplies. HP Papers have been manufactured and marketed exclusively worldwide in over 72 countries by International Paper (IP) under licence from HP since

EMEA. Based in sales offices in all major countries in the region, IP’s sales and marketing teams have a deep understanding of all local markets and provide expertise and marketing support to their customers. IP has been serving customers specifically in the EMEA market for half a century and continues to grow its business in the region. The company’s uncoated woodfree papers business is a key player in the EMEA office and converting papers segment.

HP and International Paper have collaborated for 20 years in the office paper category. Business relationships don’t last 20 years without strong collaboration as a foundation

International Paper’s award-winning Tear-Strip solution

ADVANCED COLORLOK TECHNOLOGY HP and IP have also been collaborating to make ordinary paper extraordinary with HP ColorLok technology. With this technology that was first launched in 2005 and co-developed by integrating HP’s ink technology with International

April 2017

2000 (when IP bought Champion). Since the company launched the first ream of these papers, it has been relentlessly focusing on improving its performance, such as printability, for example. Broadly speaking, HP Papers comprise a full range of high-quality office papers and support a wide range of print applications, from everyday copies to full-colour presentations. Consumers can be assured of consistent, high-quality performance every time, whether they are looking for high-volume, standard black and white document printing or for premium-quality papers for colourful, professional presentations and communication. IP also offers its channel partners a wide range of product packaging that will suit both B2B and B2B consumers. The manufacturer’s three paper mills in Europe, the Middle East & Africa (Kwidzyn, Poland; Saillat, France; and Svetogorks, Russia) and the mills in the US and Brazil are all qualified to produce HP Papers and IP is able to efficiently supply them to customers across

GUARANTEED PERFORMANCE QUALITY HP Papers are tested and qualified on a number of different printers and copiers to assure best performance across all office equipment. And while the majority of the hardware is from HP, the paper is also tested on high and medium-speed copiers and printers manufactured by other OEMs. These printers and copiers range in speeds from 20 pages per minute (ppm) to 180ppm. HP’s qualification process is an extensive testing protocol with stringent performance requirements. Paper is evaluated in a range of environmental conditions, for instance, simulating cold dry climates such as Alaska in the winter or hot humid tropical weather prevalent in the rainforest. All this determines the robustness of the specifications and design. Paper that runs and prints well across this broad range of climates will perform exceptionally well in the office environment. The final product is only approved by HP if it meets all the criteria. HP Everyday Papers are designed to work with all home and office printers and copiers. To ensure complete customer satisfaction, International Paper offers a performance guarantee and a replacement or refund of the purchase price in the unlikely case of any print performance issues.

VENDOR PROFILE International Paper

Paper’s manufacturing expertise, scientists from both companies have jointly redefined what paper can do. HP Papers with ColorLok produce noticeably richer and more vivid colours, deeper and bolder blacks, crisper text – all with a quick-drying, smudge-free formulation. It quite simply creates a new standard in printed imagery. “ColorLok technology is an example of how powerful HP’s partnership with International Paper really is,” says Gerald Demets, Commercial Director at International Paper. “Innovating the chemistry of paper as part of a total printing system allows us to deliver unparalleled benefits to our customers.” As colour printing becomes more prevalent in the home, home office and business, HP and International Paper continue to develop new ways to increase performance and output quality through the role of the paper within the printing system. HP Papers with ColorLok are suitable for laser printing, but additional benefits can be realised when used with inkjet printing systems.

Demets adds: “International Paper paper mills are up to 85% energy self-sufficient and we are committed to the long-term sustainability of our business. We have set ourselves 12 voluntary goals for 2020 which we report on regularly and in a transparent manner.”

€0.10 of every HP Papers’ Pink Ream are donated to breast cancer organisation, the Susan G Komen network

Our message is that there is room for both digital and traditional media, and we want to encourage consumers to print from their mobile devices

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COMMITTED SUPPORT WITH PINK REAM Sometimes an innovative product can bring other benefits too. HP Papers in North America have donated over $800,000 to causes that work hard to make a difference, especially to breast cancer awareness and research programmes. Focused on life-changing innovations, these organisations tirelessly work to improve outcomes and change people’s lives for the better, and HP Papers are proud to support them – it’s innovation for the greater good. This year HP Papers will expand its long-standing collaboration with breast cancer network, the Susan G Komen organisation, into Europe by launching the HP Pink Ream product. From each ream of HP Office Pink Ream €0.10 – with a minimum guarantee of €100,000 – will be donated to help save lives from breast cancer through the Susan G Komen Europe Network.

ENVIRONMENTAL COMMITMENT HP Papers is the only office paper range in Europe that is 100% FSC, PEFC and EU Flower-certified. International Paper only sources wood from controlled forests and pursues independent certification of its products and facilities in accordance with recognised certification schemes across the globe.

Gerald Demets, Commercial Director at International Paper

MOBILE PRINTING FOCUS Addressing the needs of a customer base that is becoming ever more mobile, IP launched an app called Happy2Print in 2015. Developed to promote mobile printing, the goal was to increase consumer awareness of the ease of printing from mobile devices. The app, which is available on Android and iOS platforms for both smartphones and tablets and works on all printers has so far been downloaded over 120,000 times in Europe. It is available to all consumers in Europe free of charge and aims to make their experience when printing from mobile devices hassle-free. Says Demets: “Our message is that there is room for both digital and traditional media, and we want to encourage consumers to print from their mobile devices documents that they want or need on paper.” CONTINUOUS INNOVATION International Paper has always put great emphasis on innovation within its portfolio. And this has paid off. Its Easy Open Solution was recognised at the Benelux Office Product Awards 2016, winning the office product category and by Germany’s office supplies brand association Verband der PBS Markenindustrie in early 2017, also in the office product category. On a pan-European basis, International Paper won a European Office Products Awards (EOPA) in the Core Office Products category with its Easy Open Solution. The ‘Tear-Strip’ is available for several IP brands, including HP Papers. The solution allows the ream to be opened with just two fingers, with no unintended tearing of the packaging. A pull on the ‘Tear-Strip’ which is integrated into the wrapper will open the ream in an instant, and the paper will be ready to be loaded into the printer. As the EOPA judges said: “A ream of paper that has a tape which can be easily pulled open like a zip is a concept that’s been used in many categories, but not in office paper.” BASED ON A SOLID FOUNDATION Overall, IP and HP’s relationship is one that has clearly stood the test of time. John Ferraro, Director and General Manager of Media Supplies and Solutions at HP, says: “HP and International Paper have collaborated for 20 years in the office paper category. Business relationships don’t last 20 years without strong collaboration as a foundation. We have a shared focus on our synergies and a shared vision for the category that enable us to deliver great products. “I can definitely say that innovation has driven the success of this collaboration which has resulted in the development of ColorLok technology, EcoFFICIENT paper and a drive to support sustainable forestry practices. As HP dives deeper into the office space on the hardware side of the equation, I expect our partnership with IP will continue to deliver innovation to support it.”

Maria Dannemiller, IP’s Global HP Brand Manager, talks to OPI about International Paper and HP’s long-standing relationship and its benefits for end consumers

OPI: What’s the importance of HP Papers in International Paper’s (IP) global product portfolio? Maria Dannemiller: HP Papers strengthen International Paper’s strong portfolio of brands that cater to diverse users of printing papers. It is IP’s global premium brand bringing a complete solution to users who prefer to see the synergistic effects of all HP original supplies when printing in the home or in the office. This iconic brand complements IP’s position as a leader in cut-size papers globally. IP’s imaging brands such as Rey, Pol, Ballet, Svetocopy, Hammermill, Chamex and Reflection are designed to work across all imaging equipment while HP Papers are developed and optimised to have the best performance with HP inks, toners and printers.

IP and HP have innovated together to bring customer solutions that not only improve the printing process, but also reduce the overall cost of printing We are constantly innovating whether it is through technologies like Colorlok, low grammage papers such as the EcoFFICIENT brand in North America or commitment to causes supporting breast cancer research with the Susan G Komen foundation.

OPI: What about HP Papers performance on non-HP hardware? Does the quality deteriorate? MD: Because some offices and printing centres may have different brands of imaging equipment and do not want to carry different brands of papers, our labs and manufacturing facilities also test and qualify HP Papers for all other major OEMs. In fact, 25% of the paper tested during qualification is on other OEM equipment, in particular the very high-speed copiers normally found in print centres. So to answer your question, ‘no’, it will not deteriorate. We guarantee the performance of HP Papers across any OEM equipment or we will replace the paper or refund your money. OPI: Let’s talk about the ColorLok qualification you mentioned before. How are IP and HP still working together to promote ColorLok as an industry standard? MD: HP and IP are committed to offering papers that promote ColorLok technology. Both companies continue to invest in awareness and purchase preference through campaigns, advertisement and customer events. In fact, in the very near future all HP Papers including those normally specified for laser applications will contain the technology. Last year, HP launched a new global ColorLok website that is user friendly, dynamic and rich with information about the technology. It also has a grade selector showing the products containing ColorLok technology in each country or region of the world. It is a standard for better printing in both laser and inkjet applications. Combining ColorLok with HP’s home and office printers gives significantly better results – vivid colours and sharper images. With the increased installed base of high-speed inkjet printers I’m certain we will continue to see higher demand for ColorLok technology.

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OPI: Please tell me about the ‘interaction’ of HP Papers with HP hardware? MD: For the past 20 years, IP and HP have innovated together to bring customer solutions that not only improve the printing process, but also reduce the overall cost of printing. Most notably the ColorLok technology was brought to market as a result of our two companies listening to their customers and meeting the needs for improved inkjet performance and lower cost of printing. Since the ColorLok launch both companies have continued to improve both the print and paper technology. HP has recently launched its OfficeJet Pro line of printers and HP Papers have been optimised to meet the challenge of the faster printing speeds with paper that dries ink faster yielding vivid colours and crisp text and images. As you know, before going to market, HP Papers are run through a comprehensive series of tests called the HP qualification process, jointly developed

by IP and HP. These tests follow industry standards but also include HP and IP proprietary tests (see page 41). They test for print quality, jam-free testing as well as other criteria that ensure papers are non-abrasive and have the specialised surface properties that protect the life of the printer as well as the consumables. The qualification and development process as well as the strict adherence to manufacturing specifications including end-use testing at the manufacturing facilities allow us to boast our “any printer guarantee”.

International Paper

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HOW TO...

Social selling IN ACTION

In the second part of our How to… guide on social selling, Thierry Gillmann focuses on the stages of a social selling programme and how to implement them successfully for your sales force

he concept of a social selling strategy in your company may well be broadly accepted by your sales representatives, but the practicalities of implementation often work a bit differently. Sales representatives often have a modus operandi that is decided on the spur of the moment, all with the aim of achieving their targets. They do not always have the time to step back and consider their tools. It is therefore vital to show them the benefits of social selling in practice rather than in theory. As SAP Social Evangelist Sylvie Lachkar says: “They appreciate the full value of the approach from the very first workshop and realise they can make progress very rapidly.”

PROVEN SUCCESS Social selling is no magic wand and social media is not going to replace telephone or email. It’s just another weapon in the marketing arsenal, adapted to a new context that fits easily in a day-to-day business

April 2017

INTERNAL TRAINING Caroline Sautereau launched the first social selling training sessions at prepaid corporate services firm Edenred France in 2015. “There are three training courses for each sales representative. The first one provides an overview of social media, new user habits, and the strategy for a company’s digital and social presence. The second focuses on LinkedIn: how to develop an efficient LinkedIn profile and optimise sales reps’ presence online. The third course teaches them how to generate a file of prospects in five minutes.” Geared to small groups (ten participants maximum), these very specific courses are spaced one month apart to give participants time to get used to their new work habits. “We also organise practical workshops between sessions,” adds Sautereau. At the same time, Edenred charts and implements a sound content strategy. It creates original content in Manager Attitude, for example, which is a proprietary online magazine. “Manager Attitude is at the heart of our approach, featuring quality articles and useful documents available for downloading on a daily basis,” Sautereau emphasises. The company has also opted for a curation principle whereby everyone

can add articles or information, and disseminated a curation guide in-house. All content can be shared by sales teams through a social commitment platform. Says Sautereau: “This is where sales representatives come to find relevant content that they will then publish on social media. All sales representatives are free to share whatever they wish on LinkedIn or Twitter without going through the employer, but in compliance with the terms of their employment contract, of course.” As with all new ways of working, there are always doubters. “Sales representatives often fear that we are going to tell them how to do their job,” explains Sautereau. “But once the first users see how easy it is to broaden their network, identify prospects, get in touch with people that are impossible to contact otherwise, and establish a real follow-up, things change. Some sales reps have become enthusiastic internal ambassadors who have taken – and continue to take – part in subsequent courses to share the success they have had in consulting with their peers.”

Social Selling HOW TO...

strategy. The latter point is significant as it helps overcome the classic excuse of “I’ll never find the time to do all that”. “How much time do your sales representatives spend on the phone every day to no avail? They will be able to devote that time to social selling,” adds Lachkar. One useful tip is to suggest a three-step routine: contents, targeting, interaction. The results speak for themselves. The most successful sales representatives are those who use the social selling method. But Sautereau is quick to add that the concept does not work if sales reps are left to their own devices once they have been trained.

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Your teams finally share useful content, relevant to their audiences, on a regular basis and in a generous and transparent manner They need support and guidance over the long term, from newsletters dedicated to social selling to coffee get-togethers where sales reps can discuss their experiences, problems and questions. “Many sales people come to see us after their initial attempts, not with their apprehensions, but with their new expectations: how can they go further, find more contents, share them better, open up to new social media. Success breeds success,” concludes Lachkar.

STEP-BY-STEP GUIDE TO SOCIAL SELLING

What are the implementation stages of a social selling strategy? Here’s a generic example that can be adapted to a specific reseller’s situation. The background: you manage the sales team of a solutions provider to support corporate services; your targets are corporate services directors. You have decided to focus on one of their professional expectations – how to manage a whole host of small concurrent projects more efficiently. PROFILES This choice has now become the core of your social selling strategy. Ask all members of your team to adapt their LinkedIn profiles by highlighting in their résumé (CV) that the management of ‘massively parallel’ multiple projects is in your company’s DNA. They need to express their willingness to help those who wish to ask questions on the topic.

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CURATION Proceed to develop a curation log for the multiple project management sector and share the contents with your team on a daily basis. Everyone will select the information that is most suitable for them, and share it on their respective account in ‘public view’ mode.

PROPRIETARY CONTENT Create a website or blog on the concurrent management of many small projects. Articles

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featured regularly on that platform should be directly accessible, and therefore well listed on Google. Furthermore, they will be shared via the social media of every member of your team.

CULTIVATING A SENSE OF SHARING Your teams finally share useful content, relevant to their audiences, on a regular basis and in a generous and transparent manner. By doing so, they boost the name recognition of your brand and enable your sales representatives to develop a reassuring, customer-facing front.

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CONTACT These sales representatives now have to go after corporate services directors on LinkedIn and ask them to join their network. All reps will thank those who accept their request to be connected and tell them that they share content on a regular basis which they might find useful. FOLLOW-UP After a certain period of time, sales representatives will have to contact the directors again, asking them what they think about the shared content, the curation log and the articles on your blog. They will then try to be even more useful to their contacts by providing content with even higher added value, like a link to a free white paper, for instance. TRANSFORMATION The bond of trust with your contacts will be strengthened with each step along the way. As a result, sales representatives can soon suggest to discuss matters further over the telephone, or to fix a meet-up appointment. In our final instalment of this How to… guide, Thierry Gillmann will discuss the dos and don’ts of social selling and summarise the key takeaways. Thierry Gillmann is an advanced content marketing evangelist with an entrepreneurial background. He is CEO of Voicings, a French content consultancy boutique specialised in B2B and technology sectors.

EVENT

EUROPEAN OFFICE PRODUCTS AWARDS

Alright on

THE NIGHT...

he 16th European Office Products Awards (EOPA) culminated in an evening of fine food and wine, great entertainment and a chance to celebrate some outstanding companies and individuals from the business supplies sector. Held for the fourth time as part of the OPI Partnership event in Amsterdam in early March (see our review on page 55), it turned out to be an unmissable evening. The first treat of the night came with the Industry Achievement award which went to Lyreco icon and current Chairman Georges Gaspard. Later on in the evening and after the gala dinner which included a hilarious entertainment

programme, Thomas Glatzel, SVP Direct at Office Depot Europe, gave a positive and interactive industry toast to the audience before the remaining awards were announced. As the following pages show, the worthy winners of this year’s EOPA not only showed product innovation and expansion, but also foresight and an ability to adapt to the new and changing world of business supplies. And, of course, there were more individual awards that, on this occasion, put the spotlight on a highly-influential woman in our sector as well as on the power and importance of millennials – they are the future of our industry.

We would like to thank the following sponsors for their generous support:

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systems – far ahead of anyone else in the sector, as Hamelin pointed out. Soon, he started to expand in Europe, with a first partnership in Spain. Many more countries followed, ultimately making Lyreco a leading OP reseller across Europe, Asia and Australia. INDUSTRY AC HI Aside from real vision as to where he wanted ER his company to go, Gaspard over the years developed a real talent for recruiting great managers, which somewhat explains his own preference to stay in the background. Indeed, in accepting the award, Gaspard first and foremost reiterated the core human values within Lyreco. He also announced that his daughter Nathalie Gaspard will ultimately succeed him at the helm in a step-by-step, gradual handover. A true industry icon that stands very tall among all previous EOPA Industry Achievement winners. DS AR AW

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This year’s Industry Achievement award went to a man who prefers to stay out of the limelight and instead put forward his team to take the credit. But it’s simply impossible to overstate this person’s achievement in his own company and the impact he’s had not only on his home market, but on the global OP reseller landscape. Hamelin CEO Stéphane Hamelin introduced the first EOPA winner of the night, hailing Lyreco Chairman Georges Gaspard as the man who established the office supplies industry standard in Europe. Working his way up the company ladder, Gaspard started as a salesman in his family business 40 years ago to become Managing Director ten years later. At the time Lyreco was a €10 million company. From what was initially a small, France-based wholesaler, Gaspard started focusing on the office supplies segment, investing heavily in logistic and IT

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INDUSTRY ACHIEVEMENT OF THE YEAR

Franck Suhit from Lyreco presented the award to tesa’s Matthias Schumacher (l) and Falk Butterwegge (r)

TESA – TESA GLUE STAMP ECOLOGO This new award recognises the best development on an existing product that meets the changing needs of the consumer. In their deliberations, judges considered a number of criteria: creativity and innovation; how a product’s development responds to changing consumer needs; and evidence of consumer reaction such as increased sales or market share gains. tesa’s Glue Stamp ecoLogo ticked all the boxes with a product that offers something significantly different and innovative. Importantly, it also enjoyed great exposure in a wide range of channels, contributing to an all-round winning combination. In a category with a broad selection of nominations and a very strong shortlist, tesa nevertheless came out the undisputed winner. A very clever change to an existing product; easy to use and a simple but effective solution in a very mature category – that was the unanimous verdict by the judging panel.

BUSINESS PRODUCT OF THE YEAR

Staples’ Mike Ayckbourn presented the award to Pilot’s Raphael Carlioz (l) and Paul Phelan (r) PILOT CORPORATION OF EUROPE – FRIXION RANGE In this award category, the judging panel was looking for a product – or entire range – in the business supplies sector that is clearly outperforming the competition as well as generating excellent revenues. Although tightly contested by a number of other shortlisted products in various categories – the award is open to products in core OP or any of the emerging adjacent segments – Pilot’s FriXion range ultimately pipped everybody else to the post. Having been around for over ten years now, Pilot continues to innovate within its FriXion range and have a real impact on the business supplies sector. Importantly, it also continues to deliver excellent growth as well as revenues, partially enhanced by ongoing success specifically in the overall writing instruments sector which is driven by a number of trends, such as the adult colouring craze.

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PRODUCT DEVELOPMENT OF THE YEAR

RESELLER OF THE YEAR – UNDER €100 MILLION IBA This award seeks to recognise resellers with a strong presence in their respective markets. During the judging process the panel discussed, among other things, delivery solutions and developments in new product categories, services and customer channels. The winner of this award which is split into two sub-categories – one under and one over €100 million in revenues – delivered on all the criteria and more. Switzerland-based iba, which is part of the mighty Migros stable, has seen solid progress over the past five years, increasing revenues from CHF55 million to CHF85 million ($55-$85 million) in that time, all under the expert leadership of Christa Furter who has been in charge since 2011. Furter is not someone who shouts about her achievements, instead quietly guiding her team to make iba a solutions instead of an office products company, expanding in categories such as facilities supplies and MPS, and putting iba’s digital capabilities at the top of the agenda.

April 20117

Beth Wright from Bi-silque presented the award to (from left) Simon Schweizer, Christa Furter and Thomas Lang

EOPA EVENT

PRODUCT INNOVATION OF THE YEAR BROTHER INTERNATIONAL EUROPE – BROTHER QL-800 LABEL PRINTER SERIES This award recognises outstanding product innovation and potential in the market. There were plenty of entries in this category, with the judges having a tough time reducing them to a shortlist, let alone selecting a winner. As ever, the question was whether a product is really innovative. Also importantly, does it address a need and Stefan Sonesson from RKV presented have a real impact on the the award to Brother’s John Tucker (l) entire channel? Brother’s QL-800 series of label printers answered all of those questions. As the only two-colour label printer on the market, it certainly filled a gap and the judges felt it was a real enhancement to what’s already available in the market. Positive feedback from the wholesale community also shows that this is a product that really sells.

DEALER GROUP OF THE YEAR CALIPAGE In the current climate, dealer groups need to work especially hard to maintain relevance and deliver value. For this award the judges were looking for a dynamic and engaged dealer group that provides a comprehensive package to give its members a competitive edge in a challenging market. Calipage, a network of dealers associated with pan-European wholesaler ADVEO, pipped all other groups to the post after lengthy discussions among the judges. The Calipage network in France stood out in particular, due to the group’s high and positive engagement with vendors. With over 550 members across Europe now, including France, Iberia and Germany, Calipage has big plans to expand the network geographically, as well as putting greater focus on e-commerce and a new concept called Calipage Pro.

HIGHLY COMMENDED: ACCO Brands Europe – Nobo Nano Clean Steel Whiteboard

Brother’s QL-800 label printer series

Susanne Fritz from HSM presented the award to Dennis Albers (l) and Pieter Wolters (r)

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RESELLER OF THE YEAR – REVENUES OVER €100 MILLION

Pilot’s Paul Phelan presented the award to Büromarkt Böttcher’s Udo Böttcher (l)

BÜROMARKT BÖTTCHER This is the second of the reseller awards, this time finding the company that has done exceptionally well in the ‘over €100 million revenue category’. All shortlisted companies met several of the criteria, including strong e-commerce and m-commerce capabilities; developments in new product categories; and strong sales performance and market share gains. But it was Germany’s Büromarkt Böttcher that took the award with its phenomenal performance – in 2016 alone, it saw a sales increase of 54% compared to the previous 12 months to €216 million ($233 million). Achieving that in a declining market is highly impressive and means taking considerable market share from the competition. But Böttcher is about much more than sales performance and comprehensively meeting and exceeding the aforementioned criteria. It also excels at the all-important outstanding customer service. The judges felt this was a very worthy winner in a tough and challenging environment.

NEWELL BRANDS – ‘DISCOVER SHARPIE’ As multimedia content for brands becomes increasingly vital, companies that produce creative and informative videos to showcase their products and engage the consumer are reaping the rewards. The judging panel looked at how a video captures the viewers’ attention, brings a product to life while at the same time conveying a message. Revenues generated as a result of the video, as well as customer engagement and brand enhancement are further criteria the judges assessed. The winner of this award was a unanimous choice: Newell Brands’ ‘Discover Sharpie’ video is short and simple and tells viewers all they need to know about the product and its use.

PRODUCT DESIGN OF THE YEAR

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EOPA OFFICE PRO DU CT

Brother UK’s Phil Jones MBE presented the award to his colleague Aaron Hopkinson (l)

example of how a company can teach a young individual how to make an impact in the business supplies sector. Importantly, however, as Jones enthused, employees like Hopkinson can also teach existing staff – mostly much older – the use of new tools, applications and insights on how to reach younger audiences effectively.

April 20117

Focusing on new entrants to the industry, with a particular emphasis on millennials, this new award seeks to reward a young executive who is making a real impact in the business he/she works in and has the potential to shape the future of our industry. Phil Jones MBE, Managing Director of Brother UK – a keen proponent of fostering new talent – introduced Aaron Hopkinson, a young individual who joined Brother’s apprenticeship programme in 2014 as a digital marketing apprentice. As Jones pointed out, he excelled at this, but clearly also showed a real talent around the company’s products. As Hopkinson moved across the various parts of the business to experience all of its facets, it became obvious that his future direction should be orientated towards the company’s actual technology, rather than directed at marketing it. In July 2015, he moved to product management where he now works as Assistant Product Manager, taking portfolio responsibility for Brother’s scanner business. Presenting eloquently to Brother’s own sales teams as well as customers, Hopkinson is an excellent

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YOUNG EXECUTIVE OF THE YEAR

F THE YEAR EO -E TIV

EVO Group’s Andrew Stacey presented the award to Fellowes’ James Webb (l)

Maria Chappell from Euroffice Group (l) and OPI’s Janet Bell (r) presented the award to Isabelle Gippet from Newell Brands (middle)

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FELLOWES – AERAMAX PROFESSIONAL AMII AIR PURIFIER In this new category, judges were looking for unique, design-led products that meet the needs of the modern purchaser and show that functionality shouldn’t come at the cost of attractive design. That said, price must also still be a factor, because if resellers don’t sell it, the design becomes irrelevant too. Fellowes’ air purifier for comparatively small public spaces such as washrooms, hotel rooms and healthcare consultation rooms, met all the criteria and fulfills a real need in the end-user community. The judges were impressed with good revenues and feedback from the US and unanimously saw huge potential for this new product in the European market. Well done Fellowes – one of a number of winning categories for the manufacturer on the night.

EVENT EOPA

PRODUCT VIDEO OF THE YEAR

EOPA EVENT

WHOLESALER OF THE YEAR

International Paper’s Gerald Demets presented the award to Fellowes’ James Webb (l)

MARKETING INITIATIVE OF THE YEAR FELLOWES – ‘KEEP IT CONFIDENTIAL WITH THE WORLD’S TOUGHEST SHREDDERS’ This category is open to any organisation that can clearly show the success of a specific marketing campaign. In the judging process, the panel considered – among other things – the objectives of the campaign, originality and creativity, and ROI generated. Fellowes’ ‘Keep it Confidential with The World’s Toughest Shredders’ campaign ran simultaneously across Europe and by far exceeded campaign objectives. The company achieved 29 million end-user contacts and drove 105,000 targeted visitors to its dedicated landing page. More than 400,000 watched the company’s full campaign video. In terms of ROI, during the campaign period Fellowes saw an increase of 30% in sales value, which resulted in an immediate full return of the company’s €440,000 campaign investment.

EXERTIS SUPPLIES This award recognises a dynamic wholesaler which is responding to meet the needs of an ever-changing market. The UK market is clearly changing with the two main wholesalers in the country adopting an increasingly hybrid model as part of their overall set-up. And Dublin-based sales, marketing, distribution and support services group DCC, through its UK subsidiary Exertis Supplies, has stepped up to the plate as a viable alternative, filling an important gap in the market. The judges highlighted the company’s great logistics, excellent back-office system and impressive sales and profit growth. Exertis Supplies, they said, which is particularly strong in the ink and toner category having been formed from DCC’s 2011 acquisition of EOS distributor Advent Data, is a well-founded and ambitious wholesaler that does things a little differently, with a focus on low cost and ultra efficiency.

Isabelle Gippet from Newell Brands presented the award to Exertis Supplies’ Raj Advani (l) and Tim Holmes (r)

VENDOR OF THE YEAR

Corwell’s Lázló Fehér presented the award to Fellowes’ Michel van Beek (l) FELLOWES It there was one all-round winner of the night, it was most definitely Fellowes, winning an EOPA in three different categories. One of them was for Vendor of the Year, an award it has now taken home for the third consecutive year. It was a fitting tribute to a company that this year is celebrating its 100th anniversary, proving time and again that it has the ability to continuously reinvent itself to stay relevant in a changing market. The judges were united in their praise of Fellowes, saying that the company is hugely proactive and very successful in building customer relationships while at the same time offering much-needed and valued support to its reseller partners. Brand strength, supply chain excellence and a real ability to successfully enhance an existing or diversy into a new product category completed the picture. HIGHLY COMMENDED: Safescan

PROFESSIONAL OF THE YEAR

WINNE DS

E PRODUCTS A FIC WA OF

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EOPA

FESSIONAL PRO O YEAR - EUROP EA HE FT

OPI’s CEO Steve Hilleard presented the award to Bi-silque’s Beth Wright

The Professional of the Year award recognises the exceptional talent of an individual whose efforts and dedication directly influence the success of their company. Professionalism, enthusiasm for the sector and leadership ability were all qualities that the judges were looking for. This year’s winner had all of those in spades. In his introduction of this individual, OPI CEO Steve Hilleard briefly charted the career of this rare beast in the European business supplies sector – a female executive with a long and varied background in OP already and plenty more potential to come. Step up Beth Wright – the undisputed winner of the 2017 Professional of the Year award. Wright’s natural home is not Europe, of course, but Florida in the US. But she certainly adopted Portugal as her second home, working currently as Chief Commercial Officer of visual communications leader Bi-silque. Her career began with consumables wholesaler Daisytek. Following a brief period outside office products, she then jumped across the fence into the manufacturing sector where she has continued to make an impact to this day. One of Wright’s most notable successes was launching the Portugal-based Bi-silque brand in the mature and very challenging US market. Her energy, talent and sheer determination in that endeavour was noted by Bi-silque’s top management and resulted in her promotion to a broader, more international role. The company’s current story of growth through innovation is in no small part due to Wright who, the judges felt, will go a long way in this industry.

STRIVING FOR THE

PERFECT

REVIEW

Partnership

or the fourth time, senior executives from Europe’s leading resellers and vendors met last month for a couple of days of high-level, strategic meetings in Amsterdam, the Netherlands. The venue for this year’s OPI Partnership, held from 7-9 March, was once again the beautiful Hotel Okura, which provided a highly-efficient business as well as fabulous culinary backdrop to the event. What started as a relatively small gathering in 2014 comprising a select few vendors and resellers has, over just a few years, developed into a much-anticipated industry event. This year it attracted 26 of Europe’s best-known manufacturers covering a wide variety of product categories, and about 50 senior-level executives from the region’s largest and most influential resellers. The aim, as always, was not to talk about day-to-day business, but instead discuss and develop strategic action plans for continued successful collaboration. In many cases, it also provided a much-valued first stepping stone to future long-term relationships. Framing these highly-confidential, behind-closed-doors, strictly-timed meetings was a selection of networking opportunities that allowed

VENDOR FEEDBACK What was your overall impression of the event?

7.7% GOOD

92.3%

EXCELLENT

EVENT

attendees to further cement relationships and mix with like-minded individuals – often competitors in their daily lives – in a more relaxed environment. The opening night’s welcome dinner at the stunning Michelin-star Sazanka restaurant or the celebratory and very entertaining European Office Products Awards dinner (see page 48 for more details on the winners) certainly completed an event that 100% of vendors described as “good” or “excellent”. Meanwhile, asked whether they would return to Partnership next year, over 90% of resellers replied with an affirmative “definitely”. EXCELLENT FEEDBACK But, as OPI CEO Steve Hilleard emphasises, the organising OPI team will certainly not rest on its laurels: “This year’s Partnership was a terrific success judging by the feedback we’ve had. Importantly, both vendors and resellers received a huge amount of value from the strategic top-level meetings that bring together so many of the industry’s senior executives. “But there’s still room for improvement, perhaps most notably in terms of attracting an even wider range of vendors from many of the emerging product categories that resellers are now exploring. Work has already begun on Partnership 2018!”

We met most of our strategic partners which was a very effective time investment for us and hopefully also our reseller partners. We have defined further growth potential with our partners which is the foundation of a successful future. The planning and organisation of the event was also best-in-class Jeffrey James Köhler, International Key Account Director Business Solutions, Newell Brands

Mike Ayckbourn, Group Category Director, Staples Solutions

RESELLER FEEDBACK Would you be interested in attending Partnership 2018?

MAYBE 9.1%

DEFINITELY

90.9%

April 2017

I am always pleased to see the industry coming together and elevating discussions from our day-to-day work to the more strategic actions we should be working on for a longer window of success. We will be there again in 2018

5 MINUTES WITH...

Niek von Reth CAREER Q&A

What’s your life philosophy? I’ve never really had a personal slogan, but within the work environment it would be to always do the best you can as well as helping others to develop and exceed themselves. Other than that, enjoy the little things in life. Long-term plans are fine but don’t let them steer your life too much. Influences beyond your control can change everything in an instant. What’s your most prized possession? My daughter. Your favourite gadget? I love the Uber app. Unfortunately, it’s not allowed in the Netherlands, but it’s a great way to order a taxi and follow it in real time. What’s your favourite cuisine? I like the concept of tapas, but with the twist of having small portions of many different cuisines in one meal. Describe yourself in one sentence. A positive mindset, inquisitive and humorous, but also impatient. What’s your guilty pleasure? I love to do last minute short city or country trips, especially by car – just going out and discovering new things. Do you have any nicknames? When I was younger, friends used to call me ‘The Duke’ because of my non-typical Dutch surname. Your favourite place to visit in the Netherlands? The province of Zeeland. Many small picturesque harbours, beaches and old fishermen homes.

Describe your current job. European Business Development Manager Print for ALSO.

What personal item do you have on your work desk? A stress ball. The rest of the desk is covered with invoices, papers and other printed materials (someone needs to keep the printing business alive J).

If you weren’t doing your present job, what would you like to be doing? I only started this job last August and I have many exciting challenges in the upcoming years developing ALSO’s online print marketplace – WePrintSmarter. So I really can’t think of any other job I would like to do right now.

What do you do in your spare time? Spend time with family and friends. What words do you use the most? Yes, but… What’s your ‘specialist’ subject? Developing new automated business technologies and then taking them into the field and marketing them. What makes you happy? When traffic is light and I can drive fast. Favourite author? Stephen King. What is the hardest thing you’ve ever had to do? I can’t mention it here. But ask me one-on-one and I’ll tell all.

The industry figure you most admire and why? Ursula Burns, former CEO of Xerox. She was the first African-American woman to head a Fortune 500 company. She changed it from a traditional copier business into a document technology and business processing outsourcing company.

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What do you like best about the OP industry? I like that it keeps on developing – moving away from hardware to a full service-driven industry.

If you could change one thing about the industry, what would it be? Make multi-branded print services more accessible to SMB resellers. Actually, that is something I’m currently working on and developing…

European 7

14-16 June 2017 The Westin Grand Berlin

An invitation-only conference for C-level executives with a focus on the European business products industry “The European OPI CEO Forum is one event that I always prioritise attending. It’s an insightful blend of current industry challenges and the wider future trends. I always return to the day job with lots of ideas, food for thought and a broader perspective of the changes that successful companies need to embrace. It’s also a one-stop shop to network with the key leaders shaping our industry.” Simon Drakeford, CEO, EO Group

OPI EUROPEAN FORUM l The European Forum is not a large conference, but a small, closed forum for CEOs and senior level executives at leading resellers, manufacturers and wholesalers of business supplies. l

The European Forum will feature speakers and moderators of an extremely high quality to stimulate thought and debate.

The European Forum offers a unique opportunity to spend quality networking time with fellow leaders in the business supplies sector.

PAST ATTENDEES

Attendees at recent OPI European Forums include senior representatives from companies such as: 3M, ACCO Brands, Acme United, Actionable Intelligence, Advanced Workplace Associates, ADVEO, ALSO International, Amazon France, Amazon Germany, Amazon UK, Arnos Australia, Avery, BIC, Bi-silque, Bong, Brother, Bruneau, Bureaucrat, CEP Office Solutions, Clover Technologies Group, COLOP, Corwell, CPD, Daymon Worldwide, ECi, edding, Esselte, EO Group, Everything Office, EVO Group, Exacompta, Fellowes, First Base Group, Forrester Research, FusionPLUS Data, GMK Markenberatung, Gruppo Buffetti, Hamelin, HP, Highlands, HSM, ICIDU, Interaction, International Paper, Lyreco, M2, MBP Group, MEDIUM, Messe Frankfurt, Moorside Office, nectere, NEMO Group, Newell Brands, Office Club, Office Depot, Office Friendly, OP Network, OP Resource, Oresa Ventures Romania, OTTO Office, PBS Holding, Pilot Corporation of Europe, Printus, ProBuro, Really Useful Products, RTC Proffice Experience, Rubbermaid Commercial Products, Ryman, Smarton Belkanton, SPOT Group, Staples, Stewart Superior, Superstat, tesa, TC Group, UOE, Victor Stationery, Waser + Co, Westcoast, Wulff Beltton, Xerox.

For more information about this event, please visit www.opi.net/EF2017 If you would like to be considered for an invitation, please email steve.hilleard@opi.net

FINAL WORD

Tapping into EDUCATION

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he education sector offers huge potential for independent office products dealers wanting to increase their bottom line and capture sales within the growing and profitable school and colleges market. There are many sales opportunities available as schools look to invest and stock up on their supplies for the year ahead. As with all industries, when selling to schools it is important to really get to know your customers’ needs and requirements so that you can recommend the right products. It’s not all about price – good product knowledge and advice is crucial when it comes to selling educational products. Engagement with customers is also essential when trying to maximise sales in this stable yet lucrative market.

BUILD ON YOUR STRENGTH An education catalogue is a vital tool to establishing yourself as a credible supplier and allows you to clearly set out your capabilities. Dealers need to generate awareness of their ability to supply educational products and have a focused sales campaign with targets for sales teams to open doors with local educational establishments. Office products dealers have the added advantage of being able to provide a local, personal service. In the UK market, the buying period of local authorities is usually between April and June. In my experience they generally actively seek a local business that is part of the community. Don’t hesitate to strongly market your USPs, including stock room management, storage of bulky items and a flexible delivery service. Also, always try to leverage your high service levels and customer service excellence wherever possible – this isn’t something the mainstream educational suppliers tend to do well. A dealer group can support its members with a complete educational programme to help gain new business from local schools. This may incorporate preferential terms with relevant suppliers, catalogues, direct mail and email marketing together with training and advice on how to market your business within this sector. It can give office supplies dealers the opportunity to quote on annual bulk purchases as well as ongoing business throughout the year. It can also help them remain a valuable supplier to schools on specialist education products while developing their general office supplies business at the same time. Dealers need to listen to the conversations of those working within the education sector and get to know their irritations and satisfactions. This will then allow campaigns and promotions to be tailored. Use these to your advantage to raise awareness amongst your target audience.

Dealers can also level the playing field by switch-selling to entry-level products. In education catalogues, the price on the page is the sell price in the majority of cases. ‘What you see is what you pay’ is the norm for most education customers rather than ‘list less’ or separate contact lists. PRODUCT FOCUS Many of the top-selling commercial stationery products such as pens, pencils, filing and printer supplies are also bestsellers in education. Indeed, in many instances a dealer’s office products range will closely mirror an education supplier’s office products range. More unique products include exercise books which are usually forward-ordered and supplied in bulk rather like diaries in the commercial

Sian Haskell, Director of Marketing, Integra Business Solutions

Try to leverage your high service levels and customer service excellence wherever possible – this isn’t something the mainstream educational suppliers tend to do well market, and classroom supplies such as stickers, stamps and specialist papers, as well as classroom furniture and lockers. Significant volumes of audiovisual equipment are now also being sold into the market. The style of teaching is continually changing in both primary and secondary schools and with that change the resources and the equipment required. With iPads at one end of the spectrum and more paper-based craft materials at the other, this creates the need for secure storage cupboards and more IT accessories. ClassroomSpecial chairs, Issue tables and storage units are perennially popular with primary schools, FACILITIES especially flexible dining furniture that can be SUPPLIES easily put out, folded and stored away. June is the time to target schools for furniture sales as these high-value projects are usually negotiated around this time so that goods can be delivered and installed during the (UK) summer holidays. There is huge potential in the education sector. With the right support dealers can really tap into this area to maximise sales. See also page 36 for our Category Update on the education sector.

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